MNCS Morning Navigator

06 September 2023

MNCS Morning Navigator September 6, 2023

Global Market Highlights
DJIA weakened -0.56% on Tuesday (05/09), followed by the S&P500 (-0.42%) and Nasdaq (-0.08%). Wall Street was corrected, with investors paying close attention to negative sentiment from the Chinese and European macroeconomics. In addition, the release of factory orders data in Jul-2023 fell -2.1% MoM (vs grew +2.3% MoM in Jun-2023). Today, the market will be looking toward several data releases such as: 1) US ISM Services PMI Aug-2023; 2) US Balance of Trade Jul-2023; 3) UK S&P Global/CIPS Construction PMI Aug-2023.

Domestic Update
• The IMF forecasts the economic growth of ASEAN countries to be +4.5%-4.6% YoY in FY23E, higher than the global growth rate of +3.0% YoY. MNCS Comment: We see the potential risk of a global economic slowdown, especially in China and the US. The exposure from the property market and the era of high-interest rates could affect the economic growth of developing countries in the future. However, we maintain our economic growth outlook for Indonesia within the range of 4.9%-5.1% YoY. This growth is expected to be supported, among other things, by a macroeconomic policy mix that promotes stability.

Company News
1. PTPP IJ reported a new contract acquisition worth IDR22.5 trillion in Aug-2023 (Market Bisnis). MNCS Comment: Thus, the new contract value grew by +42.6% YoY (vs IDR15.78 trillion in 8M22). Meanwhile, with a target new contract value for FY23E set at IDR34 trillion, the realization up to 8M23 has reached 66.2%. Currently, PTPP is traded at the level of 18.65x/0.32x PER/PBV.
2. ASLC IJ reported that the number of vehicles successfully auctioned reached 41k units up to 1H23 (Emiten News). MNCS Comment: Consequently, the number of auctioned vehicles increased by 17.1% YoY (vs 35k in 1H22), surpassing the target of 38k. The momentum of used car sales aligns with our expectations for this year, where there has been a one-year lag compared to new car sales. It is hoped that this increased volume can drive better company performance in the future. Currently, ASLC is traded at a level of 1.94x PBV.
3. BRMS IJ is currently discussing further sources of funding for project development in Kerta (Banten) and Linge (Aceh) (Investor ID). MNCS Comment: : We observe that the company is striving to enhance asset productivity to support the underutilized processing plant. Moreover, the company plans to double the existing production capacity through the expansion of a third plant, which can process 4k tons of ore per day. Currently, BRMS is traded at the level of 1.74x PBV.

IHSG Updates
JCI weakened -0.07% to 6,991.71 on Tuesday (05/09), followed by net foreign buy reaching IDR150.07 billion. A number of sectors experienced weakening and weighed on the index, led by the technology sector (-1.28%) followed by the non-cyclical sector (-0.58%). On the other hand, the sector that experienced strengthening was led by the transportation sector (+2.86%) followed by the infrastructure sector (+0.95%). The index weakened along with the majority of other Asian exchanges, where investors were paying attention to the release of China's PMI Services data in Aug-2023 which slowed to a level of 51.8, or was below the consensus estimate at the level of 53.6 and the Jul-2023 realization at the level of 51.1. The Rupiah closed lower at IDR15,265/USD. We estimate that the JCI will move in the price range of 6,970-7,020. Today's recommendation: BRMS, GOTO, ISAT, NCKL.

Corporate Actions

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