Global Market Highlights
DJIA weakened by -1.01% on Tuesday (20/09), followed by the S&P500 (-1.13%) and the Nasdaq (-0.95%). Wall Street was corrected as the yield on the US T-note 10Y increased to 3.57%, triggered by the Swedish central bank raising its benchmark interest rate by +100 bps. Making investors speculate if the Fed at the FOMC this month has the potential to increase the FFR by +100 bps. Today, the market will be looking toward several data releases such as: 1) US MBA Mortgage Applications; 2) US Existing Home Sales MoM Aug; 3) UK Public Sector Net Borrowing Aug.
Domestic Update
• The government issued 6 series of SBSN worth IDR6.3 trillion at auction Tuesday (20/09/22). The issuance value is lower than the indicative target of IDR9 trillion. MNCS Comment: We see lower investors' appetite on yesterday's auction reflected by the incoming bids value amounting at IDR17.1 trillion (vs. IDR24.1 trillion in the previous auction). We believe investors still wait & see ahead of the FOMC meeting & recent increase in UST note yield.
• Furthermore, the national Covid-19 daily rate had increased by 2,518 active cases (20/09).
Company News
1. KLBF IJ targeted net sales growth in FY22E of +11% YoY (Kontan). MNCS Comment: In 1H22, the company's net sales grew by +12.1% YoY while net profit grew by +9.33% YoY. KLBF managed to maintain its positive performance in 1H22 amidst the declining performance of several other health issuers. We see that this is inseparable from the company's business model with 4 business pillars, one of which is the logistics and distribution segment which contributes greatly. We are optimistic about the company's target, which is supported by: 1) ASP increase in FY22E +5-8% YoY; 2) capex allocation of IDR1 trillion. Currently, KLBF is traded at the level of 26.49x/4.55x PER/PBV.
2. TOBA IJ together with GOTO through its JV, Electrum, succeeded in supplying 300 electric motorcycles for the Gojek fleet (Market Bisnis). MNCS Comment: It is hoped that this synergy will open up greater opportunities in the future, along with the development of domestic EV trends. So that it can be one of the drivers of the company's future performance. Currently, TOBA is traded at the level of 6.23x/1.34x PER/PBV.
3. DRMA IJ targeted revenue and net profit growth in FY22E by +20% YoY/+50% YoY, respectively (Market Bisnis). MNCS Comment: DRMA's performance in 1H22 recorded growth in revenue and net profit of +21.69% YoY/+45.10% YoY, respectively. With the massive domestic automotive sales this year, along with the post-pandemic and also PPnBM incentives, it is hoped that it will boost the company's performance and achieve the company's target in FY22E. Currently, DRMA is traded at the level of 10.98x/2.75x PER/PBV.
IHSG Updates
JCI closed flat by +0.02% to 7,196.95 on Tuesday (20/09), followed by net foreign buy which reached IDR241.23 billion. A number of sectors strengthened and pushed the index up, led by the technology sector (+0.94%) followed by the health sector (+0.36%). On the other hand, the weakening sectors were led by the transportation sector (-1.04%) followed by the property sector (-0.99%). The strengthening of the index was in line with Asian markets and Wall Street. Investors positively welcomed the dovish attitude of China's central bank (PBOC) to maintain lending rates (1Y : 3.65%/5Y: 4.3%), which could be a stimulus for global economic growth. On the other hand, the Rupiah exchange rate closed lower at IDR14,983/USD. We estimate that the JCI will move in the price range of 7,140-7,250 pending the release of Loan Growth YoY Aug data. Today's recommendation: ARKO, BTPS, INKP, TOWR.
Corporate Actions
Cum Dividend: MBAP (IDR1,030/share), BSSR (IDR567.13/share)
RUPS: HEXA
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