Global Market Highlights
DJIA rose by +0.67% on Monday (24/06), while the S&P 500 (-0.31%) and Nasdaq (-1.09%) weakened. Wall Street closed mixed as investors reacted to hawkish comments from the Fed. Additionally, a contraction in technology stocks weighed on the market. On the positive side, the Dallas Fed Manufacturing data for Jun-2024 improved to -15.1 from -19.4 in May-2024. Today the market will be looking forward to several data releases such as: 1) US Chicago Fed National Activity Index May-2024; 2) US CB Consumer Confidence Jun-2024; 3) US Richmond Fed Manufacturing Index Jun-2024.
Domestic Update
BPS reported that CPO export realization in May-2024 fell by -27.11% YoY due to a contraction in global CPO demand. MNCS Comment: We believe this decline is due to post-election normalization in India and reliance on other vegetable oils such as soybean oil in China. We observe that domestic CPO demand remains high for both food and non-food products (B20, B30) and the implementation of DMO has also contributed to the drop in export realization in May 2024. Additionally, lower export tariffs for other CPO derivative products have driven companies to be more productive in midstream processes, resulting in added value.
Company News
1. AGII IJ will distribute a cash dividend for FY23 amounting to IDR33.1 billion, or IDR10.9 per share (Kontan). MNCS Comment: We estimate that AGII will offer a dividend yield of 0.6%. We note that the total DPS has increased compared to FY22, which was IDR4.86 per share, in line with an increase in the payout ratio to 20% (vs 15.2% in FY22). Additionally, we see the DPS increase is also in line with a +87.2% YoY increase in net profit for FY23. Meanwhile, the average dividend yield over the last 4 years has been 0.4%. AGII is currently trading at 35.10x/1.47x PER/PBV.
2. INDY IJ speeds up the project of coal gasification (Kontan). MNCS Comment: INDY has prepared USD257.4 million of capex budget for FY24E, including for the coal gasification project. Meanwhile, in 1Q24, the company has absorbed USD37.8 million or equivalent to 14.7% of the total budget, where 90% were allocated for the non-coal business segment including gold mining, electric vehicles, and nature-based solutions. This was in line with management’s target to increase the contribution of the non-coal segment to 50% of the total revenue in the future. In 1Q24, the company booked a revenue of USD567.3 million (-37.4% YoY) and a net income of USD20.1 million (-65.9% YoY) following the pressured coal prices within the period. INDY is currently trading at 19.26x/2.33x PER/PBV.
3. KLBF IJ is optimistic to achieve up to 7% sales growth in FY24E amidst Rupiah fluctuations (Kontan). MNCS Comment: Following this, KLBF aims for up to 15% growth of net profit. To mitigate the foreign exchange risks, the management applies the policy of maintaining foreign currency cash balance reserves of USD50-60 million on the balance sheet. In 1Q24, the company booked a revenue of IDR8.3 trillion (+6.3% YoY), representing 25.7% of the annual target. The net profit was recorded at IDR957.6 billion (+11.9% YoY), reflecting 30.1% of the goal. KLBF is currently trading at 2.97x PBV.
IHSG Updates
The JCI grew by +0.13% to 6,889.17 on Monday (24/06), despite a net foreign sell of IDR37.53 billion. Most sectors strengthened and supported the index, led by the consumer cyclicals sector (+2.19%) and followed by the technology sector (+1.38%). On the other hand, the property & real estate sector led the loss (-0.79%) and followed by the healthcare sector (-0.41%). The index gained along with the decreasing foreign outflow. Meanwhile the other Asian indices closed mixed, where the markets seem to still observe the summary of opinions from BoJ, as well as the Singapore’s inflation rate at 3.1% YoY at May-2024 (vs 2.7% YoY Apr-2024). The Rupiah closed higher at IDR16,394/USD. We estimate that the JCI will move in the price range of 6,823-7,043. Today's recommendations: CUAN, INCO, ISAT, MIDI.
Corporate Actions
Cum Dividend: BIRD (IDR91/share)
AGMS: AMMN, FREN
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