MNCS Morning Navigator

17 Januari 2023

MNCS Morning Navigator January 17, 2023

Global Market Highlights
Wall Street closed on Monday (16/01) commemorating Martin Luther King Jr Day. Meanwhile, Asian markets tend to close in the positive zone ahead of the release of China's GDP growth in 4Q22 which is estimated at +1.8% YoY (vs +3.9% YoY in 3Q22). Today, the market will be looking toward several data releases such as: 1) UK Unemployment Rate Nov; 2) Germany Inflation Rate YoY Final Dec; 3) Germany ZEW Economic Sentiment Index Jan.

Domestic Update
• Indonesia's trade balance recorded a surplus of USD3.89 billion in Dec-2022 or continuing the trend of surplus for 32 months in a row. MNCS Comment: The increase in commodity prices, especially coal, CPO, iron ore and oil and gas are still the main drivers of the trade balance surplus. However, we foresee that Indonesia's FY23E international trade performance will tend to be moderated in line with macro-economic conditions which tend to experience disinflation.

Company News
1. TINS IJ realized exploration costs in 4Q22 of IDR73.5 billion (Emiten News). MNCS Comment: Exploration costs increased by +34.3% QoQ (vs IDR54.7 billion in 3Q22). Exploration activities are still aimed at the tin commodity. It is hoped that this exploration activity will increase the company's tin reserves. Currently, TINS is traded at the level of 5.99x/1.29x PER/PBV.
2. UNTR IJ through its entity, Agincourt Resources (AR) realized exploration costs in 4Q22 of USD1.63 million (Emiten News). MNCS Comment: Exploration realization fell -25.7% QoQ (vs USD2.19 million in 3Q22). Cost reduction in 4Q22 was in line with slightly lower drilling rates. It is hoped that this exploration activity will increase mining productivity in line with the increase in the company's reserves. Currently, UNTR is traded at the level of 4.27x/1.14x PER/PBV.
3. ANTM IJ targets to produce 130k tons of alumina and 1.4-1.5 million wmt of bauxite ore in FY23E (Market Bisnis). MNCS Comment: The target for alumina production is relatively stable compared to FY22 of 126k tonnes, with realization up to 9M22 reaching 115.8k tonnes. Meanwhile, the target of bauxite ore production decreased from FY22 of 1.8 million wmt. We see a decline in the production target in line with the plan to ban exports thus causing the sales to be more focused on domestic and more realistic targets. In 9M22, the actual production of bauxite ore reached 1.3 million wmt. Currently, ANTM is traded at the level of 14.96x/2.32x PER/PBV.

IHSG Updates
JCI strengthened +0.70% to 6,688.06 on Monday (16/01), followed by net foreign sell which reached IDR335.60 trillion. The majority of sectors experienced strengthening and boosted the index rate, led by the raw materials sector (+1.55%) and followed by the transportation sector (+0.66%). On the other hand, the sector that experienced weakening was the non-cyclical sector (-0.58%). The index strengthened as investors responded positively to the trade balance in Dec-2022, which had a surplus of USD3.89 billion. On the other hand, the Rupiah exchange rate closed higher at the level of IDR15,045/USD. We estimate that the JCI will move in the price range of 6,624-6,690. Today's recommendation: BUMI, CPIN, MAPI, MDKA.

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