Global Market Highlights
The DJIA weakened -0.98% on Wednesday (18/10), followed by S&P500 (-1.34%) and Nasdaq (-1.62%). Wall Street closed lower, with negative catalysts stemming from the escalating geopolitical tension between Israel and Hamas following the bombing of a hospital in Gaza. Furthermore, the release of preliminary data on building permits in Sep-2023 which decreased by -4.4% MoM, also weighed on the index's movement. Today, the market will be looking toward several data releases such as: 1) JP Balance Trade Sep-23; 2) AUS Unemployment Rate Sep-23; 3) CN House Price Index YoY Sep-23.
Domestic Update
Bulog will distribute commercial rice from the government's rice reserves (CBP) amounting to 200k tons. MNCS Comment: We have observed that the average price of rice has increased by ~14% YTD. It is expected that through this distribution, the rise in rice prices will be curbed, approaching the highest retail price (HET) of IDR11k. Additionally, we anticipate that this action will maintain consumers purchasing power going forward and result in manageable inflation.
Company News
1. HEAL IJ reported a net profit of IDR348.8 billion in 9M23, representing a YoY increase of +42.1% (vs IDR245.5 billion in 9M22) (Emiten News). MNCS Comment: The increase in net profit is supported by a +15.8% YoY rise in revenue to IDR4.2 trillion (vs IDR3.7 trillion in 9M23). This is concurrent with a +13.5% YoY increase in inpatient and a +15.5% YoY increase in outpatient revenues in 9M23. Additionally, we note that there is an expansion in margins, with NPM expanding to 8.2% (vs 6.7% in 9M22). Currently, HEAL is traded at a level of 44.25x/5.57x PER/PBV.
2. UNTR IJ acquired a nickel mining company, Stargate, through its subsidiary PT Danusa Tambang Nusantara (DTN) for IDR1.64 trillion (Market Bisnis). MNCS Comment: We view the company's efforts to diversify its business into the nickel segment positively. This diversification is expected to enhance the company's revenue stream in the future and lead to a more sustainable business. Currently, UNTR is traded at a level of 4.37x/1.37x PER/PBV.
3. ESSA IJ reported a -90.7% YoY decrease in net profit to USD9.8 million in 9M23 (vs USD104.6 million in 9M22) (Market Bisnis). MNCS Comment: The decline in performance is attributed to a -58.2% YoY drop in revenue in 9M23, in line with the contraction in commodity prices and a temporary halt in ammonia plant operations in 1Q23. Margins have also decreased, with OPM/NPM reaching 13.3%/4.2%, respectively, in 9M23 (vs 41.1%/18.8% in 9M22). Currently, ESSA is traded at a level of 1.99x PBV.
IHSG Updates
The JCI weakened by -0.17% to reach 6,927.91 on Wednesday (18/10), followed by a net foreign sell of IDR1.57 trillion. Most sectors experienced a decline and weighing down the index, led by the cyclical sector (-0.65%) followed by the financial sector (-0.53%). On the other hand, sector that gained were led by the infrastructure sector (+1.99%), followed by the basic materials sector (+0.60%). The index weakened in line with various Asian markets. Investors tend to adopt a wait and see approach ahead of Bank Indonesia's RDG decision, amid increasing pressure on the currency market. The Rupiah closed lower at IDR15,730/USD. We estimate the IHSG will move within the price range of 6,912-6,950. Today's Recommendations: AKRA, APLN, BRPT, ELSA.
Corporate Actions
EGMS: BABP, SOHO
AGMS: ARTI
Disclaimer On
