MNCS Morning Navigator

25 Januari 2023

MNCS Morning Navigator January 25, 2023

Global Market Highlights
DJIA strengthened +0.31% on Tuesday (24/01), while the S&P500 (-0.07%) and Nasdaq (-0.27%). Wall Street closed mixed due to the earnings season in 4Q22. Meanwhile, the S&P Global Manufacturing PMI Flash data in Jan-2023 slightly rose to 46.8 points (vs 46.2 points previously). Today, the market will be looking toward several data releases such as: 1) US MBA 30-Year Mortgage Rate Jan 20; 2) France Unemployment Benefit Claims Dec; 3) Germany Ifo Business Climate Jan.

Domestic Update
Bank Indonesia reported that the M2 position in Dec-2022 was recorded at IDR8,525.5 trillion or grew +8.3% YoY. MNCS Comment: This growth was supported by the performance of M1 money supply which grew +9.5% YoY and quasi money reached +6.8% YoY. Meanwhile, net foreign assets grew +4.9% YoY and lending +11.0% YoY.

Company News
1. BBNI IJ posted net profit growth of +68% YoY to IDR18.3 trillion in FY22 (CNBC Indonesia). MNCS Comment: This net profit achievement was supported by: 1) consolidated credit growth +10.9% YoY to IDR646.2 trillion (vs IDR582.4 trillion in FY21); 2) increase in NIM on bank only to 4.81% (vs 4.67% in FY21); 3) credit cost reduction to 1.9% (vs 3.3% in FY21). Gross NPL is maintained at the level of 2.8%. BBNI targets +7-9% YoY credit growth in FY23E followed by NIM >4.7% and credit cost <1.5%. Currently, BBNI is traded at 1.22x PBV.
2. PPRE IJ recorded a new contract value of IDR5.24 trillion in FY22 (Kontan). MNCS Comment: Thus, the realization of the target value of new contracts in FY22 (IDR5.9 trillion) is 88.8%. The mining services sector encouraged the achievement of new contracts by 55% or IDR2.9 trillion followed by the civil work sector 40.7% or IDR2.13 trillion. In FY23E, PPRE is targeting the acquisition of IDR6-7 trillion in new contracts. Currently, PPRE is traded at the level of 11.01x/0.50x PER/PBV.
3. FREN IJ targets a capex allocation of USD200 million, or equivalent to IDR2.98 trillion in FY23E (Market Bisnis). MNCS Comment: The amount of capex allocation is relatively the same as the FY22 target, where funds are used for network optimization and expansion. It is hoped that through this capex allocation, it can maintain and improve FREN's performance which has started to record profits in FY22. Currently, FREN is traded at the level of 10.72x/1.64x PER/PBV.

IHSG Updates
JCI weakened -0.20% to 6,860.85 on Tuesday (24/01), followed by net foreign buy reaching IDR156.66 billion. The majority of sectors experienced weakness and weighed on the index, led by the health sector (-0.48%) followed by the industrial sector (-0.40%). On the other hand, sectors that experienced strengthening were led by the technology sector (+3.16%) followed by the transportation sector (+1.06%). The weakening of the index occurred amid the growth of foreign direct investment in 4Q22 which grew +43.3% YoY. We see investors tend to wait and see ahead of the release of US GDP growth in 4Q22. On the other hand, the Rupiah exchange rate closed higher at the level of IDR14,888/USD. We estimate that the JCI will move in the price range of 6,820-6,870. Today's recommendation: AKRA, IMAS, INDF, UNVR.

Corporate Actions

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