MNCS Morning Navigator

25 November 2022

MNCS Morning Navigator November 25, 2022

Global Market Highlights
Wall Street closed commemorating Thanksgiving. Meanwhile, European markets closed higher on Thursday (24/11), supported by positive catalysts from the Fed which plans to slow down the hike in the benchmark interest rate (FFR). Today, the market will be looking toward several data releases such as: 1) Germany GDP Growth Rate YoY Final Q3; 2) Germany GfK Consumer Confidence Dec; 3) France Consumer Confidence Nov.

Domestic Update
• Loan interest rate increased 12 bps MoM to 9.09% while the 12-month term deposit rate increased +32 bps MoM to 3.84% as of Oct-2022. MNCS Comment: The increase in interest rates in the banking sector reflects the ongoing transmission of monetary policy. The increase in deposit rates which were higher than loans could be offset by strengthening the CASA structure so that the impact on CoF could be relatively manageable.
• Furthermore, the national Covid-19 daily rate had increased by 7,110 active cases (24/11).

Company News
1. MTDL IJ targets revenue growth of +15% YoY in FY22E, supported by the growing trend of ICT industry growth following the pandemic (Emiten News). MNCS Comment: With revenue in FY21 reaching IDR18.50 trillion, the projected revenue in FY22E is IDR21.28 trillion. Meanwhile, the realization of revenue up to 9M22 was IDR15.18 trillion or 71.35% of the target. However, we are optimistic that the company can achieve this target, supported by the increasing need for IT security, cloud systems and year-end momentum which is expected to accelerate revenue in 4Q22. Currently, MTDL is traded at the level of 14.38x/2.37x PER/PBV.
2. WEGE IJ targets the acquisition of new contracts in FY23F to reach IDR8.4 trillion, or up +18.31% YoY from the FY22E target of IDR7.1 trillion (Emiten News). MNCS Comment: Up to 10M22, WEGE's new contract value reached IDR4.22 trillion, or the realization of the FY22E target of 59.44%. We see that the new contract value target in FY23F will be supported by: 1) an increase in the infrastructure budget in the 2023 APBN by +7.75% from the 2022 outlook; 2) IKN development. WEGE is currently traded at the level of 12.96x/0.68x PER/PBV.
3. PPRE IJ revised its revenue target in FY22E from previously IDR4.4 trillion to IDR3.8 trillion, while the profit target for net profit remained at IDR181 billion (Kontan). MNCS Comment: As of 9M22, PPRE posted revenue of IDR2.64 trillion (+40.08% YoY) with realization on target of 69.47%. Meanwhile, net profit was recorded at IDR78.67 billion (+39.29% YoY) with realization on target of 43.47%. Currently PPRE is trading at 13.55x/0.61x PER/PBV.

IHSG Updates
JCI rose +0.37% to 7,080.52 on Thursday (24/11), followed by net foreign buy which reached IDR969.12 billion. The majority of sectors strengthened and pushed up the index, led by the property sector (+1.97%) and followed by the health sector (+0.83%). On the other hand, the sectors that experienced weakness were the technology sector (-1.20%) followed by the energy sector (-0.70%). The strengthening of the index was in line with the strengthening of Wall Street and the majority of Asian bourses. We see investors tend to respond positively to the Fed's certainty to increase the FFR in Dec-2022 by +50 bps or in line with market participants' expectations. On the other hand, the Rupiah exchange rate closed higher at IDR15,664/USD. We estimate that the JCI will move in the price range of 7,030-7,100. Today's recommendation: ASII, BBCA, BSDE, MDKA.

Corporate Actions

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