Global Market Highlights
The DJIA strengthened by +0.17% on Tuesday (21/05), followed by the S&P 500 (+0.25%) and the Nasdaq (+0.22%). Wall Street recorded slight gains as investors are waiting ahead for the minutes of the FOMC scheduled today after multiple comments from the Fed’s officials gave no clear clues upon the rate cuts decision. Additionally, investors also set their focus on the earnings release of Nvidia, the third-largest market-capped firm in Wall Street, expecting the previous skyrocketing performance to sustain. Today the market will be looking forward to several data releases such as: 1) Indonesia Loan Growth YoY Apr-2024; 2) Japan Balance of Trade Apr-2024; 3) US MBA Purchase Index May 17th, 2024.
Domestic Update
The Minister of Finance revised the target of economic growth to the range of 5.1%-5.5% in 2025, submitted on the Macro Economy Draft and Fiscal Policy Principles (REM-PPKF) to the DPR RI. MNCS Comment: This target is lower than the previous REM-PPKF handed on last Feb-2024 (5.3%-5.6%), driven by some factors, including inflation rate, continuation and expansion of natural resources (SDA) downstreams, the development of the EV industry, investment in climate, and the quality of human resources (HR). Following this, the inflation rate is expected to be 1.5%-3.5%, 10Y SBN yield is estimated to be in the range of 6.9%-7.3%, and the Rupiah exchange to be IDR15,300-IDR16,000/USD.
Company News
1. HEAL IJ recorded a net profit increase of +75.3% YoY to IDR190.9 billion in 1Q24 (vs IDR108.9 billion in 1Q23). MNCS Comment: This net profit increase was primarily supported by revenue growth of +26.2% YoY to IDR1.7 trillion (vs IDR1.4 trillion in 1Q23). Additionally, we observed decent cost control as indicated by expansive margins. The company's GPM/OPM increased to 39.2%/19.5% (vs 37.4%/14.6% in 1Q23). HEAL is currently trading at the level of 26.66x/4.88x PER/PBV.
2. KMDS IJ will distribute a final dividend of IDR22 per share for FY23 (Kontan). MNCS Comments: After distributing an interim dividend of IDR12 billion or equivalent to IDR15/share on Oct-2023, KMDS will distribute a final dividend of IDR22 per share for FY23. Total FY23 DPS is IDR37/share with payout ratio of 34.2%. This dividend distribution will offer a potential yield of ~4.5%. KMDS is currently trading at 7.34x/1.77x PER/PBV.
3. CPIN IJ is eyeing for revenue growth up to +10% YoY in FY24E (Kontan). MNCS Comment: This target is set following the prominent performance during 1Q24, where sales grew by +9.3% YoY and followed by effective cost management, resulting in +153.2% YoY and +195.1% YoY spikes in operating profit and net profit, respectively. This achievement translated into margin expansion of 6.7%/4.5% OPM/NPM (vs 2.9%/1.7% in 1Q23). Meanwhile, better chicken price throughout the year is highly expected to support this target. CPIN is currently trading at 3.06x PBV.
IHSG Updates
The JCI declined by -1.11% to 7,186.04 on Tuesday (21/05), followed by a net foreign sell reaching IDR1.06 trillion. Almost all sectors experienced declines, weighing on the index, led by the consumer cyclical sector (-1.62%) and followed by the financial sector (-1.54%). On the other hand, the sector that saw gains was the transportation and logistics sector (+0.67%). The index weakened along with other Asian markets, as investors anticipated a potential interest rate hike by the Australian central bank. Additionally, investors were in a wait-and-see ahead of the BI Board of Governors meeting (RDG) in May-2024. The Rupiah closed lower at IDR15,995/USD. We estimate that the JCI will move in the price range of 7,160-7,235. Today's recommendations: AMRT, BRPT, BULL, TINS.
Corporate Actions
Cum dividend: INTP (IDR90/share), LTLS (IDR35/share), TOTL (IDR40/share)
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