Global Market Highlights
The DJIA rose by +0.12% on Thursday (29/02), followed by S&P 500 (+0.52%) and Nasdaq (+0.90%). Wall Street successfully rebounded as optimism increased regarding the slowdown in future inflation. This was driven by the release of the Core PCE Price Index data in Jan-2024, growing +0.4% MoM, in line with consensus expectations. Additionally, the release of Pending Home Sales data in Jan-2024 (-4.9% MoM), led to a decrease in UST yields to 4.25%, serving as a catalyst for the indices. Today the market will be looking forward to several data releases such as: 1) China NBS Manufacturing PMI Feb-2024; 2) EU Inflation Rate Flash Feb-2024; 3) US ISM Manufacturing PMI Feb-2024.
Domestic Update
Bank Indonesia projects that Islamic Economy and Finance (Eksyar) will grow by 4.7%-5.5% YoY in FY24E, after successfully achieving positive growth in FY23 and securing the third position after Malaysia and Saudi Arabia in the State of The Global of Islamic Economic (SGIE). MNCS Comment: We note that the positive growth of Eksyar was primarily driven by the performance of the Halal Value Chain (HVC) sector, which supports ~23% of the national economy with a growth of 3.93% YoY in FY23. Bank Indonesia's expectation for the growth of Eksyar is supported by the assumption of an increase in Islamic banking financing, estimated to grow by 10%-12% YoY in FY24E.
Company News
1. DSNG IJ reported a total revenue of IDR9.5 trillion in FY23 or declined -1.4% YoY with a net profit of IDR841.7 billion or dropped -30.2% YoY (Kontan). MNCS Comment: We note that the CPO segment contributed 88% to revenue (growing 2.9% YoY), supported by an increase in sales volume of 4% YoY and higher ASP (IDR11.4 million/ton vs. IDR11.2 million/ton in FY22). Apart from that, the company recorded revenue from the renewables segment of IDR70.4 billion from sales of kernel shell by-products. On the other hand, cost of goods sold increased 7.0% YoY due to fertilizer prices which were still high at the time of purchase. Currently DSNG is trading at 6.50x/0.63x PER/PBV.
2. SIMP IJ reported a net profit decline of -38.5% YoY to IDR736.4 billion in FY23 (vs IDR1.2 trillion in FY22) (Kontan). MNCS Comment: The decrease in net profit aligns with a -10.1% YoY drop in revenue to IDR16.0 trillion (vs IDR17.8 trillion in FY22). It is noteworthy that the vegetable oil and fat segment contracted by -10.8% YoY to IDR11.3 trillion (vs to IDR12.7 trillion in FY22). Additionally, a decline in other operating income (-45.4% YoY) also impeded profitability. SIMP is currently trading at 7.73x/0.33x PER/PBV.
3. INPP IJ announced a capex budget of IDR1 trillion for FY24 (Emiten News). MNCS Comment: The company increased their capex budget as they plan to use it in enlarging their portfolio in Semarang, Bandung, Jakarta, and Balikpapan, while the residential project in Jakarta is expected to finalise in Dec-2024. We view the projects could potentially become a positive contributor to the company’s performance, considering the developments are strategically planned to attract customers/tenants. The company booked significant +53.82% YoY revenue growth in 9M23, followed by impressive +6,027.36% YoY net income growth and 11.23% NPM. INPP is currently trading at 7.09x/2.04x PER/PBV.
IHSG Updates
The JCI weakened by -0.17% to 7,317.11 on Thursday (29/02), followed by a net foreign sell of reaching IDR640.27 billion. Most sectors closed in the red zone, hampering the index, led by the technology sector (-1.90%) followed by the property sector (-0.75%). On the other hand, sectors that experienced gains were led by the basic industry sector (+1.37%) followed by the infrastructure sector (+0.58%). The index consolidated amidst mixed movements in the Asian market, as investors were on the watch for last night’s PCE inflation readings and in general still await a firmer policy stance from the Fed. The Rupiah closed lower at IDR15,715/USD. We estimate the IHSG will move within the price range of 7,279-7,337. Today's Recommendations: CPIN, ENRG, GOTO, HOKI.
Corporate Actions
AGMS: BBRI, MEGA
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