Global Market Highlights
DJIA fell -1.07% on Friday (10/03), followed by the S&P500 (-1.45%) and the Nasdaq (-1.76%). Wall Street continued to weaken as the release of Non Farm Payrolls data in Feb-2023 which was recorded at 311k, or above the consensus at 205k, indicating a still solid labor market, which is feared to further open up opportunities for The Fed to raise its benchmark interest rate from what was anticipated by market. Today, the market will be looking toward several data releases such as: 1) US Consumer Inflation Expectations Feb; 2) US 3-Month Bill Auction; 3) US 6-Month Bill Auction.
Domestic Update
• Based on transaction data March 6 – 9 2023, non-residents sold IDR2.67 trillion net on the domestic financial market (net sell of IDR3.03 trillion on the SBN market and net buy of IDR0.36 trillion on the stock market). MNCS Comment: Rebalancing activity on the stock market to SBN is still occurring along with attractive risk & return where the yield on the 10Y SBN is 6.95% (vs JCI -0.82% YTD).
Company News
1. BYAN IJ recorded net profit growth of +79.6% YoY in FY22 to USD2.2 billion (vs USD1.2 billion in FY21) (Kontan). MNCS Comment: The increase in net profit was supported by revenue growth of +64.9% YoY to USD4.7 billion (vs USD2.9 billion in FY21), or above management's estimate of USD3.2-3.4 billion. Margins were recorded as expansive, where the company's GPM/OPM in FY22 were recorded at 67.2%/62.6% respectively (vs 61.2%/58.8% in FY21). Currently, BYAN is being traded at the level of 18.14x/20.86x PER/PBV.
2. WEGE IJ posted a net profit of IDR230.1 billion, or grew +7.6% YoY (vs IDR213.9 billion in FY21) (Kontan). MNCS Comment: Increase in net profit amidst a decline in revenue (-25.3% YoY) in line with; 1) COGS decrease (-26.2% YoY); 2) decrease in financial expenses (-11.1% YoY); 3) decrease in final tax burden (-31.3% YoY); and 4) increase in other income (+19.9% YoY). Margins were expansive, with GPM/NPM being 9.6%/9.7% respectively (vs 8.5%/6.8% in FY21). Currently, WEGE is traded at the level of 5.91x/0.64x PBV.
3. SLIS IJ will conduct a rights issue with a target of up to IDR147 billion, which will be intended for additional capital for its entity, PT Champion Bike, for the development of the EV segment. MNCS Comment: We view positively the company's efforts to increase capital which can add to the product portfolio and improve future performance, especially where the company is a producer that receives subsidies for purchasing 2W EVs with a minimum TKDN of 40%. Currently, SLIS is traded at the level of 11.10x/1.62x PER/PBV.
IHSG Updates
JCI weakened -0.51% to 6,765.30 on Friday (10/03), followed by net foreign buy reaching IDR37.24 billion. All sectors experienced weakening and suppressed the index rate, led by the transportation sector (-1.47%) followed by the technology sector (-1.33%). The weakening of Wall Street and Asian stock exchanges also weighed on the index, where investors sold off to avoid market volatility ahead of the announcement of US inflation data in Feb-2023 (14/03), which could influence The Fed's decision on the FOMC Mar-2023. On the other hand, the Rupiah exchange rate closed lower at the level of IDR15,450/USD. We estimate that the JCI will move in the price range of 6,742-6,784. Today's recommendation: AALI, BBRI, ESSA, TOWR.
Corporate Actions
RUPS: BBRI
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