Global Market Highlights
DJIA weakened by -1.71% on Friday (30/09), followed by the S&P500 (-1.51%) and the Nasdaq (-1.51%). Wall Street corrected as investors worried about the Fed's more aggressive monetary tightening, following the release of personal spending data on Aug-22 which grew +0.4% MoM, or exceeded consensus at +0.2% MoM. Today, the market will be looking toward several data releases such as: 1) US ISM Manufacturing PMI Sep; 2) US S&P Global Manufacturing PMI Final Sep; 3) UK S&P Global/CIPS Manufacturing PMI Final Sep.
Domestic Update
• Inflation is expected to jump >5% YoY in Sep-22. MNCS Comment: The increase in inflation is driven by subsidized fuel price hike 30% that we expect to cause inflation rise +1.14% MoM/+5.93% YoY.
• Furthermore, the national Covid-19 daily rate had increased by 1,322 active cases (02/10).
Company News
1. KAEF IJ reported a -20.39% YoY decline in 1H22 revenue to IDR4.43 trillion (vs IDR5.56 trillion in 1H21). Meanwhile, on the bottom line, KAEF recorded a net loss of IDR205.12 billion (vs net profit of IDR57.60 billion in 1H21) (Kontan). MNCS Comment: The decline in revenue was in line with the contraction in manufacturing revenue segment (-80.22% YoY) and other income (-76.46% YoY). Net loss was created as revenue decreased and operating expenses increased by +3.33% YoY. Currently, KAEF is traded at the level of 0.97x PBV.
2. ERAA IJ had opened 40 new outlets for the Erajaya Digital business line with 5 of them are partnership outlets. The portfolio of 40 outlets includes 37 Erafone outlets, 2 Samsung Store outlets and 1 iBox outlet (Market Bisnis). MNCS Comment: As of 1H22, the total number of ERAA outlets reached 1,326. With the addition of these 40 outlets along with 49 other outlets in the Lifestyle, Beauty and Wellness, and Digital divisions for the period of Jul-Sep'22, the total ERAA outlets has reached ~1,415. The company expects this expansion to boost the company's performance in the future. Currently, ERAA is traded at the level of 6.51x/1.05x PER/PBV.
3. KRAS IJ collaborated with Baowu Group Zhongnan Co. Ltd. reactivated the Blast Furnace Complex, targeted to start reactivation at the end of Dec-22 (CNBC Indonesia). MNCS Comment: At this plant, the Wire Rod Mill production capacity can reach 600,000 tons per year and Billets 3.7 million tons per year. With the presence of a factory that strengthens the company's upstream business, it is hoped that it will encourage the company's performance going forward, amid the market momentum that the company had managed to gain this year. KRAS is currently traded at the level of 3.30x/0.69x PER/PBV.
IHSG Updates
JCI closed flat +0.07% to 7,040.80 on Friday (30/09), followed by net foreign buy which reached IDR236.89 billion. A number of sectors experienced strengthening and boosted the index rate, led by the health sector (+1.39%) followed by the energy sector (+0.65%). On the other hand, the weakening sectors were led by the property sector (-1.44%) followed by the transportation sector (-1.34%). We see that the negative sentiment from the potential global economic recession triggered by the aggressive increase in FFR had started to subside, as market players tend to turn their attention to domestic macro data at the beginning of Oct-22, namely PMI and Sep-22 inflation rate. On the other hand, the Rupiah exchange rate closed higher at the level of IDR15,228/USD. We estimate that the JCI will move in the price range of 7,000-7,100. Today's recommendation: BBTN, BIPI, CARE, KRYA.
Corporate Actions
RUPS: HRUM, ADMF, BEEF
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