Global Market Highlights
DJIA weakened by -1.70% on Wednesday (21/09), followed by the S&P500 (-1.71%) and the Nasdaq (-1.79%). Wall Street corrected as market participants anticipated a +75 bps FFR increase at the Fed's FOMC. In addition, data released on existing home sales in Aug-22 was 4.8 million, higher than the consensus at 4.7 million but slightly down from Jul-22 which was 4.82 million. Today, the market will be looking toward several data releases such as: 1) US Continuing Jobless Claims; 2) UK BoE Interest Rate Decision; 3) Japan BoJ Interest Rate Decision.
Domestic Update
• OJK issues 3 capital market regulations: 1) POJK Number 14/POJK.04/2022 (Submission of Periodic Financial Report); 2) POJK Number 15/POJK.04/2022 (stock split & reverse stock split) and 3) POJK Number 17/POJK.04/2022 (Fund Manager's Code of Conduct). MNCS Comment: We consider the 3 new POJKs to provide a clear legal framework and strengthen the domestic capital market industry by prioritizing the principles of fairness, order, efficiency and protecting the interests of investors and the public.
• Furthermore, the national Covid-19 daily rate had increased by 2,384 active cases (21/09).
Company News
1. RALS IJ reported the realization of 1H22 capex allocation of IDR148 billion. Meanwhile, the remaining capex allocation will be used for the expansion of new outlets in Timika and Cipanas (Kontan). MNCS Comment: With the FY22E capex target reaching IDR300 billion, the realization had reached 49.33%. We believe that the company's new store expansion can be a turnaround story for RALS, thus projecting the company's revenue to grow in FY22E and FY23F by +24.3% YoY/+9.1% YoY respectively, supported by SSSG +20.7% YoY /+19.3% YoY. Currently, RALS is traded at the level of 7.26x/1.13x PER/PBV.
2. WIIM IJ will boost revenue performance through expansion in the domestic market, as well as the exports market (Kontan). MNCS Comment: In 1H22, revenue grew by +38.20% YoY, supported by SKM segment +53,32% YoY. Meanwhile, the company's export contribution was only 0.96%. We are optimistic about the company's current growth space, where the company's sold products are tier-2 SKM and SKT, making the selling price to be relatively affordable compared to its tier-1 competitors. WIIM is currently traded at the level of 10.35x/1.22x PER/PBV.
3. ZYRX IJ posted its +30.56% YoY revenue growth in 1H22 to IDR107.92 billion (vs IDR82.66 billion in 1H21). Meanwhile, net profit grew by +134.47% YoY to IDR8.11 billion (vs IDR3.46 billion in 1H21) (Kontan). MNCS Comment: Revenue growth was supported by the increase in IT product segment which grew by +126.69% YoY, and contributed 43.43% (vs 25.01% in 1H21). We view positively the increase in this segment which was the driving force for the company's revenue in 1H22, where the company's revenue mainly came from the sale of portable computing devices (+3.42% YoY) such as laptops, in line with the company's cooperation with the government in terms of procurement for educational institutions. ZYRX is currently traded at the level of 41.49x/3.40x PER/PBV.
IHSG Updates
JCI weakened by -0.12% to 7,188.31 on Wednesday (21/09), followed by net foreign sell which reached IDR911.89 billion. A number of sectors weakened and weighed on the index, led by the property sector (-1.47%) followed by the infrastructure sector (-1.14%). On the other hand, the sectors that experienced strengthening were led by the technology sector (+0.75%) followed by the non-cyclical sector (+0.17%). The index's decline was in line with Asian markets and Wall Street. We see that investors tend to wait and see ahead of the release of the Bank Indonesia benchmark interest rate (BI7DRR) and the Fed's benchmark interest rate (FFR). The consensus estimated that Bank Indonesia will increase the BI7DRR by +25 bps to 4%, while the Fed will increase the FFR by +75 bps to 3.00-3.25%. On the other hand, the Rupiah exchange rate closed lower at IDR14,998/USD. We estimate that the JCI will move in the price range of 7,140-7,250 pending the release of Interest Rate Decision, Deposit Facility Rate SEP, and Lending Facility Rate SEP data. Today's recommendation: AGII, SRTG, TKIM, UNVR.
Corporate Actions
RUPS: ARKO
Public Expose: ASII, CARS
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