MNCS Morning Navigator

18 September 2023

MNCS Morning Navigator September 18, 2023

Global Market Highlights
The DJIA weakened -0.83% on Friday (15/09), followed by the S&P500 (-1.22%) and Nasdaq (-1.56%). Wall Street closed lower, where investors focused on the release of the Michigan Consumer Sentiment Preliminary data for Sep-2023, which dropped to 67.7 (vs 69.1 in consensus). Moreover, the rise in the UST 10Y yield to 4.3% also weighed down the index's performance. Today, the market will be looking toward several data releases such as: 1) US NAHB Housing Market Index Sep-2023; 2) US Net Long-Term TIC Flows Jul-2023; 3) US Overall Net Capital Flows Jul-2023.

Domestic Update
• The Central Bureau of Statistics (BPS) reports that Indonesia's trade balance in Aug-2023 recorded a surplus of USD3.12 billion, marking a consecutive surplus for 40 months. MNCS Comment: The trade balance surplus in Aug-2023 exceeded consensus estimates of USD1.5 billion. This was supported by an increase in export performance of +5.5% MoM amidst a decrease in imports by -3.5% MoM. From the leading commodity exports, CPO as well as iron and steel recorded increases of +5.3% MoM/+1.3% MoM. We observe that the positive development in the trade balance performance can strengthen the stability of the IDR exchange rate.

Company News
1. WOOD IJ has reduced its sales target for FY23E by 45-50% (Emiten News). MNCS Comment: Previously, the company targeted revenue growth for FY23E of +10% YoY, aiming for IDR5.0 trillion. However, revenue in 1H23 only accumulated to IDR1.3 trillion, achieving just 25.6% of the FY23E target. We believe the company is realistic about existing headwinds, especially in the US market. Therefore, the revenue target for FY23E is between IDR2.5-2.7 trillion (1H23 realization: 51.2%-46.5%). Currently, WOOD is traded at the level of 34.89x/0.72x PER/PBV.
2. RALS IJ revised its sales and net profit targets for FY23E to match FY22 achievements (Kontan). MNCS Comment: For FY23E, we project RALS' revenue and net profit to decline by -10.4% YoY/-10.9% YoY, respectively. This is mainly due to weak performance in 1H23, where gross sales only reached 55% of the target (vs pre-pandemic average of 62%). Furthermore, we do not foresee any significant boosters for RALS in 2H23. Currently, RALS is traded at the level of 8.05x/1.09x PER/PBV.
3. PANI IJ has received approval through EGMS to conduct a rights issue, issuing 8 billion new shares (Market Bisnis). MNCS Comment: With an estimated additional fund of IDR9.5 trillion from the rights issue, the company is positioned to expand by doubling its land bank portfolio. We view this effort positively, which can propel the company's future performance. Currently, PANI is traded at the level of 24.53x PBV.

IHSG Updates
JCI strengthened +0.34% to 6,982.79 on Friday (15/09), followed by net foreign sell reaching IDR1.35 trillion. A number of sectors experienced strengthening and pushed up the index rate, led by the raw materials sector (+2.06%) followed by the energy sector (+0.24%). On the other hand, the sectors experiencing weakness were led by the health sector (-1.96%) followed by the property sector (-1.08%). The strengthening of the index aligns with the majority of other Asian exchanges, where investors positively responded to China's retail sales data release for Aug-2023 at +4.6% YoY (vs +3.0% YoY in consensus). With such achievements, a positive global economic growth outlook is anticipated. The Rupiah closed higher at IDR15,353/USD. We estimate the IHSG will move within the price range of 6,967-7,025. Today's Recommendations: AKRA, BMRI, GOTO, MBMA.

Corporate Actions

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