Global Market Highlights
The DJIA grew by +0.09% on Wednesday (04/09), meanwhile the S&P 500 (-0.16%) and the Nasdaq (-0.30%) corrected. Wall Street closed mixed as investors are digesting the job markets data from JOLTs on Jul-2024. The job openings fell below expectations at 7.67mn (vs cons 8.19mn), meanwhile the job quits was above forecast at 3.28mn (vs forecast 3.1mn). Additionally, markets will be waiting for the job markets data readings today. On the other hand, balance of trade was relatively in line with markets’ expectations, with deficit of -USD78.8bn (cons. -USD79bn). Today the market will be looking forward to several data releases such as: 1) Korea GDP Growth Rate Final 2Q24; 2) US Initial Jobless Claims Aug/31; 3) US S&P Global Services PMI Final Aug-2024.
Domestic Update
BI reported a softer net liability of Indonesia’s International Investment Position (PII) at USD247.3 billion in 2Q24, -2.60% QoQ compared to USD253.9 billion net liability in 1Q24. MNCS Comment: The decrease resulted from the growth in Foreign Financial Assets (AFLN) position (+1.2% QoQ to USD485.7 billion) and lower Foreign Financial Liabilities (KFLN) position (-0.1% QoQ to USD738.7 billion). The decline in KFLN was mainly affected by the decline in domestic stock prices, strengthening USD exchange rate against IDR, and value of domestic financial instruments during the period. This performance reflected a PII/GDP ratio of 18.1% in 2Q24, lower than 18.4% in 1Q24.
Company News
1. PTRO IJ reported a significant drop in net profit by -88.6% YoY to USD1.32 million in 1H24. MNCS Comment: Despite revenue growth of +16.1% YoY, yet, cost of revenue increased by +19.3% YoY, putting pressure on gross profit, which fell by -2.3% YoY. Additionally, increases in G&A expenses (+24.2% YoY), financial expenses (+86.3% YoY), and tax expenses (+316.5% YoY) led to a significant net profit decline of -88.6% YoY in 1H24. PTRO is currently trading at 3.57x PBV.
2. AALI IJ realized the production of 2.1 million tons of fresh fruit bunches (FFB) in 7M24. MNCS Comment: We note that the realized FFB production has reached 47.0% of the FY24E target of 4.5 million tons, while realized CPO production has reached 44.0% (FY24E Target: 1.4 million tons). However, management estimates that national CPO and FFB production will decline by 4%-10% YoY in FY24E, driven by weather uncertainty and the potential impact of La Nina. Therefore, we anticipate lower FFB and CPO production in 2H24. Nonetheless, solid ASP and moderated fertilizer prices are expected to offset the volume decline and support the company’s performance going forward. AALI is currently trading at 11.57x/0.52x PER/PBV.
3. GOLF IJ reported a net profit decline of -42.0% YoY to IDR8.8 billion in 1H24 (vs IDR15.1 billion in 1H23). MNCS Comment: The net profit decline was attributed to flat revenue growth of +0.1% YoY, while cost of revenue rose by +7.3% YoY, leading to a -4.9% YoY decline in gross profit, with a GPM of 56.4% in 1H24 (vs 59.4% in 1H23). Additionally, selling expenses increased to IDR1.4 billion (+75.3% YoY), and G&A expenses rose to IDR20.6 billion (+19.7% YoY), further squeezing GOLF's profitability. The NPM declined to 13.8% (vs 23.8% in 1H23). GOLF is currently trading at 0.58x PBV.
IHSG Updates
The JCI strengthened by +0.74% to 7,672.90 on Wednesday (04/09), followed by a net foreign buy of IDR192.6 billion. The majority of sectors experienced gains, driving the index higher, led by the consumer cyclical sector (+2.76%) and followed by the healthcare sector (+1.61%). On the other hand, the sectors that experienced declines were led by the transportation and logistics sector (-1.03%), followed by the basic materials sector (-0.87%). The index managed to rebound despite the broader Asian markets closing lower, as investors grew optimistic ahead of the release of US labor market data, which could support the Fed's rate cut later this month. Additionally, the sustained net inflow, driven by the attractiveness of the domestic market, also served as a positive catalyst for the index. The Rupiah closed higher at IDR15,475/USD. We estimate that the JCI will move in the price range of 7,633-7,701. Today's recommendations: ACES, AGII, INDF, TKIM.
Corporate Actions
EGMS: BJBR, SMIL
AGMS: KRAS
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