Global Market Highlights
The DJIA declined by -0.31% on Tuesday (11/06), while the S&P500 rose by +0.27% followed by the Nasdaq (+0.88%). Wall Street closed mixed as investors wait-and-see ahead of the release of May-2024 headline inflation data, which is expected to remain flat on an annual basis at +3.4% YoY. Today the market will be looking forward to several data releases such as: 1) China Inflation Rate YoY May-2024; 2) UK GDP MoM Apr-2024; 3) US Inflation Rate May-2024.
Domestic Update
The retail sales index in Apr-2024 stood at 236.3, reflecting a monthly growth of +0.4% MoM, but a decline of -2.73% YoY on an annual basis. MNCS Comment: We attribute the annual decline to normalization post the festive Lebaran period, which occurred near the end of 1Q24. Meanwhile, monthly retail sales were supported by the Food, Beverage, and Tobacco group (+0.8% MoM), the Information and Communication Equipment group (+5.4% MoM), and the Cultural and Recreational Goods group (+5.1% MoM). We see growth in the Information and Communication Equipment group, bolstered by THR and Bonuses, as a positive catalyst for ERAA's sales in 2Q24.
Company News
1. DEPO IJ has realized 42% of its targeted capex of IDR260 billion in 1Q24 (Kontan). MNCS Comment: With the capex allocation of IDR109.2 billion in 1Q24 designated for store acquisitions in Pekanbaru and renovations of several other stores, we expect this to support the company's business operations and revenue streamlining going forward. The company targets a revenue growth of 14%-15% YoY in FY24E, estimated to reach IDR3.1 trillion. Meanwhile, the company's revenue in 1Q24 was recorded at IDR694.8 billion, reflecting ~23% of the FY24E target. DEPO is currently trading at 26.09x/2.01x PER/PBV.
2. PWON IJ acquired 5.2ha land in Semarang amounting to IDR121.7 billion on 06/06 (Kontan). MNCS Comment: This transaction accumulated to 18.2ha of land purchases in Semarang with the total value reaching IDR424.5 billion, completed with the company’s internal cash. The management stated that this land will be developed into a superblock area which includes retail, malls, hotels and apartments. We estimate that this project holds the potential to sustain the business performance going forward. In 1Q24, PWON booked +10.5% YoY growth in revenue, but followed by -44.4% YoY drop in net income, influenced by the increase in COGS (+6.5% YoY), opex (29.5% YoY), and finance costs (+15.6% YoY). PWON is currently trading at 0.84x PBV.
3. SMDR IJ actualized the addition of 8 fleets until May-2024 (Kontan). MNCS Comment: This acquisition includes container ships, gas tankers, tugboats and barges, reflecting 66.7% of the target of 12 additional fleets this year. This acquisition is aimed to support the company in getting new projects from the logistics and ports services business line. In 1Q24, the company recorded a -24.7% YoY slowdown in revenue and -63.0% YoY in net income, pressured by the drop in the shipping and agency segment (-30.9% YoY) as the freight rate declined. SMDR is currently trading at 0.43x PBV.
IHSG Updates
The JCI corrected by -0.95% to 6,855.69 on Tuesday (11/06), followed by a net foreign outflow of IDR1.17 trillion. Most sectors weakened and pressured the index, led by the industrials sector (-2.45%) and followed by the financials sector (-1.08%). Meanwhile, the infrastructures sector led the gain (+0.87%) and followed by the energy sector (+0.14%). The index weakened along with the sunk of retail sales in Apr-2024 to -2.7% YoY from +9.3% YoY in Mar-2024, far below the estimation at +11.0% YoY. Most of the Asian markets plummeted as investors wait for the release of China’s inflation rate for May-2024. The Rupiah continued its weakening to IDR16,290/USD. We estimate that the JCI will move in the price range of 6,829-6,905. Today's recommendations: ELSA, KLBF, MBMA, TINS.
Corporate Actions
Cum Dividend: JRPT (IDR24/share)
AGMS: ERAL, MYOR
Disclaimer On
