MNCS Morning Navigator

14 November 2022

MNCS Morning Navigator November 14, 2022

Global Market Highlights
DJIA was up +0.10% on Friday (11/11), followed by the S&P500 (+0.92%) and the Nasdaq (+1.88%). Wall Street managed to continue its strengthening even though it tends to slow down compared to before, where investors were watching the release of the Michigan Consumer Sentiment Prel data in Nov-22 which fell to the level of 54.7 points (vs 59.9 points in Oct-2022). Meanwhile, amid positive sentiment from the declining inflation rate in Oct-22, 5Y inflation expectations rose again to 3% (vs 2.9% previously). Today, the market will be looking toward several data releases such as: 1) US Consumer Inflation Expectations Oct; 2) US 3-Month Bill Auction; 3) US Fed Brainard Speech.

Domestic Update
• Bank's corporate loan disbursement rose 12.7% to IDR3,220.9 trillion as of Sep-22. MNCS Comment: We see that corporate lending continues to grow in line with the outlook for the domestic economy which is still likely to be solid amidst the potential global recession, supported by the wind fall, accommodative fiscal policy and Indonesia's macroeconomic resilience.
• Furthermore, the national Covid-19 daily rate had increased by 4,877 active cases (13/11).

Company News
1. FREN IJ posted an +8.44% YoY revenue growth in 9M22 to IDR8.29 trillion (vs IDR7.64 trillion in 9M21). Meanwhile, net profit was recorded at IDR1.64 trillion in 9M22 (vs net loss of IDR441.72 billion in 9M21) (IQ Plus). MNCS Comment: The increase in revenue was supported by revenue growth in the data telecommunications service segment by +5.91% YoY. Meanwhile, the significant increase in net profit in 9M22 was due to gains from investing in Moratel shares. Currently, FREN is traded at the level of 11.69x/1.79x PER/PBV.
2. MARK IJ posted an -11.55% YoY decline in revenue in 9M22 to IDR736.07 billion (vs IDR832.15 billion in 9M21). Meanwhile, net profit fell -21.20% YoY to IDR217.59 billion (vs IDR276.14 billion in 9M21) (Market Bisnis). MNCS Comment: The decline in revenue was due to the decline in the export sales of -16.53% YoY which contributed 80.41% of the company's total revenue in 9M22. Meanwhile, the lower net profit was due to the increasing G&A by +62.15% YoY which weighed on operating profit performance (-6.28% YoY) and reduced OPM to 37.90% (vs 44.18% in 9M21). Currently, MARK is traded at the level of 8.71x/3.29x PER/PBV.
3. KEEN IJ posted a +3.64% YoY revenue growth in 9M22 to USD27.57 million (vs USD26.60 million in 9M21). Meanwhile, net profit increased significantly by +259.36% YoY to USD8.88 million (vs USD2.47 million in 9M21) (Investor ID). MNCS Comment: The increase in revenue was supported by an increase in concessional interest income of +27.23% YoY and the addition of the segment for the Ordi Hulu PLTM. Meanwhile, the increase in net profit, apart from the expansionary margin, was also due to the reduced tax rate from 62.3% to 15.1%. Currently, KEEN is traded at the level of 15.23x/1.21x PER/PBV.

IHSG Updates
JCI strengthened +1.76% to 7,089.21 on Friday (11/11), followed by net foreign sell which reached IDR660.93 billion. The majority of sectors experienced strengthening and boosted the index rate, led by the technology sector (+4.35%) and followed by the raw materials sector (+2.52%). On the other hand, the sectors that experienced weakness were the health sector (-0.90%) followed by the industrial sector (-0.58%). The strengthening of the index was in line with the strengthening of Wall Street and Asian markets. Investors responded positively to the release of US inflation data in Oct-22 which was recorded at +7.7% YoY and 0.4% MoM, below the consensus estimate (8.0% YoY and 0.6% MoM) and Sep-22 realization (8.2% YoY and 0.4% MoM). On the other hand, the Rupiah exchange rate closed lower at IDR15,495/USD. We estimate that the JCI will move in the price range of 7,030--7,113 pending the release of Property Price Index YoY Q3 and Car Sales YoY Oct data. Today's recommendation: BIPI, ELSA, GOTO, CARE.

Corporate Actions
Public Expose: WSKT

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