MNCS Morning Navigator

13 September 2022

MNCS Morning Navigator September 13, 2022

Global Market Highlights
DJIA strengthened by +0.71% on Monday (12/09), followed by the S&P500 (+1.06%) and the Nasdaq (+1.27%). Wall Street strengthened on the back of market participants' expectations for the release of the potentially declining US inflation data in Aug-22, where consensus forecasted Aug-22 inflation of 8.1% YoY (vs 8.5% in Jul-22). Today, the market will be looking toward several data releases such as: 1) US Core Inflation Rate YoY Aug; 2) US Inflation Rate YoY Aug; 3) Germany Inflation Rate YoY Final Aug.

Domestic Update
Domestic motorcycle sales were recorded at 524,821 units in Aug-2022. MNCS Comment: Motorcycle sales in August rose by 11.6% YoY and became the highest since April 2020 which indicates economic conditions continue to improve.
Furthermore, the national Covid-19 daily rate had increased by 1,848 active cases (12/09).

Company News
1. MDKA IJ posted a +152.11% YoY revenue growth in 1H22 to USD341.40 million (vs USD135.42 million in 1H21). Meanwhile, net profit increased significantly by +1,549.51% YoY to USD96.79 million (vs USD5.87 million in 1H21) (Kontan). MNCS Comment: The increase in revenue was supported by: 1) sales of 5,041 tons of MBM NPI with an ASP of USD18,669/ton; 2) increase in gold production at TB mine by +34% YoY accompanied by an increase in selling price by +4.24% YoY. The increase in net profit was in line with the company's widening margins where GPM and OPM were recorded at 30.58%/22.01%, respectively (vs 20.98%/11.37% in 1H21). Currently, MDKA is traded at the level of 34.95x/6.56x PER/PBV.
2. AKRA IJ reported the latest capex allocation in FY22E of IDR150-180 billion (Emiten News). MNCS Comment: This amount decreased from the initial estimate of IDR300-400 billion, in line with the completion of the company's business expansion, especially in JIIPE. AKRA is currently traded at the level of 12.66x/2.42x PER/PBV.
3. ADRO IJ targeted the first phase of aluminum smelter operation with a capacity of 500,000 tons/year in 1Q25. The smelter capacity will continue to be increased until it reaches 1.5 million tons/year (Kontan). MNCS Comment: We view positively the company's steps in diversifying its business towards a greener direction, thus supporting the company's performance going forward. It is estimated that the cost of the smelter construction project is USD728 million or around IDR10-11 trillion. ADRO is currently traded at the level of 3.52x/1.68x PER/PBV.

IHSG Updates
JCI rose by +0.16% to 7,254.46 on Monday (12/09), followed by net foreign buy which reached IDR829.54 billion. The majority of sectors experienced strengthening and pushed the index rate, led by the property sector (+1.81%) followed by the property sector (+1.50%). On the other hand, the sectors that experienced weakness were led by the transportation sector (-0.97%) followed by the infrastructure sector (-0.59%). The index strengthened on the back of the rising Wall Street and Asian markets. In addition, investors were also watching the release of the Aug-22 motorcycle sales data which rebounded +11.6% YoY, from Jul-22 which contracted -13.3% YoY, indicating that the economy is under control amidst the potential for higher inflation going forward and global uncertainty. On the other hand, the Rupiah exchange rate closed lower at IDR14,842/USD. We estimate that the JCI will move in the 7,230-7,280 price range. Today's recommendation: ICBP, MTEL, MYOR, TINS.

Corporate Actions
Public Expose: BBNI, PTBA, UNTR

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