Global Market Highlights
The DJIA strengthened by +0.20% on Wednesday (06/03), followed by S&P 500 (+0.51%) and Nasdaq (+0.58%). The Wall Street rally was supported by increased expectations of a rate cut, following the release of weak labor market data. Notably, JOLTs Job Openings in Jan-2024 decreased to 8.86 million (vs 8.89 million in Dec-2023). Furthermore, ADP Employment Change in Feb-2024 recorded 140k, lower than the consensus expectation of 150k. Today, the market will await several data releases, including: 1) China Balance of Trade Jan-Feb 2024; 2) US Initial Jobless Claims Mar/02; 3) US Balance of Trade Jan-2024.
Domestic Update
Bank Indonesia projects that the economy will grow at a rate of 4.75%-5.5% for FY24E and between 4.8%-5.6%, or at least slightly above 5.2%, for FY25F. Peak level of economic growth is expected to happen in FY27F. MNCS Comment: We assess that the optimism of Bank Indonesia is contributed from the quick count result from the presidential election held in Feb-2024, which is most likely to be a one-round election. The expectation of a single-round election is anticipated to be a driving factor in strengthening domestic consumption, especially among the middle to upper classes. The positive economic outlook is further supported by continued performance in exports and investments in both the construction and non-construction sectors.
Company News
1. CMRY IJ recorded a net profit of IDR1.24 trillion in FY23 or an increase of +16.98% YoY vs IDR1.06 trillion in FY22 (Kontan). MNCS Comment: This achievement was supported by revenue which increased +21.98% YoY to IDR7.77 trillion with GPM being maintained at the level of 41.57%. NPM was recorded at 15.96%, sloping from 16.64% in FY22 in line with increasing sales and marketing expenses (+27.56% YoY), general and administrative expenses (+44.48% YoY) and financial expenses (+2.75% YoY). CMRY is currently trading at 26.90x/5.62x PER/PBV.
2. BBTN IJ will distribute dividends amounting to IDR700.19 billion, or equivalent to IDR49.89 per share (Bloomberg Technoz). MNCS Comment: We note that DPS has increased from the previous period, which was IDR43.39 per share. Meanwhile, we estimate that BBTN will offer a dividend yield of around ~3.6%. Notably, the 5-year average dividend yield is 1.69%. BBTN is currently trading at 0.64x PBV.
3. SGER IJ has commenced the construction of a hydrogen peroxide plant worth USD50 million (Kontan). MNCS Comment: This hydrogen peroxide facility project is estimated to be completed within 22 months which will have a capacity of 20,000 metric tons (100% concentration) or 40,000 metric tons (50% concentration) annually. We assess that this factory expansion is management’s effort to meet the growing domestic demand for hydrogen peroxide aligning with the estimated annual growth of 4.5% until FY30F in the Southeast Asia region, especially from the textile and chemical sectors. SGER is currently trading at 14.68x/6.68x PER/PBV.
IHSG Updates
The JCI managed to rebound +1.14% to 7,329.80 on Wednesday (06/03), followed by foreign net buy reaching IDR84.27 billion. Most sectors closed higher, led by the technology sector (+5.31%) and followed by the transportation sector (+1.18%). On the other hand, the sectors experiencing weakness were led by the infrastructure sector (-0.92%) and cyclicals (-0.58%). Within the Asian region, the JCI's performance was the second strongest after the HSI (+1.70%), where other indices still closed mixed ahead of Jerome Powell's statement last night. The Rupiah closed stronger at IDR15,700/USD. We estimate that the JCI will move in the price range of 7,295-7,337. Today's recommendations: ANTM, BBRI, ICBP, MAHA.
Corporate Actions
AGMS: BMRI, SDRA
Stock Split: SCCO (1:4)
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