MNCS Morning Navigator

11 Januari 2023

MNCS Morning Navigator January 11, 2023

Global Market Highlights
DJIA strengthened +0.56% on Tuesday (10/01), followed by the S&P500 (+0.70%) and the Nasdaq (+1.01%). Wall Street strengthened as inflation expectations decreased in Dec-2022 to 6.5% YoY (vs +7.1% YoY in Nov-2022 realization). Today, the market will be looking toward several data releases such as: 1) US MBA 30-Year Mortgage Rate Jan 6; 2) US MBA Mortgage Applications Jan 6; 3) Germany 10-Year Bond Auction.

Domestic Update
• The government issued SBSN of IDR 13.85 trillion in an auction on Tuesday (10/01/23). The emission value was slightly lower than the indicative target of IDR14 trillion, with a total incoming bid of IDR17.45 trillions. MNCS Comment: Albeit the auctions at the beginning of the year tended to be quiet, we foresee that portfolio rebalancing to fixed income assets, especially SBN, can be a positive catalyst for subsequent SBN auctions, in line with foreign inflows into SBN and a downward trend in yields in response to the disinflationary phenomenon.

Company News
1. UNTR IJ targets Komatsu heavy equipment sales of 5,700 units in FY23E (Bisnis Market). MNCS Comment: Komatsu heavy equipment sales target in FY23E higher compared to FY22 of 5,000 units. This will be supported by a capex allocation of USD1 billion. Even though coal prices are softening, the increase in the target indicates that coal exploration and exploitation activities will continue this year. Currently, UNTR is traded at the level of 4.40x/1.17x PER/PBV.
2. TMAS IJ allocates capex of IDR1 trillion in FY23E (Kontan). MNCS Comment: The amount of capex allocation has not changed from the target in FY22E. Meanwhile, the realized capex will be used for ship expansion. It is hoped that the addition of the fleet will boost the company's performance and maintain a net profit margin of 10-15% in FY23E. Currently, TMAS is traded at the level of 9.30x/5.75x PER/PBV.
3. MDKA IJ reported that exploration costs in 4Q22 reached IDR393.9 billion (IQ Plus). MNCS Comment: Exploration costs in 4Q22 grew +30.6% QoQ/+132.6% YoY. Exploration activities are focused on the Tujuh Bukit area (gold and silver) and Pulau Wetar (copper). It is hoped that through increased exploration activities it can boost the company's performance going forward. Currently, MDKA is traded at the level of 6.86x PBV.

IHSG Updates
JCI weakened -0.98% to 6,622.50 on Tuesday (10/01), followed by net foreign sell which reached IDR516.74 billion. The majority of sectors experienced weakness and weighed on the index, led by the financial sector (-1.75%) and followed by the health sector (-1.23%). On the other hand, the sectors that experienced strengthening were the energy sector (+1.58%) followed by the industrial sector (+0.11%). The weakening of the index was in line with the strengthening of Wall Street and Asian Exchanges. We see investors responding to the release of retail sales data Nov-2022 which grew slower by +1.3% YoY (vs +3.7% YoY in Oct-2022). On the other hand, the Rupiah exchange rate closed lower at the level of IDR15,573/USD. We estimate that the JCI will move in the price range of 6,530-6,650. Today's recommendation: BRMS, EXCL, HRUM, INDY.

Corporate Actions
IPO: BMBL (IDR188/share)

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