FROM EQUITY RESEARCH DESK

IDEA OF THE DAY

Consumer: Stimulus on the Horizon (OVERWEIGHT)

• The newly launched “8+4” program stimulus should serve as a catalyst for consumer spending recovery and support Consumer sector’s growth.
• While we expect the stimulus impact may take place in 4Q25 onwards, we maintain our rev/core earnings growth of +4.8/+0.4% yoy in FY25F.
• Reiterate our Overweight stance on the sector. Our top pick is ICBP (Buy, TP Rp12,000), followed by MYOR (Buy, TP Rp2,500).

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Bank Mandiri: 2Q25 Earnings Missed; Profit Hit by One-Off Cost (BMRI.IJ Rp 4,380; BUY TP Rp 5,000)

• BMRI reported net profit of Rp11.3tr in 2Q25 (-15% qoq, -19% yoy), bringing its 1H25 NP to Rp24.5tr (-8% yoy), missing our/cons FY25F.
• cut FY25 guidance for loan growth to 8–10%, NIM to 4.8–5.0%, CoC to 0.8–1.0%, while expecting CIR to be at 45%.
• We maintain our Buy rating with a lower TP of Rp5,000 as we cut our FY25/26/27F by 9.9/13.4/10.9%, reflecting lower ROE.

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RESEARCH COMMENTARY

BBRI (Not Rated) Concall KTA – Not Expecting ST Impact

• The impact of incentives and rate cuts on CoF will be minimal in the short term but will provide a stronger foundation for 2026.
• The FY24 loan growth target remains at 7-9%, with increased optimism to achieve the 7-7.5% range, up from below 7% previously. CoC remains unchanged at 3.0-3.2%, with early indications of up to 3.3%. Other guidance remains unchanged.
• Under the 3.2% CoC assumption, the 2023 vintage Kupedes downgrade will be Rp2tr, while the current downgrade is still Rp2.3-2.4tr per month, affecting CoC by 11-14 basis points.
• There was disruption in early August 2025 due to the implementation of payment ID and freezing of dormant account noise, which was resolved by September 2025. In mid-September, the MoF liquidity injection allowed the bank to review the TD rate. The bank aims to limit the special rate to a maximum of 5%.
• The bank is still waiting for the underlying agreement to disburse the Rp55tr state fund. There is no specific rule in the regulation, and the bank expects most of it to be disbursed to the SME segment. In business-as-usual (BAU) conditions, the monthly disbursement is Rp20-30tr, so the bank believes it can disburse the state fund in less than three months.
• The banks are currently negotiating to increase the withdrawal notification period from 1 day to 10 days. Government withdrawals will depend on revenue and spending, which will affect banks with high LDRs more significantly.
• For 2026, the early targets are: loan growth of 8-9%, CoC of 2.9-3.2%, and CIR of 40-43%. The bank hopes to see more impact from government programs, such as MBG and housing, in 2026.
• The bank aims for 3-5% growth in FY26F Kupedes, PNM as the biggest beneficiary of government direct subsidies, and expects Pegadaian’s growth to normalize from 35-40% this year to lower double digits, as FY26 growth engine.
• Corporate and commercial segments will benefit earliest due to their typical floating rates, followed by consumer and SME segments. Corporates can potentially use the Patriot bond as collateral for bank loans.
• Despite the government’s intention to boost industrial loan growth, the bank will continue to prioritize profitability. (Victor Stefano & Naura Reyhan Muchlis – BRIDS)

 

BRIS (Hold, TP: 2,900) 2Q25 Results – Slightly below

2Q25 Insight:

• Soft bottom line amid NIM expansion: BRIS posted net profit of Rp1.9tr in 2Q25 (–1% qoq, +10% yoy), with NIM expansion partly offset by higher opex.
• NIM expansion, likely one-off: NIM expanded to 5.8% driven by a higher loan yield of 9.0% in 2Q25 (+80bps qoq, +80bps yoy), which we believe is due to a one-off adjustment in mortgage, similar to its parent, BMRI.
• Steady qoq CoF: CoF remained stable at 2.8% (-1bps qoq) but still 24bps higher yoy.
• Higher opex: Also similar to BMRI, BRIS booked higher opex of Rp3.2tr (+6% qoq, +24% yoy), bringing CIR higher to 50.1%.
• Higher provisions and CoC: The bank booked provision expenses of Rp703bn (+9% qoq, +21% yoy), bringing CoC higher to 1.0% amid robust loan growth.
• LDR remains below 90%: Loans grew 2% qoq while deposits grew 1%, resulting in a slightly higher LDR of 89.5% in 2Q25 from 89.0% in 1Q25.

 

1H25 Insight:

• Slightly below bottom line: BRIS posted net profit of Rp3.7tr in 1H25 (+10% yoy), achieving 48% of ours and 47% of consensus’ FY25F estimates, i.e., slightly behind expectations.
• Higher NIM amid possible one-off yield: NIM increased 27bps to 5.4% amid a 23bps increase in CoF as loan yield rose 33bps to 8.7%.
• CIR remains higher: The 20% jump in opex offset the 15% NII growth and 17% other income growth, resulting in a 176bps increase in CIR to 49.5%.
• CoC remained low: CoC remained at 0.9% as the 19% increase in provision expenses was offset by 14% loan growth.
• Steady NPL: NPL stood at 1.9% in 2Q25, unchanged from 1Q25 but improved from 2.0% in 2Q24.

 

Summary:

• BRIS’s 1H25 results were weak as the possibly one-off yield adjustment could not offset rising costs, i.e., operating cost and credit cost. (Victor Stefano & Naura Reyhan Muchlis – BRIDS

SMGR (Sell, TP Rp2,500): 8M25 - Monthly Sales Improved on Export, Domestic Market Share Still Contracted YoY

• SMGR booked 3.5mn tons sales in Aug25 (+2.4% yoy, +9.8% mom), bringing 8M25 volume to 23.9mn tons (-2.7% yoy). The monhtly increase was driven by higher exports at 683k tons (+75.5% mom/+35.8% yoy) vs. 527k/389k tons in Jun25/Jul25.
• Domestic sales reached 2.8 mn tons in Aug25 (+0.7% mom/-3.3% yoy), in-line with national sales volume growth (-0.1% mom, -3.8% yoy), slightly better than INTP (-1.1% mom in Aug25).
• Overall 8M25 SMGR's volume decline (-2.7% yoy) mirrors the national trend (-3.3% yoy), though market share still contracted from 49.7% in 8M24 to 47.9% in 8M25.
• This reflects a 63% of our FY25F target of ~38.0mn tons, relatively in-line with its historical 8M contribution to FY of 63-64%.
• Despite Aug25 improvement in both export and domestic markets, we previously cut FY25F volume from 38.6mn tons (+1% yoy) to 38.0mn tons (-1% yoy), on concerns over weak 2H25 purchasing power, rainy season, and slow gov’t infra spending. Limited cost control amid ongoing distribution issues is also a risk. We see the recent share price rally as unwarranted, with downside risk of EPS downgrade post-3Q25 results.
• We currently have a Sell rating on SMGR with a DCF-based TP of Rp2,500. Post-3Q25 results shall provide a clearer review point. (Ismail Fakhri Suweleh & Sabela Amalina – BRIDS)

MARKET NEWS

MACROECONOMY

Indonesia: Free Nutritious Meal Program Budget Absorption Stuck at 19% The Head of the National Nutrition Agency (BGN) responded to the low budget absorption of the Free Nutritious Meal (MBG) program up to September 2025. The initiative, launched by President on January 6, 2025, was allocated Rp71tr from the state budget. However, by early September, only 19% of the budget had been spent. This slow progress has sparked public criticism, including from Finance Minister, who warned that the MBG budget could be reallocated to other programs if absorption does not improve. (Kontan)

 

SECTOR

Commodity Price Daily Update September 19, 2025

CORPORATE

ANTM–IBC and Huayou Target Oct–Nov 2025 Groundbreaking for Titan EV Battery Project

The US$9.8bn Titan EV battery ecosystem project by Antam–IBC and Huayou Holding is targeted for groundbreaking by late October or early November 2025, after previous delays from August and September. The project, backed by President Prabowo, shifted partners from LG to Huayou, with Antam and IBC holding majority upstream ownership. (Kontan)

 

ENRG’s Subsidiary Boosts Kampar Block Output with Kayuara-20 Well

ENRG’s subsidiray, PT EMP Energi Riau, has completed drilling the Kayuara-20 well at Kampar Block, Riau, expected to add 200 barrels per day (bpd) and lift production above 1,000 bpd by late September 2025. The block averaged 845 bpd in 1H25, while Kayuara-20 holds an Original Oil In Place (OOIP) of 2.32 million barrels. ENRG emphasized the success reflects its commitment to boosting national oil output following its March 2024 asset acquisition. (Bisnis)