Global Market Highlights
The DJIA declined by -0.70% on Wednesday (25/09), followed by the S&P 500 (-0.19%). Meanwhile the Nasdaq was flat (+0.04%). Wall Street closed mixed as markets await the reading of several key indicators to gauge the potential rate cut in Nov-2024. Additionally, investors will also focus on Powell’s remark today. Today the market will be looking forward to several data releases such as: 1) US GDP Growth Rate QoQ Final Q2; 2) Initial Jobless Claims Sep/21; 3) US Fed Chair Powell Speech.
Domestic Update
Minister of Finance, Sri Mulyani Indrawati, reported a deficit of IDR153.7 trillion in the State Revenue and Expenditure Budget (APBN) until Aug-2024. MNCS Comment: This deficit was driven by state income of IDR1,777 trillion (-2.5% YoY), representing 63.4% of the target, and state expenditures of IDR1,930.7 trillion (+15.3% YoY), or 58.1% of the funding ceiling (pagu). The deficit is equivalent to 0.68% of GDP. The significant rise in spending was largely attributed to election-related costs and social spending, particularly addressing the impacts of El Niño. We also anticipate the budget deficit to widen further with the upcoming simultaneous regional elections.
Company News
1. ADMF IJ plans to issue bonds amounting to IDR2.0 trillion. MNCS Comment: The bonds will be issued in 3 series with a total target of IDR9.0 trillion. Management stated that the proceeds from this bond issuance, after deducting costs, will be used to consumer financing activities related to the company’s core business. Additionally, the bond offering date is set to begin on October 3, 2024. ADMF is currently trading at 7.43x/1.04x PER/PBV.
2. RAJA IJ reported an increase in net profit of +55.3% YoY to USD14.3 million in 1H24 (vs USD9.2 million in 1H23). MNCS Comment: The rise in net profit was attributed to a +67.2% YoY increase in revenue to USD123.5 million (vs USD73.9 million in 1H23), driven primarily by an increase in gas sales. However, cost of revenue also increased by +67.5% YoY during the same period. Additionally, G&A expenses grew by +10.3% YoY and finance costs increased by +39.5% YoY. As a result, GPM/NPM were pressured to 29.1%/11.6% in 1H24 (vs 29.2%/12.5% in 1H23). RAJA is currently trading at 11.38x/2.43x PER/PBV.
3. RMKE IJ reported coal sales of 1.8 million MT as of Aug-24. MNCS Comment: We note that coal sales as of Aug-24 increased by +12.4% YoY, amounting to 50.3% of the coal sales target this year (Target FY24E: 3.5 million MT). Additionally, the company’s barge-loading service volume was reported at 5.4 million MT in the same period, amounting to 49.3% of the volume target this year (Target FY24E: 10.9 million MT). Management is optimistic about reaching these targets and noted that coal prices have been relatively stable in 2Q24, enhancing the company’s financial performance. Additionally, RMKE plans to collaborate with mines around its loading station in Palembang and acquire mines in Jambi to boost its coal production. RMKE is currently trading at 10.49x/1.70x PER/PBV.
IHSG Updates
The JCI weakened by -0.48% to 7,740.90 on Wednesday (25/09), followed by a net foreign sell of IDR1.86 trillion. Most sectors experienced declines, led by the financial sector (-1.37%) followed by the transportation sector (-1.12%). On the other hand, sectors that posted gains were led by the basic materials sector (+1.92%) and the technology sector (+1.37%). The index's decline was in line with most Asian markets. Investors tended to wait and see ahead of the Bank of Japan meeting and the release of the US final 2Q24 GDP data. Additionally, the foreign investor outflow from several banking stocks further weighed on the index. The Rupiah closed higher at IDR15,100/USD. We estimate that the JCI will move in the price range of 7,678-7,775. Today's recommendations: ADRO, ASII, BBRI, MEDC.
Corporate Actions
EGMS: BJTM, KINO, WIFI
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