MNCS Morning Navigator

20 Maret 2023

MNCS Morning Navigator March 20, 2023

Global Market Highlights
DJIA fell -1.19% on Friday (17/03), followed by the S&P500 (-1.10%) and the Nasdaq (-0.74%). Wall Street weakened, where investors were watching the development of the mini liquidity crisis at SVB and Signature Bank. In addition, fears of a recession have resurfaced, in line with the release of Industrial Production data in Feb-2023 which contracted -0.2% YoY. Today, the market will be looking toward several data releases such as: 1) US 6-Month Bill Auction; 2) Germany PPI YoY Feb; 3) Germany 12-Month Bubill Auction.

Domestic Update
• Demand for corporate financing and new lending by banks increased, reflected in the growth in weighted net balances (WNB) of 9.4% and 66.7%, respectively. MNCS Comment: The growth in demand for financing and new credit distribution reflects the improving sentiment of the projected economy and credit risk going forward, as well as being supported by the reopening from China and the improving outlook from the US and Europe.

Company News
1. BRMS IJ recorded a decrease in net profit -79.4% YoY to USD 14.2 million (vs USD 69.1 million in FY21) (Emiten News). MNCS Comment: The decline in net profit was due to the high base in LK 2021 along with other income worth USD118.4 million, most of which was contributed by the accounts receivable recovery. BRMS posted revenue/operating profit performance of 10.1% YoY/+23.2% YoY respectively in FY22. Currently, BRMS is traded at the level of 97.26x/1.19x PER/PBV.
2. AGII IJ targets a capex allocation of up to IDR600 billion in FY23 (Kontan). MNCS Comment: We estimate capex to increase 2x (vs IDR300 billion in FY22) in line with business development, which we expect through factory expansion in Batang, as well as expansion of distribution channels. Currently, AGII is traded at the level of 64.05x/1.70x PER/PBV.
3. MTEL IJ has the potential to acquire 2,600 towers owned by Telkomsel, and distribute cash dividends of 70% payout ratio of FY22 net profit (Emiten News). MNCS Comment: We view the acquisition positively as it can strengthen the company's footprint. In addition, we estimate the size of the dividend for the FY22 book at IDR15 per share (vs IDR11.57 per share in FY21), or offer a dividend yield of up to 2%. Currently, MTEL is traded at the level of 35.56x/1.88x PER/PBV.

IHSG Updates
JCI strengthened +1.71% to 6,678.24 on Friday (17/03), followed by net foreign buy reaching IDR1.01 trillion. Almost all sectors experienced strengthening and boosted the index rate, led by the energy sector (+3.44%) followed by the transportation sector (+2.88%). On the other hand, the sector that experienced weakness was the technology sector (-0.09%). The strengthening of the index was in line with Asian stock exchanges and Wall Street, where investors responded positively to the reduced US banking liquidity crisis sentiment, in line with investment efforts by several stakeholders as a buffer. On the other hand, the Rupiah exchange rate closed higher at the level of IDR15,345/USD. We estimate that the JCI will move in the price range of 6,596-6,620. Today's recommendation: BEST, INDF, PGAS, RALS.

Corporate Actions

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