MNCS Morning Navigator

11 Juni 2024

MNCS Morning Navigator June 11, 2024

Global Market Highlights
The DJIA rose slightly by +0.18% on Monday (10/06), followed by the S&P500 (+0.26%) and Nasdaq (+0.35%). Wall Street strengthened, supported by expectations of a slowdown in inflation in May-2024. Consensus anticipates that core inflation will slow to +3.5% YoY (vs the Apr-2024 realization of +3.6% YoY). Meanwhile, headline inflation is expected to slow to +0.1% MoM (vs +0.3% MoM in April-2024). Today the market will be looking forward to several data releases such as: 1) Indonesia Retail Sales YoY Apr-2024; 2) UK Unemployment Rate Apr-2024; 3) US Redbook JUN/08.

Domestic Update
Bank Indonesia recorded the Consumer Confidence Index (CCI) in May-2024 at the level of 125.2. MNCS Comment: The CCI in May-2024 fell by -1.9% MoM/-2.4% YoY, lower than the Apr-2024 realization of 127.7 but still in the optimistic zone. We view the monthly decline as likely influenced by post-Lebaran festive normalization. Additionally, the decrease is attributed to the Current Economic Condition Index (CECI), which fell to 115.4 points (vs 119.4 in Apr-2024), and the Consumer Expectation Index (CEI), which decreased to 135.0 points (vs 136.0 in Apr-2024). Looking ahead, we expect the CCI to maintain its optimistic zone despite potential continued declines amid the higher-for-longer scenario.

Company News
1. IPCC IJ will distribute dividends for the 2023 fiscal year amounting to IDR152.7 billion, or equivalent to IDR83.97 per share with a payout ratio of 80% (Kontan). MNCS Comment: Factoring in the interim dividend distribution in Dec-2023 of IDR21.7 per share, the total final dividend is recorded at IDR62.27 per share. We estimate a potential dividend yield of approximately ~9%. The DPS realization in FY23 is higher than in FY22 (IDR62.3 per share), in line with a net profit increase of +18.0% YoY. IPCC is currently trading at 8.29x/1.01x PER/PBV.
2. SMRA IJ recorded marketing sales of IDR405.9 billion in May-2024 (Kontan). MNCS Comment: This performance translated into +43%/+79.7% MoM/YoY growth. Up to May-2024, the marketing sales amounted to IDR1.5 trillion (+11.7% YoY), or equivalent to 30% of the total annual target at IDR5 trillion for FY24E. The houses segment constituted 82.4% of the total presales, followed by the apartment (8.1%), the land plots (5%), and the shophouses (3.6%). In 1Q24, the company reported a +42.3% YoY rise in revenue and +62.5% YoY net income, supported by both property development (+58.3% YoY) and investment properties (+21.5% YoY) segments. SMRA is currently trading at 19.64x/0.68x PER/PBV.
3. RISE IJ plans to launch 21 new projects in FY24E (Emiten News). MNCS Comment: Aimed as key initiatives to strengthen its position in the property industry, these new projects include mixed concepted developments (residential, office, hospitality and commercial needs in one location) in Surabaya and other potential high growth areas. We view this aggressive expansion to deliver positive support to the company in the future, given that RISE recorded -7.4% YoY in revenue and -44.7% YoY in net income, influenced by -31.3% YoY fell in the real estate segment. RISE is currently trading at 4.37x PBV.

IHSG Updates
The JCI rebounded by +0.34% to 6,921.55 on Monday (10/06), despite a net foreign sell of IDR296.06 billion. The infrastructures sector led the gain (+0.82%) and was followed by the healthcare sector (+0.31%). Meanwhile, the corrected sectors were led by the technology sector (-2.04%) and followed by the energy sector (-1.38%). The index strengthened amidst the drop of consumer confidence to 125.2 bps in May-2024 (vs 127.7/128 bps in Apr-2024/Forecast). Investors seem to wait and see for the retail sales data reading today. The other Asian markets closed mixed while investors are digesting the slower-than-expected GDP growth rate in Japan. The Fed’s interest rate cut decision will remain in the market spotlight this week. The Rupiah closed lower at IDR16,280/USD. We estimate that the JCI will move in the price range of 6,878-6,948. Today's recommendations: BBNI, BBRI, MAPI, SMRA.

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