Global Market Highlights
DJIA strengthened by +0.28% on Monday (31/07), followed by the S&P500 (+0.15%) and Nasdaq (+0.21%). Wall Street continued its solid rise, bolstered by the release of the Chicago PMI data in Jul-2023, which rose to 42.8 (vs 41.5 in Jun-2023), as well as positive signals from The Fed regarding the inflation outlook. Today, the market will be looking toward several data releases such as: 1) US ISM Manufacturing PMI Jul-2023; 2) US S&P Global Manufacturing PMI Final Jul-2023; 3) Germany Unemployment Rate Jul-2023.
Domestic Update
• GAPMMI projects a growth of +6% YoY in the food and beverage industry for FY23E in line with the ongoing political year. MNCS Comment: The turnover of money during the political year FY24F is estimated to increase from FY19 due to the expansion of provinces and the addition of house of representatives’ seats. This is expected to have a positive impact, especially on consumer staples companies, in accelerating top-line growth.
Company News
1. GGRM IJ recorded a net profit in 1H23 of IDR3.3 trillion, or an increase of +243.9% YoY (vs IDR956.1 billion in 1H22) (Emiten News). MNCS Comment: The increase in net profit was in line with aggressive product price adjustments that can offset the rise in CHT tariffs, leading to expansive margins. The GPM/NPM in 1H23 were recorded each at 14.2%/5.9% (vs 8.3%/1.6% in 1H22). Currently, GGRM is traded at the level of 8.17x/0.91x PER/PBV.
2. SMDR IJ will distribute an interim dividend for the fiscal year FY23E, valued at IDR65.5 billion, or equivalent to IDR4 per share (Emiten News). MNCS Comment: We estimate that the interim dividend will reach a 126% payout ratio from net income in 1H23, with a dividend yield of 1.1%. In addition, the realization of the interim dividend from the company's cash in 1H23 is only 16%, leaving ample room for growth, in line with the windfall in FY22. Currently, SMDR is traded at the level of 3.88x/0.85x PER/PBV.
3. DSNG IJ reported a net profit decrease of -21.8% YoY, down to IDR361.7 billion (vs IDR462.7 billion in 1H22) (Issuer News). MNCS Comment: The decline in net profit occurred amidst a revenue increase of +15.1% YoY, concurrently with a rise in COGS by +27.0% YoY. This surge was propelled by production costs, as well as an increase in OPEX by +12.3% YoY. Meanwhile, the NPM was recorded at 8.3% (vs 12.2% in 1H22). Currently, DSNG is traded at a level of 7.25x/0.75x PER/PBV.
IHSG Updates
JCI strengthened +0.45% to 6,931.36 on Monday (31/07), followed by a net foreign sell reaching IDR1.48 trillion. Several sectors experienced growth, propelling the pace of the index, led by the industrial sector (+1.83%) followed by the raw materials sector (+1.63%). On the other hand, the sectors that weakened were led by the energy sector (-1.19%) followed by the transportation sector (-0.89%). The strengthening of the index aligns with the Asian markets, where investors responded positively to the release of the NBS version of China's PMI Manufacturing data in Jul-2023, which rebounded to a level of 49.3 (vs 49 in Jun-2023), reflecting a recovery in demand. The Rupiah closed higher at IDR15,080/USD. We estimate that the JCI will move in the price range of 6,903-6,954 pending the release of Inflation Rate Jul-2023, Core Inflation Rate Jul-2023, and Tourist Arrivals YoY Jun-2023 data. Today's recommendation: ANTM, ASSA, JSMR, PGAS.
Corporate Actions
RUPS: ICON
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