Global Market Highlights
The DJIA closed higher by +0.53% on Monday (15/07), followed by the S&P 500 (+0.28%) and the Nasdaq (+0.40%). Wall Street strengthened as the market remains hopeful for the rate cut probability in Sep-2024. Additionally, investors are expecting another proof of soft-landing indications from the retail sales performance in Jun-2024, which is estimated to slow down to 2.1% YoY (vs 2.3% YoY in May-2024). Today the market will be looking forward to several data releases such as: 1) US Retail Sales Jun-2024; 2) EA Balance of Trade May-2024; 3) Canada Inflation Rate Jun-2024.
Domestic Update
The Central Statistics Agency (BPS) reported a surplus of USD2.39 billion in Indonesia’s trade balance for Jun-2024, lower than USD2.92 billion in May-2024 and consensus of USD2.98 billion. MNCS Comment: This marked the smaller amount of surplus since Feb-2024, indicating slower exports growth compared to imports. This continued surplus was mainly supported by the non-oil and gas sectors with a surplus of USD4.43billion, increased from USD4.26 billion previously. Meanwhile, the oil and gas sectors recorded a higher deficit of USD2.04 billion (-USD1.33 billion in May-2024), in line with the increase in the oil and gas imports that surpassed the exports.
Company News
1. ACES IJ allocates capex up to IDR250 billion (Kontan). MNCS Comment: We note that this capex allocation in FY24E is almost doubled from the realized capex in FY23 or increased by +92.2% YoY (vs. realized capex amounting to IDR130.1 billion in FY23). Until the beginning of 1H24, ACES has opened 7 new stores from the target of 15 store rollouts in FY24E. Additionally, management is targeting sales growth of 10% YoY in FY24E, we note that in 1Q24 the company had achieved 23.8% of its revenue target. ACES is currently trading at 16.22x/2.01x PER/PBV.
2. ISSP IJ will distribute dividends for FY23 amounting to IDR106 billion or equivalent to IDR15/share (Emiten News). MNCS Comment: We estimate a potential yield reaching ~5.3% with a payout ratio of 21.3%. The DPS and DPR is higher than the previous year, IDR6/share with a DPR of 14.0% in FY22. This is in line with a jump in net profit of +62.9% YoY in FY23. ISSP is currently trading at 4.65x/0.43x PER/PBV.
3. OBMD IJ has used IPO funds worth IDR27.8 billion (Emiten News). MNCS Comment: We note that the proceeds from this IPO were 83.2% for purchasing raw materials, 7.0% for developing integrated systems, 2.8% for purchasing lab equipment, and 7.0% was deposited in a checking account. In addition, the company is eyeing sales of IDR161.5 billion for FY2E4, with a 33.6% achievement in 1Q24. OBMD is currently trading at 2.86/1.41x PER/PBV.
IHSG Updates
The JCI weakened by -0.66% to 7,278.86 on Monday (15/07), amid a net foreign buy of IDR117.86 billion. The majority of sectors experienced declines and weighed on the index, led by the infrastructure sector (-1.05%) and followed by the basic materials sector (-0.53%). Meanwhile, the sectors that experienced gains were led by the transportation and logistics sector (+0.89%) and followed by the technology sector (+0.53%). The index corrected along with other Asian markets, as investors tended to take profits after the index strengthened for four consecutive days. This was also attributed to negative sentiment from China's GDP in 2Q24, which was recorded at +4.7% YoY, below the consensus estimate of +5.1% YoY. Additionally, investors were monitoring the performance of the domestic trade balance in Jun-2024, which maintained a surplus but with a weaker figure of USD2.39 billion (vs USD2.92 billion in May-2024). The Rupiah closed lower at IDR16,170/USD. We estimate that the JCI will move in the price range of 7,239-7,296. Today's recommendations: ADRO, DEWA, SMDR, TUGU.
Corporate Actions
AGMS: TAXI
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