Global Market Highlights
The DJIA slid -0.31% on Friday (12/01), whereas S&P 500 (+0.08%) and Nasdaq (+0.02%) ticked higher. Wall Street equities closed in the mix accompanied by a rally in the UST 10-yr notes on the back of encouraging US Dec-2023 PPI report. The PPI came weaker than expectations at -0.1% MoM/+1.0% YoY (vs 0.1% MoM/+1.3% YoY), along with the Core PPI (+1.8% YoY/+0.0% MoM vs +1.9% YoY/+0.2% MoM), prompting investors to reprice a higher Mar-2024 FOMC rate cut probability. Today the market will be looking forward to several data releases such as: 1) UK Unemployment Rate Nov-2023; 2) Germany Economic Sentiment Index Jan-2024; 3) US NY Empire State Manufacturing Index Jan-2024.
Domestic Update
Gaikindo reports that the sales of car units in FY23 reached 1.01 million units. MNCS Comment: Car sales in FY23 experienced a decline of -4.0% YoY, falling below the target of 1.05 million units. This decline correlates with the low sales in 2H, contributing 49.6% (vs the 5Y average of 53.3%). We also attribute the high interest rate, issues with the Daihatsu factory, and the high base in FY22 as factors weighing on sales performance in FY23.
Company News
1. SMDR IJ is set to expand its fleet of ships by 12 units, comprising 6 container ships, 2 gas tankers, 2 tugboats and 2 barges (Kontan). MNCS Comment: We assess the addition of the vessel fleet as a potential growth driver for the company's performance this year, in line with the momentum of increasing freight rates amidst geopolitical conflicts. We noted that the capex provided for the procurement of a new fleet was worth USD280 million. Currently, SMDR is trading at 4.43x/0.80x PER/PBV.
2. AKRA IJ targets the sale of 130 Ha of industrial land in JIIPE in FY24E (Kontan). MNCS Comment: We note that the sales target is higher compared to FY23 at 75 Ha, with FY23 realization reaching 91 Ha (121.3% of the target). In 9M23, the revenue from the industrial estate segment increased by +341.3% YoY, with a margin of 16.7%. With the raised target for land sales amid the potential increase in oil prices due to the escalation of conflict in the Middle-East, we expect this to drive the company's performance towards achieving the FY24E net profit growth target of +15% YoY. Currently, AKRA is traded at a level of 13.73X/2.93x PER/PBV.
3. WINS IJ budgets USD20 mn capex for additional high tier ships purchase in FY24 (Kontan). MNCS Comment: We view the plan to acquire more ships as a positive catalyst to increase the company’s income from ship charter and other marine services. The company has successfully booked +23.26% YoY revenue on 9M23 and additionally signed new contracts with increased rent rates. WINS is currently trading at level 0.7x PBV.
IHSG Updates
The JCI strengthened by +0.29% to 7,241.14 on Friday (12/01), followed by net foreign buy of IDR1.12 trillion. Some sectors grew, led by the industrials sector (+0.84%) and followed by the energy sector (+0.78%). On the other hand, some weakened sectors were led by the transportation & logistic sector (-1.05%) and followed by the infrastructures sector (-0.95%). The other Asian markets closed mixed as investors still digest the released of global macroeconomy dataset. The Rupiah closed lower at IDR15,550/USD. We estimate the IHSG will move within the price range of 7,200-7,295. Today's Recommendations: ACES, ELSA, ISAT, SMGR.
Corporate Actions
EGMS: SPTO
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