Global Market Highlights
DJIA weakened by -0.39% on Monday (31/10), followed by the S&P500 (-0.75%) and the Nasdaq (-1.03%). Wall Street was under pressure as the yield on US T-note 10Y rose to 4.08% triggered by the inflation rate in Europe in Oct-22 of +10.7% YoY (vs +10.2% YoY on consensus). In addition, we see market participants trying to price-in ahead of the release of the benchmark interest rate decision (FFR) at the Nov-22 FOMC which is expected to rise +75 bps to 4.00%. Today, the market will be looking toward several data releases such as: 1) US ISM Manufacturing PMI Oct; 2) US Construction Spending MoM Sep; 3) UK Manufacturing Global/CIPS Manufacturing PMI Final Oct.
Domestic Update
• Indonesia's Manufacturing PMI in Oct-22 remains expansive despite dropping to 51.8 points (vs 53.7 points in Sep-2022). MNCS Comment: The slowdown was influenced by demand and slowing output in line with high inflation which forced producers to reduce their purchases of stock of goods.
• Furthermore, the national Covid-19 daily rate had increased by 2,457 active cases (31/10).
Company News
1. ASII IJ posted a +32.23% YoY revenue growth in 9M22 to IDR221.35 trillion (vs IDRt167.40 trillion in 9M21). Meanwhile, net profit grew by +55.77% YoY to IDR23.33 trillion (vs IDR14.98 trillion in 9M21) (IQ Plus). MNCS Comment: Revenue growth was supported by automotive segment revenue growth of +29.28% YoY and heavy equipment, mining and energy segment growth of +58.30% YoY. Meanwhile, net profit increased as JV net profit increased by +22.43% YoY and fair value gain on investment in GOTO amounted to IDR1.08 trillion, thus widening NPM to 10.54% (vs 8.95% in 9M21). ASII is currently traded at the level of 8.65x/1.42x PER/PBV.
2. TLKM IJ posted a +2.67% YoY revenue growth in 9M22 to IDR108.87 trillion (vs IDR106.04 trillion in 9M21). Meanwhile, net profit decreased by -12.14% YoY to IDR16.58 trillion (vs IDR18.87 trillion in 9M21) (IQ Plus). MNCS Comment: The increase in revenue was in line with the increase in revenue from the data, internet and IT segments by +6.06% YoY along with the increase in mobile data traffic +20.7% YoY. Meanwhile, the decrease in net profit was in line with the increase in depreciation and amortization expenses of +12.78% YoY as well as a loss on the unrealized investment value of GOTO of IDR3.08 trillion (vs profit of IDR403 billion in 9M21). Currently, TLKM is traded at the level of 19.67x/3.52x PER/PBV.
3. GGRM IJ posted a +2.01% YoY revenue growth in 9M22 to IDR93.92 trillion (vs IDR92.07 trillion in 9M21). Meanwhile, net profit fell by -63.78% YoY to IDR1.50 trillion (vs IDR4.13 trillion in 9M21) (Market Bisnis). MNCS Comment: The increase in revenue was in line with the increase in SKM segment revenue by +1.71% YoY and contributed to total revenue in 9M22 by 91.59%. Meanwhile, the decrease in net profit was due to the excise duty, VAT and tax expense which increased by +5.95% and weighed on the gross profit performance of -26.06% YoY. Currently, GGRM is traded at the level of 23.22x/0.82x PER/PBV.
IHSG Updates
JCI strengthened by +0.61% to 7,098.89 on Monday (31/10), followed by net foreign buy which reached IDR963.12 billion. The majority of sectors experienced strengthening and boosted the index rate, led by the energy sector (+2.17%) and followed by the transportation & logistics sector (+1.94%). On the other hand, the sectors that experienced weakness were the industrial sector (-0.90%) followed by the technology sector (-0.68%). The index's strengthening was in line with Wall Street and a number of Asian bourses ahead of the release of Indonesia's inflation data in Oct-22 which is expected to rise according to the consensus estimate of +5.99% YoY (vs +5.95% YoY realized in Sep-22). We see that the index's strengthening was driven by the release of the financial report performance of big cap issuers in 9M22 which was observed to be solid. On the other hand, the Rupiah exchange rate closed lower at IDR15,598/USD. We estimate that the JCI will move in the price range of 7,000-7,130. Today's recommendation: BTPS, ESSA, TINS, SMGR.
Corporate Actions
Public Expose: HMSP
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