FROM EQUITY RESEARCH
PT Victoria Care Indonesia:  Strong brands and digital marketing channel drive promising growth outlook (NOT RATED) ·         Backed by major brands and strong new product launches in FY22, VICI 9M23’s top line outperformed FMCG peers at 41% yoy. ·         Digital marketing channel has supported new product launches, strong sales and robust earnings growth. ·         For FY24, the company estimates revenues growth of 15-20%, with a minimum GPM of 53% and NIM of 12-13%. 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

The Fed Kept the Rate Steady at 5.25%-5.50%

The Federal Reserve leave the rate unchanged at 5.25%-5.50%, the fourth time in 2023. According to the new dot plot, we’ll see more rate cut in 2024 (75bps) compared to the Sep’s dot plot (50bps). In 2025, the rate cuts expectation remain unchanged at 125bps. The Fed has acknowledge that the growth in 4Q23 has slowed substantially compared to 3Q23. There are no members that expect further tightening in 2024, but Fed Chair Jerome Powell still leave the door open for another hike if it’s justified by the data.

Rate cut expectation by The Fed

• 2024: Dec’s median is at 4.6% vs Sep’s 5.1%
• 2025: Dec’s median is at 3.6% vs. Sep’s 3.9%

 

Market now expect even larger rate cut at 150 bps compared to the previous expectation of 100bps - 125bps with one 50bps rate cut is expected in June. It’s double than what The Fed implied. Yield on UST 10y dropped by 100 bps, closing in on the 4% mark. All major stock indices in the US jumped by more than 1% following the newly rate cut expectation. (Federal Reserve)

 

CORPORATE

ADRO Thermal Flat Coal Production Projections in 2024

Coal issuer ADRO projects that thermal coal production will grow flat in 2024. Company said that Flat production is to ensure that coal reserves are maintained and to meet the supply of power plants.  Meanwhile, ADRO targets to increase metallurgical coal production to 6mn tons in 2025 and for this year’s, ADRO targets 4.3mn tons metallurgical coal production. ADRO is also targeting a balanced 50:50 contribution to thermal coal and non-thermal coal business revenue by 2030. ADRO will boost the aluminum smelter, new renewable energy (EBT), and cooking coal businesses. (Bisnis)

 

ASII Car Sales in November 2023 Up 6.1%

ASII announced car sales during the Jan - Nov 2023 period, ASII realized car sales of 513,058 units in January-November 2023. These sales decreased by 1.16% (YoY) compared to the same period last year, which amounted to 519,085 units. Toyota and Lexus were again the brands with the largest sales contribution to ASII with 306,941 units.  Daihatsu with 175,195 units, Isuzu with 29,027 units, UD Trucks with 1,703 units, and Peugeot with 192 units. For the Low-Cost Green Car (LCGC) category, there were 140,260 units in January-November 2023. (Kontan)

 

INTP: Cement Market Update November 2023

Market: Cement demand continued to grow in November +13.5% YoY with growth in all areas for both bag and bulk products. The bag market in Java grew slightly better at +10.0% than outside Java +9.3%, while bulk market grew stronger in outside Java +36.1% than Java +14.8%.INTP’s volume grew +11.8% YoY. In Java, the market grew from higher demand in retail market as the impact of tax incentive for low to medium cost housing started to show. In outside Java, INTP has started supply to new capital city (IKN) and maximized distribution to its terminals in North Sumatera (Kuala Tanjung), Palembang, and Lampung amid the progress of Trans-Sumatera toll project.

Compared to last month, INTP’s volume grew +3.3% MoM supported more from bag market growth (+3.9%), especially in outside Java (+8.8%) while relatively flat in Java.

INTP has completed the acquisition of PT. Semen Grobogan and sales volume from this location will be admitted starting December. Logistics synergies and savings should be seen immediately and a key step to secure future supply to Central and East Java areas. (The Company)

 

NCKL Disbursed Loans to Subsidiary Worth Rp500bn

NCKL provided a loan facility worth Rp500bn to its subsidiary, Gane Tambang Sentosa (GTS). The applicable interest on this loan is 8% per annum. The term of the loan agreement is for 5 years from the date of the first loan disbursement. The loan is intended for capital expenditure and GTS's routine operational activities. (Bisnis)

 

TPIA Received an Investment from EGCO Group Thailand Worth Rp3.03tr

TPIA received an investment of Rp3.03tr (US$194mn) from Electric Generating Public Company Limited or EGCO Group (EGCO), an independent energy producer in Thailand. Upon the completion of the transaction, EGCO will own a 30% stake in TPIA’s subsidiary, Chandra Daya Investasi (CDI). TPIA will retain a majority stake of 70% in CDI. Moreover, the net funds raised will be used to develop Chandra Asri Group and EGCO’s infrastructure business, including energy, water, and port facilities. (Bisnis)