Global Market Highlights
The DJIA rose by +0.61% on Tuesday (12/03), followed by S&P 500 (+1.12%) and Nasdaq (+1.54%). Wall Street surged following the release of inflation data in Feb-2024, which remained relatively stable despite still being above the consensus target. Headline inflation in Feb-2024 recorded at +3.2% YoY, higher than the realization in Jan-2024 and the consensus of +3.1% YoY. Meanwhile, core inflation in Feb-2024 stood at +3.8% YoY, down from the realization in Jan-2024 (+3.9% YoY), but still above the consensus expectation of +3.7% YoY. Today, the market will await several data releases, including: 1) US EIA Crude Oil Stocks Change 8-Mar; 2) UK GDP MoM Jan-2024; 3) China Outstanding Loan Growth YoY Feb-2024.
Domestic Update
Airlangga Hartarto, the Coordinating Minister of Economic Affairs, confirms that the implementation of the 12% VAT hike will take effect in 2025. MNCS Comment: The rise in the VAT rate is in line with the government regulation, UU No 7 Year 2021 concerning the Harmonization of Tax Regulations, which states that the VAT rate stands at 11% which has been implemented since April 1st, 2022 and will increase to 12% no later than January 1st, 2025. The Government of Indonesia claims that this tax rate is still below the world average of VAT at the level of 15%. It is anticipated that the VAT rate hike will enhance state revenue and fiscal stability.
Company News
1. TAPG IJ recorded a decline in net profit of -46.1% YoY to IDR1.6 trillion in FY23 (Kontan). MNCS Comment: The decline in net profit was in line with revenue decreasing by -10.9% YoY, in line with lower ASP and high fertilizer prices. When compared with CPO issuers under our coverage, TAPG's performance decline was the largest vs AALI (-38.8% YoY), DSNG (-30.4% YoY) and LSIP (-26.5% YoY). TAPG is currently trading at 7.10x/1.05x PER/PBV.
2. PRDA IJ recorded a decrease in net profit by -30.1% YoY to IDR259.9 billion in FY23 (vs IDR371.6 billion in FY22) (Emiten News). MNCS Comment: We observed this decline in net profit alongside relatively flat revenue (+1.9% YoY) amid a COGS increase of +5.7% YoY. Additionally, OPEX increased by +14.6% YoY, burdening the operational profit performance, which decreased by -31.0% YoY to IDR308.5 billion (vs IDR447.0 billion in FY22). NPM was recorded at 11.7% (vs 17.0% in FY22). PRDA is currently trading at 15.62x/1.72x PER/PBV.
3. CTRA IJ aims for IDR11.1 trillion pre-sales income in FY24 (Kontan). MNCS Comment: Management is optimistic to increase the target, after successfully earning marketing sales at IDR10.2 trillion (+24% YoY) in FY23, surpassing the target of IDR9.8 trillion. We view the target is supported with the DTP VAT incentives for units below IDR2 billion as boosters, where the sales of property within this value dominated 47% of the total sales in FY23. CTRA is currently trading at 19.38x/1.04x PER/PBV.
IHSG Updates
The JCI was closed on Tuesday (12/03) to commemorate Nyepi Day. Regionally, investors’ appetite remains solid despite being overshadowed by a rise in the 10-yr UST yield following strong inflation data, as the MSCI Asia ex-Japan index closed +1.0% higher on Tuesday and the correction of the Nikkei 225 index slowed ahead of the BoJ's board of governors meeting. Investors will further monitor Indonesia’s Consumer Confidence Index data for Feb-2024, which is expected to be stronger. The Rupiah closed stronger at IDR15,653/USD. We estimate that the JCI will move in the price range of 7,327-7,451. Today's recommendations: AMRT, ARTO, ASII, JPFA.
Corporate Actions
AGMS: BEKS
EGMS: OKAS
Cum Dividend: BBRI (IDR234/share), MEGA (IDR209/share)
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