Global Market Highlights
DJIA is up +0.45% on Friday (25/11), while the S&P500 (-0.03%) and the Nasdaq (-0.52%). Wall Street closed mixed after the Thanksgiving holiday, where investors watched the development of the Covid-19 case in China and awaited the release of labor market data in the last week of Nov-2022. Today, the market will be looking toward several data releases such as: 1) US Dallas Fed Manufacturing Index Nov; 2) US 3-Month Bill Auction; 3) UK CBI Distributive Trades Nov.
Domestic Update
• Bank Indonesia (BI) reported that foreign investors booked a net buy of IDR9.72 trillion SBN during November 21-24, 2022. MNCS Comment: The inflow of foreign portfolios in the government bond market also triggers a decrease in yields. Now, the 10-year SUN yield has fallen below 7%.
• Furthermore, the national Covid-19 daily rate had increased by 4,151 active cases (27/11).
Company News
1. AGII IJ will build a new factory in the Batang Integrated Industrial Estate (KIT), not only limited to KIT, but AGII will also supply the needs of Central Java and its surroundings (Investor ID). MNCS Comment: We view the company's expansion in KIT Batang as a positive thing, apart from a strategic operating area, it can streamline operational costs, and support distribution from the Kendal factory to accelerate the company's revenue. AGII is currently traded at the level of 64.54x/1.84x PER/PBV.
2. DRMA IJ maintains revenue growth target in FY22E and FY23F at +20% YoY. Meanwhile, net profit growth in FY22E is targeted to reach +50% YoY (Market Bisnis). MNCS Comment: The company's estimated revenue in FY22E/FY23F is IDR3.50/RID4.20 trillion, respectively, and net profit in FY22E is 451.71 billion. With the company's revenue and net profit of up to 9M22 reaching IDR2.66 trillion/IDR451.71 billion, the realization reached 76.05%/55.33%. We see a number of drivers that will accelerate the company's performance, namely: 1) factory expansion; 2) innovation in the EV industry. DRMA is currently traded at the level of 9.23x/2.48x PER/PBV.
3. RAJA IJ posted a net profit of USD4.60M in 9M22, or grew 43x YoY (vs. USD105.75K in 9M21) (Investor ID). MNCS Comment: Significant net profit growth in line with: 1) revenue growth +20.84% YoY; 2) increase in subsidiary's profit +161.98% YoY; 3) Expansive GPM by 218 bps YoY to 16.21% . Currently, RAJA is traded at the level of 47.27x/2.78x PER/PBV.
IHSG Updates
JCI weakened -0.39% to 7,053.15 on Friday (25/11), followed by net foreign buy which reached IDR1.07 billion. The majority of sectors were weak and weighed on the index's pace, led by the energy sector (-1.31%) and followed by the technology sector (-1.04%). On the other hand, the sectors that experienced strengthening were the cyclical sector (+0.02%) followed by the non-cyclical sector (+0.02%). The weakening of the index was in line with the weakening of a number of Asian bourses and Wall Street. We see investors responding negatively to the release of Japan's core inflation rate data in Nov-2022 which increased by +3.6% YoY, higher than the consensus forecast (3.5% YoY) and the realization in Oct-2022 (3.4% YoY). On the other hand, the Rupiah exchange rate closed lower at the level of IDR15,673/USD. We estimate that the JCI will move in the price range of 7,030-7,100. Today's recommendation: BBNI, INDF, TOWR, UNTR.
Corporate Actions
Cum Dividend: AVIA (IDR10/share)
Public Expose: FREN, WGSH
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