Global Market Highlights
DJIA strengthened by +0.28% on Monday (25/07), followed by the S&P 500 (+0.13%) while the Nasdaq (-0.43%). Wall Street closed mixed with the driving catalyst came from the release of positive 2Q22 financial reports from the energy sector. Meanwhile, technology-based stocks corrected as they waited for the release of performance data for Apple, Alphabet, Amazon, Meta, and Microsoft, where it is feared that the release of the performances of these tech companies is less than satisfactory, as experienced by the Snap company. On the other hand, the release of data on the Chicago Fed National Activity Index Jun-22 which contracted -0.19 points or stuck at the same level in May-22. Today, the market will be looking toward several data releases such as: 1) US CB Consumer Confidence; 2) US New Home Sales MoM; 3) US House Price Index MoM.
Domestic Update
• BI plans to sell SBN with a tenor of <5 years worth IDR70 trillion in the secondary market. MNCS Comment: We view that BI's policy is a further step to normalize banking liquidity after the increase in the Statutory Reserves. On the other hand, the sale of SBN by BI will have an impact on increasing yields, making SBN valuations more attractive.
• Furthermore, the national Covid-19 daily rate had increased by 4,048 active cases (25/07).
Company News
1. AKRA IJ recorded a revenue growth in 1H22 of +106.51% YoY to IDR22.11 trillion (vs IDR10.71 trillion in 1H21). Meanwhile, net profit grew +51.94% YoY to IDR927.41 billion (vs IDR610.36 billion in 1H21) (Kontan). MNCS Comment: The increase in revenue was supported by revenue growth in the trading and distribution segment +119.37% YoY and manufacturing +58.15% YoY, in line with the increasing demand for basic chemicals and petroleum products from customers, especially in mining and plantation companies, which was in line with the commodity boom. Meanwhile, COGS rose +113.14% YoY and pushed GPM down to 7.32% (vs 10.20% in 1H21). OPM and NPM decreased to 5.39% and 4.32%, respectively (vs 7.14% and 5.14% in 1H21) in line with higher operating expenses +20.20% YoY, foreign exchange loss and reduced financial income -32.76% YoY. AKRA is currently traded at 12.84x/2.25x PER/PBV.
2. CMRY IJ recorded a +98% YoY revenue growth in 1H22 to IDR3.13 trillion (vs IDR1.58 trillion in 1H21). Meanwhile, net profit grew +59.4% YoY to IDR581.11 billion (vs IDR364.48 billion in 1H21) (CNBC Indonesia). MNCS Comment: The increase in revenue was supported by increases in all segments, with dairy products +72.42% YoY and consumer foods +149.65% YoY. However, COGS increased significantly +115.55% YoY in line with the high price of raw materials and reduced overall margins, where in 1H22 the company's GPM, OPM and NPM were recorded at 43.29%, 22.26% and 18.55%, respectively (vs 47.89%, 29.42% and 23.04% in 1H21). CMRY is currently traded at 30.11x/7.32x PER/PBV.
3. TAPG IJ posted a +61.6% YoY sales growth in 1H22 to IDR4.61 trillion (vs IDR2.85 trillion in 1H21). Meanwhile, net profit grew +339% YoY to IDR1.78 trillion (vs IDR405.89 billion) (CNBC Indonesia). MNCS Comment: Revenue growth was supported by high ASP accompanied by increased volume, where FFB nucleus production grew +10.2% YoY while plasma FFB +4.4% YoY. Furthermore, CPO production also increased to 492,870 tons or grew +7.5% YoY. The company's margin grew significantly indicating maintained efficiency, where in 1H22 the company's GPM, OPM and NPM were recorded at 42.50%, 36.57% and 38.57%, respectively (vs 23.31%, 15.18% and 14.21% in 1H21). The increase in NPM was supported by the profit from JV which increased by +207.80% YoY. Currently, TAPG is traded at the level of 3.82x/1.55x PER/PBV.
IHSG Updates
JCI weakened by -0.41% to 6,858.41 on Monday (25/07), followed by net foreign sell which reached IDR272.23 billion. The majority of sectors weakened and weighed on the index's pace, led by the technology sector (-3.25%) followed by the transportation sector (-1.91%). On the other hand, the strengthening sector was led by the energy sector (+0.95%) followed by the infrastructure sector (+0.67%). The index's decline was in line with other Asian bourses. Investors tend to wait and see ahead of the release of the US benchmark interest rate (FFR) scheduled for Thursday this week. On the other hand, the Rupiah exchange rate closed higher at IDR14,998/USD. We estimate that the JCI will move in the price range of 6,757-6,900. Today's recommendation: DEWA, HRUM, INDF, PTPP.
Corporate Action
IPO: HATM (IDR160/share)
RUPS: TNCA, IBOS
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