GREATER CHINA Strategy Alpha Picks: May Conviction Call: Adding CR Beer, Crystal, Geely, Haier, Kuaishou, Ningbo Tuopu, Pinduoduo, Shenzhou, and Tencent to our BUY list, closing out SELL calls. INDONESIA Strategy Alpha Picks: Slight Outperformance In A Bear Market: Our picks are BSDE, TLKM, ACES, BBTN, CMRY, SIDO, JSMR and AKRA. MALAYSIA Strategy Alpha Picks: Well-Positioned For 1Q Results Season: Our April picks again beat the KLCI. May 24 picks: GENM, Inari, Mah Sing, MrDIY, MYEG, Press Meta...
GREATER CHINA Strategy Alpha Picks: May Conviction Call Adding CR Beer, Crystal, Geely, Haier, Kuaishou, Ningbo Tuopu, Pinduoduo, Shenzhou, and Tencent to our BUY list, closing out SELL calls. Small-Mid Cap Monthly Reiterate BUY on Crystal International. Sector Automobile Weekly: EV sales pick up; take...
Despite NIM declining by 30bp yoy and flat non-interest income, 1Q24 net profit was up 1.1% yoy (-20.6% qoq), with ROE remaining high at 19.7%, which was supported by a 19% yoy loan growth and 13bp yoy decline in CoC. Loan yield was stable at 7.7%, but CoF increased 49bp yoy. The wholesale segment’s NPL ratio improved qoq and yoy while retail’s NPL ratio inched up. Maintain BUY with a lower target price of Rp7,300 as we cut our earnings estimates and ROE assumptions.
Strategy: Alpha Picks: Slight Outperformance In A Bear Market: Our picks are BSDE, TLKM, ACES, BBTN, CMRY, SIDO, JSMR and AKRA. Astra Agro Lestari (AALI IJ/SELL/Rp6,425/Target: Rp5,715): 1Q24: Within expectations. Maintain SELL as we are concerned with its flat FFB production growth, lower mill utilisation rate and weak downstream margin. Bank Mandiri (BMRI IJ/BUY/Rp6,325/Target: Rp7,300): 1Q24: Net profit up 1.1% yoy, slightly below expectations. Maintain BUY with a lower target price. Trime...
As of Feb 24, CoF remained elevated. Combined unconsolidated interest expenses of the big four banks increased 44% yoy in 2M24 while NIM contracted by 21bp in 2M24. Based on historical data, tighter liquidity could improve Indonesian banks’ NIM due to more efficient funding usage. Nevertheless, a longer-term, tighter liquidity can lower NIM. The impact could be different for individual banks, depending on the banks’ funding and asset composition. Maintain OVERWEIGHT. Top picks: BBCA and BMRI.
OVERWEIGHT on Indonesia banks as they offer the highest earnings growth in 2024/25 and benefit from the recent rally in commodity prices. We like Singapore banks for their attractive dividend yields. Our top BUYs are DBS (Target: S$43.25), CIMB (Target: RM7.33), SCB X (Target: Bt130) and BMRI (Target: Rp7,900). We also like OCBC (Target: S$18.15), RHB (Target: RM6.18) and BBNI (Target: Rp6,300) as attractive yield plays.
GREATER CHINA Strategy Alpha Picks: April Conviction Calls: Adding AIA, Midea, Hansoh Pharmaceutical, Shenzhen Inovance and Trip.com to our BUY list, with SELL calls on BYD, EVE Energy, and Li Auto. INDONESIA Strategy Alpha Picks: Outperformance In Mar 24 and 1Q24: Our picks are ACES, BBTN, CMRY, SIDO, EXCL, MAPI, JSMR, CTRA, and AKRA. MALAYSIA Strategy Alpha Picks: Expanding The Variety Of Events Bets: Our Alpha Picks trounced the KLCI in Mar 24. Apr 24 picks: GENM, Inari, Mah Sing, MrDIY, MY...
BMRI’s ROE hit 23% in 2023, up from 14.7% in 2022. The bank expects to maintain its >20% ROE and continue to gain market share by tapping its wholesale customers’ value chains and leveraging technology. Its digital app, LIVIN, has been a big growth driver with 24,600 account openings per day which increased its CASA market share to 18.4% in Nov 23. We raise our target price to Rp7,900 on the back of a lower risk-free rate, but we downgrade our rating to HOLD due its lofty valuation.
Semen Indonesia (SMGR IJ/BUY/Rp5,850/Target: Rp7,000): 4Q23: Net profit drops on rising COGS and SGA; results below expectations. Bank Mandiri (BMRI IJ/HOLD/Rp7,400/Target: Rp7,900): Lofty valuation despite 20% ROE; downgrade to HOLD. TRADERS’ CORNER GoTo Gojek Tokopedia (GOTO IJ): Technical BUY Mayora Indah (MYOR IJ): Technical BUY
GREATER CHINA Economics Money Supply: Weaker appetite for credit could limit impact of policy easing. Sector Aviation: Airlines’ Feb 24 operating data beat our expectations on stronger-than-expected holiday effect. Near-term risk-reward appears more balanced. Upgrade to MARKET WEIGHT. Results Contemporary Amperex Technology (300750 CH/BUY/Rmb180.85 /Target: Rmb250.00): 4Q23: Earnings beat on margins. Maintain BUY. Fuyao Glass Industry Group (3606 HK/BUY/HK$41.40/Target: HK$50.00): 4Q23: Net prof...
GREATER CHINA Strategy Alpha Picks: March Conviction Call: Adding CMB, COLI, CR Beer, Kuaishou and TUL to our BUY list, closing out SELL calls. INDONESIA Strategy Alpha Picks: Significant Outperformance In Feb 24: Our picks are BBTN, CMRY, SIDO, EXCL, MAPI, JSMR, CTRA, MYOR and AKRA. MALAYSIA Strategy Alpha Picks: Focusing On Earnings Momentum: Our Alpha Picks underperformed the KLCI in Feb 24 (-0.9% vs 2.5%). Mar 24 picks significantly feature companies with good earnings momentum. SINGAPORE...
Indonesian banks could sustain their lofty valuations on the back of: a) solid bank performances, b) stability after the election, and c) a resilient domestic economy. The rate cuts, which are expected to take place in 2H24, can serve as a positive catalyst as rate cuts usually have a positive impact on Indonesian banks. Following a 15% CAGR net profit in 2019-23, we expect the big four banks to deliver 11%/10% net profit growth in 2024/25 respectively. Maintain OVERWEIGHT. Our top picks: BBNI, ...
GREATER CHINA Strategy Alpha Picks: February Conviction Calls: We remain hedged, adding COSCO Shipping Holdings and Foxconn Industrial Internet to our BUY list, but include additional SELL calls on Li Auto and Xpeng. INDONESIA Strategy Alpha Picks: Outperformance in Jan 24: Our picks are EXCL, MAPI, BMRI, JSMR, BBNI, CTRA, MYOR and AKRA. MALAYSIA Strategy Alpha Picks: Eyes Also On Results Season Winners: Our Alpha Picks performance again trounced the KLCI in Jan 24 (+9.6% vs +4.0%). Feb 24 pic...
Net profit grew strongly by 15.6% qoq and 52.1% yoy in 4Q23, bringing 2023 net profit growth to 33.7% yoy. ROE hit a new high of 23% while NPL fell to 1.2%. BMRI’s digital initiatives helped it increase its share of the CASA market to 18.4% in 2023 (2021: 16.6%). Following the strong 2023 earnings, we project a 9.4% net profit growth in 2024, mainly driven by strong loan growth and cost control. CoC will be higher, but below 2019’s 1.4%. Maintain BUY with a higher target price of Rp7,400.
Our portfolio delivered a 2.5% return in Jan 24, while the JCI declined 3.4% during the same period. The top gainers were BMRI (+7.4%), AKRA (+7.3%), MAPI (6.7%), BBNI (+4.5%), CTRA (+4.3%) and JSMR (+0.2%). Losers were MYOR (-8.1%) and TLKM (-2.2%). Barito Group stocks softened in Jan 24 with BREN and BRPT dropping 33.78% and 20.3% respectively. We replace TLKM with EXCL. Our picks are EXCL, MAPI, BMRI, JSMR, BBNI, CTRA, MYOR and AKRA.
Strategy: Alpha Picks: Outperformance in Jan 24: Our picks are EXCL, MAPI, BMRI, JSMR, BBNI, CTRA, MYOR and AKRA. Bank Mandiri (BMRI IJ/BUY/Rp6,675/Target: Rp7,400): 4Q23: Net profit up 15.6% qoq and 52.1% yoy; CASA market share rising. TRADERS’ CORNER Charoen Pokphand Indonesia (CPIN IJ): Technical BUY Indah Kiat Pulp & Paper (INKP IJ): Technical BUY
GREATER CHINA Update Xiaomi Corp (1810 HK/BUY/HK$12.20/Target: HK$21.60): 4Q23 results preview: Solid results on resilient smartphone margins. INDONESIA Strategy Alpha Picks: Outperformance in Jan 24: Our picks are EXCL, MAPI, BMRI, JSMR, BBNI, CTRA, MYOR and AKRA. Results Bank Mandiri (BMRI IJ/BUY/Rp6,675/Target: Rp7,400): 4Q23: Net profit up 15.6% qoq and 52.1% yoy; CASA market share rising. MALAYSIA Strategy Alpha Picks: Eyes Also On Results Season Winners: Our Alpha Picks performance again...
Interest rates have peaked and entered a downcycle. Indonesian banks are the biggest beneficiaries of lower interest rates and have the highest earnings growth in 2024 and 2025. Our top BUYs are OCBC (Target: S$16.85), CIMB (Target: RM6.65), SCB X (Target: Bt124) and BBNI (Target: Rp6,300). Yield plays, such as DBS (Target: S$41.65), RHB (Target: RM6.35), KTB (Target: Bt21.50) and BMRI (Target: Rp6,500), are attractive in an environment of lower bond yields.
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