Global Market Highlights
The DJIA weakened by -0.76% on Thursday (26/10), followed by S&P500 (-1.18%) and Nasdaq (-1.76%). Wall Street weakened amid positive macroeconomic data, with GDP in 3Q23 growing by +4.9% QoQ, exceeding the consensus of +4.3% QoQ. Investor sell-off actions following disappointing technology company earnings weighed on the index. Additionally, concerns over increasing geopolitical tensions in the Middle East also created negative sentiment. Today, the market will be looking toward several data releases such as: 1) US Core PCE Price Index MoM Sep-23; 2) US Personal Income MoM Sep-23; 3) US Michigan Consumer Sentiment Final Oct-23.
Domestic Update
Aprindo estimates that domestic retail business growth may increase by 10%-15% in the run-up to the political year. MNCS Comment: In the previous political year in FY19, domestic retail business was able to achieve a 10%-15% increase. We are also optimistic that the retail business can achieve positive results in the political year, especially supported by disbursements that secure basic needs and stimulate consumer appetite for secondary needs. However, the weakening of the Rupiah will pose a downside risk, so retailers in the mid-high segment will tend to be more resilient.
Company News
1. MTDL IJ recorded a net profit growth of +8.2% YoY to IDR401.8 billion in 9M23 (vs IDR371.4 billion in 9M22) (Emiten News). MNCS Comment: The increase in net profit amid flat revenue (-0.4% YoY), along with effective efficiency. It is noted that the cost of revenue decreased by -1.1% YoY, leading to an increase in gross profit by +8.0% YoY. Margins also increased, with OPM/NPM reaching 5.0%/2.7% (vs 4.8%/2.4% in 9M22). Currently, MTDL is traded at a level of 11.27x/1.75x PER/PBV.
2. DRMA IJ reported solid performance, with net profit growth of +107.8% YoY to IDR519.4 billion in 9M23 (vs IDR249.9 billion in 9M22) (Emiten News). MNCS Comment: The significant growth is supported by a +59.7% YoY increase in revenue to IDR4.2 trillion in 9M23 (vs IDR2.7 trillion in 9M22). Additionally, we also note that margins have increased, with OPM/NPM rising to 16.1%/12.2% (vs 13.0%/9.4% in 9M22). Currently, DRMA is traded at a level of 9.31x/3.56x PER/PBV.
3. TAPG IJ reported a net profit decline of -52.8% YoY to IDR1.1 trillion in 9M23 (vs IDR2.3 trillion in 9M22) (Emiten News). MNCS Comment: The decrease in net profit is accompanied by a -10.5% YoY decrease in revenue to IDR6.0 trillion in 9M23 (vs IDR6.7 trillion in 9M22). Meanwhile, the cost of sales increased by +14.2% YoY, thereby depressing the gross profit performance, which fell by -45.8% YoY. Margins contracted, with OPM/NPM reaching 15.1%/18.3% (vs 33.8%/34.6% in 9M22). Currently, TAPG is traded at a level of 7.49x/1.06x PER/PBV.
IHSG Updates
The JCI weakened by -1.75% to 6,714.52 on Thursday (26/10), followed by a net foreign sell of IDR1.3 trillion. Almost all sectors saw declines, led by the transportation and logistics sector (+1.89%) followed by the technology sector (+1.63%). On the other hand, the healthcare sector saw an increase of +0.18%. The index's decline was in line with most other Asian markets, with investors anticipating potential hawkish policies from The Fed following solid US economic data. The Rupiah closed lower at IDR15,920/USD. We estimate the IHSG will move within the price range of 6,700-6,766. Today's Recommendations: APLN, BBCA, BBRI, HRTA.
Corporate Actions
EGMS: FMII, GSMF, TBLA
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