MNCS Morning Navigator

01 September 2022

MNCS Morning Navigator September 1, 2022

Global Market Highlights
DJIA weakened by -0.88% on Wednesday (31/08), followed by S&P500 (-0.78%) and Nasdaq (-0.56%). Wall Street weakened amid the release of the Chicago PMI Aug-22 data which was expansive to the level of 52.2 points or above consensus/previous at 52/52.1 points. The increase in the yield of US T-note 10Y to 3.14% along with the hawkish tone of the Fed pressured Wall Street. Today, the market will be looking toward several data releases such as: 1) US ISM Manufacturing PMI Aug; 2) US S&P Global Manufacturing PMI Final Aug; 3) UK S&P Global/CIPS Manufacturing PMI Final Aug.

Domestic Update
Bank Indonesia (BI) estimates a deflation of -0.13% MoM in August 2022. However, annual inflation is at +4.77% YoY. MNCS Comment: We estimate deflation to occur at -0.05% MoM indicating an increase in an annual inflation of 4.85% YoY in August 2022 in line with the decline in prices of several food commodities such as shallots, red chilies, cooking oil and cayenne pepper.
Furthermore, the national Covid-19 daily rate had increased by 4,563 active cases (31/08).

Company News
1. AMRT IJ recorded a net revenue growth of +13.92% YoY in 1H22 to IDR47.89 trillion (vs IDR42.04 trillion in 1H21). Meanwhile, net profit increased +46.93% YoY to IDR1.25 trillion (vs IDR853.29 billion in 1H21) (Emiten News). MNCS Comment: The positive achievement was in line with the increasing revenue supported by growth in the food revenue segment (+16.76% YoY) followed by non-food (+8.14% YoY). In addition, the company's margins grew limited, with GPM, OPM and NPM to 20.73%/3.49%/2.62%, respectively (vs 20.40%/2.84%/2.03% in 1H21). AMRT is currently traded at the level of 36.10x/9.77x PER/PBV.
2. ICBP IJ recorded a revenue growth in 1H22 of +15.58% YoY to IDR32.59 trillion (vs IDR28.20 trillion in 1H21). Meanwhile, net profit fell -40.08% YoY to IDR1.93 trillion (vs IDR3.22 trillion in 1H21) (CNBC Indonesia). MNCS Comment: Revenue growth was in line with the increasing contribution of the company's main revenue segment, where noodles (+15.43% YoY), dairy (+14.62% YoY) and snack foods (+18.36% YoY). However, the decrease in net profit was in line with: 1) rising COGS +24.91% YoY which reduced GPM by -5.08% YoY; 2) increased financial burden (+80,54% YoY). Currently, ICBP is traded at the level of 25.07x/2.70x PER/PBV.
3. ERAA IJ posted a +9.58% YoY revenue growth in 1H22 to IDR23.40 trillion (vs IDR21.35 trillion in 1H21). Meanwhile, net profit fell by -9.14% YoY to IDR507.52 billion (vs IDR558.54 billion in 1H21) (CNBC Indonesia). MNCS Comment: Revenue growth was supported by the increase in the cellular phone segment (+7.73% YoY) followed by accessories (+68.93% YoY). Meanwhile, the decrease in net profit was in line with the increase in: 1) selling expenses (+9.87% YoY); 2) general expenses (+37.78% YoY); 3) financial burden (+15.87% YoY). Currently, ERAA is traded at the level of 7.67x/1.24x PER/PBV.

IHSG Updates
JCI rose +0.27% to 7,178.59 on Wednesday (31/08), followed by net foreign sell which reached IDR44.90 billion. The majority of sectors experienced strengthening and boosted the index rate, led by the financial sector (+1.59%) followed by the industrial sector (+0.12%). On the other hand, the weakening sectors were led by the technology sector (-1.34%) followed by the property sector (-0.53%). The index rose amid concerns from market participants that the planned increase in subsidized fuel could increase the rate of inflation. On the other hand, market participants were watching the release of Japan's retail sales data Jul-22 which grew beyond consensus at 2.4% YoY (vs 1.9% YoY on consensus) and China's Manufacturing PMI Aug-22 which increased but remained at a contraction level of 49.4 points (vs 49.2 points on consensus). On the other hand, the Rupiah exchange rate closed flat at IDR14,843/USD. We estimate that the JCI will move in the price range of 7,130-7,180 pending the release of S&P Global Manufacturing PMI Aug, Inflation Rate YoY Aug, Inflation Rate MoM Aug, Tourist Arrivals Yoy Jul, and Core Inflation Rate YoY Aug data. Today's recommendation: BBNI, ELSA, JPFA, RALS.

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