Global Market Highlights
DJIA weakened -0.51% on Tuesday (22/08), followed by S&P500 (-0.28%) while Nasdaq (+0.06%). Wall Street closed mixed, as investors paid attention to the release of existing home sales data in Jul-2023 which amounted to 4.07 million units, down -2.2% MoM and below the consensus estimate of 4.15 million units. Today, the market will be looking toward several data releases such as: 1) US Jackson Hole Symposium; 2) US S&P Global Composite PMI Flash Aug-2023; 3) Germany HCOB Manufacturing PMI Flash Aug-2023.
Domestic Update
• Bank Indonesia (BI) reported that the current account balance for 2Q23 recorded a deficit of USD1.9 billion, equivalent to 0.5% of the GDP. MNCS Comment: The current account balance experienced a deficit after previously showing a surplus for seven consecutive quarters. This deficit is attributed to the weakening of the global economy and the declining trend in commodity prices. The drop in commodity prices has led the trade balance to show a moderating trend. Meanwhile, Indonesia's Balance of Payments for 2Q23 recorded a deficit of USD7.4 billion, with the capital and financial transaction performance showing a deficit of USD5.0 billion.
Company News
1. ADMR IJ recorded a decrease in net profit -19.1% YoY to USD163.5 million in 1H23 (vs USD202.0 million in 1H22 (Kontan). MNCS Comment: Decreased net profit amid an increase in revenue of +6.4% YoY to USD463.6 million in 1H23, in line with the increase in OPEX +132.7% YoY and COGS +41.8% which also suppressed profitability. All margins experienced a contraction where GPM/NPM became 54.6%/35.3% (vs 66.0%/46.4% in 1H22). Currently, ADMR is traded at the level of 10.07x/4.71x PER/PBV.
2. TOTL IJ recorded the value of the new contract up to 7M23 reaching IDR2.0 trillion (Kontan). MNCS Comment: The new contracts’ value has increased significantly, where at the early Jul-2022, the new contracts only reached IDR618.9 billion. Meanwhile, with a target of IDR2.6 trillion in FY23E, realization up to 7M23 reached 75.4%. Currently, TOTL is traded at the level of 10.14x/1.41x PER/PBV.
3. SMGR IJ has allocated funds from the rights issue amounting to IDR1.6 trillion to bolster its waste processing facilities, which will be used as an alternative energy source to replace coal (Investor ID). MNCS Comment: We view the company's efforts to optimize the role of alternative energy positively, as it can reduce costs. We anticipate that this efficiency will lead to better profitability for SMGR in the future, making their business more sustainable. Currently, SMGR is traded at a level of 26.31x/1.09x PER/PBV.
IHSG Updates
JCI strengthened +0.73% to 6,916.45 on Tuesday (22/08), followed by net foreign sell reaching IDR280.28 billion. Almost all sectors experienced strengthening and boosted the index rate, led by the transportation sector (+1.38%) followed by the energy sector (+1.28%). On the other hand, the sector that experienced weakness was the technology sector (-0.90%). The index's gains were in line with the majority of other Asian markets, where investors expected a dovish policy from the Fed at this week's Jackson Hole meeting. The Rupiah closed higher at IDR15,315/USD. We estimate that the JCI will move in the price range of 6,891-6,934. Today's recommendation: HRUM, MDKA, MEDC, TOWR.
Corporate Actions
RUPS: BNLI, TELE, SKBM
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