Global Market Highlights
DJIA fell -0.71% on Tuesday (28/02), followed by the S&P500 (-0.30%) and Nasdaq (-0.10%). Wall Street weakened where investors responded negatively to the release of the Feb-2023 consumer confidence data which fell to a level of 102.9, or below the Jan-2023 realization/consensus of 106/108.5, respectively. Today, the market will be looking toward several data releases such as: 1) US ISM Manufacturing PMI Feb; 2) Germany Unemployment Rate Feb; 3) Germany Inflation Rate YoY Prel Feb.
Domestic Update
• As of March 1, 2023, the price of Pertamax and Pertamax Turbo fuels has been increased by IDR500 and IDR250 for DKI Jakarta, Banten, West Java, Central Java, Yogyakarta and East Java. MNCS Comment: We see that the increase in fuel prices accompanied by a weakening of the Rupiah due to the Fed’s hawkish sentiment will lead to an increase in cost push inflation which has the potential to weaken people's purchasing power, and will be followed by an increase in the prices of goods and services especially ahead of an surge in demand in the nearing Ramadan month.
Company News
1. UNTR IJ posted net profit growth of +104.3% YoY to IDR21.0 trillion in FY22 (vs IDR10.3 trillion in FY21) (Emiten News). MNCS Comment: Net profit growth supported by revenue increase +55.6% YoY to IDR123.6 trillion (vs IDR79.5 trillion in FY21), as Komatsu sales volume increased +86% YoY to 5,753 units (vs 3,088 units in FY21) ). Cost efficiency was seen along with expansive margins, where GPM/OPM was 28.1%/23.6% respectively (vs. 24.7%/18.7% in FY21). Currently, UNTR is traded at the level of 4.95x/1.23x PER/PBV.
2. CTRA IJ targets to acquire marketing sales of IDR8.9 trillion in FY23E (Market Bisnis). MNCS Comment: Target marketing sales to grow +8.5% YoY from the realization in FY22 of IDR8.2 trillion. We are conservative towards the target set by the company as we are exposed to an increase in the benchmark interest rate which also raises mortgage rates and the end of incentives. It was noted that residential property sales in the primary market in 4Q22 began to experience a slowdown, namely +4.6% YoY (vs +13.6% YoY in 3Q22). Currently, CTRA is traded at the level of 9.04x/1.01x PER/PBV.
3. HEAL IJ targets +18% YoY revenue growth to IDR5.9 trillion in FY23E (Market Bisnis). MNCS Comment: We view that this target will be supported by a capex allocation of IDR1-1.2 trillion for the expansion of 3-4 new hospitals, resulting in the total hospital operations to reach 47-48 units. In addition, along with the reduction in Covid-19 cases, the company can focus on non-Covid services which are expected to boost the company's performance this year. Currently, HEAL is traded at the level of 7.32x/2.21x PER/PBV.
IHSG Updates
JCI weakened -0.17% to 6,843.24 on Tuesday (28/02), followed by net foreign sell reaching IDR1.06 trillion. The majority of sectors experienced weakening and weighed on the index, led by the infrastructure sector (-0.96%) followed by the non-cyclical sector (-0.62%). On the other hand, sectors that experienced strengthening were led by the industrial sector (+3.46%) followed by the transportation sector (+2.83%). The weakening of the index occurred as investors tended to wait and see ahead of the release of macroeconomic data for Feb-2022. On the other hand, the Rupiah exchange rate closed higher at the level of IDR15,250/USD. We estimate that the JCI will move in the price range of 6,804-6,864 pending the release of S&P Global Manufacturing PMI Feb, Inflate Rate Feb, Core Inflation Rate YoY Feb, and Tourist Arrivals YoY Jan data. Today's recommendation: ASLC, PGAS, SMGR, SMRA.
Corporate Actions
IPO: HILL (IDR1,250/share)
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