Global Market Highlights
The DJIA weakened by -0.30% on Monday (03/06), while the S&P 500 strengthened (+0.11%) and the Nasdaq followed (+0.56%). Wall Street closed mixed as the market focused on the release of the ISM Manufacturing PMI data for May-2024, which fell to 48.7, lower than the Apr-2024 figure and the consensus of 48.6/48.5. Meanwhile, the further decline in UST yield to 4.4% acted as a catalyst for Wall Street. Today the market will be looking forward to several data releases such as: 1) US Redbook YoY Jun/01; 2) US JOLTs Job Openings Apr-2024; 3) US Factory Orders MoM Apr-2024.
Domestic Update
BPS reported that the inflation rate in May-2024 was +2.84% YoY on an annual basis, while there was a deflation of -0.03% MoM on a monthly basis. Core inflation was recorded at +1.93% YoY/+0.17% MoM. MNCS Comment: We note that the inflation rate in May-2024 was below the consensus estimate of +2.94% YoY. The annual inflation rate was mainly attributed to price increases in the food, beverage, and tobacco group, as well as the clothing and footwear group. We observe a trend of slowing inflation over the past three months, driven by increased supply during the harvest season and normalization following the festive Ramadhan period. With controlled inflation, maintaining Rupiah stability remains the focus of the Government and BI, amidst high global interest rate pressures and escalating geopolitical tensions in the Middle East.
Company News
1. INDY IJ reported a net profit decline of -65.9% YoY to USD20.1 million in 1Q24 (vs USD58.9 million in 1Q23) (Emiten News). MNCS Comment: The net profit decline was mainly due to a revenue decrease of -37.4% YoY to USD567.3 million (vs USD906.8 million in 1Q23), in line with the normalization of global coal prices and a decrease in production volume. We also note that all margins contracted, with GPM/OPM falling to 16.5%/8.0% (vs 22.0%/15.3% in 1Q23). INDY is currently trading at 5.68x/0.35x PER/PBV.
2. MTDL IJ has absorbed 20% of the capex allocation until 1Q24 (Kontan). MNCS Comment: This capex actualization amounted to IDR126 billion from a budget of IDR630 billion, which consisted of IDR20 billion for warehouse enlargement (vs budget IDR120 billion), IDR6 billion as the utilizations for internal equipment (vs budget IDR10 billion), and IDR100 billion for maintaining the oil and gas rental equipment (vs budget IDR500 billion). Following this expansion, the management is expecting a revenue rise of 13% YoY and a net income growth of 10% YoY in FY24E. In 1Q24, the company booked a sales growth of IDR5.1 trillion (+12.3% YoY) and a net profit of IDR147.4 billion (+0.7% YoY), reflecting 20.3%/20.6% of the total target respectively. MTDL is currently trading at 1.31x PBV.
3. BIRD IJ recorded a softening net income (-6.8% YoY) in 1Q24 (Kontan). MNCS Comment: The company recorded a positive growth in its top-line (+7.1% YoY), supported by all business segments, the taxi fleet (+4.6% YoY), the fleets and driver rental (+11.1% YoY), and the auctions commission (+11.0% YoY). However, the slowdown in its bottom-line was due to the rise in the cost of revenue (+7.6% YoY) and the operating expenses (+28.0% YoY), resulting in a lower NPM at 10.3% (vs 11.8% in 1Q23). BIRD is currently trading at 0.67x PBV.
IHSG Updates
The JCI rebounded by +0.94% to 7,036.19 on Monday (03/06), despite a net foreign sell of IDR243.44 billion. Most sectors strengthened and drove the index, with the healthcare sector leading the gain (+1.58%) and followed by the energy sector (+1.14%). Meanwhile, some other sectors weakened, led by the infrastructures sector (-0.64%) and followed by the properties & real estate sector (-0.45%). The index climbed amidst a soft manufacturing PMI at 52.1 bps in May-2024 (vs 52.9/52.2 Apr-2024/Consensus) and slower annual inflation rate at 2.84% YoY in May-2024 (vs 3.0%/2.94% Apr-2024/Consensus). All the Asian markets closed in the green zone, as investors reacted positively towards the manufacturing PMI of Japan, Korea, and China. The Rupiah closed higher at IDR16,230/USD. We estimate that the JCI will move in the price range of 7,040-7,102. Today's recommendations: ACES, BMRI, BUKA, TLKM.
Corporate Actions
Cum dividend: BBMD (IDR34.27/share), BISI (IDR80/share), SGRO (IDR121/share)
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