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MNCS Morning Navigator

16 November 2022

MNCS Morning Navigator November 16, 2022

Global Market Highlights
DJIA was up +0.17% on Tuesday (15/11), followed by the S&P500 (+0.87%) and the Nasdaq (+1.45%). Wall Street managed to rebound supported by the release of PPI data in Oct-2022 which grew +0.2% MoM/+8% YoY, or lower than the consensus estimate of +0.4% MoM/+8.3% YoY. In addition, the decline in the yield of US T-notes to the level of 3.79% also contributed to the strengthening of the index. Today, the market will be looking toward several data releases such as: 1) US Retail Sales MoM Oct; 2) UK Inflation Rate YoY Oct; 3) UK Core Inflation Rate YoY Oct.

Domestic Update
• Indonesia's trade balance recorded a surplus of USD5.67 billion Oct-22. The trade balance surplus continued for 30 consecutive months and increased from the previous period of USD4.99 billion. MNCS Comment: The continuing trade balance surplus is in line with rising export performance of +0.13% MoM due to increased oil and gas exports amidst declining import performance of -3.40% MoM.
• Furthermore, the national Covid-19 daily rate had increased by 7,893 active cases (15/11).

Company News
1. ERAA IJ recorded sales growth in 9M22 by +12.06% YoY to IDR34.94 trillion (vs IDR31.18 trillion in 9M21). However, net profit decreased by -5.41% YoY to IDR680.29 billion (vs IDR719.21 billion in 9M21) (IQ Plus). MNCS Comment: The increase in revenue was supported by the increase in revenue from the cellular phone and tablet segment (+10.58% YoY) followed by the accessories and others segment (+69.50% YoY). Meanwhile, the decrease in net profit was in line with the increase in operating expenses (+30.16% YoY) which weighed on the operating profit performance (-1.92% YoY). We also see the decline in net profit as a side effect of aggressive business expansion into its new 4 pillars, thus making the economic benefits to not be realized directly. Currently, ERAA is trading at the level of 7.03x/1.00x PER/PBV.
2. MYOR IJ is optimistic that revenue and net profit in FY22E can grow +10% YoY/+8.3% YoY, respectively (Market Bisnis). MNCS Comment: We believe the company can achieve the target, where in 9M22, revenue and net profit grew +11.78% YoY/+10.92% YoY respectively. We see that efficiency in advertising and promotion costs also supports bottom-line performance amid rising production prices. However, we anticipate several risks going forward, stemming from: 1) persistently high commodity prices which increase packaging costs; 2) decline in market share. MYOR is currently traded at the level of 36.64x/4.51x PER/PBV.
3. PTPP IJ reported that the new contract value up to 10M22 reached IDR21.82 trillion (Investor ID). MNCS Comment: Thus, the value of new contracts up to 10M22 grew by +50.79% YoY (vs IDR14.47 trillion). Meanwhile, with the target value of new contracts in FY22E reaching IDR30.01 trillion, making the realization up to 10M22 to be recorded at 72.71%. Currently, PTPP is traded at the level of 30.17x/0.51x PBV.

IHSG Updates
JCI strengthened +0.23% to 7,035.50 on Tuesday (15/11), followed by net foreign sell which reached IDR322.57 billion. The majority of sectors strengthened and pushed the index up, led by the transportation sector (+1.04%) and followed by the non-cyclical sector (+0.69%). On the other hand, the sectors that experienced weakness were the cyclical sector (-0.27%) followed by the infrastructure sector (-0.10%). The index rose amid weakening Wall Street and a number of Asian bourses. Investors responded positively to the release of Indonesia's trade balance data in Oct-2022, which grew to USD5.67 billion, or higher than the consensus forecast (USD4.50 billion) and the realization in Sep-2022 (USD4.99 billion). On the other hand, the Rupiah exchange rate closed lower at IDR15,538/USD. We estimate that the JCI will move in the price range of 7,000-7,050. Today's recommendation: ARKO, HRUM, MDKA, PWON.

Corporate Actions
RUPS: BACA, WAPO
Public Expose: OBMD

Disclaimer On

ERAA MYOR PTPP ARKO HRUM MDKA PWON BACA WAPO OBMD

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