MNCS Morning Navigator

18 Januari 2023

MNCS Morning Navigator January 18, 2023

Global Market Highlights
DJIA weakened -1.14% on Tuesday (17/01), followed by S&P500 (-0.20%) while Nasdaq (+0.14%). Wall Street closed mixed after the release of earnings season in 4Q22. In addition, investors were also paying close attention to the release of NY Empire State Manufacturing Index data in Jan-2023 which contracted to a level of -32.9 (vs 11.2 points in Dec-2022). Today, the market will be looking toward several data releases such as: 1) US PPI MoM Dec; 2) US Retail Sales MoM Dec; 3) Japan BoJ Interest Rate Decision.

Domestic Update
Bank Indonesia reported that bank lending in Dec-2022 showed indications of increasing MoM, reflected in the Weighted Net Balance (WNB) value of 77.7%, or higher than Nov-2022 of 58.6%. MNCS Comment: We view positive credit growth to be supported by positive deposit growth coupled with adequate banking liquidity. Furthermore, the credit outlook for FY23E is still positive, especially as seen from KBMI I banking which carried out corporate actions in the form of rights issues to strengthen capital in accordance with OJK regulations.

Company News
1. PTRO IJ targets a capex allocation growth of +30% YoY in FY23E (Kontan). MNCS Comment: The increase in capex was to support an increase in contract value, where PTRO managed to book a contract value of USD1.6 billion in FY22, or higher than the FY21 estimate of USD1 billion. This has the potential to boost the company's performance this year. Currently, PTRO is traded at the level of 13.06x/1.04x PER/PBV.
2. TOTL IJ targets contract acquisition of IDR2.6 trillion in FY23E, consisting of IDR2.1 trillion carry over and IDR500 billion new contracts (Kontan). MNCS Comment: The contract acquisition target has increased from the FY22 realization of IDR2.28 trillion. We see that the company will maximize the tender process with an estimated pipeline size of IDR10 trillion to achieve this target. Currently, TOTL is traded at the level of 11.86x/0.86x PER/PBV.
3. SIDO IJ projects a capex allocation of IDR197 billion in FY23E (Market Bisnis). MNCS Comment: We view the capex allocation to improve performance with a revenue growth target of +10-15% YoY in FY23E. The capex allocation will be allocated to realize green house projects, add production equipment to increase export market penetration. Currently, SIDO is traded at the level of 22.64x/6.17x PER/PBV.

IHSG Updates
JCI strengthened +1.19% to 6,767.34 on Tuesday (17/01), followed by net foreign buy which reached IDR20.65 billion. The majority of sectors experienced strengthening and drove the index rate, led by the technology sector (+1.94%) and followed by the financial sector (+1.15%). On the other hand, the sectors that experienced weakness were the property sector (-0.24%) followed by the health sector (-0.19%). We see that the strengthening of the index occurred as investors responded positively to the release of China's GDP data in 4Q22 which was able to grow +2.9% YoY, or exceeded the consensus estimate of +1.8% YoY. On the other hand, the Rupiah exchange rate closed lower at the level of IDR15,165/USD. We estimate that the JCI will move in the price range of 6,624-6,690 pending the release of Car Sales YoY Dec and Loan Growth YoY Dec data. Today's recommendation: HRUM, ISAT, SMGR, TKIM.

Corporate Actions

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