Global Market Highlights
DJIA remained flat at +0.04% on Friday (21/06), while the S&P 500 (-0.16%) and Nasdaq (-0.18%) weakened. Wall Street experienced a slight decline as investors focused on the release of May-2024 existing home sales data, which fell by -0.7% MoM to 4.11 million. Additionally, the rise in the S&P Global Manufacturing PMI Flash to 51.7 (vs 51 consensus) served as a hawkish signal for the Fed. Today the market will be looking forward to several data releases such as: 1) Japan BoJ Summary of Opinions; 2) Germany Ifo Business Climate Jun-2024; 3) US Dallas Fed Manufacturing Index Jun-2024.
Domestic Update
Bank Indonesia reported that M2 money supply in May-2024 increased by +7.6% YoY, higher than the +6.9% YoY growth in Apr-2024. MNCS Comment: We note the expansive growth of M2 money supply in May-2024 was driven by credit distribution growth of +11.4% YoY (vs +12.3% YoY in Apr-2024), and a net foreign asset increase of +0.6% YoY. However, we also observe that the growth of M1 money supply remains relatively low at +6.3% YoY, reflecting low key consumer purchasing power. The limited growth in M1 money supply is consistent with the higher for longer interest rate environment, leading consumers to prefer investing in short-term financial assets.
Company News
1. BELL IJ invests IDR20 billion for a new factory in Solo (Emiten News). MNCS Comment: Company expands its factory to increase production capacity and company's competitiveness. This new factory will be used as a retail, uniform, and clothing production center to optimize its operations and quality control. In addition, the company also plans to open 10 new outlets in FY24. In 1Q24, the company posted revenue of IDR135.5 trillion (+21.6% YoY) and a spike in net profit of +97.6% YoY, resulting in GPM/NPM of 33.1%/4.1% respectively. BELL is currently trading at 2.35x PBV.
2. ZONE IJ has absorbed 100% capex in 1Q24 (Kontan). MNCS Comment: The IDR22 billion capex was allocated to open 22 new outlets and revitalization of existing ones. Management claimed that the expansion was in line with the business plan to pursue the momentum of Eid al-Fitr while further store additions are still under consideration. In 1Q24, the company successfully booked IDR214.87 billions of sales (+40.6% YoY), supported by the clothes segment (+35.0% YoY) and the accessories segment (+212.2% YoY). However, its bottom-line experienced slowdown (-6.9% YoY), burdened by the increase in COGS (+117.3% YoY) and the selling expenses (+16.5% YoY), narrowing the NPM to 8.0% (vs 12% in 1Q23). ZONE is currently trading at 2.33x PBV.
3. WINS IJ expects higher profit growth for FY24E (Kontan). MNCS Comment: In the 1Q24, the company booked a revenue of USD17.0 million (+16.3% YoY), driven by the growth in the vessel charter segment (+23.9% YoY). From the bottom-line stance, WINS reported a significant soar of net income to USD2.2 million (+1,122.8% YoY). This performance was mainly attributable to the interest income (+975.1% YoY) and the disposal of one of its ships with the gain of USD98.3 thousand. Following this, management prepared a capex of USD35.0 million to further recompose low-yielding ships and add higher-value ships. WINS is currently trading at 0.77x PBV.
IHSG Updates
The JCI strengthened by +0.89% to 6,879.98 on Friday (21/06), accompanied by a net foreign buy of IDR1.15 trillion. Most sectors gained and drove the index up, led by the infrastructures sector (+2.84%) and followed by the financials sector (+1.78%). On the other hand, the energy sector experienced a slight loss (-0.04%). The index gained following the positive report of the M2 money supply in Indonesia for May-2024, meanwhile most of the Asian indices closed in the red zone as investors are digesting the inflation rate from Japan (2.8% in May-2024) and as well waiting for BoJ’s summary of opinions. The Rupiah continued its weakening to IDR16,450/USD. We estimate that the JCI will move in the price range of 6,800-7,060. Today's recommendations: BMRI, MAHA, MBMA, SIDO.
Corporate Actions
Cum Dividend: INDS (IDR100/Share), MYOR (IDR55/Share)
AGMS: SMLE
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