Global Market Highlights
The DJIA advanced slightly by +0.08% on Tuesday (07/05), followed by the S&P 500 (+0.13%). Meanwhile, the Nasdaq showed a slight contraction (-0.10%). Wall Street closed flat after 3 consecutive days of rallies with the market's focus remained on the betting of rate cut implementation by the Fed and expectation that the first cut will take place in 3Q24. Meanwhile, the Redbook index gained by +6% YoY for the week ending May 4th, 2024 (vs +5% YoY in the previous period), became an upside incentive for Wall Street. Today the market will be looking forward to several data releases such as: 1) Indonesia Motorbike Sales YoY Apr-2024; 2) Indonesia Foreign Exchange Reserves Apr-2024; 3) US Wholesale Inventories MoM Mar-2024.
Domestic Update
The Ministry of Finance (Kemenkeu) conveyed that the excise receipts for alcoholic beverages (MMEA category) achieved IDR1.72 trillion (+6.58% YoY) in 1Q24, or equivalent to 18.42% from the 2024 APBN target. MNCS Comment: The growth in alcoholic beverages segment was mainly attributed to the implementation of MMEA’s increased tariff policy and +2.11% YoY rise in the production. Conversely, the tobacco excise showed a slowdown to IDR51.20 trillion (-7.39% YoY) or reflecting 22.22% of the target. This contraction was influenced by the decline in both production and effective rates, while advanced prepayments by the end of 2023 also became a contributing factor.
Company News
1. ACES IJ recorded a net profit growth of +29.3% YoY to IDR204.8 billion in 1Q24 (vs IDR158.4 billion in 1Q23) (Emiten News). MNCS Comment: 1Q24 net profit was above our estimation, reflecting 27.4% of the FY24E target. The increase in net profit was supported by a +14.9% YoY rise in revenue, along with a recorded SSSG of +13.2%. Additionally, margins expanded with GPM/OPM increasing to 49.4%/13.6% (vs 48.5%/12.0% in 1Q23). ACES is currently trading at 18.63x/2.40x PER/PBV.
2. MPXL IJ posted a net profit increase of +123.6% YoY to IDR4.1 billion in 1Q24 (vs IDR1.8 billion in 1Q23) (Emiten News). MNCS Comment: The growth in net profit was driven by a +60.2% YoY increase in revenue to IDR45.4 billion (vs IDR28.3 billion in 1Q23). Furthermore, efficiency seen alongside increasing margins also contributed to MPXL's profitability. Notably, the company's GPM/OPM rose to 21.9%/15.2% (vs 15.1%/8.6% in 1Q23). MPXL is currently trading at 18.38x/3.31x PER/PBV.
3. CLEO IJ posted IDR115.33 billion net income or boasting a growth of +96.11% YoY in 1Q24 (Kontan). MNCS Comment: The rising bottom-line was in line with the increasing revenue (+37.59% YoY), while expenses remained effective, with COGS grew by +20.46% YoY and opex increased by +28.37% YoY. The advancing net sales was boosted by all business segments, with the bottle segment (+13.65% YoY), the non-bottle segment (+46.22% YoY), and the other segment (+51.16% YoY). From the margin standpoint, the company successfully improved its GPM/NPM to 59.33%/18.41% (vs 53.54%/12.91% in 1Q23). We anticipate CLEO to achieve its double-digit target on top- and bottom-line in FY24E, considering its capex allocation for aggressive factories rollouts and distribution networks. CLEO is currently trading at 7.77x PBV.
IHSG Updates
The JCI weakened by -0.17% to 7,123.61 on Tuesday (07/05), followed by net foreign sell reaching IDR715.64 billion. Most sectors experienced declines, weighing on the index, led by the transportation and logistics sector (-0.90%) followed by the financial sector (-0.78%). On the other hand, sectors that experienced gains were led by the basic materials sector (+0.89%), followed by the healthcare sector (+0.64%). The index weakened amid positive closures in Asian markets, with investors tending to wait and see ahead of the release of foreign exchange reserves (cadev) data in Apr-2024, which is expected to decrease due to the need for currency intervention. The Rupiah closed lower at IDR16,049/USD. We estimate that the JCI will move in the price range of 7,095-7,153. Today's recommendations: ERAA, INCO, MBMA, UNVR.
Corporate Actions
Cum Dividend: AKRA (IDR50/share), SMSM (IDR25/share)
AGMS: JSMR
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