Global Market Highlights
DJIA closed flat +0.02% on Wednesday (01/03), while the S&P500 (-0.47%) and Nasdaq (-0.66%). Wall Street closed mixed as UST yields increased, following the hawkish tone of The Fed calling for an increase in its benchmark interest rate to a level of >5%. Today, the market will be looking toward several data releases such as: 1) US Initial Jobless Claims Feb 25; 2) US Continuing Jobless Claims Feb 18; 3) Japan Consumer Confidence Feb.
Domestic Update
• Along with the release of stable inflation rate, strengthening public demand and purchasing power followed by a rise in employment, Indonesia’s S&P PMI was reported at 51.2 in Feb-2023 (vs 51.3 in Jan-2023). MNCS Comments: We see the persistently expansive PMI to be supported by strong domestic demand ahead of the month of Ramadan and Eid al-Fitr, in line with the Feb-2023 Industrial Confidence Index which was expansive at 52.32 (vs 51.54 in Jan-2023).
Company News
1. SIMP IJ posted net profit growth of +21.0% YoY to IDR1.2 trillion in FY22 (vs IDR1.0 trillion in FY21) (Kontan). MNCS Comment: The company’s net profit growth amidst revenue decline (-9.5% YoY) was supported by: 1) OPEX decline -22.5% YoY; 2) reduced effective tax rate to 37.0% (vs 41.3% in FY21). Currently, SIMP is traded at the level of 5.64x/0.41x PER/PBV.
2. LSIP IJ posted net profit growth of +4.4% YoY to IDR1.0 trillion in FY22 (vs IDR992.4 billion in FY21) (Emiten News). MNCS Comment: Net profit growth was supported by: 1) slightly increased revenue +1.3% YoY; 2) OPEX drop -53.7% YoY; 3) increase in financial income +35.6% YoY. Currently, LSIP is traded at the level of 7.16x/0.69x PER/PBV.
3. EXCL IJ collaborates with Cisco to improve network capabilities, end-to-end automation and routed optical networking as the transformation to 5G to streamline IoT connectivity. This has the potential for power efficiency of up to 40%-70% for equipment (Kontan). MNCS Comment: We look positively at this collaboration which can improve the quality of data services for customers, thus encouraging better EXCL performance going forward. Currently, EXCL is traded at the level of 24.38x/1.05x PER/PBV.
IHSG Updates
JCI closed relatively flat +0.02% to 6,844.94 on Wednesday (1/03), followed by net foreign buy reaching IDR847.92 billion. The majority of sectors experienced weakness and weighed on the index, led by the transportation sector (-1.70%) followed by the property sector (-0.69%). On the other hand, sectors that experienced strengthening were led by the financial sector (+0.59%) followed by the technology sector (+0.58%). Investors were watching the Feb-2023 inflation rate of +5.47% YoY, or above the consensus at +5.44% YoY. On the other hand, the Rupiah exchange rate closed higher at the level of IDR15,235/USD. We estimate that the JCI will move in the price range of 6,804-6,864. Today's recommendation: INCO, INDY, TLKM, WOOD.
Corporate Actions
RUPS: BPFI
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