Global Market Highlights
DJIA gained +0.84% on Friday (30/06), followed by the S&P500 (+1.23%) and the Nasdaq (+1.45%). Wall Street managed to gain ground supported by positive macroeconomic data. Note, the PCE price index in May-2023 slowed to +0.1% MoM/+3.8% YoY (vs +0.4% MoM/+4.3% YoY earlier), which is expected to dampen The Fed. Today, the market will be looking toward several data releases such as: 1) US ISM Manufacturing PMI June; 2) US Construction Spending MoM May; 3) UK S&P Global/CIPS Manufacturing PMI Final June.
Domestic Update
• IMF projects that Indonesia's foreign direct investment growth in FY23E will reach +19% YoY. MNCS Comment: In 1Q23, it was recorded that FDI revenues increased +20.2% YoY and contributed 53.8%. We view this growth trend as supported by the downstream industry campaign, reflected by the largest contribution, namely the base metal and metal goods industry (USD2.9 billion), followed by transportation, warehouse and telecommunications (USD1.2 billion) and the chemical and pharmaceutical industry (USD1.1 billion). In addition, a solid economic outlook and stable political factors will also accelerate this growth.
Company News
1. ERAA IJ will distribute cash dividends for the FY22 financial year of IDR299 billion, or the equivalent of IDR19 per share (Kontan). MNCS Comment: Thus, ERAA will offer a dividend yield of 4.0% (vs 5Y average of 3.4%). DPS decreased compared to the previous year (IDR22.8 per share) as the payout ratio decreased. Currently, ERAA is traded at the level of 8.06x/1.09x PER/PBV.
2. DRMA IJ targets revenue growth of 20%-25% YoY in FY23E (Emiten News). MNCS Comment: This target has increased from the previous which was +20% YoY. Meanwhile, in 1Q23, total revenue was recorded at IDR1.4 trillion, or realization reached 29.5%-30.8%. We are optimistic that DRMA can achieve this target, where the Indonesian Motorcycle Industry Association projects 2W sales growth of 5%-9% YoY in FY23E. Currently, DRMA is traded at the level of 7.79x/4.46x PER/PBV.
3. KRAS IJ recorded a net profit in FY22 of USD19.5 million, or decreased -56.2% YoY (Market Bisnis). MNCS Comment: Decreased net profit amid increase in revenue (+5.8% YoY) and PBT (+246.1% YoY), along with a 13x increase in tax expense, which was attributable to deferred tax expense. Currently, KRAS is traded at the level of 0.44x PBV.
IHSG Updates
IHSG closed commemorating holidays with Eid al-Adha 1444H. Asian stocks on the last day of trading for June-2023 closed mixed, where investors tended to wait and see ahead of the release of Caixin's manufacturing PMI data. Meanwhile, South Korea recorded industrial production growth of +3.2% MoM in May-2023, supported by the automotive and semiconductor segments. Looking ahead, the domestic market will look forward to the release of the Jun-2023 inflation data which is expected to slow down. The Rupiah closed at IDR14,993/USD. We estimate that the JCI will move in the price range of 6,642-6,681 pending the release of S&P Global Manufacturing PMI Jun-2023, and Tourist Arrivals May-2023 data. Today's recommendation: ADRO, BBRI, INDF, MAPI.
Corporate Actions
Cum Dividend: SHIP (IDR17.5/share), MAPI (IDR8/share), MAPA (IDR40/share)
Disclaimer On
