Global Market Highlights
The DJIA declined by -0.23% on Tuesday (10/09). Meanwhile the S&P 500 (+0.45%) and the Nasdaq (+0.84%). Wall Street closed mixed as investors are in wait-and-see mode ahead of the Aug-2024 core inflation reading, which could influence the expectations of Fed’s rate cut decision. The figure is expected to remain steady at 0.2% MoM/3.2% YoY or unchanged from the previous month. Today the market will be looking forward to several data releases such as: 1) AU Consumer Inflation Expectations Sep-2024; 2) GB Balance of Trade Jul-2024; 3) US Core Inflation Rate Aug-2024.
Domestic Update
Bank Indonesia reported the retail sales performance in Jul-2024 grew by 4.5% YoY to 212.4bps. However, on a monthly basis the retail sales contracted by -7.2% MoM. MNCS Comment: The decline in monthly performance was due to the normalization of demand after Eid Adha. Meanwhile, the annual growth was mainly driven by the food sector (+6.5% vs +3.5% in Jun-2024), clothing (+3.4% vs -0.5%), automotive parts & accessories (+6.3% vs +11.4%) and fuels (+1.7% vs +3.0%). Retail sales are expected to grow by 1.6% MoM/5.8% YoY to 215,9bps in Aug-2024.
Company News
1. TINS IJ is optimistic about achieving a +50.0% YoY growth in tin ore production for FY24E. MNCS Comment: We note that the realized tin ore production has increased by +32.2% YoY to 10,250 tons in 1H24 (vs 7,755 tons in 1H23), amounting to 45.9% of the FY24E target of 22,327.5 tons. Management estimates that tin ore production will continue to ramp up in 2H24, supported by an increase in global tin price. Therefore, the company expects that this trend will continue and net profit in 2H24 will be higher than 1H24. TINS is currently trading at 8.36x/1.07x PER/PBV.
2. TPMA IJ established a JV with a IDR10.2 billion investment. MNCS Comment: We note that this JV aims to provide added value to the company through strategic synergies and expansions. Management hopes that this JV will be able to increase the company’s profitability by enhancing its operational and cost efficiency. Additionally, the JV is planning to purchase 20 tugboat and barges, along with 2 floating crane vessels. This acquisition will take place over a period of 2-3 years, with a total CAPEX of USD90.0 million. Furthermore, TPMA will hold a 51.00% share in the company. TPMA is currently trading at 7.16x/1.55x PER/PBV.
3. KRYA IJ secured new contract values totaling IDR24.7 billion. MNCS Comment: We note that the new contract involves the construction of a warehouse and office for PT Elson Bernardi, including key facilities such as a production warehouse, IPAL plant, CNG system, and other critical infrastructure. This project is anticipated to be completed within 6 months and is expected to significantly boost KRYA’s revenue and strengthen its market position in the construction sector, representing a positive step toward achieving the FY24E target of IDR227.0 billion in new contract values. KRYA is currently trading at 0.94x PBV.
IHSG Updates
The JCI rose by +0.76% to 7,761.39 on Tuesday (10/09), followed by a net foreign buy of IDR459.5 billion. Most sectors strengthened and supported the index's increase, led by the technology sector (+2.29%) and followed by the infrastructure sector (+1.63%). On the other hand, the sectors that experienced declines were led by the industrial sector (-1.03%) and followed by the energy sector (-0.09%). The index managed to rebound amid a mixed close in Asian markets, as investors responded positively to the robust growth in retail sales in Jul-2024, which expanded by +4.5% YoY (vs +2.7% YoY in Jun-2024). Additionally, investors also noted China's trade balance performance in Aug-2024, which recorded a surplus of USD91.02 billion, surpassing the consensus expectation of USD83.90 billion. The Rupiah closed higher at IDR15,450/USD. We estimate that the JCI will move in the price range of 7,725-7,764. Today's recommendations: BBNI, INKP, PANI, TOWR.
Corporate Actions
EGMS: BESS
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