Global Market Highlights
The DJIA declined by -1.04% on Tuesday (05/03), followed by S&P 500 (-1.02%) and Nasdaq (-1.65%). Wall Street went down following disappointing macroeconomic data, where the ISM Services PMI in Feb-2024 dropped to 52.6 points (vs prev. 53.4). Additionally, factory orders in Jan-2024 fell by -3.6% MoM (vs consensus of -2.9% YoY). Today, the market will await several data releases, including: 1) US Fed Chair Powell Testimony; 2) US JOLTs Job Openings Jan-2024; 3) EU Retail Sales Jan-2024.
Domestic Update
The Indonesian government successfully absorbed IDR 7.38 trillion during yesterday's (05/03) SBSN auction. The total bids, facilitated through Bank Indonesia, reached IDR 17.05 trillion. MNCS Comment: We note that the open auction surpassed the government's indicative target of IDR 12 trillion for the 7 series of SBSN, although only 43.28% of the total bid was translated into nominal value. The funds raised will contribute to meeting part of the financing target in the FY24E state budget.
Company News
1. PTBA IJ posted a net profit of IDR 6.1 trillion in FY23 or shrank -51.4% YoY vs IDR12.6 trillion in FY22 (Kontan). MNCS Comment: This figure fell below the estimate of a more moderate decline in net profit (-38.2% YoY), with a realized NPM of 16.3% vs the estimated 21.1%. Revenue was recorded at IDR38.5 trillion or reflected 104.5% of the MNCS estimate, however the margin erosion was caused by mining service costs which increased +15.9% YoY to IDR11.1 trillion, which was estimated to be due to the increasing SR. PTBA is currently trading at the level of 5.17x/1.47x PER/PBV.
2. UNTR IJ through its entity Energia Prima Nusantara (EPN), has signed a share purchase agreement as part of the plan to acquire the geothermal company Supreme Energy Rantau Dedap (Emiten News). MNCS Comment: We assess the company's plan positively to enhance its business unit portfolio, especially in the non-coal segment. We see this move as having the potential to improve the company's performance and ESG value. UNTR is currently trading at 4.37x/1.14x PER/PBV.
3. PTPP IJ reported a +77.17% YoY bottom-line growth in FY23 (Emiten News). MNCS Comment: The company successfully recorded + 5.67% YoY increase in revenue and followed by 2.41% NPM (vs 1.44% in FY22). We anticipate this growth to continue in FY24E, in line with management’s target in new contracts to reach IDR32 trillion. In the 1M24, the company has secured 96 on-going projects and IDR3.54 trillion of new contracts (vs IDR1.77 trillion in 1M23. Additionally, the development of IKN also becomes a catalyst to the company’s outlook. PTPP is currently trading at 6.55x/0.21x PER/PBV.
IHSG Updates
The JCI closed lower by -0.40% to 7,247.46 on Tuesday (05/03), followed by foreign net sell reaching IDR 765.0 billion. Most sectors closed in the red zone, led by the property sector (-1.43%) and followed by the non-cyclical sector (-0.89%). On the other hand, the sectors that experienced strengthening were led by the energy sector (+0.72%). The index is still consolidating amidst profit -takings and the wait-and-see attitude of foreign and domestic investors ahead of global macroeconomic data announcements, earnings releases and speeches by Fed officials. The Rupiah closed lower at IDR15,769/USD. We estimate that the JCI will move in the price range of 7,223-7,283. Today's recommendations: ACES, BRIS, PTBA, TOBA.
Corporate Actions
AGMS: BBTN
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