Global Market Highlights
The DJIA closed flat at +0.04% on Monday (30/09). Meanwhile the S&P 500 (+0.42%) and the Nasdaq (+0.38%) strengthened. Wall Street ended relatively stronger as markets responded to comments from Fed Chair Powell, indicating the potential for two more rate cuts this year, totalling 50bps. Investors remained cautiously optimistic ahead of key economic data releases later this week, which could further influence the Fed's policy direction. Today the market will be looking forward to several data releases such as: 1) Indonesia Core Inflation Rate Sep-2024; 2) Japan Jibun Bank Manufacturing PMI Final Sep-2024; 3) US JOLTs Job Openings Aug-2024.
Domestic Update
The Directorate General of Taxes (DJP) of the Ministry of Finance (Kemenkeu) reported a 52.8% YoY surge in tax restitution as of Aug-2024, reaching IDR216.85 trillion (vs IDR141.95 trillion Aug-2023). MNCS Comment: This increase was largely driven by corporate income tax (PPh Badan) refunds, which grew by 102.9%, followed by a 43.9% YoY rise in domestic VAT. These figures subsequently impacted net tax revenue, which contracted by -4.04% YoY (-5.75% YoY in Jul-2024). The sharp rise in tax restitution signals that companies are utilizing available tax incentives, possibly reflecting broader economic adjustments. However, we anticipate this may temporarily strain government revenue, necessitating balanced fiscal measures in the coming months to maintain the state's budgetary goals.
Company News
1. TOWR IJ reported an increase in net profit to IDR1.6 trillion (+9.4% YoY) in 1H24. MNCS Comment: This increase in net profit was attributed to a +6.5% YoY increase in revenue to IDR6.2 trillion (vs. IDR5.8 trillion in 1H23), driven by an increase in all business segments, with cost of revenues increasing at a manageable level (+8.0% YoY), expanding gross profit by +5.9% YoY to IDR4.3 trillion in 1H24 (vs. IDR4.1 trillion in 1H23). Furthermore, finance income increased by +87.0% YoY and finance cost decreased by -2.5% YoY. As a result, NPM increased from 25.4% to 26.1% in 1H24. TOWR is currently trading at 13.59x/2.55x PER/PBV.
2. UNTD IJ reported a decline in net profit to IDR5.5 billion (-84.7% YoY) in 1H24. MNCS Comment: This decrease in net profit was attributed to a -34.6% YoY decrease in revenue to IDR247.3 billion (vs. IDR378.5 billion in 1H23). Additionally, selling expenses and G&A expenses increased by +41.1% YoY and +42.4% YoY respectively, pressuring operating profit by -56.5% YoY to IDR28.6 billion in 1H24 (vs. IDR65.8 billion in 1H23). In terms of margin, OPM/NPM dropped to 11.6%/2.2% (vs. 17.4%/9.6% in 1H23). UNTD is currently trading at 1.34x PBV.
3. TAPG IJ realized the production of 1.8 million tons of fresh fruit bunches (FFB) as of 8M24. MNCS Comment: We note that the realized FFB production has reached 58.9% of the FY24E target of 3.1 million tons, while realized CPO production has reached 57.3% (FY24E Target: 995,000 tons). Additionally, management estimates production will improve by the end of 3Q24, supported by favorable production cycles and weather conditions. In FY24E, the company will focus on production optimization through fertilization programs to improve ASP, as well as infrastructure optimization strategies to ensure efficient production and delivery regardless of weather. Furthermore, TAPG has allocated IDR600 billion for capex in FY24E for infrastructure development. TAPG is currently trading at 8.32x/1.60x PER/PBV.
IHSG Updates
The JCI plunged by -2.2% to 7,527.93 in Monday (30/09), followed by a net foreign sell of IDR3.10 trillion. Most sectors experienced declines, led by the energy sector (-2.11%) and followed by the infrastructure sector (-1.75%). On the other hand, the sectors that saw gains were led by the basic materials sector (+0.25%) and followed by the healthcare sector (+0.02%). The index dropped significantly amid mixed closures in Asian markets, with continued declines driven by outflows from big cap stocks, triggered by stimulus actions in China. In addition, investors remained wait and see ahead of the release of domestic macroeconomic data such as the manufacturing PMI and inflation for Sep-2024. The Rupiah closed lower at IDR15,140/USD. We estimate that the JCI will move in the price range of 7,488-7,612. Today's recommendations: AUTO, MDKA, PGEO, PTBA.
Corporate Actions
EGMS: CBPE, MAPB, TFAS
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