MNCS Morning Navigator

30 November 2023

MNCS Morning Navigator November 30, 2023

Global Market Highlights
The DJIA relatively flat at +0.04% on Wednesday (29/11), while S&P500 (-0.09%) and Nasdaq (-0.16%). Wall Street tended to correct amidst the release of 3Q23 GDP data, which revised upward to +5.2% QoQ from the previous +4.9% QoQ. The sell-off in healthcare companies hindered the index's momentum. Meanwhile, the robust GDP growth in 3Q23 is also feared to trigger hawkish tones from The Fed, becoming a negative sentiment for the index. Today, the market will be looking toward several data releases such as: 1) US Core PCE Price Index MoM Oct-23; 2) EU Inflation Rate YoY Flash Nov-23; 3) China NBS Manufacturing PMI Nov-23.

Domestic Update
Bank Indonesia (BI) stated to maintain the BI7DRR benchmark interest rate at 6.0% in FY24F. MNCS Comment: We assess the BI7DRR being held at 6.0% as an effort to keep inflation on target at 2.5%±1% in FY24F, amid the potential rise in staple product prices due to the El-Nino impact. Additionally, this effort acts as a buffer for the Rupiah exchange rate, given the ongoing global economic uncertainties.

Company News
1. BBTN IJ is optimistic about achieving a net profit target of IDR3.2 trillion in FY23E (Emiten News). MNCS Comment: We note that the net profit until 9M23 reached IDR2.3 trillion, or a realization of 71.9% of the FY23E target. We are optimistic that the company can achieve the net profit target in FY23E, considering the insurance claims from IFG amounting to IDR700 billion that can act as a cushion for profitability in 4Q23. Currently, BBTN is traded at a level of 0.62x PBV.
2. WEGE IJ recorded new contract values of IDR3.3 trillion until 10M23 (Market Bisnis). MNCS Comment: We note that the new contract values decreased by -21.8% YoY (vs IDR4.2 trillion in 10M22). The majority of new contract values still come from residential projects at 59.7%. Meanwhile, with a target of new contract values of IDR6.7 trillion in FY23E, the realization until 10M23 reached 49.3%. We anticipate a significant increase in new contract values towards the end of the year. Currently, WEGE is traded at a level of 30.11x/0.34x PER/PBV.
3. SIDO IJ projects a double-digit decline of -10% YoY in revenue and net profit for FY23E, attributed to weakening consumer purchasing power (Emiten News). MNCS Comment: In 9M23, SIDO recorded an 18.6% YoY decrease in net profit to IDR586.6 billion (vs IDR720.4 billion in 9M22). We note that the decrease in net profit is due to the increase in AMP costs amid a -9.7% YoY decline in revenue to maintain a solid market share. Additionally, we view El-Nino as a contributing factor to the company's performance decline, considering a similar trend in FY14. Currently, SIDO is traded at a level of 19.10x/4.39x PER/PBV.

IHSG Updates
The JCI closed flat at -0.07% to 7,036.09 on Wednesday (29/11), followed by a net foreign sell of IDR49.38 billion. Several sectors experienced declines, burdening the index, led by the infrastructure sector (-0.93%), followed by the non-cyclical sector (-0.86%). On the other hand, sectors that experienced gains were led by the basic material sector (+1.59%), followed by the transportation and logistics sector (+1.06%). The index closed flat amid most Asian markets closing weaker, as investors tended to engage in profit-taking ahead of the release of several macroeconomic data at the beginning of the month. The Rupiah closed higher at IDR15,395/USD. We estimate the IHSG will move within the price range of 7,000-7,050. Today's Recommendations: ASSA, HRTA, MIKA, TOWR.

Corporate Actions
IPO : AYAM (IDR100/share)
Right Issue : PANI (31:200)

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