MNCS Morning Navigator

21 November 2022

MNCS Morning Navigator November 21, 2022

Global Market Highlights
DJIA was up +0.59% on Friday (18/11), followed by the S&P500 (+0.48%) and the Nasdaq (+0.01%). Wall Street rebounded following the release of Existing Home Sales data in Oct-2022 which was recorded at 4.43 million, or above the consensus at 4.38 million, yet down from Sep-2022 (4.71 million). In addition, investors also responded positively to the meeting between the US trade representatives and the Chinese trade minister in Bangkok, which is expected to reduce tariffs after the trade war, thereby reducing the inflation rate. Today, the market will be looking toward several data releases such as: 1) US Chicago Fed National Activity Index Oct; 2) US 6-Month Bill Auction; 3) Germany PPI YoY Oct.

Domestic Update
• Based on transaction data from November 14 to 17, 2022, non-residents in the domestic financial market made a net sale of IDR1.02 trillion, consisting of a net purchase of IDR1.83 trillion on the government securities market and a net sale of IDR2.84 trillion on the stock market. MNCS Comment: The reversal of the trend of inflows into the SBN market shows that foreign investors are starting to see the more attractive yields offered by SBN. With this inflow, the yield on SBN decreased. The 10-year yield fell to 7%.
• Furthermore, the national Covid-19 daily rate had increased by 5,172 active cases (20/11).

Company News
1. WIIM IJ posted a +38.83% YoY revenue growth to IDR2.65 trillion (vs IDR1.91 trillion in 9M21). Meanwhile, net profit grew +55.59% YoY to IDR169.31 billion (vs IDR108.82 billion in 9M21) (IQ Plus). MNCS Comment: We view that WIIM's net profit grew amid the decline in big-player net profit in the tobacco industry. Moreover, the growth was inline with the excise tariffs on the company's products using tier 2 tariffs, considering the gap between tier 2 and tier 1 is quite wide (~40%). WIIM is currently traded at the level of 7.07x/1.12x PER/PBV.
2. IPCC IJ reported that the monthly yard occupancy ratio (YoR) rose significantly to >60%, while the daily YoR had touched >100% (Investor ID). MNCS Comment: We see that historically, the frequency of loading and unloading of vehicles tends to increase in 4Q22. In addition, significant improvements occurred in line with: 1) increased mobility post-pandemic; 2) rising demand for automobiles (+23.34% YoY in Oct-2022); 3) commodity windfall. It is hoped that this increase in activity will boost the company's revenue in 4Q22. Currently, IPCC is traded at the level of 7.39x/0.95x PER/PBV.
3. ADRO IJ through the Adaro Power entity received an appointment from PLN for the construction of a wind-powered power plant (PLTB) project with a power of 70 MW (Market Bisnis). MNCS Comment: We view positively the company's achievements by continuously accelerating the use of renewable energy that can increase ESG value. The PLTB project will later support the ADRO aluminum smelter which has an investment value of USD728 million. ADRO is currently traded at the level of 2.97x/1.30x PER/PBV.

IHSG Updates
JCI strengthened +0.53% to 7,082.18 on Friday (18/11), followed by net foreign buy which reached IDR667.94 billion. A number of sectors strengthened and pushed up the index, led by the cyclical sector (+0.67%) and followed by the energy sector (+0.65%). On the other hand, the sectors that experienced weakness were the transportation & logistics sector (-1.05%), followed by the infrastructure sector (-0.21%). The strengthening of the index was in line with the strengthening of Wall Street and some Asian bourses. We see investors responding positively to the release of Indonesia's current account data, which recorded a surplus of USD4.4 billion in 3Q22 (vs USD4.0 billion in 2Q22) and maintained a surplus for 5 consecutive quarters. On the other hand, the Rupiah exchange rate closed lower at IDR15,688/USD. We estimate that the JCI will move in the price range of 7,000-7,050. Today's recommendation: BBCA, BIRD, DEWA, ICBP.

Corporate Actions
Public Expose: PGAS

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