Global Market Highlights
Wall Street closed in trading (04/09) commemorating Labor Day. This week, investors will pay close attention to the release of PMI Services data in Aug-2023 which is expected to decline slightly to the level of 52.5 (vs 52.7 in Jul-2023 realization). Furthermore, investors were also optimistic for the Fed on maintaining the interest rates benchmark, where the probability of consensus on the upcoming FOMC is at 93.0% (vs 7% forecast for +25 bps hike). Today, the market will be looking toward several data releases such as: 1) US Factory Orders MoM Jul-2023; 2) UK S&P Global/CIPS Services PMI Final Aug-2023; 3) Germany HCOB Services PMI Final Aug-2023.
Domestic Update
• Indonesia's Manufacturing PMI in Aug-2023 rose to a level of 53.9 (vs 53.3 in Jul-2023). MNCS Comment: Indonesia's manufacturing activity in Aug-2023 reached its highest level for the year. This indicates an increase in demand alongside an improving business climate, such as a reduction in input costs and improvements in the supply chain.
Company News
1. PGAS IJ reported a net profit decline of -39.1% to USD145.3 million in 1H23 (vs USD238.6 million in 1H22) (CNBC Indonesia). MNCS Comment: The decrease in net profit occurred despite revenue growth of +2.5% YoY. This was due to: 1) An increase in COGS (+7.3% YoY), which negatively impacted gross profit performance (-12.5% YoY); 2) A rise in OPEX (+4.2% YoY). The NPM stood at 8.1%, down from 13.7% in 1H22. Currently, PGAS is traded at the level of 7.51x/0.85x PER/PBV.
2. SSMS IJ reported a net profit of IDR237.8 billion in 1H23, a decline of 76.6% YoY (vs IDR1.0 trillion in 1H22) (Kontan). MNCS Comment: This decline in net profit corresponds with a -14.7% YoY decrease in revenue and a +65.7% increase in COGS, which burdened the company's profitability. The NPM decreased to 8.3% (vs 30.3% in 1H22). Currently, SSMS is traded at the level of 24.83x/1.99x PER/PBV.
3. WIKA IJ recorded a new contract value of IDR15.41 trillion in 7M23 (Investor ID). MNCS Comment: The new contract value for WIKA in 7M23 increased by +5.0% YoY (vs IDR14.67 trillion in 7M22). Meanwhile, with a target for a new contract value in FY23E of IDR36 trillion, the realization up to 7M23 has reached 42.8%. Currently, WIKA is traded at the level of 0.19x PBV.
IHSG Updates
JCI strengthened +0.27% to 6,996.75 on Monday (04/09), followed by net foreign buy reaching IDR468.15 billion. A number of sectors experienced strengthening and pushed up the index rate, led by the energy sector (+1.42%) followed by the raw materials sector (+1.22%). On the other hand, the sectors experiencing weakness were led by the non-cyclical sector (-1.12%) followed by the health sector (-0.90%). The index strengthened along with other Asian stock exchanges, where investors were optimistic about the Chinese government's stimulus which was expected to stabilize its economy. The Rupiah closed flat at IDR15,240/USD. We estimate that the JCI will move in the price range of 6,970-7,020. Today's recommendation: BBRI, PTBA, RALS, WIIM.
Corporate Actions
AGMS: IPCC, POLY
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