FROM EQUITY RESEARCH DESK

IDEA OF THE DAY

BRIDS FIRST TAKE

  • Automotive: Robust Feb25 4W Sales, Yet Still Down in 2M25 (OVERWEIGHT) To see the full version of this report, please click here

 

To see the full version of this snapshoot, please click here

 

RESEARCH COMMENTARY

BBRI (Not Rated) - Meeting KTA

TL;DR: micro situation is still challenging but the banks remain confident in the guided provisions with some risks in the macro assumption.

 

We conducted a meeting today with Ety Yuniarti (Head of Market, Portfolio, Enterprise Risk Management BRI) with several key takeaways as follows:

 

Provision Bottoming Out This Year

  • The initial plan was for a two-year process. Hence, the impact from 2023 Kupedes will still be felt until 1Q26.
  • There is Rp90tr remaining balance of 2023 Kupedes, with Rp9tr write-off budget this year, leaving Rp23tr balance for FY26.
  • Why not front-load provision? Micro and small businesses are sensitive to government intervention.
  • No significant improvement yet in micro loan conditions, and the unusual deflation patterns prompted a cautious approach.
  • Confident in current provisioning levels; LaR is well covered.
  • 2026 CoC depends on 2024 loan disbursement quality.

 

Macroeconomic Factors

  • Will revise down GDP growth assumptions if deflation persists.
  • Quieter purchasing behavior observed during this year's Ramadan.
  • Management has a 10% overlay on provisioning; if exceeded, a revision may be needed.
  • Net NPL formation assumption: flat.

 

Government Initiatives

  • Cooperatives (Kopdes Merah Putih)
  • Minimal exposure to koperasi; Bukopin and BPR have more direct exposure.
  • Typically, smaller private banks partner with koperasi via channeling arrangements.
  • Different legal standards apply to koperasi vs. individual borrowers.
  • Key risk: Changes in koperasi management (pengurus) and who is responsible in case of defaults?
  • Will have to see if the Village Fund (Dana Desa) could be legally tied to loan repayment of Kopdes Merah Putih.

 

  • MBG (Makan Bergizi Gratis)
  • No formal partnership yet.
  • Funds are still disbursed from the ministry directly to kitchens, not through banks.

 

  • 3 Million Housing
  • Issue lies in project size and developer readiness.
  • BBRI is ready to participate more than in the past.

 

  • KUR
  • KUR loans under 50mn are not required to have collateral.
  • Average ticket size: 40mn, aligning with internal risk assessments.

 

  • Danantara
  • Business process remains the same.
  • Changes in management, commissioner, and dividend determination.

 

YTD 2025 Trends

  • January sees lower productivity due to employee mutations and holiday-related delays.
  • BBRI used provisions to absorb higher downgrades in Jan25.
  • December 2023 had high micro disbursements, but December 2024 did not repeat this trend.
  • CoC will go down in Feb25, but 2M25’s provisions might still be slightly higher than 2M24’s.
  • Micro segment NPL still rising, leading to negative micro disbursement.
  • NPL formation improved in Jan25 but slightly declined in Feb25.

 

2025 Guidance

  • Loan Growth: 7-9%
  • Cautious approach due to state budget adjustments and potential lower GDP growth.
  • Concerns over second-half 2025 economic developments.
  • NIM: 7.3-7.7%.
  • BBRI remains confident in achieving this target.
  • CoC (Cost of Credit): 3.0-3.2%
  • Sufficient provisions unless conditions worsen. (Victor Stefano & Naura Reyhan Muchlis – BRIDS)

 

INTP (Buy, TP: Rp8,800) - Feb25 Sales Volume

Industry

  • Feb25: 4.6 Mt (-4.1% mom/+5.0% yoy)
  • 2M25: 9.4 Mt (-0.4% yoy)
  • Bag: 3.3 Mt in Feb25 (-5.5% mom/+9.2% yoy), 72.1% to total sales (vs 73.1% in Jan25)
  • Bulk: 1.3 Mt in Feb25 (-0.3% mom/-4.4% yoy)

 

INTP

  • Feb25: 1.3 Mt (-11.5% mom/+0.5% yoy)
  • 2M25: 2.8 Mt (-0.3% yoy), 14% of our estimate (inline)
  • Market share: 28.6% in Feb25 (vs 29.9% in Feb24)

 

Comment:

  • We observed a recovery in cement industry sales volume in Feb25, driven by more effective working days. Weaker mom sales was due to lower working days in Feb vs Jan25.
  • The bag market expanded in Java (+7.8%) and outside Java (+10.5%), while bulk market rose in Java (+7.9%) from several ongoing projects but fell outside Java (-20.7%) due to normalizing demand from IKN.
  • INTP’s growth (+0.5% yoy) lagged the industry impacted by heavy rains and floods in Java, which accounts for 65% of its total volume.
  • We expect slower sales volume growth in March due to the Eid Fitr holiday. We maintain our Buy rating with a TP of Rp8,800. (Richard Jerry, CFA & Sabela Nur Amalina – BRIDS)

MARKET NEWS

MACROECONOMY

Indonesia: 2M25 Fiscal Revenue Drops 21% yoy, Deficit at Rp31.2tr

For 2M25, fiscal revenue declined by 21% yoy to Rp316.9tr, mainly due to a 30% drop in tax revenue. Excise revenue grew slightly by 2%, while non-tax revenue fell 4%. Spending fell 7% to Rp348.1tr, with central government spending down 12% and K/L (ministries/institutions) spending contracting by 30%, though non-K/L spending increased by 7% and regional transfers remained stable (+1%). The primary balance shrank by 49% yoy to Rp48.1tr, while the fiscal balance shifted to a deficit of Rp31.2tr (-0.13% of GDP) from a surplus of Rp26tn (0.11% of GDP) a year prior. Financing rose 19% to Rp220.1tr due to the frontloading scheme. (MoF)

SECTOR

Commodity Price Daily Update Mar 13, 2025

14 Maret 2025 (1).png

CORPORATE

DMAS Targets Marketing Sales of Rp1.8tr in 2025

DMAS is targeting marketing sales worth Rp1.81tr in 2025. According to DMAS, this target represents a moderate conservation target. The marketing sales target is supported not only by sales in the industrial sector but also by commercial and residential products in Deltamas City. DMAS also stated that one of the considerations in setting the 2025 marketing sales target is the substantial demand for industrial land, with 90 ha at the beginning of 2025. Furthermore, the demand for industrial land is primarily dominated by the data center segment, along with other sectors such as FMCG, chemicals, and others. (Kontan)

 

EMTK Offer 300mn Shares to Employees

EMTEK plans to conduct a private placement through the Management and Employee Stock options (MESOP). The company intends to issue free shares to program participants, with up to 300mn new shares to be issued from the company’s portfolio—equivalent to 0.49% of its issued and fully paid-up capital. The MESOP share price will be determined by the BOD and BOC, with an exercise price set at a minimum of 90% of the average closing price of EMTK shares over the last 25 consecutive trading days in the regular market prior to the report submission to the IDX. To proceed with this plan, EMTK will seek shareholder approval at the General Meeting of Shareholders scheduled for April 28, 2025. (IDX, Emitennews)

 

Frisian Flag Indonesia Introduces Cheddar Cheese Block

PT Frisian Flag Indonesia (FFI) has launched Frisian Flag Keju Balok Cheddar, produced through a third-party facility despite its long dairy expertise. The mgmt. stated the release caters to increased Ramadan demand. While not made in FFI’s factory, the company maintains full control over quality and recipe. (Kontan)

 

PepsiCo Brings Back Lays, Doritos, and Cheetos to the Indonesian Market

Popular snack brands Lays, Doritos, and Cheetos have re-entered the Indonesian market under PepsiCo Indonesia. Production of Lays and Doritos is set to begin this week, while Cheetos has been in production since Jann25 and is now available at several retailers. To support local production, PepsiCo Indonesia has invested Rp3tr in a new factory in Cikarang, West Java, which has been operational since Jan25. (Kontan)

 

Telkomsel and Tencent Cloud Develop AI-Powered Customer Solutions

Telkomsel and Tencent Cloud have announced a strategic collaboration to develop AI-powered and cloud-based customer solutions at the Mobile World Conference (MWC) 2025. Their partnership will focus on AI-generated content (AIGC), AI translation, electronic know your customer (e-KYC) with palm verification, and other AI capabilities for both business-to-business (B2B) and business-to-consumer (B2C) segments. Additionally, both companies have agreed to implement cloud cost optimization for public and hybrid cloud solutions while adopting other digital technologies to enhance business operations and customer experiences. (Kontan)

 

TINS Targets 15% Increase in Production in 2025

TINS aims to increase its tin production by 15% in 2025 compared to the total production in 2024. According to TINS, the company targets a production range of 21,000 to 23,000 tons. Additionally, TINS predicts that the company's profit for the year 2024 is expected to be around Rp1tr – Rp1.1tr. (Kontan)