Global Market Highlights
The DJIA strengthened by +0.40% on Tuesday (10/10), followed by the S&P500 (+0.52%) and Nasdaq (+0.58%). Wall Street continued to show strength, bolstered by the positive catalyst from The Fed's dovish tone, fueling speculation to maintain the FFR in the upcoming FOMC. Additionally, China's plan to expand its budget deficit in FY23E also propelled index gains. Today, the market will be looking toward several data releases such as: 1) US FOMC Minutes; 2) US PPI MoM Sep-2023; 3) Germany Inflation Rate YoY Final Sep-2023.
Domestic Update
Bank Indonesia (BI) reported that retail sales in Aug-2023 grew by +1.1% YoY. MNCS Comment: The performance of retail sales in Aug-2023 slowed compared to the previous month's realization of +1.6% YoY. However, on a MoM basis, retail sales managed to rebound by +0.4% (vs -8.8% MoM in the previous month). This was supported by segments: 1) food, beverages, and tobacco; 2) spare parts and accessories; 3) clothing.
Company News
1. SMMT IJ will distribute an interim cash dividend for FY23E of IDR116.6 billion, equivalent to IDR37 per share (Emiten News). MNCS Comment: Consequently, we estimate that SMMT will offer a dividend yield of 3.0%. With net earnings in 1H23 reaching IDR162.2 billion, the payout ratio stands at 71.9%. Currently, SMMT is traded at a level of 12.09x/4.04x PER/PBV.
2. AVIA IJ is optimistic about targeting revenue growth in FY23E of 8% YoY-12% YoY to IDR7.2 trillion-IDR7.5 trillion (Market Bisnis). MNCS Comment: In 1H23, AVIA's revenue grew by +3.8% YoY to IDR3.5 trillion, realizing 48.5%-46.8% of the FY23E target. However, we are optimistic that the company can achieve the lower band target, supported by: 1) launching new architecture segment products; 2) expanding distribution channels to strengthen market share. Currently, AVIA is traded at a level of 21.31x/3.50x PER/PBV.
3. PWON IJ recorded marketing sales of IDR1 trillion up to 9M23 (Market Bisnis). MNCS Comment: The marketing sales decreased by -14.5% YoY compared to the 9M22 achievement of IDR1.2 trillion. Meanwhile, with a marketing sales target of IDR1.6 trillion for FY23E, the realization up to 9M23 is 62.5%. We are optimistic that PWON can achieve this target, supported by the Bella and Lancaster projects. Currently, PWON is traded at a level of 9.16x/1.11x PER/PBV.
IHSG Updates
The JCI rose by +0.45% to 6,922.19 on Tuesday (10/10), accompanied by a net foreign sell of IDR234.43 billion. Most sectors experienced gains, driving the index, led by the infrastructure sector (+3.21%) followed by the energy sector (+0.90%). On the other hand, the declining sectors were led by the health sector (-0.74%), followed by the transportation sector (-0.37%). The index rose alongside with most other Asian exchanges, where investors responded positively to The Fed's dovish tone and optimism ahead of the release of China's credit growth data in Sep-2023. The Rupiah closed lower at IDR15,735/USD. We estimate the IHSG will move within the price range of 6,900-6,960 pending the release of Retail Sales Aug-2023 data. Today's Recommendations: ENRG, PGEO, PTPP, TLKM.
Corporate Actions
IPO: KOKA (IDR128/share), LOPI (IDR100/share)
Cum Dividend: ASII (IDR98/share)
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