Global Market Highlights
DJIA fell -0.84% on Thursday (17/08), followed by the S&P500 (-0.77%) and the Nasdaq (-1.17%). Wall Street declined as the UST yield rose to 4.29%. Initial jobless claims as of 12-Aug dropped to 239k (vs 250k in the previous week). Meanwhile, the CB leading index data for Jul-2023 continued its downward trend, showing a decrease of 0.4% MoM. Today, the market will be looking toward several data releases such as: 1) US Baker Hughes Total Rig Count 18-Aug-2023; 2) UK Retail Sales YoY Jul-2023; 3) UK Retail Sales ex Fuel YoY Jul-2023.
Domestic Update
• Indonesia aims for an economic growth of +5.2% YoY in 2024. MNCS Comment: Achieving this target seems challenging, especially considering the looming global economic slowdown and the potential for a mild recession. However, the surge in investment and other financial instruments, following the appointment of a new government head, is anticipated to drive economic acceleration. Moreover, we foresee household consumption holding strong despite the El-Nino phenomenon, with the social protection budget of IDR493.5 trillion (vs IDR439.1 trillion in FY23) serving as a buffer.
Company News
1. PBID IJ recorded a decrease in net profit -22.2% YoY to IDR167.4 billion in 1H23 (vs IDR215.0 billion in 1H22) (Emiten News). MNCS Comment: The net profit declined due to a 6.4% YoY decrease in revenue to IDR2.3 trillion (vs IDR2.5 trillion in 1H22). PBID is working on increasing its efficiency, as indicated by the reduction in COGS/OPEX by 4.1% YoY and 5.1% YoY, respectively. However, margin contraction is inevitable. GPM/NPM in 1H23 stood at 16.9%/7.1%, respectively (vs 18.8%/8.6% in 1H22). Currently, PBID is traded at the level of 8.29x/1.15x PER/PBV.
2. ITMG IJ targets a coal production volume of 16.6 - 17.0 million tons for FY23E. Meanwhile, the targeted sales volume is projected to be 21.5 - 22.2 million tons (Emiten News). MNCS Comment: In 1H23, the production volume reached 8.2 million tonnes, representing a realization of 49.4% - 48.2% of the FY23E target. Concurrently, the sales volume for 1H23 totaled 9.9 million tons, which reflects 46.0% - 44.6% of the FY23E target. We are optimistic that the production volume will meet the FY23E target, bolstered by more favorable weather conditions which are expected to also enhance sales volume. Currently, ITMG is traded at the level of 3.45x/1.18x PER/PBV.
3. GOTO IJ recorded a +102.3% YoY decrease in revenue growth and reduced its loss to IDR7.16 trillion in 1H23 (Emiten News). MNCS Comment: GOTO's earnings release in 1H23 demonstrates improvement. It was noted that the adjusted EBITDA grew by +70% YoY, supported by an increase in take rates of +4.0% YoY and a reduction in sales, marketing, and non-variable expenses. GOTO also plans to divest non-core assets, potentially increasing liquidity. We are optimistic about GOTO's prospects for achieving positive Adjusted EBITDA in the future. Currently, GOTO is traded at the level of 0.92x PBV.
IHSG Updates
JCI closed commemorating the Independence Day on Thursday (17/08). Meanwhile, Asian stock markets closed with mixed results, as investors closely monitored the release of the FOMC minutes from the Fed, which appeared to be hawkish. The Fed remains concerned about future trends in inflation, suggesting a potential rise in the benchmark interest rate (FFR). This stance aligns with the inflation rate that has yet to meet the ~2% target and the persistently tight labor market. The Rupiah closed at IDR15,283/USD. We estimate that the JCI will move in the price range of 6,878-6,913. Today's recommendation: BBNI, CTRA, ITMG, LSIP.
Corporate Actions
Cum Dividend: RSGK (IDR15/share)
RUPS: DPUM
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