Global Market Highlights
The DJIA strengthened by +1.51% on Friday (31/05), followed by the S&P 500 (+0.80%). Meanwhile, the Nasdaq relatively flat (-0.01%). Wall Street generally trended upward, in line with a decrease in UST yield to 4.5%. This was driven by the release of the core PCE price index data for Apr-2024, which slowed to +0.2% MoM (vs. +0.3% MoM as per consensus). The slowdown has rekindled hopes for a potential rate cut by the Fed in the future. Today the market will be looking forward to several data releases such as: 1) Japan PMI Manufacturing Final May-2024; 2) EA PMI Manufacturing Final May-2024; 3) US ISM Manufacturing PMI May-2024.
Domestic Update
Consensus estimates suggest that inflation in May-2024 is likely to slow to +2.94% YoY/+0.05% MoM (vs +3.0% YoY/+0.25% MoM in Apr-2024). Meanwhile, core inflation is expected to rise to +1.88% YoY (vs +1.82% YoY in Apr-2024). MNCS Comment: We believe the slowdown in May-2024 inflation is due to normalization following the festive Lebaran period in Apr-2024 and moderation in certain food prices triggered by the harvest season. We note that the price of medium rice decreased by -2.2% MoM, garlic by -0.2% MoM, and cooking oil by -0.4% MoM. Additionally, the relatively flat change in non-subsidized fuel prices at the beginning of May-2024 will have a minimal impact on the inflation rate of government-regulated price components. We expect that the slowing inflation rate will help maintain consumer purchasing power going forward.
Company News
1. ANJT IJ still recorded a net loss of USD3.6 million in 1Q24, but this is an improvement compared to a net loss of USD3.8 million in 1Q23 (Emiten News). MNCS Comment: The ongoing net loss is in line with a revenue decline of -4.3% YoY to USD48.9 million (vs USD 51.1 million in 1Q23). Meanwhile, OPEX increased by +1.4% YoY, accompanied by a +7.8% YoY rise in financial expenses. One positive note is that the operational profit in 1Q24 totaled USD 104.5 thousand (vs an operational loss of USD 207.1 thousand in 1Q23). ANJT is currently trading at 0.35x PBV.
2. INTP IJ recorded 5.1 million tons of cement sales until 4M24 (Kontan). MNCS Comment: In Apr-2024, the business successfully sold 930,000 tons of cement, resulting in a market share of 29.7%. This indicated ~24% of the company’s annual target of 21 million tons in FY24E (vs realization of 19.3 million tons in FY23). We view this performance as on track amidst challenging oversupply market conditions, where the average utilization of cement manufacturers in Indonesia stood at 55%-60%. The distribution of cement for IKN development and VAT subsidies for home ownership will remain as the company’s positive incentive this year. INTP is currently trading at 1.05x PBV.
3. ASLC IJ aims for +25% YoY sales growth in FY24E (Kontan). MNCS Comment: In 1Q24, the company booked a revenue of IDR183.3 billion (+37.4% YoY), indicating 26.9% of the total target (IDR682.4 billion in FY23). The growth was supported by all business segments, the used vehicle sales (+3.4% YoY), the auction administration service (+48.6% YoY), the auction service (+38.5% YoY), and the pawn service as its new business line. Followed by effective costs management, the company recorded +64.8% YoY gross profit growth and +1,687.1% YoY net income growth. Additionally, the capex of IDR6 billion for new dealer rollouts is expected to help the company in achieving its goal. ASLC is currently trading at 1.56x PBV.
IHSG Updates
The JCI contracted by -0.90% to 6,970.74 on Friday (31/05), followed by a net foreign outflow of IDR66.58 billion. Most sectors plummeted and pressured the index, with the infrastructures sector leading the loss by -3.17% and followed by the healthcare sector (-2.49%). Meanwhile the financials sector became the only sector that experienced gain (+0.43%). The index weakened as investors tend to wait and see for the reading of the inflation rate in Indonesia for May-2024 today, as well as the S&P Global Manufacturing PMI. The other Asian markets closed mixed with market’s reaction over mostly positive macroeconomic data released by Japan and Korea, while China’s below-expected PMI became a downward incentive. The Rupiah closed higher at IDR16,250/USD. We estimate that the JCI will move in the price range of 6,940-7,027. Today's recommendations: BRPT, DOID, ESSA, UNIQ.
Corporate Actions
Cum dividend: BFIN (IDR27/share)
AGMS: MTEL, VKTR
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