MNCS Morning Navigator

23 November 2022

MNCS Morning Navigator November 23, 2022

Global Market Highlights
DJIA gained +1.18% on Tuesday (22/11), followed by the S&P500 (+1.36%) and Nasdaq (+1.36%). Wall Street managed to rebound as the yield on the US T-note 10Y fell to 3.78%. In addition, investors also tend to be optimistic ahead of the release of Durable Goods Orders data in Oct-2022 which is estimated to continue to grow +0.4% MoM according to the consensus. Today, the market will be looking toward several data releases such as: 1) US Durable Goods Orders MoM Oct; 2) US Michigan Consumer Sentiment Final Nov; 3) US S&P Global Composite PMI Flash Nov.

Domestic Update
• The government issued 8 series of SUN (2 SPN + 6ON) worth of IDR15.2 trillion in the SUN auction on Tuesday (22/11/22). MNCS Comment: Yesterday's SUN auction result was better than the previous auction (08/11/22) as reflected in the number of incoming bids reaching IDR30.3 trillion (vs IDR23.0 trillion at the previous auction) and the weighted average yield won was lower. We see this improvement was driven by the recent downturn in global government bond yields in line with expectations of lower FFR increases in the upcoming meetings.
• Furthermore, the national Covid-19 daily rate had increased by 7,644 active cases (22/11).

Company News
1. UNTR IJ reported that Komatsu heavy equipment sales in Oct-2022 reached 553 units, thus making the accumulated sales of heavy equipment up to 10M22 to reach 5,087 units (Kontan). MNCS Comment: Up to 10M22, heavy equipment sales have grown +96,41% YoY. With the sales target of Komatsu heavy equipment in FY22E of 5,000 units, it has been achieved with a realization of 101.74% up to 10M22. Currently, UNTR is trading at 5.10x/1.36x PER/PBV.
2. ASLC IJ realized Caroline's O20 expansion in Medan at the end of Oct-2022, and marked the 22nd touch points, or exceeded the management's target of 20 touch points in FY22E (IQ Plus). MNCS Comment: We view positively the company's expansion, where the used car market is expected to increase in FY23F in line with the rapid growth of new car sales in FY22E (+23.34% as of Oct-2022). It is hoped that through aggressive expansion along with this catalyst, the financial performance will be restored going forward. ASLC is currently traded at the level of 2.66x PBV.
3. CSAP IJ reported revenue growth in 9M22 of +9.41% YoY to IDR10.85 trillion (vs IDR9.92 trillion in 9M21). Meanwhile, net profit grew +22.25% YoY to IDR167.27 billion (vs IDR136.83 billion in 9M21) (Kontan). MNCS Comment: Revenue growth was in line with the increase in ceramic revenue (+10.40% YoY) which contributed 38% to the company's sales, as well as consumer goods (+5.71% YoY). Meanwhile, the increase in net profit was in line with the increase in other income +22.60% YoY. Currently, CSAP is traded at the level of 15.99x/1.60x PER/PBV.

IHSG Updates
JCI weakened -0.46% to 7,030.59 on Tuesday (22/11), followed by net foreign buys which reached IDR433.50 billion. The majority of sectors weakened and weighed on the pace of the index, led by the technology sector (-2.07%) and followed by the transportation sector (-0.87%). On the other hand, the sectors that experienced strengthening were the energy sector (+1.53%) followed by the property sector (+0.16%). The weakening of the index was in line with the weakening of Wall Street and a number of Asian bourses. We see investors responding negatively to the release of Hong Kong inflation rate data in Oct-2022 which increased by 0.3% MoM (vs 0.1% MoM in Sep-2022), as well as another increase in the number of daily positive Covid-19 cases in China on Monday 21 November 2022 which broke a record high for 6 months at 28,793 cases. On the other hand, the Rupiah exchange rate closed higher at IDR15,698/USD. We estimate that the JCI will move in the price range of 6,980-7,070 pending the release of M2 Money Supply YoY Oct data. Today's recommendation: BBTN, ESSA, PWON, SMGR.

Corporate Actions
Cum Dividend: SPTO (IDR25/share)
Cum Rights: OASA (IDR100/share), PBRX (IDR50/share)

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