Global Market Highlights
The DJIA rose +1.03% on Thursday (28/07), followed by the S&P500 (+1.21%) and the Nasdaq (+1.08%). Wall Street's strengthening occurred amid the release of US GDP data in 2Q22 which contracted -0.9% QoQ, while the Fed's statement regarding the plan to increase interest rates has slown down and the decline in US T-note 10Y yield to a level of 2.67% became the driving force for Wall Street. Today, the market will be looking toward several data releases such as: 1) US PCE Price Index YoY; 2) US Core PCE Price Index YoY; 3) US Michigan Consumer Sentiment Final.
Domestic Update
• The total balance of regional governments deposited in banks reached IDR220.95 trillion as of Jun-22 (+10.06% MoM). MNCS Comment: Slow government spending will likely reduce budget effectiveness in creating a multiplier effect for the economy, therefore it needs to be encouraged in order to maintain recovery & growth momentum.
• Furthermore, the national Covid-19 daily rate had increased by 6,353 active cases (28/07).
Company News
1. ASII IJ posted +33.80% YoY revenue growth in 1H22 to IDR143.69 trillion (vs IDR107.39 trillion in 1H21). Meanwhile, net profit grew +105.77% YoY to IDR18.17 trillion (vs IDR8.83 trillion in 1H21) (Kontan). MNCS Comment: The increase in revenue was supported by growth in the heavy equipment sales segment (62.01% YoY) followed by the automotive segment (+27.45% YoY), in line with the momentum of the commodity boom and the relaxation of PPnBM on motor vehicles. Gross profit grew +46.92% pushing GPM up to 23.35% (vs 21.26% in 1H21). NPM was recorded at 12.65% (vs 8.22% in 1H21). If the return on investment in GOTO is not included, net profit will grow +63.76% YoY to IDR14.46 trillion. ASII is currently traded at 8.93x/1.37x PER/PBV.
2. UNTR IJ recorded +62% YoY revenue growth in 1H22 to IDR60.4 trillion. Meanwhile, net profit grew +105.77% YoY to IDR18.17 trillion (vs IDR8.83 trillion in 1H21) (Kontan). MNCS Comment: Revenue growth in line with the increase in revenue from construction machinery segment (+93.66% YoY) and coal mining (+136.10% YoY). UNTR also recorded Komatsu heavy equipment sales in 1H22 grew +111.09% YoY to 2,873 units (vs 1,361 units in 1H21). The company's entire margin increased, with GPM, OPM and NPM rising by 27.32%, 23.53% and 17.13%, respectively (vs 21.51%, 16.18% and 12.10% in 1H21). Currently, UNTR is traded at 6.67x/1.59x PER/PBV.
3. HMSP IJ recorded revenue growth in 1H22 of +17.35% YoY to IDR53.5 trillion (vs IDR45.52 trillion in 1H21). Meanwhile, net profit fell -9.67% YoY to IDR3.04 trillion (vs IDR4.13 trillion in 1H21) (CNBC Indonesia). MNCS Comment: Revenue growth was supported by higher sales volume which grew +5.67% YoY to 42.28 billion sticks in 1H22 (vs 40.01 billion sticks in 1H21). Excise tax expense increased +28.00% YoY resulting in a decrease in gross profit -9.66% YoY and GPM decreased to 14.92% (vs 18.55% in 1H21). Meanwhile, NPM was recorded at 5.70% (vs 8.68% in 1H21). Currently HMSP is traded at 9.59x/0.93x PER/PBV.
IHSG Updates
JCI rose +0.85% to 6,956.82 on Thursday (28/07), followed by net foreign sell which reached IDR21.71 billion. The majority of sectors experienced strengthening and boosted the index rate, led by the raw materials sector (+2.45%) followed by the non-cyclical sector (+1.94%). On the other hand, the weakening sectors were led by the health sector (-1.41%) followed by the non-cyclical sector (-1.24%). The strengthening of the index was in line with the Global and Asian markets. The Fed's decision to raise interest rates (FFR) was in line with market participants' expectations, namely +75 bps to 2.25%-2.50%, and was responded positively by the investors. The Fed assured that the employment field was still wide and the economic situation was still far away from recession, became the driver of the index rate. Furthermore, the Fed also considered future interest rate hikes will tend to slow down. On the other hand, the Rupiah exchange rate closed higher at IDR14,933/USD. We estimate that the JCI will move in the price range of 6,850-7,010. Today's recommendation: BBKP, BBTN, ISAT, MPMX.
Corporate Action
Cum Dividend: SMKL (IDR12/share), SIMP (IDR13/share), LSIP (IDR51/share)
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