Global Market Highlights
The DJIA slipped -0.26% on Wednesday (24/01), whereas the S&P 500 (+0.08%) and the Nasdaq (+0.55%) continued their strengthening. Wall Street settled mixed again as investors discerned encouraging corporate earnings especially in the tech sector, while partially held back from UST 10-yr yield’s rebound by 4.8 bps on stronger-than-expected manufacturing activity. The US S&P Manufacturing PMI Jan-2024 rose to 50.3 instead of the anticipated decline to 47.6. On the other hand, PBoC’s decision to cut their reserve requirement ratio for banks by 50 bps to 10% brings fresh air for the global growth prospect by boosting liquidity. Today the market will be looking forward to several data releases such as: 1) US Durable Goods Orders MoM Dec-2023; 2) US GDP Growth Rate QoQ 4Q-2023; 3) US Initial Jobless Claims 20 Jan-2024.
Domestic Update
The Ministry of Investment reports that the realized investment in FY23 has accumulated to IDR1,418.9 trillion, with the composition of Foreign Investment (PMA) at 52.4%, while Domestic Investment (PMDN) accounts for 47.6%. MNCS Comment: Thus, the investment realization in FY23 exceeds the set target of IDR 1,400 trillion, reflecting 101.4% of the target and a growth of +17.5% YoY. This figure also mirrors the optimism of foreign investors regarding Indonesia's future prospects. Furthermore, with the realization of investment in downstream sectors reaching 26.5% or IDR 375.4 trillion, we expect it to boost and strengthen the national economic fundamentals.
Company News
1. HEAL IJ has targeted to increase the number of hospital beds to 7,700 from 6,618 beds through the construction of 4 new hospitals in FY24E (Kontan). MNCS Comment: We note the target of building 4 new hospitals located in strategic locations that are in line with the national development agenda, namely in Pasuruan, the new capital Ibu Kota Nusantara (IKN), Pantai Indah Kapuk 2 and Madiun. Through this expansion, we assess that the company can achieve their targeted revenue growth to reach IDR 6.7 trillion in FY24E or grow ~18% YoY. HEAL is currently trading at 45.43x/5.72x PER/PBV.
2. HRUM IJ targets coal production in FY24E at 6 million tons (Investor ID). MNCS Comment: This production target is relatively similar to the upper band target in FY23 of 6 million tons. We are optimistic that the company can achieve this target, as evidenced by the cumulative production volume of 5.4 million tons in 9M23, reflecting 90%-98% of the FY23 target. Furthermore, this target will be supported by a capex allocation of USD50 million. Currently, HRUM is traded at a level of 7.00x/1.19x PER/PBV.
3. MPXL IJ targets for IDR222 bn revenue and IDR18.2 bn net income in FY24E (Emiten News). MNCS Comment: We assess this growth target to be approachable considering the company’s strategic approach to expand their business, including the realization of capex allocation to add new fleet units to IKN projects and involving the operation of new subsidiary for heavy equipment rental of mining project in Sulawesi. In 9M23, the company successfully performed +13.01% YoY of revenue and +54.75% YoY net profit growth. MPXL is currently trading at 5.98x PBV.
IHSG Updates
The JCI weakened by -0.39% to 7,227.82 on Wednesday (24/01), amidst net foreign buy of IDR1.48 tn. Most sectors decreased and weighed the index down, led by the basic materials sector (-1.14%) and followed by the technology sector (-0.75%). Meanwhile, some strengthened sectors were led by the healthcare sector (+2.14%) and followed by the transportation & logistic sector (+0.86%). The index’s movement aligned with the slump in Foreign Direct Investment (FDI) in Indonesia from 16.2% in 3Q23 to 5.3% in 4Q23 and marked the softest growth since 3Q20. The Rupiah closed lower at IDR15,710/USD. We estimate the IHSG will move within the price range of 7,211-7,254. Today's Recommendations: ADMR, MDKA, MPMX, ARTO.
Corporate Actions
EGMS: CSMI
Disclaimer On
