Global Market Highlights
DJIA strengthened by +2.43% on Tuesday (19/07), followed by S&P 500 (+2.76%) and Nasdaq (+3.11%). Wall Street strengthened amid the release of Housing Starts data Jun-22 which fell -2.01% MoM to 1.56 million units (vs 1.59 million units in May-22). The catalyst driving the index rate came from investors' expectations of earnings reports of companies that perform well and prices that had already been priced in in response to negative sentiment in the market. Today, the market will be looking toward several data releases such as: 1) US MBA Mortgage Applications; 2) UK Inflation Rate YoY; 3) UK Core Inflation Rate YoY.
Domestic Update
• BI Banking Survey 2Q22, credit is expected to grow +9.2% FY22E, higher than +5.1% YoY in FY21. MNCS Comment: Positive views on FY22F loan growth are supported by: 1) strengthening economic conditions; 2) ample liquidity in the banking system.
• Furthermore, the national Covid-19 daily rate had increased by 5,085 active cases (19/07).
Company News
1. INCO IJ reported a decrease in nickel production in 1H22 of 26,394 tons of nickel in matte, decreased by -13% YoY from the 1H21 achievement of 30,246 tons of nickel matte (Kontan). MNCS Comment: In 2Q22, nickel production volume decreased by -16.49% YoY. The decline in production was in line with the replacement of the roof of Furnace 1, the construction of Furnace 4 and the shutdown for maintenance. Currently, INCO is traded at 13.13x/1.60x PER/PBV.
2. ADHI IJ recorded a new contract value in 1H22 of IDR12.2 trillion, with the composition of the new contract portfolio included 15% of Government, 5% of BUMN and BUMD and 80% of other private companies (Kontan). MNCS Comment: New contract value increased +82.09% YoY compared to 1H21 of IDR6.7 trillion. Meanwhile, the realization of new contracts had reached 69.79% of the FY22E target of IDR17.48 trillion. ADHI is currently traded at the level of 72.83x/0.43x PER/PBV.
3. TRIN IJ targeted revenues in FY22E and FY23F of IDR1 trillion and IDR1.16 trillion, respectively. Meanwhile, the estimated net profit for FY22E is IDR153 billion and FY23F is IDR279 billion. As of 1H22, marketing sales were recorded at IDR382.05 billion (Kontan). MNCS Comment: Marketing sales grew +22.13% YoY from the 1H21 gain of IDR312.82 billion. Meanwhile, with a marketing sales target of IDR1 trillion in FY22E, the realization in 1H22 had only reached 38.21%. We see that the company's target will be supported by the Sequoia Hills (Sentul), Holdwell Business Park (Lampung) and TanaMori (Labuan Bajo) projects. Currently, TRIN is traded at 3.06x PBV.
IHSG Updates
JCI strengthened by +1.15% to 6,736.09 on Tuesday (19/07), followed by net foreign buy which reached IDR58.03 billion. All sectors strengthened and pushed up the index, led by the energy sector (+3.46%) followed by the raw materials sector (+3.41%). The strengthening of the index occurred amid the weakening of the majority of Asian bourses, while the increase in global commodity prices such as CPO (+9.95%) and WTI crude oil (+5.13%) as of 18-Jul, accompanied by expectations of the BI7DRR benchmark interest rate at Jul-22 which was increased by Bank Indonesia (BI) were responded positively by investors. On the other hand, the Rupiah exchange rate closed higher at IDR14,978/USD. We estimate that the JCI will move in the price range of 6,640-6,757. Today's recommendation: AALI, ASII, MDKA, PTBA.
Corporate Action
IPO: AXIO (IDR140/share)
RUPS: BCAP, BABP
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