Global Market Highlights
DJIA declined by -0.09% on Wednesday (12/06), while the S&P500 continued to strengthen by +0.85%, followed by the Nasdaq (+1.53%). Wall Street closed mixed amid positive catalysts from the release of May-2024 inflation data, which slowed to +3.3% YoY, lower than the consensus estimate of +3.4% YoY. On the other hand, investors are observing the projection of a rate cut by The Fed in FY24E to 1x25 bps, more moderate compared to the March-2024 projection of 3x25 bps. Today the market will be looking forward to several data releases such as: 1) China New Yuan Loans May-2024; 2) US PPI MoM May-2024; 3) US Initial Jobless Claims JUN/08.
Domestic Update
Gaikindo reported that 4W wholesales performance in May-2024 declined by -13.3% YoY to 71.3k units, bringing the 5M24 sales performance to 335.0k units (-21.0% YoY). MNCS Comment: As a result, the 4W wholesales performance in 5M24 reflects 30.5% of the FY24E target of 1.1 million units. We believe the sales decline is due to the increase in interest rates, which has driven up vehicle loan rates over the past few months. Going forward, we expect various automotive events to act as a buffer for sales performance.
Company News
1. ADHI IJ realized new contract acquisitions worth IDR9.4 trillion in 5M24 (Kontan). MNCS Comment: We note that the new contract acquisitions in 5M24 reflect 25.1% of the target of IDR37.4 trillion. Furthermore, the building segment dominated with a 50% contribution, followed by the water resources segment with 35%. We anticipate continued contract additions through the end of the year, supported by development plans in IKN and other private projects. ADHI is currently trading at 0.19x PBV.
2. MYOR IJ targets sales of IDR34.28 trillion in FY24E (Kontan). MNCS Comment: This target reflects a +8.9% YoY growth compared to the sales in FY23. Following this, the company aims to achieve a bottom-line of IDR3.47 trillion, or equivalent to +8.6% growth compared to the achievement in FY23. In 1Q24, MYOR booked a revenue of IDR8.76 trillion (+3.7% YoY), reflecting 25.6% of the target. Meanwhile, the net profit was reported at IDR1.11 trillion, soaring by +52.9% YoY and reflecting 32.0% of the annual goal. MYOR is currently trading at 3.25x PBV.
3. PRDA IJ absorbed ~12% of the total capex budget in 1Q24 (Kontan). MNCS Comment: The company budgets a capex of IDR250-300 billion for FY24E, with 30%-35% is intended for the development of digitalization and information technology, 40%-55% for the development and capacity building of laboratory equipment, while the rest will be allocated for development of existing outlets. Following this, the management targets a revenue growth above the GDP target (5.2%) for FY24E. In 1Q24, the business experienced slowdowns in revenue (-6.0% YoY) and net income (-45.3% YoY), due to the decline in all segments. PRDA is currently trading at 1.14x PBV.
IHSG Updates
The JCI declined by -0.08% to 6,850.10 on Wednesday (12/06), followed by a net foreign sell of IDR746.97 billion. Most of the sectors contracted and pressured the index, led by the technology sector (-2.24%) and followed by the transportation & logistic sector (-1.73%). Meanwhile, the infrastructures sector was the only one that experienced gain (+0.21%). The index weakened with most of the other Asian markets as investors were digesting China’s inflation rate while also waiting for the Fed interest Rate Decision, following the release of US inflation rate for May-2024. The Rupiah closed lower at IDR16,295/USD. We estimate that the JCI will move in the price range of 6,800-6,863. Today's recommendations: BRIS, DOID, SMGA, TLKM.
Corporate Actions
AGMS: CMRY
Cum Dividend: DSNG (IDR22/share), SMAR (IDR95/share)
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