MNCS Morning Navigator

Global Market Highlights
DJIA fell -0.11% on Thursday (25/05), while the S&P500 (+0.88%) and Nasdaq (+1.71%). Wall Street closed mixed amid the market which is still watching the development of the debt ceiling. The positive catalyst came from May-20 initial jobless claims of 229k, or below consensus at 245k indicating a still solid job market. Today, the market will be looking toward several data releases such as: 1) US Core PCE Price Index YoY Apr; 2) US Durable Goods Orders MoM Apr; 3) US Michigan Consumer Sentiment Final May.

Domestic Update

·      Government debt as of the end of Apr-2023 was recorded at IDR7,849.9 trillion or decreased IDR29 trillion from Mar-2023. MNCS Comment: Debt ratio fell to 38.15% of GDP (vs 39.17% of GDP in Mar-2023), which is still far below the threshold of 60% of GDP. This was supported by a higher debt principal payment ratio than the issuance of SBN and new loans, along with the strong appreciation momentum of the rupiah against major world currencies.

Company News

1. MPMX IJ will distribute cash dividends for the FY22 financial year of IDR589.4 billion or the equivalent of IDR135 per share. Cum date on the regular market and negotiations on June 5, 2023 (Market Bisnis). MNCS Comment: Therefore, we estimate MPMX will offer a dividend yield of 11.2%. DPS decreased from the previous year amid an increase in net profit +60.7% YoY, as the payout ratio decreased to 89% (vs 195.6% in FY21). Currently, MPMX is traded at the level of 10.26x/0.85x PER/PBV.
2. INDY IJ has realized a capex allocation of USD22.5 million, or equivalent to IDR336.4 billion in 1Q23 (Market Bisnis). MNCS Comment: Thus, INDY's realized capex in 1Q23 reached 7.4% of the FY23E target of USD302.4 million. We view that capex realization will increase significantly in the following quarters as business diversification into the non-coal business continues to increase. Currently, INDY is traded at the level of 2.71x/0.51x PER/PBV.
3. UNTR IJ recorded sales of Komatsu heavy equipment up to 4M23 reaching 2,116 units (Market Bisnis). MNCS Comment: Komatsu heavy equipment sales increased +2.6% YoY (vs 2,062 units in 4M22), where the company targets sales of heavy equipment to reach 6,000 units in FY23E, or realization up to 4M23 of 35.3%. Currently, UNTR is traded at the level of 4.12x/0.99x PER/PBV.

IHSG Updates
JCI weakened -0.62% to 6,704.23 on Thursday (25/05), followed by net foreign buy reaching IDR31.13 billion. The majority of sectors experienced weakening and weighed on the index, led by the energy sector (-1.97%) followed by the industrial sector (-1.49%). On the other hand, sectors that experienced strengthening were led by the transportation sector (+1.39%) followed by the property sector (+0.46%). The weakening of the index was in line with the majority of Asian exchanges, amid BI's decision to maintain the BI7DRR benchmark interest rate at 5.75%. Negative sentiment came from the FOMC minutes which hinted at the Fed's hawkish stance going forward, as well as observing the hampered development of the debt ceiling. The rupiah closed lower at IDR14,950/USD. We estimate that the JCI will move in the price range of 6,682-6,720. Today's recommendation: BIRD, ERAA, MEDC, TOWR.

Corporate Actions
Cum Dividend: AMRT (IDR24.06/share), INTP (IDR160/share), TPMA (IDR60/share)

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