Global Market Highlights
The DJIA declined by -1.29% on Tuesday (03/10), followed by S&P500 (-1.37%) and Nasdaq (-1.87%). Wall Street contracted as investors initiated a sell-off due to the rise in the UST yield, which hit a 16-year high at 4.8%. This yield hike was triggered by the release of robust employment market data, with job openings in Aug-2023 recorded at 9.6 million (vs 8.8 million consensus). Today, the market will be looking toward several data releases such as: 1) US ISM Services PMI Sep-2023; 2) US ADP Employment Change Sep-2023; 3) Germany HCOB Services PMI Final Sep-2023.
Domestic Update
Indonesia's Manufacturing PMI for Sep-2023 dropped to 52.3 (vs 53.9 in Aug-2023). MNCS Comment: Although it has decreased, the Manufacturing PMI still maintains its expansionary level for 25 consecutive months. The decline in the Manufacturing PMI is in line with the Industrial Confidence Index which dropped to 52.51 in Sep-2023 (vs 53.22 the previous month). Amid global uncertainties and rising input costs from commodities, we anticipate that Indonesia's Manufacturing PMI can deliver a solid performance moving forward.
Company News
1. MEDC IJ reported a net profit decline of -60.6% YoY, amounting to USD119.5 million in 1H23 (vs USD303.1 million in 1H22) (CNBC Indonesia). MNCS Comment: This significant drop in net profit is attributed to flat revenues, growing by +0.7% YoY, amid rising COGS (+32.4% YoY) and OPEX (+29.5% YoY). We observed margin contraction, where the company's OPM/NPM became 31.6%/10.7% (vs 47.8%/27.3% in 1H22). Currently, MEDC is traded at a level of 10.57x/1.51x PER/PBV.
2. ASII IJ plans to distribute interim cash dividends for the FY23E accounting period amounting to IDR3.97 trillion, equivalent to IDR98 per share (Emiten News). MNCS Comment: Hence, we estimate that ASII will offer a dividend yield of 1.6%. With a net profit in 1H23 reaching IDR17.4 trillion, the payout ratio stands at 22.7%. Currently, ASII is traded at a level of 7.19x/1.35x PER/PBV.
3. ASLC IJ provided an additional capital injection to its entity, PT Autopedia Sukses Gadai (ASG), amounting to IDR2.5 billion (Emiten News). MNCS Comment: We expect this move to enhance the company's business ecosystem value. With ASG's presence, we hope it will positively impact JBA and Caroline's sales, driving the company's future performance. Currently, ASLC is traded at a level of 1.82x PBV.
IHSG Updates
The JCI declined by -0.30% to 6,940.89 on Tuesday (03/10), accompanied by a net foreign buy reaching IDR170.56 billion. Most sectors experienced a downturn, burdening the index's pace, led by the energy sector (-1.91%) followed by the industrial sector (-1.34%). On the other hand, the strengthening sectors were led by the property sector (+0.88%), followed by the cyclical sector (+0.19%). The index's decline aligns with Asian markets, as investors focused on the ongoing Chinese property market crisis and concerns over a high global interest rate era. The Rupiah closed lower at IDR15,580/USD. We estimate the IHSG will move within the price range of 6,930-6,962. Today's Recommendations: CPIN, HRUM, ITMG, TKIM.
Corporate Actions
EGMS: ESSA, GEMS
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