Global Market Highlights
DJIA fell -0.11% on Monday (21/08), while the S&P500 (+0.69%) and Nasdaq (+1.56%). Wall Street closed mixed again, where investors were keeping a close eye on China's macro developments and positively appraising PBOC's efforts to cut the 1Y lending rate by 10 bps to 3.45%. This is expected to be a stimulus for the economy in the future. Today, the market will be looking toward several data releases such as: 1) US Existing Home Sales Jul-2023; 2) US NY Fed Treasury Purchases 2.25 to 4.5 years; 3) UK Public Sector Net Borrowing Jul-2023.
Domestic Update
• The government plans to impose a tax on Packaged Sugary Drinks in 2024, in line with the economic recovery momentum. MNCS Comment: We believe the regulation needs to be clearer and more detailed as there are many companies in the beverage industry with a diverse range of products. Meanwhile, we assess that the impact on our consumer issuers will be minimal, where the revenue target is only IDR4.1 trillion in FY23E, or 0.2% of the total state revenue target for FY23E (vs tobacco tax revenue ~10%).
Company News
1. INDY IJ has signed with investors to increase capital for its EV business, securing a loan valued at USD45 million or IDR689.6 billion (Market Bisnis). MNCS Comment: We view the capital increase positively, as it can strengthen the fundamental business line of the company's EV, especially with the Alva One brand. We anticipate that INDY's continuous efforts in business diversification will lead to a more sustainable future. Currently, INDY is traded at the level of 4.02x/0.60x PER/PBV.
2. PRDA IJ targets a 9%-10% YoY revenue growth in FY23E, supported in part by the contribution from its digital business (Investor ID). MNCS Comment: Consequently, the revenue estimate for FY23E is expected to reach IDR2.4 trillion. Meanwhile, the revenue for 1H23 accumulated to IDR1.1 trillion (+2.5% YoY), achieving 48.7% of the target. Currently, PRDA is traded at the level of 18.75x/2.48x PER/PBV.
3. RMKO IJ recorded a net profit increase of +150.9% YoY, amounting to IDR16.2 billion in its in-house financial report for Jun-2023 (Market Business). MNCS Comment: The surge in net profit was supported by a rise in revenue to IDR134.4 billion (+113.9% YoY). All of the company's business segments also experienced growth. The mining services segment grew by +121.1% YoY, driven by a +56.6% YoY increase in OB removal volume. In terms of efficiency efforts, the company optimized its fuel usage ratio per MT of coal by -16.6% YoY, leading to improved profitability. Currently, RMKO is traded at the level of 13.97x/4.91x PER/PBV.
IHSG Updates
JCI strengthened +0.09% to 6,866.03 on Monday (21/08), followed by net foreign sell reaching IDR2.3 trillion. A number of sectors experienced strengthening and boosted the index, led by the energy sector (+1.95%) followed by the raw materials sector (+0.78%). On the other hand, the sector that experienced weakness was led by the property sector (-0.89%) followed by the transportation sector (-0.69%). The index managed to strengthen amid mixed Asian market movements, where investors tend to be optimistic ahead of the release of Indonesia's current account data in 2Q23 which is expected to remain a surplus. The Rupiah closed at IDR15,325/USD. We estimate that the JCI will move in the price range of 6,838-6,900. Today's recommendation: ENRG, INDY, PGAS, UNTR.
Corporate Actions
RUPS: TSPC, GDYR, ROCK
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