BRIDS Market Pulse : Chart of the week – CPO price vs. Consumers Sector Revenue Growth

Stock Code	Last Price	Change	Change %
DCII	166,700	1,550	0.94%
LIFE	6,450	450	7.50%
KONI	1,635	325	24.81%
TPIA	8,175	300	3.81%
TGKA	6,875	200	3.00%
UNIC	7,525	200	2.73%
DSSA	45,675	175	0.38%
UNTR	22,875	175	0.77%

BRIDS Market Pulse

Chart of the week – CPO price vs. Consumers Sector Revenue Growth

Source: Bloomberg, BRIDS

In the spotlight

JCI further de-rating; all eyes on IDR and bond yield. Another week of foreign funds’ outflow (US$293mn) has driven further correction in JCI (-1.7% wow), alongside other EM markets. We noted that JCI has de-rated to 11.8x fwd PE (vs. bottom of 11.5x), which should have priced in the lower EPS growth outlook (BRIDS FY24F: 2.7%). External factors (i.e., strong USD, Trump’s possible tariffs) remain key risks for IDR and JCI, although DXY has recently traded close to a resistance level at 107.
Trade balance: Indonesia's trade surplus fell to US$2.47bn in Oct24, (vs. USD3.26bn in Sep24), with expanding import (+17.5% yoy to US$21.9bn) across all items, which may indicate an early sign of improving domestic activities. The non-oil & gas trade surplus reached a seven-month high, primarily driven by a surge in palm oil exports.
VAT hike vs. upcoming regional wage adjustment. Govt’s confirmation of a hike in the VAT rate to 12% may add to further headwind on household consumption growth in FY25. This may be somewhat offset by a possible higher increase in regional wage adjustments, though still subject to the decision of the formula review this week.
ADRO: EGMS on 18^th Nov24 to approve special dividend. We estimate that post-spin-off of AADI, ADRO’s valuation would be at US$5.3-7.0bn. Our base-case valuation of AADI’s equity is US$6.1bn. We lowered our rating to Hold, with a higher TP of Rp4,100 (please see our note).
CPO price on uptrend, a potential positive for consumers. CPO price (MYR5,151/t as of 15^th Nov24) has been supported by higher demand from the B40 program, against tighter supply growth. The positive CPO price may act to support purchasing power, as it historically coincided with recovery in consumers’ sectors companies.
Commodities: Coal market has returned to quiet with flat prices across ICI indices and Newcastle corrected -1.3% wow, in line with the drop in Brent. Metal prices have also continued to show softness, amid strong USD and lack of catalysts from China's stimulus plan, with copper trading close to near-term support at $8,800-8,900/t.