MNCS Morning Navigator

17 November 2023

MNCS Morning Navigator November 17, 2023

Global Market Highlights
The DJIA weakened by -0.13% on Thursday (16/11), while S&P500 (+0.12%) and Nasdaq (+0.07%). Wall Street closed mixed as investors responded to several negative 3Q23 earnings releases. Meanwhile, initial jobless claims as of Nov-11 were recorded at 231k, exceeding the consensus estimate of 220k, hence maintaining investor confidence in The Fed to maintain the benchmark interest rate at the upcoming FOMC. Today, the market will be looking toward several data releases such as: 1) UK Retail Sales MoM Oct-23; 2) EU Inflation Rate Final YoY Oct-23; 3) US Building Permits Prel MoM Oct-23.

Domestic Update
Bank Indonesia (BI) reported that the residential property price index increased by +1.96% YoY in 3Q23. MNCS Comment: The expansive residential property price index compared to the achievement of +1.92% YoY in 2Q23. This is supported by a slowdown in sales contraction in 3Q23 to -6.59% YoY (vs -12.30% YoY in 2Q22). Going forward, we see the potential for increased demand supported by the VAT incentive for home purchases up to IDR5 billion.

Company News
1. ITMG IJ acquired 5.060 ha of Mining Business License (IUP) through PT Graha Panca Karsa (GPK), which will operate in 2024 (Emiten News). MNCS Comment: We assess the addition of owned IUP positively, which can boost coal production volume for ITMG in FY24F. Additionally, we anticipate that the increase in production volume can act as a buffer for the company's performance amid declining coal ASP. Currently, ITMG is traded at a level of 3.42x/1.10x PER/PBV.
2. INDY IJ reported coal production until Oct-2023 reaching 25.4 million tons (Market Bisnis). MNCS Comment: With a production target of 31 million tons in FY23E, the realization until 10M23 reached 81.9%. We expect a more conducive climate in the last 2 months for INDY to achieve the remaining production target of 5.6 million tons. Currently, INDY is traded at a level of 4.05x/0.42x PER/PBV.
3. ASII IJ reported the realization of 4W unit sales at 465,869 units until 10M23, a decrease of -0.51% YoY compared to the achievement of 468,290 units in 10M22 (Kontan). MNCS Comment: The decrease in unit sales is in line with the industry's performance, which recorded a decline of -1.8% YoY. Meanwhile, ASII was able to maintain a market share of 55.7% until 10M23 (vs 55.8% in 9M23). Currently, ASII is traded at a level of 6.88x/1.24x PER/PBV.

IHSG Updates
The JCI closed flat -0.00% at 6,958.01 on Thursday (16/11), followed by a net foreign buy of IDR405.65 billion. Most sectors experienced a decline and burdening the index, led by the property sector (-0.61%), followed by the non-cyclical sector (-0.41%). On the other hand, sectors that experienced gains were led by the transportation sector (+0.44%), followed by the industrial sector (+0.23%). The index's decline aligns with most other Asian markets, as investors wait and see approach toward the US-China meeting. Meanwhile, China's house price index continued its contraction trend of -0.1% YoY in Oct-2023. The Rupiah closed lower at IDR15,545/USD. We estimate the IHSG will move within the price range of 6,872-6,900. Today's Recommendations: ASII, BBCA, HMSP, INCO.

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