Global Market Highlights
The DJIA corrected by -1.25% on Wednesday (24/07), followed by the S&P 500 (-2.31%) and the Nasdaq (-3.64%). Wall Street fell heavily, dragged by the tumbling down of the Magnificent 7 stock prices, as investors tend to wait and see for the earnings releases of 2Q24 after Tesla and Alphabet failed to meet markets’ high hopes. Additionally, the S&P Global Composite PMI Flash in Jul-2024 showed a relatively resilient figure at 55.0bps (vs 54.8 bps in Jun-2024), suggesting more evidence of economic stability that led to lower confidence of rate cut. Today the market will be looking forward to several data releases such as: 1) US GDP Growth Rate QoQ Adv 2Q24; 2) US PCE Prices QoQ Adv 2Q24; 3) US Initial Jobless Claims Jul/20.
Domestic Update
Two-Wheeled Electric Motor Vehicle Purchase Assistance Information System (Sisapira) reported a total of 44,004 units of subsidized electric motorbikes have been sold to the public as of July 24th, 2024 (vs 11,532 units in FY23). MNCS Comment: This Sisapira program allows a subsidy of IDR7 million/unit, accelerating the public's enthusiasm to own electric motorcycles at a favorable price. Following this performance, Indonesian Electric Motorcycle Industry Association (Aismoli) anticipates that the target of 50,000 units of sales could be achieved before the end of FY24E and expects this program to continue in FY25.
Company News
1. HMSP IJ reported a net profit decline in 1H24 of -11.6% YoY to IDR3.3 trillion (Investor ID). MNCS Comment: The net profit in 1H24 was pressured by disappointing performance in 2Q24. It was noted that revenue in 2Q24 decreased by -1.4% QoQ/-1.6% YoY. Meanwhile, the gross profit in 2Q24 contracted by -17.3% QoQ/-10.3% YoY, influenced by slow ASP adjustment of around ~2% QoQ (vs ~4% QoQ in 1Q24). This led to a net profit decline in 2Q24 of -52.4% QoQ/-32.7% YoY. The 2Q24 NPM stood at 3.7%, the lowest in the past 10 years. HMSP is currently trading at 12.01x/0.69x PER/PBV.
2. SIDO IJ posted a jump in net profit of +35.6% YoY to IDR608.5 billion in 1H24 (Kontan). MNCS Comment: This increase in net profit was supported by an increase in sales of +14.7% YoY. All sales segments experienced an increase, namely herbal medicine and supplements (+11% YoY), food and beverages (+20.4% YoY), and pharmaceuticals (+20% YoY). In addition, a decrease in G&A expenses of -14.2% YoY also contributed to an increase in net profit. As a result, GPM and NPM rose to levels of 58.2% and 32.1% respectively in 1H24 (vs 53.1% and 27.1% in 1H23). SIDO is currently trading at 6.23x PBV.
3. AMAR IJ recorded net profit reached IDR 97.7 billion (+15% YoY) in 1H24 (Emiten News). MNCS Comment: The increase in bottom-line was mainly driven by NII which grew by +35.1% YoY and non-interest income which rose by +32.4%, in line with outstanding loans which grew by +25.3% YoY reaching IDR 2.8 trillion in 1H24. NIM improved to 22.9% in 1H24 (vs 17.3% in 1H23). NPL fell to 1.21% in 1H24 (vs 1.84% in 1H23), which indicates solid improvement in loan performance and lower risk. AMAR is currently trading at 1.25x PBV.
IHSG Updates
The JCI weakened -0.70% to 7.262,76 on Wednesday (24/07), followed by net foreign sell of IDR368.77 billion. The majority of sectors experienced declines, weighing down the index, led by the technology sector (-1.67%) and followed by the infrastructure sector (-1.49%). On the other hand, sectors that experienced gains were led by the transportation and logistics sector (+0.77%) and followed by the industrial sector (+0.56%). The index corrected along with other Asian markets, as investors continued to monitor 2Q24 earnings reports. Additionally, investors responded to Japan's Jul-2024 manufacturing PMI flash, which fell into contraction territory at 49.2 (vs consensus at 50.5). The Rupiah closed lower at IDR16,215/USD. We estimate that the JCI will move in the price range of 7,238-7,285. Today's recommendations: ASII, BIRD, BREN, TLKM.
Corporate Actions
AGMS: INAF
Disclaimer On
