Global Market Highlights
The DJIA strengthened by +0.02% on Monday (18/09), followed by the S&P500 (+0.07%) and Nasdaq (+0.01%). Wall Street saw a slight increase, with the catalyst coming from the drop in the UST 10Y yield to 4.3%. Additionally, investors adopted a "wait and see" approach in anticipation of the housing market data release, which consensus expectations believe to be roughly in line with the figures from Jul-2023. Today, the market will be looking toward several data releases such as: 1) US Building Permits Prel Aug-2023; 2) US Housing Starts Aug-2023; 3) US API Crude Oil Stock Change 15-Sep-2023.
Domestic Update
• Indonesia's exports and imports are expected to slow down, triggered by the moderation of commodity prices and the deceleration of global economic growth. MNCS Comment: We believe that downstreaming industrial efforts can create added value, serving as a buffer. On the other hand, we anticipate a surge in oil and gas imports leading up to the festive season in 4Q23, accompanied by rising global crude oil prices. We also expect price increases in primary commodities like coal and CPO to slow down the decline in non-oil and gas exports.
Company News
1. IPCC IJ is targeting a financial performance growth of 15%-20% YoY in FY23E (Investor ID). MNCS Comment: Thus, the company's revenue target for FY23E is IDR 835.6-871.9 billion. Meanwhile, revenue in 1H23 stood at IDR 367.0 billion, growing +21.4% YoY (realization: 43.9%-42.1% of target). We are optimistic the company can reach this target, given the export and import volumes of CBU in 7M23, which grew +18.9% YoY/+49.4% YoY, respectively. Furthermore, the evolution of EVs (Electric Vehicles) is expected to serve as a cushion for volume. Currently, IPCC is traded at levels of 8.12x/1.03x PER/PBV.
2. KLBF IJ has realized capex allocation of IDR400 billion until 1H23 (Investor ID). MNCS Comment: We note that capex realization reached 57.1%-50.0% of the company's FY23E target of IDR700-800 billion. The FY23E capex is focused on increasing production capacity, distribution networks, and R&D support. We view the realization positively, expecting it to boost revenue performance to IDR33 trillion in FY23E (+14.1% YoY). Currently, KLBF is traded at the level of 27.82x/4.23x PER/PBV.
3. TINS IJ through its entity PT Timah Industri, continues to enhance downstreaming by producing tin chemical and tin solder products for the global export market (Market Bisnis). MNCS Comment: We view the increased downstreaming positively, which can act as a buffer for the company amid the raw tin export ban policy. Currently, TINS is traded at the level of 0.87x PBV.
IHSG Updates
JCI weakened -0.67% to 6,936.98 on Monday (18/09), followed by net foreign buy reaching IDR343.19 billion. Almost all sectors experienced weakness and weighed on the index rate, led by the cyclical sector (-2.32%) followed by the transportation sector (-2.05%). On the other hand, the sector that experienced strengthening was the energy sector (+0.11%). The index weakened amid mixed Asian markets, where investors tended to 'wait and see' ahead of the FOMC and PBOC interest rate decisions this week. With such achievements, a positive global economic growth outlook is anticipated. The Rupiah closed lower at IDR15,370/USD. We estimate the IHSG will move within the price range of 6,916-6,956. Today's Recommendations: EXCL, KLBF, LSIP, TBIG.
Corporate Actions
EGMS: BBNI
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