MNCS Morning Navigator

25 Mei 2023

MNCS Morning Navigator May 25, 2023

Global Market Highlights
DJIA fell -0.77% on Wednesday (24/05), followed by the S&P500 (-0.73%) and the Nasdaq (-0.61%). Wall Street continues to weaken, where investors are watching the settlement of the debt ceiling which has not made significant progress nearing maturity. Meanwhile, the market was also weighed down by the release of UK core inflation data in Apr-2023 which again experienced an increase of +6.8% YoY, or the highest since 1992. Today, the market will be looking toward several data releases such as: 1) US GDP Growth Rate QoQ 2nd Est Q1; 2) Germany GDP Growth Rate YoY Final Q1; 3) Germany GfK Consumer Confidence Jun.

Domestic Update
Realization of the state budget up to 4M23 was recorded at IDR765.8 trillion (+2.0% YoY), consisting of central government spending IDR522.7 trillion (+2.9% YoY) and transfers to the regions IDR243.1 trillion (0.3% YoY). MNCS Comment: The realization of this spending has covered 25% of the state budget spending ceiling and is on-track encouraging economic growth in FY23E given the historically high correlation between state spending and nominal per capita GDP of 94%.

Company News
1. RALS IJ will distribute cash dividends for the FY22 financial year of IDR307.4 billion or the equivalent of IDR50 per share. Cum date on the regular market and negotiations on June 5, 2023 (Emiten News). MNCS Comment: Therefore, we estimate RALS will offer a dividend yield of 7.7%. DPS increased compared to the previous year at IDR30 per share. Currently, RALS is traded at the level of 38.22x/1.24x PER/PBV.
2. MIKA IJ will distribute cash dividends for the FY22 financial year of IDR37 per share (Emiten News). MNCS Comment: Therefore, we estimate MIKA will offer a dividend yield of 1.3%. The amount of DPS increased slightly compared to FY20-FY21 of IDR36 per share. Currently, MIKA is traded at the level of 42.78x/6.98x PER/PBV.
3. ACES IJ targets to open 10-15 stores in FY23E, with a capex allocation of IDR200-300 billion (Market Bisnis). MNCS Comment: We look positively at the expansion of ACES outlets, which can increase the company's profitability going forward, where in 4M23, ACES' revenue rose +7.6% YoY, while SSSG in Apr-2023 grew +15.0% YoY. Currently, ACES is traded at the level of 16.65x/1.74x PER/PBV.

IHSG Updates
JCI strengthened +0.14% to 6,745.80 on Wednesday (25/05), followed by net foreign buy reaching IDR736.88 billion. A number of sectors experienced strengthening and boosted the index rate, led by the infrastructure sector (+1.21%) followed by the industrial sector (+0.64%). On the other hand, sectors that experienced weakness were led by the raw materials sector (-0.31%) followed by the health sector (-0.30%). The movement of the index again outperformed with weakening Asian stocks and Wall Street, where investors did wait and see ahead of the benchmark interest rate decision and the settlement of the hampered US debt ceiling. The rupiah closed lower at IDR14,905/USD. We estimate that the JCI will move in the price range of 6,686-6,770 pending interest rate decision and the release of Loan Growth YoY Apr, Lending Facility Rate May, and Deposit Facility Rate May data. Today's recommendation: ARTO, GOTO, ISAT, JSMR.

Corporate Actions
Cum Dividend: INKP (IDR50/share), TKIM (IDR25/share), TAPG (IDR38/share)

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