External broker reports(aggregated public sources), BRI Danareksa Research

BRI Danareksa Research

External broker reports(aggregated public sources)

As a one-stop financial solution with the vision to be the most valuable securities house, BRI Danareksa Sekuritas (BRIDS) has maintained an excellent track record and extensive experience in the capital market as an underwriter, broker, and financial advisor for individual, institutional, foreign and domestic, private and government clients. Established in 1992, PT Danareksa Sekuritas is a securities company that performs activities as a securities broker, underwriter, or arranger and financial advisor.

Thematic (Sector/Industry)

<ul><li>Investors’ concerns was triggered by MSCI’s announcement that it is conducting a consultation to review a possible change in foreign inclusion factor (FIF) to possibly include KSEI data which would exclude shares held by corporate and “others” from the free-float.</li><li>MSCI has outlined two scenarios under this proposed method, which may effectively result in lower weighting for Indonesian stocks in MSCI EM Index.</li><li>Despite the overhang from MSCI index review, foreign investors flow sustained a positive flow during the week, with US$333mn of inflow, putting Indonesia among the few markets with positive flow for the second consecutive week.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Investors’ concerns was triggered by MSCI’s announcement that it is conducting a consultation to review a possible change in foreign inclusion factor (FIF) to possibly include KSEI data which would exclude shares held by corporate and “others” from the free-float.MSCI has outlined two scenarios under this proposed method, which may effectively result in lower weighting for Indonesian stocks in MSCI EM Index.Despite the overhang from MSCI index review, foreign investors flow sustained a positive flow during the week, with US$333mn of inflow, putting Indonesia among the few markets with positive flow for the second consecutive week.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

BRIDS Market Pulse : Chart of the Week – JCI Market Capitalization

External broker reports(aggregated public sources), MNC Sekuritas

MNC Sekuritas

MNC Sekuritas, the first wholly-owned subsidiary established by the Group back in 1989, provides a complete range of services, from equity, fixed income, investment banking to providing research to optimize clients’ investments. Thus far, the company has more than 140 points of sales with over 100,000 clients. Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<ul><li>Based on our channel checks, tobacco companies under our coverage were relatively slow in adjusting ASPs in 2Q24 to offset the FY25 excise tax hike (+10%).</li><li>We believe producers are being cautious in adjusting ASPs amid relatively weak consumer spending power, particularly after the rise in food staple prices in 1H24.</li><li>We note that the excise revenue target in the 2025 draft state budget is IDR244.2 tn.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Based on our channel checks, tobacco companies under our coverage were relatively slow in adjusting ASPs in 2Q24 to offset the FY25 excise tax hike (+10%).We believe producers are being cautious in adjusting ASPs amid relatively weak consumer spending power, particularly after the rise in food staple prices in 1H24.We note that the excise revenue target in the 2025 draft state budget is IDR244.2 tn.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Equity Bottom-Up

<ul><li>GGRM’s 6-8% price adjustment YTD may support FY24F margins, but we expect volume may continue to be under pressure.</li><li>We trim our FY24-25F NP by 42-47% due to lower volume assumptions (-8/-13% yoy from -5/0% prev.) and yoy margin pressure.</li><li>We downgrade our rating to Hold with a lower TP of Rp17,500 as we see less rosy NP outlook.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

GGRM’s 6-8% price adjustment YTD may support FY24F margins, but we expect volume may continue to be under pressure.We trim our FY24-25F NP by 42-47% due to lower volume assumptions (-8/-13% yoy from -5/0% prev.) and yoy margin pressure.We downgrade our rating to Hold with a lower TP of Rp17,500 as we see less rosy NP outlook.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Gudang Garam - A Still Challenging Outlook Limits Re-Rating Potential

<ul><li>FY24 excise revenue target growth of 5% yoy and 10% avg. tariff growth implies negative industry volume growth will continue.</li><li>Tepid 4% growth in 2024 minimum wages may lead to further downtrading; we expect the SKT category to continue gaining share.</li><li>We maintain OW rating as the sector’s 10.6x FY24F PE (24% disc. to avg 3yr PE) has priced in the downside, with cushion from 6-11% div. yield.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

FY24 excise revenue target growth of 5% yoy and 10% avg. tariff growth implies negative industry volume growth will continue.Tepid 4% growth in 2024 minimum wages may lead to further downtrading; we expect the SKT category to continue gaining share.We maintain OW rating as the sector’s 10.6x FY24F PE (24% disc. to avg 3yr PE) has priced in the downside, with cushion from 6-11% div. yield.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Cigarette: Attractive Value Proposition Despite Lingering Regulatory Headwinds...

Cigarette: Attractive Value Proposition Despite Lingering Regulatory Headwinds

Indonesia

PT Gudang Garam Tbk manufactures and distributes cigarettes and operates activities related to the cigarette industry. Through its subsidiaries, the Company also operates in the paper-related activities.

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Gudang Garam (GGRM IJ)

BRIDS Market Pulse : Chart of the Week – JCI Market Capitalization

MSCI has outlined two scenarios under this proposed method, which may effectively result in lower weighting for Indonesian stocks in MSCI EM Index.

BRI Danareksa Research

Tobacco Sector - A Biting Year Ahead

Based on our channel checks, tobacco companies under our coverage were relatively slow in adjusting ASPs in 2Q24 to offset the FY25 excise tax hike...

MNC Sekuritas

Gudang Garam - A Still Challenging Outlook Limits Re-Rating Potential

GGRM’s 6-8% price adjustment YTD may support FY24F margins, but we expect volume may continue to be under pressure. We trim our FY24-25F NP by 42-47%

BRI Danareksa Research

Cigarette: Attractive Value Proposition Despite Lingering Regulatory Headwinds...

FY24 excise revenue target growth of 5% yoy and 10% avg. tariff growth implies negative industry volume growth will continue.

BRI Danareksa Research

Cigarette: Attractive Value Proposition Despite Lingering Regulatory Headwinds

FY24 excise revenue target growth of 5% yoy and 10% avg. tariff growth implies negative industry volume growth will continue.

BRI Danareksa Research

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