FROM EQUITY RESEARCH
Poultry: Still unclear benefits from the potential MSG program on poultry demand (NEUTRAL) ·         Prabowo-Gibran’s team indicated its free lunch program (MSG) would be fully rolled out by FY29F needing 1.2mn tons of chicken p.a. ·         We see no clear evidence yet that MSG will bring additional demand, while uncertainty on the program poses downside risk for integrators. ·         We maintain the sector’s rating at Neutral, with CPIN (Buy TP of Rp5,200) as our top pick. To see the full version of this report, please click here   XL Axiata: Expect strong revenue momentum and FCF generation to continue in FY2 (EXCL.IJ IDR 2.200 BUY.TP IDR 3.000) ·         We expect EXCL’s revenue momentum to continue in FY24; high single digit growth guidance is based on continuous ARPU improvement and homes connect.  ·         We raised FY24-25F NP 18%/37%; we raised revenue but lowered EBITDA margin below 49% to account for stronger rollout of fixed BB. ·         We maintain Buy rating with unchanged TP:Rp3,000, implying 4.9x EV/EBITDA.  To see the full version of this report, please click here   Macro Strategy: The Next Key Focus Post Election ·         The ongoing real count continues to support the Quick Count results. Prabowo-Gibran’s wide victory margin has led to a surge of inflows. ·         While fiscal space can sustain additional spending in the initial years, the importance of fiscal re-prioritization grows. ·         MSME are still confident in their rising business activity as purchasing power remains strong according to the BRI Institute MSME Index. To see the full version of this report, please click here   To see the full version of this snapshot, please click here   MARKET NEWS

MACROECONOMY

Indonesian Residential Property Price Survey in 4Q23

The price increase in Residential Property softened to 1.7% yoy in 4Q23 from 3Q’s 1.96%. The sales improved to +3.2% yoy from the previous quarter’s contraction of -6.6%. (Bank Indonesia)

 

SECTOR

EV: Positive Electric Vehicle Financing Performance

According to Mandiri Tunas Finance (MUF), the company recorded a positive performance in the distribution of electric vehicle financing. MUF succeeded in disbursing electric vehicle financing amounting to Rp11bn (+124% yoy). Meanwhile, ADMF projects that electric vehicle financing in 2024 will continue to grow. Electric vehicle financing in 2024 is targeted to increase 2 times compared to 2023. (Kontan)

 

Consumer: Government Opens Opportunity to Import 2Mt of Rice from Thailand

The government opens the opportunity to import 2Mt of rice from Thailand this year if domestic rice production is lacking. For information, last year, the government imported 2.8Mt of rice. The government explained that the high price of rice is due to high production costs, including fertilizers, and the impact of El Nino, which makes production fall. In addition, currently, the price of lower quality rice I rose 1.42%, lower quality rice II rose 2.17%, medium quality rice I rose 1.31%, medium quality rice II rose 1.65%, super quality rice I rose 1.2% and super quality rice II rose 0.93%. (CNN Indonesia)

 

CORPORATE

INCO Share Divestment Agreement will be Signed on February 26, 2024

INCO share divestment agreement will be signed on February 26, 2024, as confirmed by the Ministry of SOEs. The agreement is related to the divestment of 14% of foreign ownership shares to MIND ID. The Ministry of SOEs, the Ministry of Investment, and the Ministry of Energy and Mineral Resources have continuously negotiated the final price for the share divestment. (Bisnis)

 

TLKM to Launch the Merah Putih 2 Satellite

TLKM will launch the Merah Putih 2 Satellite on Wednesday, February 21, 2024, in Florida, United States. According to the Minister of SOEs, the Merah Putih 2 Satellite involves Thales Alenia Space, an aerospace company based in France. Then, in launching its satellite, Telkom also involved Space X (owned by Elon Musk). (Bisnis)

 

Telkomsel Traffic Increases 8.4% during the 2024 Election

On February 14, 2024 (election date), recorded data service traffic (payload) reached 54.14 peta bytes, an increase of 8.41% compared to the average payload on normal days in 2024. The spike in Telkomsel traffic during the 2024 Election was driven by increased customer activity utilizing digital services such as video access 13.20%, social media 9.80%, communication services (chat and messaging) up to 4.56%, web browsing 9.40%, and games up to 17.70%. (Investor Daily)

 

WIKA Receives Approval to Extend Sukuk & Bond Principal Repayment after RUPO and RUPSU

WIKA obtained the blessing to extend the principal repayment of bonds and sukuk. The company said bond and sukuk holders have agreed to extend the principal repayment date of the Sustainable Public Offering I Phase II Year 2021 and Sukuk Mudharabah PUB I Phase II Year 2021, both for Series A. This follows the acquisition of support from banks through the Master Restructuring Agreement (MRA) and approval of restructuring by shareholders through the EGM. (Kontan)