BRIDS Market Pulse 

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In the spotlight

 

Market review: JCI closed flattish w-w amid profit taking by the end of the week. Foreign investors turned net sellers with US$198mn of outflows from the Indonesian market during the week, despite inflows to most of other EMs. Metals sector (+9.5% w-w) continued its outperformance amid still constructive outlook for nickel ore, followed by the Consumer (+2.7% w-w) and Retail (+3.3% w-w) sectors amid more news about government’s aim to boost spending. Investors have also shown interest in the rate-sensitive sectors (e.g., Property, Tower) ahead of the BI rate decision next week.

 

Week ahead: further trade de-escalation following constructive US-China meeting has lifted sentiment and driven flight from safe assets (Gold -4.9% w-w). Indonesia’s resilient growth outlook compared to peers (consensus’ 12-month forward EPS growth of 2.9%) and attractive valuation at ~11.5x PE position the market favorably among EM peers. Nonetheless, investors’ focus may likely remain on near-term growth outlook, following weak 1Q25 earnings and GDP print. Apr25 trade balance data (due on May 15th) may also influence market sentiment.

 

1Q25 earnings growth: Based on BRIDS’ coverage universe, 1Q25 earnings contracted -1.3% yoy with big sectors delivering weak earnings: Banks (+0.1% yoy), Telco (-6.4% yoy), Consumers (-0.5% yoy). Overall, the domestic sectors ex-banks saw earnings contraction of -1.7% yoy, reflecting weak domestic demand. The commodities sector delivered -5.4% yoy contraction, largely dragged down by the impact of above-normal rainfall in 1Q25 for coal contractors (under UNTR and ADRO).

 

Latest company guidance and checks:

 

  • Consumers: ICBP maintained 7-9% yoy revenue growth (1Q25’s revenue growth of +2% was dragged down by low Mar25 sales due to Eid holidays, with Apr25 showing positive growth) and SIDO also maintained 10% topline growth. On the retail front, ACES maintained its conservative expectation of >1% SSSG.
  • Cement: Our channel check indicated positive Apr25 growth for INTP’s bag segment, albeit from last year’s low base due to Ied, and lower contraction for the bulk segment, with Apr25 total volume of -3% yoy and flattish growth in May25 (MTD). Media news about resumption of the budget for public infra and better seasonality in 2Q25 could drive demand and improve earnings (following the sector’s earnings contraction of -62% yoy in 1Q25).
  • Automotive: ASII maintained FY25 4W market expectation of 820-865k (implying -5% to flat yoy), and slightly down market share as of 1Q25. Management sees better demand seasonality in 2Q25 onwards, though it also noted downside risk in Apr25 onwards from the halt of opsen tax subsidy by some provinces.
  • Coal: prices remained soft, in line with 2Q seasonality, but rebound in Newcastle price from low US$90s and resilient ICI4 price at US$48/t could indicate that cost supports are in play. Reports of still above-normal rainfall in Apr25 may continue to hinder production of mining contractors (UNTR and ADRO).

 

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