Global Market Highlights
The DJIA rebounded by +0.45% on Wednesday (10/01), followed by S&P 500 (+0.57%) while Nasdaq (+0.75%). Wall Street equities closed in the green despite UST yields’ higher climb on hawkish Fed remarks, backed by investors’ optimism of a favorable incoming US CPI Dec-2023 report today. Rosy US mortgage applications 05 Jan-2024 (9.9% WoW) also contributed sanguine sentiments to the market, amid a 5 bps WoW 30-yr mortgage rate rise. Today the market will be looking forward to several data releases such as: 1) US Core Inflation Rate YoY Dec-2023; 2) US Inflation Rate YoY Dec-2023; 3) US Initial Jobless Claims 06 Jan-2024.
Domestic Update
The Domestic retail sales performance in Nov-2023 recorded an increase of +2.1% YoY/+0.2% MoM. MNCS Comment: We see the positive performance of domestic retail sales in Nov-2023, supported by the sales of motor vehicles parts and accessories (+10.8% YoY), followed by automotive fuel (+10.9% YoY), and clothing (+11.4% YoY). We anticipate the growth momentum to be sustained in Dec-2023, with the festive season and moderation in food prices acting as a buffer for purchasing power.
Company News
1. TPMA IJ has allocated USD 20 million of capex for the addition of 2 tug boats, 4 barges and 1 floating crane (Emiten News). MNCS Comment: We see the addition of the ship fleet as the company's growth driver for FY24E after net profit managed to grow 37.15% YoY in 9M23, considering that the ship utilization rate has reached 100%. Revenue growth also has the potential to be supported by an increase in the FY24E national coal production target of around ~710 million tons. Currently TPMA is trading at 6.77x/1.30x PER/PBV.
2. ADHI IJ achieved a new contract value in FY23 amounting to IDR37.4 trillion (Emiten News). MNCS Comment: We note that the new contract value increased by +57.8% YoY (vs IDR23.7 trillion in FY22). Meanwhile, with a target new contract value in FY23 of IDR27 trillion, the realization has exceeded the target, reaching 138.5%. With the increased contract value, we anticipate it will drive the company's performance even better in the future. Currently, ADHI is traded at a level of 0.31X PBV.
3. TLKM IJ targets the new hyperscale data centre (HDC) of NeutraDC in Batam to be ready for service in 1Q25. MNCS Comment: Successfully booked IDR248 billion revenue and IDR59 billion EBITDA (24% EBITDA margin) in 1H23, NeutraDC targets to hit a total of IDR505 billion revenue (+166% YoY) and IDR61 billion EBITDA (+221% YoY) in FY23. We view this HDC establishment as potential for data centre to become one of the group’s growth contributors in the future. Currently TLKM is trading at 21.97x/2.65x PER/PBV.
IHSG Updates
The JCI grew by +0.38% to 7,227.30 on Wednesday (10/01), followed by net foreign buy of IDR85.87 billion. Most sectors strengthened, led by the healthcare sector (+1.52%) and followed by the infrastructures sector (+1.37%). On the other hand, some weakened sectors were led by the technology sector (-0.15%) and followed by the properties & real estate sector (-0.05%). The index inclined after the release of domestic retail sales to remain strong at level 2.1% YoY in Nov-2023. The Rupiah closed lower at IDR15,570/USD. We estimate the IHSG will move within the price range of 7,200-7,250. Today's Recommendations: BIRD, MDKA, MTEL, PGAS.
Corporate Actions
IPO: ACRO (IDR108/share)
EGMS : EXCL, INAF
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