Global Market Highlights
DJIA strengthened +1.05% on Thursday (02/03), followed by the S&P500 (+0.76%) and the Nasdaq (+0.73%). Wall Street closed higher as the Atlanta Fed's dovish tone looks to increase the FFR by +25 bps at the FOMC Mar-2023, and halt gains in mid to late summer, giving investors reassurance and easing speculation. Today, the market will be looking toward several data releases such as: 1) US ISM Non-Manufacturing PMI Feb; 2) US S&P Global Composite PMI Final Feb; 3) US S&P Global Services PMI Final Feb.
Domestic Update
• The Ministry of Trade aims to issue a Trade Regulation that requires the export of CPO through futures exchanges starting in Jun-2023. MNCS Comment: As a producer of 59% of total global palm oil production, it is only natural that Indonesia has its own reference price and does not refer to Malaysia or Rotterdam prices. Through this mechanism, export quotas will be set in accordance with the fulfillment of domestic demand in order to maintain domestic CPO price certainty.
Company News
1. ADMR IJ posted net profit growth of +114.2% YoY to USD332.2 million in FY22 (vs USD155.1 million in FY21) (Kontan). MNCS Comment: Net profit growth supported by revenue increase +97.3% YoY to USD908.1 million (vs USD460.2 million in FY21), as ASP increase was accompanied by volume +42%/+39% YoY respectively. We anticipate an increase in production volume going forward, in line with the Muara Tuhup port project which can improve the distribution process and support fuel facilities. Currently, ADMR is traded at the level of 10.28x/6.40x PER/PBV.
2. ELSA IJ posted a net profit in FY22 of IDR378.1 billion, or grew +247.7% YoY (vs IDR108.7 billion in FY21) (Kontan). MNCS Comment: The increase in net profit was supported by an increase in revenue by +51.2% YoY to IDR12.3 trillion (vs IDR8.1 trillion in FY21), driven from distribution services segment (+59% YoY) and integrated upstream oil and gas services (+32% YoY). Although GPM fell -0.52 ppt YoY to 7.4%, the gain on foreign exchange underpinned the net profit margin which increased +1.7 ppt YoY to 3.1% (vs 1.3% in FY21). Currently, ELSA is traded at the level of 6.41x/0.59x PER/PBV.
3. PTRO IJ realized the digitization of mining operations through the launch of the Minerva Digital Platform at the PT Indo Bara Pratama (IBP) East Kalimantan coal mining project (Kontan). MNCS Comment: We view positively the company's digitalization process which can increase mining productivity, through a system that quickly informs operational constraints so that they can be addressed properly and maximize equipment optimization. This is in line with the company's strategy to further diversify its business and make it one of the advantages. Currently, PTRO is traded at the level of 7.74x/1.10x PER/PBV.
IHSG Updates
JCI strengthened +0.18% to 6,857.42 on Thursday (02/03), followed by net foreign buy reaching IDR113.00 billion. The majority of sectors experienced strengthening and drove the index rate, led by the industrial sector (+1.03%) followed by the energy sector (+1.03%). On the other hand, the sectors that experienced weakness were led by the transportation sector (-1.76%) followed by the raw materials sector (-1.42%). The index's gain occurred amidst the weakening of Asian stock exchanges, where investors were watching issuer's earnings releases, and looked positively at Japan's consumer confidence data in Feb-2023 which remained solid at 31.1 (vs 31 in Jan-2023). On the other hand, the Rupiah exchange rate closed lower at the level of IDR15,280/USD. We estimate that the JCI will move in the price range of 6,843-6,880. Today's recommendation: CTRA, ESSA, PNBS, SIDO.
Corporate Actions
Cum Stock Split: MIDI (1:10)
IPO: BDKR (IDR200/share)
RUPS: BCIC
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