FROM EQUITY RESEARCH DESK

IDEA OF THE DAY

Consumer: 4Q25 Preview: Steady Revenue Growth, Margins Gradually Improving (OVERWEIGHT)

• We estimate 4Q25/ FY25 sector revenue growth of +6.7/+4.2% yoy, broadly in line with consensus’ est. of +4.1% yoy.
• The revenue growth is mainly supported by ICBP and MYOR, while we also expect GPM recovery in 4Q25 on normalization in soft commodity prices.
• Reiterate our Overweight stance on the sector; ICBP (Buy, TP Rp11,500) remains the top pick in the sector.

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RESEARCH COMMENTARY

Moody’s outlook revision: near-term caution, not a credit event

• Moody’s has revised Indonesia’s sovereign outlook to negative from stable, while affirming the Baa2 investment-grade rating. The outlook change reflects the agency’s view on rising policy uncertainty and concerns around governance. That said, the rating affirmation continues to be supported by Indonesia’s resilient growth profile, relatively prudent macroeconomic framework, and manageable government debt metrics. Indonesia also remains firmly within investment grade across rating agencies, with S&P and Fitch's BBB ratings with stable outlooks.
• We believe the outlook revision should be seen as an early signal of higher risk premium rather than a credit event. While the move may drive near-term caution toward Indonesian assets, it should not trigger forced selling or structural repricing. As such, we expect the equity market impact to be incremental to risk-off sentiment already reflected in recent foreign fund outflows (US$711mn YTD) from the JCI.
• With macro fundamentals remaining intact and the catalysts cited largely governance-related, rather than debt stress or macro deterioration, we believe a return to a stable outlook remains a plausible base case. That said, risks would increase should other rating agencies revise their outlooks or the country sees significant deterioration in external positions.
• We reiterate our preference on stocks with attractive total return upside potentials and better earnings visibility but with low foreign ownership/ outflow risk. Our top picks are: ANTM (Buy, TP Rp4,800), AADI (Buy, TP Rp9,850), ISAT (Buy, TP Rp3,000), ICBP (Buy, TP Rp11,500), JPFA (Buy, TP Rp3,100), BBNI (Buy, TP Rp4,700). (Erindra Krisnawan – BRIDS)

 

BMRI (Buy, TP: Rp5,500) - FY25 Results: Above and FY26 Guidance

FY25 Insight:

• Net profit up 1% yoy: BMRI recorded a net profit of Rp56.3tr in FY25, above our estimate (114%) and consensus (110%), supported by lower-than-expected CIR and CoC.
• High loan growth offsetting lower NIM: BMRI booked loan growth of 13% yoy, offsetting a 26bps decline in NIM and resulting in a 4% increase in NII. The corporate and commercial segments remained the biggest contributors, with 23% and 12% yoy growth, respectively, offsetting muted consumer loan growth of 4% yoy.
• LDR dropped significantly: Despite strong loan growth, deposits rose 24% yoy, led by TD growth of 87% yoy, resulting in a lower CASA ratio of 68% (FY24: 75%).
• Bank-only NIM pressured on both sides: NIM declined from 4.9% to 4.6%, driven by a 22bps drop in loan yield and a 15bps increase in CoF.
• Strong non-interest income and opex efficiency: Non-interest income rose 15% yoy, driven by both recurring (+18%) and non-recurring (+15%) income. Opex increased 15% yoy, below guidance of +25% yoy, reflecting efficiencies in other cost items despite 2025 one-off expenses.
• Lower CoC and lower coverage: CoC declined 21bps to 58bps as provision charges fell 5% yoy while loans grew 13%. NPL coverage declined to 231% (FY24: 271%) as the NPL ratio remained stable at 1.1% and write-offs declined.

 

4Q25 Insight:

• Record-high quarterly profit: BMRI posted a net profit of Rp18.6tr in 4Q25 (+40% qoq, +35% yoy), driven by resilient NIM, strong non-interest income, contained opex, and minimal CoC.
• Bank-only NIM steady qoq: NIM remained stable at 4.5%, supported by a 27bps reduction in CoF offsetting a 27bps decline in loan yield. Loan yields declined across all segments except for micro and payroll, which remained stable.
• Strong non-interest income and opex efficiency: Non-interest income rose 34% qoq and 32% yoy, driven by deposit-related and remittance fees, credit card income, Livin’ app fees, and cash recoveries.
• Lower-than-expected opex: Despite seasonal factors, opex increased only 2% qoq in 4Q25 and declined 6% yoy, even after accounting for one-off expenses.
• Minimal CoC at 0.2%: Provision charges dropped 73% qoq and 64% yoy, resulting in a CoC of 0.2%, as the bank revised its provisioning methodology for secured and unsecured LGD models, with an estimated ~30bps impact on CoC.
• Strong qoq loan and deposit growth: Loans grew 7% qoq, supported by KDMP-related lending. Deposits rose 14% qoq, driven by significant inflows toward year-end.
• Asset quality remained solid: Consolidated NPL improved from 1.2% in 3Q25 to 1.1% in 4Q25, driven by improvements in wholesale loans, partially offset by higher consumer NPLs.

 

FY26 Consolidated Guidance:

• 7–9% loan growth vs. FY25’s 13%.
• 6–4.8% NIM vs. FY25’s 4.9%.
• 6–0.8% CoC vs. FY25’s 0.58%.
• Maintain LDR below 95% vs. FY25’s 89%.
• 42–43% CIR vs. FY25’s 43.5%, with no carryover of one-off costs and consolidated opex growth expected to be in the low- to mid-single digits.
• Maintain bank-only NPL coverage at 230–250% and LaR coverage at ~40%.
• Maintain Tier 1 and CAR at 17% and 19%, respectively, anticipating a 65–70% dividend payout ratio.

 

Summary:

• Overall performance: BMRI’s FY25 results were strong, supported by robust loan and deposit growth, easing NIM pressure in 4Q25, lower-than-expected opex, and strong non-interest income growth. (Victor Stefano & Naura Reyhan Muchlis – BRIDS)

MARKET NEWS

MACROECONOMY

Indonesia’s Economy Outperformed Expectations in 4Q25 with GDP Growing 5.39% yoy

Indonesia’s economy outperformed expectations in 4Q25 with GDP growing 5.39% yoy, recording 5.11% yoy growth in 2025, above consensus and forecasts. Household consumption rose 5.11% yoy, its strongest since 3Q23, lifting full-year growth to 4.98%, supported by hotels, transport, and rising domestic travel. Investment remained solid, with GFCF up 6.12% yoy, driven by machinery and vehicles. Exports expanded 3.25% yoy, supported by non-oil shipments and tourism recovery. Manufacturing, trade, agriculture, and ICT led growth, while mining contracted amid weaker coal prices and softer Chinese demand. (Indonesia Statistics)

 

US Job Cuts Hit Highest January Level Since 2009

US companies announced the highest number of job cuts for any January since 2009, with 108,435 layoffs, up 118% from a year earlier, according to Challenger, Gray & Christmas. Hiring plans fell 13% to their weakest January level on record, reflecting cautious business sentiment for 2026. Major contributors included Amazon, UPS, and Dow, citing restructuring, contract losses, and weaker demand. The data point to a fragile labor market, despite Federal Reserve views that unemployment is showing early signs of stabilization. (Bloomberg)

 

SECTOR

Commodity Price Daily Update Feb 5, 2026

Danantara to Launch 6 Downstream Projects Worth Rp97tr

Danantara Indonesia will start groundbreaking for six strategic downstream projects worth ~US$5.8bn (Rp97.3tr) as part of 18 priority projects to shift Indonesia toward an industrial-based economy. The projects are fully funded internally and span metals, energy, agriculture processing, and chemicals, supporting the government’s broader Rp618 trillion downstream investment roadmap for 2026. (Bisnis)

 

CORPORATE

BBNI Provides Rp8tr Term Loan Facility to MEDC

BBNI has provided a Rp8tr term loan facility to MEDC to support the company’s corporate funding needs. MEDC signed the credit agreement with BBNI on 4 February 2026, with a loan principal of Rp8tr and a tenor of 84 months (seven years) from the signing date. The facility will be used for general corporate purposes, including supporting MEDC’s energy sector operations covering exploration, mining, and production of oil, natural gas, and other energy resources through its subsidiaries. (Kontan)

 

MDKA Prepares Bond Maturity Payment

MDKA is ready to repay its Merdeka Copper Gold Continuous Bond V Phase II 2025 Series A, worth Rp856bn with a 7.25% coupon, maturing on 2 March 2026. The company has prepared funds to pay both principal and the 4th coupon through KSEI before the due date. (Emiten News)

 

SMRA Invests Rp1tr in Bekasi Mall Expansion

SMRA invested Rp1tr to develop Summarecon Mall Bekasi Phase 2 (NLA ~125,000 sqm), with tenant occupancy at 85% and expected to support recurring income, especially during Ramadan–Lebaran. The company targets recurring income at 25–30% of 2026 revenue (currently ~27%) while maintaining balanced growth between property development and investment. (Bisnis)