Global Market Highlights
DJIA weakened by -0.69% on Monday (18/07), followed by S&P 500 (-0.84%) and Nasdaq (-0.81%). Wall Street was under pressure as investors watched the release of the NAHB housing market index data on Jul-22 at 55 or lower than 67 on Jun-22. Today, the market will be looking toward several data releases such as: 1) US Building Permits MoM; 2) US Housing Starts MoM; 3) UK Unemployment Rate.
Domestic Update
• The government through the Ministry of Finance abolished CPO export levies and is valid until August 31, 2022. Potential loss of state revenue is estimated to amount IDR9 trillion. MNCS Comment: In the short term, the abolition of CPO export levies is expected to increase competitiveness and also exports. This policy is aimed to boost exports and reduce the abundance of domestic palm oil stocks after the May-22 export ban.
• Furthermore, the national Covid-19 daily rate had increased by 3,393 active cases (18/07).
Company News
1. ARNA IJ recorded net sales of IDR1.35 trillion in 1H22 or grew +8% YoY. Meanwhile, net profit reached IDR305.79 billion or grew +38.42% YoY (Investor ID). MNCS Comment: We see the increase in revenue was supported by its porcelain tile products which targeted the mid-high segment accompanied by an increase in the company's production volume which we project in FY22E to grow +2% YoY to 70.40 million m2 (vs 69.07 million m2). Efficiency can be seen from the improvement in the company's margins where GPM, OPM and NPM were respectively 40.72%, 29.05%, 22.52% (vs. 35.37%, 22.68%, 17.72% in 1H21). ARNA is currently traded at 11.70x/4.69x PER/PBV.
2. CTRA IJ achieved marketing sales of IDR3.9 trillion up to 1H22 (CNBC Indonesia). MNCS Comment: Marketing sales increased +9.43% YoY compared to 1H21 of IDR3.56 trillion, while the realization of the target in FY22 (IDR8.2 trillion) reached 47.56%. Currently, CTRA is traded at 9.48x/0.92x PER/PBV.
3. PWON IJ achieved marketing sales of IDR800 billion up to 1H22. This achievement was supported by the 52% landed house segment, 41% condominium and 7% office (Kontan). MNCS Comment: Marketing sales in 1H22 decreased -2.44% YoY compared to 1H21 of IDR820 billion, while the realization of the target in FY22 (IDR1.8 trillion) reached 44.44%. Currently, PWON is traded at 13.97x/1.26x PER/PBV.
IHSG Updates
JCI strengthened by +0.11% to 6,659.25 on Monday (18/07), followed by net foreign sell which reached IDR550.40 billion. The majority of sectors experienced strengthening and supported the index's pace, led by the non-cyclical sector (+1.27%) followed by the financial sector (+1.11%). On the other hand, the weaker sectors were led by the technology sector (-1.15%) followed by the energy sector (-0.69%). The strengthening of the index was in line with the majority of other Asian bourses. The easing of investor concerns regarding the potential raise of the benchmark interest rate (FFR) at the Jul-22 FOMC by the Fed supported the index. Meanwhile, the increase in the new credit disbursement in Jun-22 where WNB was recorded at 86.7% (vs WNB 43% in May-22), which suggested an improving economic outlook had also driven the index's pace. On the other hand, the Rupiah exchange rate closed higher at IDR14,982/USD. We estimate that the JCI will move in the price range of 6,600-6,730. Today's recommendation: BMRI, HMSP, MIKA, BIPI.
Corporate Action
Cum Rights: KIOS (IDR300/share)
RUPS: MSIN, DNET
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