Global Market Highlights
Wall Street closed commemorating Juneteenth on Monday (19/06). The market will tend to wait and see during the week's trading, ahead of the testimony of The Fed officials, to provide monetary policy guidance amid an optimistic decline in the inflation rate. Apart from that, the housing market will also be the focus of investors which can indicate the state of the economy. Today, the market will be looking toward several data releases such as: 1) US Building Permits Prel May; 2) US Housing Starts MoM May; 3) Japan Industrial Production YoY Final Apr.
Domestic Update
• Motorbike sales in May-2023 rose +113.4% YoY to 529.7k units (vs -19.4% YoY in Apr-2023). MNCS Comment: We see an increase in motorbike sales in May 2023, in line with the increase in the number of working days after the Eid celebration in Apr-2023, and indicates that purchasing power is still solid amidst a manageable inflation rate. Going forward, we expect the growth rate to slow down as the high base effect diminishes in FY22.
Company News
1. DMAS IJ will distribute a final cash dividend for FY22 of IDR482 billion, or the equivalent of IDR10 per share. Cum dividend date for the regular market and negotiations on June 27, 2023 (Market Bisnis). MNCS Comment: The total dividend distributed for the FY22 fiscal year is IDR1.2 trillion. With DPS IDR10 per share, we estimate DMAS will offer a yield of 5.8%. Currently, DMAS is traded at the level of 13.41x/1.42x PER/PBV.
2. ERAA IJ is building a new distribution center (DC) in Bitung, Tangerang, to support 4 business verticals of Erajaya Group (Kontan). MNCS Comment: We view this effort positively as it can improve the company's supply chain capabilities. In addition, it is hoped that cost efficiency can be realized and sales volume accelerated, especially in areas that have attractive demands such as Tangerang and South Tangerang. Currently, ERAA is traded at the level of 8.16x/1.10x PER/PBV.
3. SMIL IJ was appointed as the sole agent (ATPM) for lithium battery sales in Indonesia, and adopted the use of this battery technology (Investor ID). MNCS Comment: We see that the use of lithium batteries in forklift units will provide SMIL with a number of advantages, such as a longer battery life time of 3 years (vs. 1.5-2.5 years for lead acid batteries), and charging speed which can increase processing time on forklift units, as well as a better life cycle. Currently, SMIL is traded at the level of 18.92x/3.79x PER/PBV.
IHSG Updates
JCI weakened -0.19% to 6,686.06 on Monday (19/06), followed by a net foreign sell of IDR408.98 billion. The majority of sectors experienced weakness and weighed on the index, led by the technology sector (-1.07%) followed by the health sector (-0.49%). On the other hand, the sector leading the gains was the property sector (+1.01%) followed by the transportation sector (+0.89%). The index weakened along with the majority of other Asian exchanges, where investors tended to wait and see ahead of the PBOC's loan interest rate setting, which is expected to be dovish. The Rupiah closed lower at IDR14,995/USD. We estimate that the JCI will move in the price range of 6,660-6,711. Today's recommendation: BMRI, JPFA, PNLF, ACES.
Corporate Actions
Cum Dividend: BRPT (IDR1.59/share)
RUPS: MAPI, RMKE
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