MNCS Morning Navigator

03 Januari 2023

MNCS Morning Navigator January 3, 2023

Global Market Highlights
Wall Street closed in commemoration of the 2023 New Year's holiday. Meanwhile, European markets closed in the positive zone amid the potential increase in benchmark interest rates and the ongoing Russia-Ukraine conflict. Asian stocks closed higher amid the decline in China Manufacturing PMI in Dec-2022 which contracted to a level of 47 points (vs 48 points previously). Today, the market will be looking toward several data releases such as: 1) Germany Inflation Rate YoY Prel Dec; 2) Germany Unemployment Change Dec; 3) Germany Unemployment Rate Dec.

Domestic Update
Dec-2022 inflation recorded at +0.66%MoM/+5.51% YoY, higher than consensus estimate/MNCS: +5.39%YoY/+5.34% YoY. MNCS Comment: The increase in inflation reflects the seasonal pattern of the end of the year in the momentum of the Christmas & New Year holidays with public transportation fares and food commodity prices being the biggest triggers.
Furthermore, the national Covid-19 daily rate had increased by 262 active cases (02/01).

Company News
1. AUTO IJ will allocate capex of up to IDR500 billion to IDR1 trillion in FY23E (Kontan). MNCS Comment: The amount of capex is relatively the same as in FY22. It is hoped that through this capex allocation, it can support the company's business performance, where Gaikindo targets car sales in FY23E of 975k units (vs 960k units in FY22). Currently, AUTO is traded at the level of 6.28x/0.61x PER/PBV.
2. SMGR IJ strengthened the capital of its entity, Semen Indonesia Building Industry (SIIB), by allocating funds worth IDR3.29 trillion (Emiten News). MNCS Comment: We see that this can strengthen governance and business in SMGR's cement ecosystem in the future. We also view this as an effort to improve performance in welcoming FY23E, where the cement industry will be supported by an increase in the infrastructure budget +7.8% YoY and the IKN project which has the potential to absorb 1.6 million tonnes of cement in FY22-FY24F. Currently, SMGR is traded at the level of 20.33x/1.21x PER/PBV.
3. FAST IJ recorded a decrease in net loss in 9M22 to IDR17.2 billion (vs IDR198.1 billion net loss in 9M21) (IQ Plus). MNCS Comment: Even though the company's revenue grew +24.8% YoY to IDR4.3 trillion (vs IDR3.5 trillion in 9M21), this was still below pre-pandemic level which was recorded around IDR6 trillion. We see a net loss that was in line with the high operating expenses, especially in managing a lower number of outlets with 729 units in 9M22 (vs 748 units in FY19), thus unabling the revenue to be offset. Currently, FAST is traded at the level of 2.94x PBV.

IHSG Updates
JCI strengthened +0.01% to 6,850.98 on Monday (02/01), followed by net foreign sell which reached IDR299.03 billion. A number of sectors experienced strengthening and boosted the index rate, led by the non-cyclical sector (+0.59%) and followed by the technology sector (+0.31%). On the other hand, the sectors that experienced weakness were the health sector (-1.69%) and followed by the energy sector (-0.17%). The index strengthened amid the release of data on Indonesia's inflation rate in Dec-2022 which reached 5.51% YoY, higher than the consensus estimate (5.39% YoY) and the realization in Nov-2022 (5.42% YoY). On the other hand, the Rupiah exchange rate closed lower at the level of IDR15,573/USD. We estimate that the JCI will move in the price range of 6,760-6,892. Today's recommendation: AISA, ITMG, SMGR, SRTG.

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