Global Market Highlights
The DJIA strengthened by +1.43% on Tuesday (14/11), followed by S&P500 (+1.91%) and Nasdaq (+2.37%). Wall Street experienced significant gains, supported by improved inflation data in Oct-2023. Notably, headline inflation in Oct-2023 recorded +3.2% YoY, lower than the consensus estimate of +3.3% YoY and the Sep-2023 realization of +3.7% YoY. With this improvement, investor confidence in The Fed's decision not to raise benchmark interest rates in the future. Today, the market will be looking toward several data releases such as: 1) US Retail Sales MoM Oct-23; 2) China Industrial Production YoY Oct-23; 3) Japan GDP Growth Annualized Prel Q3.
Domestic Update
The Ministry of Agriculture receives an additional budget of IDR5.8 trillion to boost rice and corn production affected by El-Nino exposure. MNCS Comment: We view this effort positively, expecting it to stabilize rice and corn prices amid yield shortages. Maintaining the corn supply is anticipated to curb price increases and positively impact input costs for poultry companies related to their feed production. Meanwhile, fulfilling the rice supply will maintain the purchasing power of the population, especially in the lead-up to the political year.
Company News
1. BREN IJ recorded a net profit growth of +12.4% YoY to USD84.5 million in 9M23 (vs USD75.2 million 9M22) (IDX Channel). MNCS Comment: Net profit growth is supported by a +5.1% YoY increase in revenue to USD445.3 million in 9M23 (vs USD423.5 million in 9M22). Notably, NPM increased to 19.0% (vs 17.7% in 9M22). Currently, BREN is traded at a level of 181.17x PBV.
2. NICL IJ will distribute an interim dividend of IDR42.5 billion for the fiscal year FY23E, or equivalent to IDR4 per share (Emiten News). MNCS Comment: We estimate NICL will offer a dividend yield of 1.7%. With a net profit of IDR61.6 billion in 9M23 (+8.4% YoY), the payout ratio reaches 69.0%. Currently, NICL is traded at a level of 30.54x/3.05x PER/PBV.
3. DRMA IJ targets revenue growth of +25% YoY in FY23E (Emiten News). MNCS Comment: Thus, the estimated revenue target in FY23E reaches IDR4.9 trillion. Meanwhile, revenue in 9M23 reached IDR4.2 trillion (+59.7% YoY), or reflecting 87% of the FY23E target. We are optimistic that the company can reach this target, supported by solid demand in the 4W segment. Currently, DRMA is traded at a level of 8.56x/3.27x PER/PBV.
IHSG Updates
The JCI strengthened by +0.35% to 6,862.06 on Tuesday (14/11), followed by a net foreign sell of IDR113.18 billion. Almost all sectors experienced gains and driving the index, led by the healthcare sector (+1.21%), followed by the transportation sector (+1.36%). On the other hand, the sector that experienced a decline was the non-cyclical sector (-0.15%). The index's strengthening aligns with most Asian markets, as investors are optimistic ahead of the expected slowdown in US inflation data for Oct-2023. Meanwhile, investors will wait and see ahead of the release of Indonesia's trade balance data in Oct-2023, which is estimated to slow down given the normalization of global commodity prices. The Rupiah closed higher at IDR15,695/USD. We estimate the IHSG will move within the price range of 6,830-6,910. Today's Recommendations: BMRI, ESSA, GOTO, ICBP.
Corporate Actions
EGMS : SMMT
Cum Dividend : EAST (IDR2.5/share), JAYA (IDR2/share)
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