MNCS Morning Navigator

14 September 2023

MNCS Morning Navigator September 14, 2023

Global Market Highlights
The DJIA weakened by -0.20% on Wednesday (13/09), while the S&P500 (+0.12%) and the Nasdaq (+0.29%). Wall Street closed mixed, influenced by inflation reports. Headline inflation in Aug-2023 rose by +3.7% YoY, slightly higher than the consensus of +3.6% YoY. However, core inflation slowed down in Aug-2023 to +4.3% YoY (vs +4.7% YoY in Jul-2023) and was positively received by the market. Today, the market will be looking toward several data releases such as: 1) US PPI MoM Aug-2023; 2) US Retail Sales MoM Aug-2023; 3) US Initial Jobless Claims 9-Sep-2023.

Domestic Update
• The Association of Indonesian Food and Beverage Entrepreneurs (GAPMMI) projects that the food and beverage industry can grow above +5% YoY. MNCS Comment: We note that the growth of the food and beverage industry, referring to the real GDP, was +4.6% YoY in 2Q23. We are optimistic that this target can be achieved, especially with the increased consumption expected during the elections, which should serve as a cushion for the industry. Additionally, price moderation alongside decreasing input costs is expected to drive volume.

Company News
1. INKP IJ signed a deed of sale and purchase agreement for 42 plots of land worth IDR247.93 billion to start the construction of a new plant (Emiten News). MNCS Comment: With the new plant expansion, there will be an added capacity of 3.9 million tons/year, increasing to 7.0 million tons/year. With the projected capacity increase, it is hoped this will boost the company's performance. Currently, INKP is traded at the level of 7.16x/0.66x PER/PBV.
2. ADHI IJ reported a new contract acquisition value up to 8M23 of IDR24.5 trillion (Emiten News). MNCS Comment: The new contract acquisition value for ADHI increased by +50.3% YoY (vs IDR 16.3 trillion in 8M22). Therefore, with a target new contract acquisition value in FY23E of IDR27 trillion, the realization up to 8M23 has reached 90.7%. Currently, ADHI is traded at the level of 0.49x PBV.
3. SMDR IJ realized its expansion by adding 8 new fleet ships up to 8M23 (Kontan). MNCS Comment: We view positively the company's efforts to expand its fleet, which is expected to drive growth going forward. With a target of acquiring 11 new ships in FY23E, the realization up to 8M23 has reached 72.7%. Currently, SMDR is traded at the level of 3.77x/0.83x PER/PBV.

IHSG Updates
JCI closed flat +0.02% to 6,935.48 on Wednesday (13/09), followed by net foreign sell reaching IDR1.76 trillion. The sectors that experienced strengthening were led by the energy sector (+0.89%) followed by the raw materials sector (+0.54%). On the other hand, the sectors experiencing weakness were led by the technology sector (-2.05%) followed by the transportation sector (-0.70%). The index closed flat amidst contracting Asian markets, where investors remain in wait-and-see mode ahead of global economic data releases, especially the US inflation rate for Aug-2023. The Rupiah closed lower at IDR15,370/USD. We estimate the IHSG will move within the price range of 6,908-6,941. Today's Recommendations: INDF, MDKA, SRTG, UNTR.

Corporate Actions
Cum Dividend: BSSR (IDR349.93/share)

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