Global Market Highlights
The DJIA plummeted by -1.51% on Tuesday (03/09), followed by the S&P 500 (-2.12%) and the Nasdaq (-3.26%). Wall Street corrected following the manufacturing employment data in Aug-2024 from ISM which climbed to 46bps, higher than expectations of 43.6bps and 43.4bps in Jul-2024, indicating more-resilient-than-expected job market. Additionally, investors are waiting for the balance of trade and job market performances by JOLTs, to gauge the likelihood of Fed’s interest rate cut decision this month. Today the market will be looking forward to several data releases such as: 1) Japan Jibun Bank Services PMI Final Aug-2024; 2) China Caixin Services PMI Aug-2024; 3) US Balance of Trade Jul-2024.
Domestic Update
The government plans to maintain buffer stocks in the energy sector as stipulated in Presidential Regulation (Perpres) No. 96/2024 concerning Energy Buffer Reserves, which was released on September 2, 2024. MNCS Comment: The buffer stock includes 9.64 million barrels of gasoline fuel (BBM), 525.78 thousand metric tons of liquefied petroleum gas (LPG), and 10.17 million barrels of petroleum until 2035. We believe that the ratification of this presidential decree aims to ensure national energy security, address energy crises and emergencies, and support sustainable development. The timeline set until 2035 appears feasible considering the state's financial capacity.
Company News
1. BRIS IJ recorded a net profit rise of +20,3% YoY, amounting to IDR3.3 trillion in 1H24. MNCS Comment: This increase in net profit aligns with a rise in net margin income of +2% YoY and fee based income of +28% YoY. Moreover, all financing segments also experienced growth, with the consumer segment up +15.9% YoY, wholesale increased by +14.6% YoY, and SME-micro rose by +18.6% YoY. Additionally, the CASA ratio improved to 62.1% in 1H24 (compared to 59.9% in 1H23). BRIS is currently trading at 2.87x PBV.
2. CLEO IJ is eyeing double digit growth of net profit in 2H24. MNCS Comment: This target aligns with management’s optimism following the company's impressive performance in 1H24. We note that CLEO reported a net profit surge of +77.9% YoY, amounting to IDR1.3 trillion, in line with net sales growth of +32.9% YoY in 1H24. Additionally, CLEO will add 3 new plants in Palu, Pontianak, and Pekanbaru this year, with a capex budget of Rp450 billion for FY24. This capex will be utilized for new plants construction, existing plants development, and additional machinery to enhance production capacity and automation, and distribution channels expansion. CLEO is currently trading at 8.85x PBV.
3. TOOL IJ recorded a decline in net profit to IDR1.1 billion (-89.0% YoY) in 1H24. MNCS Comment: The decrease in net profit was in line with a -14.4% YoY decline in revenue to IDR51.4 billion in 1H24 (vs IDR60.0 billion in 1H23), driven by a reduction in suitcase and tools sales. Additionally, selling expenses increased by +172.4% YoY and G&A expenses grew by +35.7% YoY, pressuring operating profit by -81.7% YoY to IDR2.7 billion in 1H24 (vs IDR14.6 billion in 1H23). In terms of margin, OPM/GPM dropped to 5.2%/2.1% (vs 24.3%/16.6% in 1H23). TOOL is currently trading at 0.59x PBV.
IHSG Updates
The JCI declined by -1.01% to 7,616.52 on Tuesday (03/09), amid a net foreign buy of IDR116.8 billion. Nearly all sectors experienced declines, weighing on the index, led by the technology sector (-3.04%) followed by the consumer cyclical sector (-1.49%). Meanwhile, the healthcare sector was the only one to post gains (+0.36%). The index weakened along with most other Asian markets, as investors grew increasingly concerned about the global economic outlook. Notably, South Korea’s annual inflation rate in Aug-2024 was recorded at +2% YoY, marking its lowest level in the past 42 months. The Rupiah closed flat at IDR15,525/USD. We estimate that the JCI will move in the price range of 7,570-7,653. Today's recommendations: AVIA, BRIS, BFIN, MYOR.
Corporate Actions
EGMS: WICO
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