Global Market Highlights
The DJIA edged +0.03% higher on Thursday (04/01), while the S&P 500 (-0.34%) and Nasdaq (-0.56%) continued their downtrend. A sharp UST 10-yr yield surge by 8 bps undermined tech stocks following the stronger-than-expected labor market data; US weekly initial unemployment claims Dec/30 fell deeper than expectations to 202k (vs. 216k), further reaffirmed by US December-23 ADP employment change that rose 164k vs. expectations of 125k, hoisting the market’s inflation expectations. Today the market will be looking forward to several data releases such as: 1) US Non-Farm Payrolls Dec-23; 2) EA Inflation Rate Flash Dec-23; 3) Japan Consumer Confidence Dec-23.
Domestic Update
The government has set a coal production target for FY24E at 710 million tons, with a DMO quota reaching 181 million tons. MNCS Comment: This production target represents an increase compared to FY23, which was set at 694.5 million tons, with actual production reaching 765.7 million tons. We see this moderate increase in the target being supported by favorable weather conditions during the peak of El-Nino in 2Q24. Meanwhile, the production target below the FY23 realization seems realistic, considering the ongoing normalization of commodity prices amid the potential increase in the cash cost of mining companies.
Company News
1. RAJA IJ continues their expansion efforts by purchasing 8% of Participating Interest (PI) in the Jabung Working Area (Kontan). MNCS Comment: After achieving a net profit growth of 150.0% YoY during 9M23, we view RAJA’s strategy of enriching their upstream oil and gas investment portfolio to bolster their profit growth, concurrent with their rapid expansion in the CNG business sector which is expected to contribute USD4.5 million to revenue in FY24E and has the potential to grow ~7% annually. Currently, RAJA is trading at 26.35x/3.50x PER/PBV.
2. MTDL IJ targets revenue and net profit growth of +10% YoY, respectively (Market Bisnis). MNCS Comment: In 9M23, we note that the company's revenue remained relatively flat (-0.4% YoY), while net profit managed to grow by +8.2% YoY. We believe the diversification of the company into a digital solution provider can act as a cushion for growth amid a slowdown in the ICT equipment segment. The order book for cloud and cybersecurity services nearly doubled in 3Q23. With a substantial customer base and a solid market share, we are optimistic that the company can achieve its targets. Currently, MTDL is traded at a level of 11.80x/1.83X PER/PBV.
3. MPXL IJ has successfully added their fleet units by +55.88% post IPO (QoQ FY23) and will continue to increase 100 more units by the end of FY24 for IKN project. The company applies a strategy to directly send new units to customers who currently have undergoing projects and by far has completed the delivery of 27 fleets to IKN (Emiten News). MNCS Comment: We view the company’s business prospect to be enticing, considering the company has successfully hit +53.96% revenue growth (QoQ FY23). Thus we estimate the growth to continue aligning with the expansion in FY24. MPXL is currently trading at level 5.00x PBV.
IHSG Updates
The JCI climbed by +1.11% to 7,359.76 on Thursday (04/01), followed by significant net foreign buy of IDR1.3 trillion. Most sectors strengthened and boosted the index up, led by the transportation & logistic sector (+2.30%) and followed by the financials sector (+2.13%). On the other hand, some weakened sectors were led by the technology sector (-0.64%) and followed by the healthcare sector (-0.36%). The index outperformed other Asian markets where investors still assess the release of China Caixin Services and Composite PMI. The Rupiah closed lower at IDR15,490/USD. We estimate the IHSG will move within the price range of 7,322-7,377. Today's Recommendations: ASII, BBCA, PTBA, TOWR.
Corporate Actions
IPO: ASLI (IDR100/share)
Cum Dividend: BSSR (IDR118.39/share), IPCM (IDR3.8/share)
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