Global Market Highlights
The DJIA strengthened by +1.20% on Monday (09/09), followed by the S&P 500 (+1.16%) and the Nasdaq (+1.16%). Wall Street rebounded as markets reacted positively to steady consumer inflation expectations in Aug-2024, which met the consensus at 3%. Additionally, markets remain optimistic about the business optimism survey from NFIB in Aug-2024, which is expected to stabilize at 93.6 bps (vs 93.7bps in Jul-2024). Today the market will be looking forward to several data releases such as: 1) Indonesia Retail Sales Jul-2024; 2) China Balance of Trade Aug-2024; 3) GB Unemployment Rate Jul-2024.
Domestic Update
Bank Indonesia reported Consumer Confidence Index (IKK) increased to 124.4bps in Aug-2024 from 123.4bps in Jul-2024. MNCS Comment: This performance beat the forecast of 123.6bps, which was primarily influenced by the stable Current Economic Condition Index (IKE) at 114.0bps (+0.5bps) and an increase in the Consumer Expectation Index (IEK) to 134.9bps (+1.6bps). The IKE was supported by the current income 122.9bps (vs 121.4bps previously). Meanwhile, the IEK was driven by improvements in all subsegments: expectations, job availability, and business activity expectations. We expect the IKK to remain optimistic in the next quarter, supported by the holiday seasons.
Company News
1. RIGS IJ reported an increase in net profit to IDR79.0 billion (+26.3% YoY) in 1H24. MNCS Comment: We note that the net profit growth was mainly attributable to a surge in finance (+732.1% YoY) and a decline in other expenses (-35.9% YoY). As a result, RIGS managed to record a net profit growth despite revenue remaining flat (+1.8% YoY). In terms of margin, OPM/NPM grew to 20.4%/22.7% in 1H24 (vs 18.2%/18.3% in 1H23). RIGS is currently trading at 4.78x/0.50x PER/PBV.
2. LFLO IJ aims for IDR121.9 billion revenue in FY24E. MNCS Comment: This target reflects a significant increase from the revenue obtained in FY23 at IDR80.7 billion, in line with management’s optimism following the company’s impressive performance in 1H24. Additionally, management anticipates that LFLO’s strategic partnership with Krisflyer, Singapore Airline’s loyalty program, will enhance the company’s brand appeal for customers interested in luxury and design, which will increase LFLO’s revenue. Furthermore, the company is strategically expanding its collaboration with sustainability-focused SMEs in Indonesia by utilizing innovative biomaterials for their furniture and accessories, contributing to environmental efforts and supporting the local economy. LFLO is currently trading at 8.76x/2.18x PER/PBV.
3. TRIN IJ recorded IDR1.1 trillion marketing sales as of Aug-24. MNCS Comment: We note that marketing sales as of Aug-24 increased by +101.0% YoY, amounting to 91.7% of the marketing sales target this year (Target FY24E: 1.2 trillion). This was mainly driven by the Sequoia Hills project, which contributed 46.5% of total marketing sales. Management is optimistic that this target is achievable, in line with the increased demand for landed housing, supported by VAT incentives with allowance of 100% until the end of the year. TRIN is currently trading at 1.03x PBV.
IHSG Updates
The JCI weakened by -0.25% to 7,702.74 on Monday (09/09), amid a net foreign buy of IDR251.6 billion. The majority of sectors experienced declines, weighing down the index, led by the healthcare sector (-0.97%) followed by energy (-0.62%). On the other hand, the sectors that showed gains were led by the property and real estate sector (+1.91%) followed by the consumer cyclical sector (+0.14%). The index’s decline was in line with other Asian markets, as investor concerns over the future economic outlook were influenced by the latest macroeconomic data from China. Notably, China’s annual inflation rate in Aug-2024 was recorded at +0.6% YoY, below the consensus expectation of +0.7% YoY, reflecting still weak consumer purchasing power. The Rupiah closed lower at IDR15,455/USD. We estimate that the JCI will move in the price range of 7,625-7,724. Today's recommendations: ADRO, AMMN, PGEO, SMDR.
Corporate Actions
EGMS: BTON, MFMI
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