MNCS Morning Navigator

15 Mei 2024

MNCS Morning Navigator May 15, 2024

Global Market Highlights
The DJIA advanced by +0.32% on Tuesday (14/05), followed by the S&P 500 (+0.48%) and the Nasdaq (+0.75%). Wall Street closed in the positive zone after Fed’s Chair, Powell, commented that he does not expect a hike in the next interest rate move by the central bank. The US PPI increased by +2.2% YoY to 144.1 bps in Apr-2024 (vs 1.8% YoY in Mar-2024), reflecting a MoM growth of +0.5% (vs -0.1% MoM in Mar-2024). Today the market will be looking forward to several data releases such as: 1) Indonesia Balance of Trade Apr-2024; 2) US Inflation Rate Apr-2024; 3) US Retail Sales Apr-2024.

Domestic Update
Bank Indonesia reported that retail sales performance in Indonesia improved by +9.3% YoY (+9.9% MoM) in Mar-2024 (vs +6.4% YoY/+2.1% YoY in Feb-2024/Forecast), marking ten consecutive months of advancement and fastest pace since Mar-2022. MNCS Comment: We view that the rising performance was primarily driven by the increase of spending during Ramadan season, accompanied by discount programs. Solid MoM improvements were recorded in all real segments, except the fuels group (-2.9% MoM). The retail sales growth is estimated to dive sharply to +0.1% YoY (+3.3% MoM) in Apr-2024, influenced by the Parts and Accessories, Motor Vehicle Fuel, and Food, Beverages and Tobacco groups.

Company News
1. INTP IJ will distribute dividends amounting to IDR308.7 billion for FY23 (Kontan). MNCS Comments: Hence, INTP will distribute dividends amounting to IDR90 per share. We estimate this dividend distribution will provide a potential yield of 1.4%. The dividend payout ratio FY23 is lower than FY22, at 15.8% (vs. 29.78% in FY22). INTP is currently trading at 25.61x/1.15x PER/PBV.
2. ADMR IJ will not distribute dividends for the fiscal year FY23 as it focuses on the development of metallurgical coal production and the construction of an aluminum smelter (Emiten News).​ MNCS Comment: We view the company's decision to retain earnings positively to support capex allocation for the smelter construction plan and the utilization of metallurgical coal production. We believe that expansion through internal funding can maintain a low level of debt exposure, which was recorded at 0.1x in 1Q24. We believe that the plans for development towards aluminum smelter and metallurgical coal will enhance the company's value and performance in the future. ADMR is currently trading at 7.39x/3.14x PER/PBV.
3. DRMA IJ is eyeing for IDR600 billion net profit in FY24E (Kontan). MNCS Comment: This target is relatively flat compared to DRMA’s net profit realization in FY23 at IDR611.8 billion. However, it reflects optimism of management, considering in 1Q24, the company performed a slowdown with revenue contracted by -7.4% YoY and net income plummeted by -38.3%. This aligned with the deceleration of domestic motor vehicles sales in the period. The positive outlook throughout the year will be supported by business expansion in export activity and new factory establishment. DRMA is currently trading at 1.93x PBV.

IHSG Updates
The JCI weakened by -0.22% to 7,083.76 on Tuesday (14/05), amidst a net foreign sell reaching IDR770.84 billion. Several sectors experienced declines and weighed on the index, led by the industrial sector (-1.41%) and followed by the technology sector (-0.14%). On the other hand, the sectors that strengthened were led by the non-cyclical sector (+0.73%) and followed by the property sector (+0.71%). The index weakened amid mixed closures in Asian markets, with investors tending to wait and see ahead of the release of US inflation data for April 2024, which is expected to slow down. The Rupiah closed lower at IDR16,104/USD. We estimate that the JCI will move in the price range of 7,052-7,130. Today's recommendations: ACES, BMRI, INCO, MEDC.

Corporate Actions
Cum Dividend: EXCL (IDR48.6/Share), TLKM (IDR178.5/Share)

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