MNCS Morning Navigator May 15, 2023
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15 May 2023

Global Market Highlights

DJIA fell -0.03% on Friday (12/05), followed by the S&P500 (-0.16%) and the Nasdaq (-0.35%). Wall Street weakened as investors paid attention to the release of Michigan Consumer Sentiment Prel data in May-2023 which contracted to a level of 57.7 (vs 63.5 previously). Today, the market will be looking toward several data releases such as: 1) US Net Long-Term TIC Flows Mar; 2) US NY Empire State Manufacturing Index Mar; 3) US 6-Month Bill Auction.

Domestics Update

Sales of cars and motorcycles in Indonesia decreased by -28% YoY and -19.4% YoY, respectively. MNCS Comment: Although sales increased 13.7% YoY in 1Q23, the decline was due to an increase in the number of holidays in Apr-2023, at the same time the trend of electric car sales increased 15.5% MoM supported by the car purchase incentive program electricity from the government, and we expect car sales to increase again in the coming months in line with the increase in people's mobility.

Company News

PTRO IJ has signed a conditional share sale and purchase agreement with PT Insan Global Pawulang, to acquire PT Kemilau Mulia Sakti for USD90.5 million, in which the entity, namely PT Cristian Eka Pratama, has the mining business permit in East Kalimantan. (Emiten News). MNCS Comment: We view the company's business diversification positively, where this can increase revenue streams in addition to managing non-coal mines such as gold and nickel. Currently, PTRO is traded at the level of 29.61x/1.16x PER/PBV.

WEGE IJ targets order book to reach IDR15.6 trillion in FY23E (Emiten News). MNCS Comment: Hence, the target order book increased +20.2% YoY (vs IDR13 trillion in FY22). We are optimistic that the company can achieve this target, supported by an estimated pipeline that includes more than 20 projects or the equivalent of IDR6.69 trillion and an estimated carry over of IDR8.93 trillion. Currently, WEGE is traded at the level of 27.10x/0.43x PER/PBV.

SMIL IJ targets revenue and net profit growth of +30% YoY/+50% YoY in FY23E, respectively (Bisnis Market). MNCS Comment: We see this target will be supported by unrealized revenue in FY22. In addition, along with the expansion in the Forklift unit (+11% YoY) obtained from IPO funding, this can open new customers so as to increase the company's profitability going forward. Currently, SMIL is traded at the level of 3.15x PBV.

IHSG Updates

JCI weakened -0.71% to 6,707.76 on Friday (12/05), followed by net foreign sell reaching IDR960.97 billion. A number of sectors experienced weakening and weighed on the index, led by the raw materials sector (-1.62%) followed by the infrastructure sector (-0.78%). On the other hand, sectors that experienced strengthening were led by the property sector (+0.53%) followed by the transportation sector (+0.33%). The index weakened as investors tended to wait and see ahead of the release of the Apr-2023 trade balance data. The rupiah closed lower at IDR14,750/USD. We estimate that the JCI will move in the price range of 6,691-6,737 pending the release of Balance of Trade Apr-2023.

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