FROM EQUITY RESEARCH DESK

IDEA OF THE DAY

Property FY24 Pre-Sales Summary: Intact Strategy Amid Industry Challenges (OVERWEIGHT)

• FY24 pre-sales grew only 4% yoy vs. FY18-23 CAGR at 8%, yet we believe still reflecting intact marketing strategies amid affordability challenges.
• Potential VAT-incentives continuation shall aid affordability and support FY25F pre-sales which we estimate to continue growing by 4%.
• We maintain our OW rating on the sector as it trades at a sharp discount with improving pre-sales. Top picks: CTRA> PWON> SMRA> BSDE.

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BRIDS FIRST TAKE

• Green Energy:  KTAs from Kadin Indonesia Green Energy Investment Dialogue (NOT RATED)

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RESEARCH COMMENTARY

ARTO (Buy, TP: Rp3,900) - Jan25 Results

Jan25 Insight

• Strong NP momentum continued: ARTO achieved its highest monthly net profit of Rp20bn in Jan25 (tripled yoy), driven by strong PPOP growth (+230% yoy), which offset a significant rise in provision expenses (+253% yoy). Jan25’s NP accounted for 10% of our estimate (above) but only 6% of consensus (below).
• Robust NIM growth from higher EA yield: NII surged +72% yoy as loans grew 39% and NIM improved by 223bps to 10.3%. The rise in NIM came despite a lower LDR of 95%, down from 112% previously.
• Improved CIR despite higher opex: CIR improved to 57.7% from 78.1% previously, despite a 26% increase in opex, as both NII and other operating income grew at a higher rate.
• CoC spiked on riskier loans: A higher portion of riskier assets led to CoC jumping from 1.8% to 4.6%.

 

Summary:

• ARTO delivered strong Jan25 results, with record-high NP. The higher EA yield successfully offset rising CoF and elevated CoC, sustaining profitability. (Victor Stefano & Naura Reyhan Muchlis – BRIDS)

BBNI (Buy, TP: Rp5,100) - Jan25 Bank-Only Results

Jan25 Insights:

• Improved bottom line: BBNI booked Rp1.6tr in net profit for Jan25 (+17% mom, +10% yoy), meeting 7% of both our and consensus FY25 estimates, i.e., in line.
• Lower CoC offset weaker NIM: CoC declined to 0.8% (-101bps mom, -32bps yoy), supporting the bottom line, as PPOP came in at Rp2.5tr (-23% mom from a high base, flat yoy) due to lower NIM.
• NIM dropped below 4%: NIM fell to 3.9% in Jan25 (-92bps mom, -21bps yoy) as asset yield declined to 6.8% (-87bps mom, -25bps yoy) while CoF rose to 3.4% (+11bps mom, +19bps yoy).
• Opex and CIR remained elevated: Opex remained high at Rp2.3tr (-30% mom from a high base, +7% yoy), and CIR rose to 47.8% (+143bps yoy).
• Negative loan and deposit growth: Both loans and deposits declined 2% mom. The drop in deposits was driven by CA (-1%), SA (-2%), and TD (-3%). LDR slightly increased to 97% from 96% in Dec24.

 

Summary:

• BBNI’s Jan25 results were slightly weak, as bottom-line growth was primarily supported by lower CoC. PPOP remained flat due to declining NIM (persistent high CoF) and elevated opex. (Victor Stefano & Naura Reyhan Muchlis – BRIDS)

BBTN (Buy, TP: Rp1,100) - Jan25 Bank-Only Results

Jan25 Insight:

• Tanked bottom line from lower NIM and higher CoC: BBTN booked a net profit of only Rp102bn in Jan25 (-83% mom, -63% yoy), meeting just 3% of both our and consensus FY25 estimates, i.e., below.
• NIM still under pressure: Despite a higher LDR, Jan25’s NIM slipped 16bps mom to 2.4% (-108bps yoy) as weaker EA yield persisted. CoF remained flat mom at 4.8%.
• CoC spiked to 1.1%: Following a reversal in Dec24, CoC rose to 1.1% in Jan25, still within management’s target of 1.0–1.1% for FY25F (vs. FY24’s 0.6%).
• Opex toned down but CIR remained elevated: Opex declined to Rp747bn (-33% mom, -8% yoy). However, CIR remained high at 62.3% as NII dropped to Rp854bn (-6% mom, -24% yoy).
• Rising LDR to 95%: LDR increased to 95% from 94% in Dec24 as loans remained flat while deposits fell 2% mom, with the CASA ratio dropping by 200bps.

 

Summary:

• BBTN’s Jan25 results were weak, as the downward NIM trend continued and CoC spiked, though still in line with management’s target. (Victor Stefano & Naura Reyhan Muchlis – BRIDS)

BDMN (Not Rated) - Jan25 Bank-Only Results

Jan25 Insights:

• Net Profit Decline due to a Surge in CIR: BDMN’s net profit declined to Rp287bn (-7% mom, -3% yoy), as lower other operating income and higher opex offsetting the higher NII.
• Higher CIR: CIR surged to 55.7% (+577bps mom, +398bps yoy) as other operating income decreased (-20% mom, -2% yoy) and opex rose (+9% mom, +10% yoy), primarily due to an increase in other expenses (+40% mom, +19% yoy).
• mom NIM Improvement: NIM reached 4.8% (+37bps mom, -41bps yoy) in Jan25. The mom improvement was supported by a higher EA yield of 8.1% (+36bps mom), while the yoy NIM decline was caused by a 53bps rise in CoF to 4.1%.
• CoC Improvement: CoC improved to 1.1% in Jan25, down from 1.3% in Dec24 and 1.5% in Jan24.
• Loans and Customer Deposits: Loans and customer deposits grew by 9% and 11% yoy, respectively. LDR declined to 103.2% (-11bps mom, -396bps yoy).

 

Summary:

• In our view, BDMN’s Jan25 results were mixed, with a decline in net profit, but partly due to a higher base in both Jan24 and Dec24, a notable improvement in NIM, and a positive CoC trend. (Victor Stefano & Naura Reyhan Muchlis – BRIDS)

BNGA (Not Rated) - Jan25 Bank-Only Results

Jan25 Insights:

• Net Profit Decline Affected by Higher Provision Expenses: BNGA’s net profit declined to Rp356bn (-47% mom, -11% yoy) in Jan25, despite a 20% monthly growth in PPOP (flat yoy). This was due to a surge in provision expenses to Rp162bn (+258% mom, +83% yoy).
• Continued NIM Compression: NIM fell slightly to 3.7% (-3bps mom, -8bps yoy) in Jan25, despite a stable EA yield of 7.4% (+2bps mom, +15bps yoy). This was driven by a rise in CoF to 4.4% (+4bps mom, +23bps yoy).
• mom Improvement in CIR: CIR improved to 53.6% in Jan25 from 65.7% in Dec24, though still higher than the 52.9% reported in Jan24. The mom improvement was supported by a sharp decline in opex (-28% mom), mainly due to a drop in other expenses (-49% mom). However, the yoy higher CIR was driven by 9% lower other operating income, as the bank recorded a Rp72bn forex loss in Jan25 compared to a Rp304bn forex gain in Jan24.
• Higher CoC: CoC rose to 0.9% in Jan25 from 0.3% in Dec24 and 0.5% in Jan24.
• Loans and Customer Deposits: Loans and customer deposits grew by 7% and 3% yoy, respectively, but both declined by 2% and 5% mom, respectively. LDR increased to 86.6% (+299bps mom,+310bps yoy), while the CASA ratio rose to 66.3% (+19bps mom, +168bps yoy).

 

Summary:

In our view, BNGA delivered a weak performance in Jan25, with ongoing NIM compression as well as higher provisions, affecting its net profit. (Victor Stefano & Naura Reyhan Muchlis – BRIDS)

CMRY (Not Rated) - FY24 Result: Inline with Consensus

FY24 Insights:

• CMRY recorded revenue of Rp9.0tr/+16.1% yoy (101% to cons) with dairy and consumer products increase +6.0% yoy/+25.1% yoy.
• Gross profits are up 26.3% yoy (vs FY23: 21.1% yoy) with GPM shows an improvement to 45.2% (vs FY23: 41.6%).
• Opex shows a significant increase of 33.6% yoy (vs FY23: 28% yoy), 112% to consensus number.
• Net profit reported an increase by 22.4% yoy (vs FY23: 17.1% yoy), inline with consensus’ of 102%, with NPM of 16.8% (vs FY23: 16.0% yoy).

 

4Q24 Insights:

• Revenue reported increase 17.6% yoy/7.6% qoq to Rp2.4tr, with double digit growth yoy in dairy and consumer products (12.7%/21.7%).
• Both segments show a lower GPM in 4Q24 with dairy products (28%, 3Q24: 35%) and consumer products (16%, 3Q24: 33%).
• An increase on opex in 4Q24 led to lower operating profit by -2.5% yoy/-40% qoq.
• Net profit up by 32.1% yoy/2.8% qoq with a slightly lower margin of 15.2% (3Q24: 15.9%).

 

Summary:

• CMRY shows a solid performance in FY24 revenue and net profit. However, an increase in opex during 4Q24 led to a decline in the FY24 operating profit. Additionally, the GPM for dairy and consumer products decreased in 4Q24 compared to the previous quarter, marking the lowest quarterly figures to date, while NPM also experienced a slight decrease in 4Q24.  (Natalia Sutanto & Sabela Nur Amalina – BRIDS)

INET (Not Rated) - KTA after speaking with INET last week; in sweetspot and expand its boundaries

• INET is a young company founded in 2017, but has been able to expand its clients from 30 ISP clients, to 158 ISPs in 2021 and to 300 ISPs as of currently.
• INET’s CEO is currently Chairman in the boards of Indonesia’s APJII and APJATEL internet associations.
• INET aims to buy a NAP license by securing a cable (mostly onshore) connecting to Singapore for IP transit. With this NAP and cable, INET will multiply its traffic capacity to 500Gbps for its B2B/ISP clients. Company has very limited financial leverage and corporate action to finance this.
• INET partners closely with WIFI.IJ to source fiber backbone in KAI railways at competitive prices and further resell it to smaller ISPs.
• INET is short-listed with 6 other players, confirmed to bid for the 1.4GHz spectrum. The selection process is planned to take place in May.
• INET feels confident will fulfill the government mandate to offer Rp100,000 BWA internet. The annual fees are expected to be Rp1.5bn/yr while the 1.4GHz frequency allows for high propagation with only few towers. Company aims for 1mn connections quickly with payback for 3-4years.

 

Comment:

• We understand that INET is in unique position, creating value by leveraging its client ISP portfolio and its access to WIFI’s backbone. The acquisition of NAP license and a frequency spectrum will significantly boost to upsell bandwidth and consumer reach for its ISPs clients. On separate note, we understand that the bidders for the spectrum shortlist includes TSEL, IOH, XL, Smartfren, WIFI, a non-listed ISP and INET. (Niko Margaronis & Kafi Ananta – BRIDS)

 

JPFA (Buy TP: Rp2,800) 4Q24 Results – In line

• JPFA reported a net profit of Rp923bn in 4Q24 (+50% qoq, reversing losses in 4Q23), bringing FY24 net profit to Rp3.0tr (tripled yoy), in line with our estimate (101%) but above consensus (110%) FY24F.
• Despite a surge in opex in 4Q24 (+27% qoq, +35% yoy), operating profits remained strong (+26% qoq, a sixfold increase from last year’s low base), supported by a higher net gross profit margin of 22.5%.
• The qoq net profit increase was mainly driven by livebird operating profits of Rp916bn (from slight losses in 3Q24), supported by higher revenues (+7% qoq) and an improved margin of 13.2% (3Q24: -0.2%) due to a 10% qoq rise in market prices.
• Feed revenues declined by 2% qoq, while feed OP dropped by half as margins shrank significantly to 3.7% in 4Q24 from 7.9% in 3Q24—an unusual trend in our view given market corn price only rose by 3% and SBM declined 10%.
• Despite a 14% qoq increase in market prices, DOC OPM declined to 14.9% in 4Q24 from 20.4% in the previous quarter.
• Net gearing further dropped to 56% in 4Q24 from 65% in 3Q24 and 80% in 4Q23, as the company reduced its short-term debt.
• In our view, despite weaker feed and DOC margins and higher opex, JPFA’s 4Q24 performance remained solid, driven by strong contributions from the livebird segment. (Victor Stefano & Wilastita Sofi – BRIDS)

MYOR (Buy, TP: Rp3,050) FY24 results: In line with consensus

FY24 result:

• FY24 revenue +14.6% yoy, with domestic up 16.6% yoy and export +12% yoy
• FY24 volume increased 10% yoy
• With a lower gross margin and lower opex, FY24 Net Profit reached Rp3tn, down 6% yoy
• The FY24 NP accounted for 98% of consensus (inline) and 106% of our FY24F (above)
• MYOR booked FY24 core profit of Rp 2.9tn (excld Forex gain Rp149bn), down 12.9% yoy

 

4Q24 result:

• Revenue was supported by domestic sales (+22% yoy) and exports (+21% yoy)
• 4Q24 volume grew 11% yoy (3Q24: +4%yoy and 4Q23: 0% yoy)
• Higher input costs led to a lower 4Q24 GPM of 20.9%
• MYOR reported 4Q24 net profit of Rp985bn, down 15.7% yoy.

 

Summary:

• MYOR strong top-line growth, combined with lower opex, provide a cushion for the bottom line. We expect continued strong revenue in 1Q25. (Natalia Sutanto & Sabela Nur Amalina – BRIDS)

NISP (Not Rated) - Jan25 Bank-Only Results

Jan25 Insights:

• Net Profit Growth: NISP’s net profit grew to Rp424bn (+17% mom, +5% yoy) in Jan25. This growth was driven by the absence of one-off costs related to commonwealth acquisition on a monthly basis and supported by a 5% increase in NII and 54% higher other operating income on a yoy basis.
• NIM Drop: NIM fell to 4.3% (-43bps mom, -16bps yoy). On a mom basis, the NIM drop, despite a slight improvement in CoF, was due to a decline in EA yield to 7.5% in Jan25 from the high base of 8.0% in Dec24. On a yoy basis, the NIM drop was driven by an 18bps increase in CoF to 4.0% from 3.9%.
• CIR Surged mom but Improved yoy: CIR surged to 47.7% in Jan25 from 34.8% in Dec24, primarily due to a 44% mom increase in opex, driven by a 34% rise in salary expenses. However, CIR improved yoy from 49.2% in Jan24, supported by a 5% increase in NII and a 54% rise in other operating income.
• Consistently low CoC: CoC remained low at 0.2% in Jan25 (-11bps mom).
• Loans and Customer Deposits: Loans and customer deposits grew by 9% and 14% yoy, respectively, but both declined by 3% and 1% mom, respectively. LDR declined to 80.3% (+216bps mom, -363bps yoy), while the CASA ratio increased to 80.3% (+216bps mom, +363bps yoy).

 

Summary:

• In our view, NISP delivered a solid performance in Jan25, reporting strong net profit growth supported by its consistently low CoC. However, risks remain due to compressed NIM. Future performance will depend on the bank's ability to maintain asset quality and reduce CoF. (Victor Stefano & Naura Reyhan Muchlis – BRIDS)

SAQU (Not Rated) - Jan25 Results

Jan25 Insights:

• Higher yoy Net Loss due to Higher Opex: On a yoy basis, net loss increased by 90% yoy to Rp7bn due to 32% yoy higher opex. On a mom basis, SAQU’s net loss declined by 88% mom to Rp7bn in Jan25 from the high base of Rp62bn in Dec24, driven by a 41% mom decline in opex. The bank reported provision reversal of Rp1.4bn in Jan25.
• Rise in CIR (yoy): CIR was higher yoy at 120.4% compared to Jan24’s 97.3% as other expenses surged by 43% yoy. On the other hand, CIR improved to 120.4% in Jan25 from 205.6% in Dec24, mainly due to a 61% mom decline in salary expenses to Rp22bn from the high base of Rp55bn in Dec24.
• Lower NIM (yoy): On a yoy basis, NIM was 44bps lower at 5.1%, despite a 17bps increase in EA yield, as CoF rose to 4.9% (+71bps yoy) in Jan25. On a mom basis, NIM increased by 13bps as the EA yield rose by 20bps mom to 7.7%.
• Loans and Customer Deposits: Loans and customer deposits grew by 19% and 29% yoy, respectively, but both declined slightly (-1%) mom. LDR was recorded at 79.4% (+11bps mom, -666bps yoy).

 

Summary:

• Overall Performance: In our view, despite several improvements on a mom basis, we noted that Dec24 was a one off high base in net loss. The yoy performance was weak as the bank recorded lower NIM and higher opex, resulting in higher CIR. (Victor Stefano & Naura Reyhan Muchlis – BRIDS)

MARKET NEWS

MACROECONOMY

US Core PCE Rose 2.6% yoy

US Core PCE rose 2.6% yoy, the softest increase since early 2021, while the overall PCE rose 2.5% yoy. The decrease in Core PCE eased the rising price pressure following the acceleration in CPI figures. (Bloomberg)

 

SECTOR

Commodity Price Daily Update Feb 28, 2025

Coal: Chinese Buyers Reject New HBA

The China Coal Transportation and Distribution Association stated that several Chinese companies are attempting to cancel or renegotiate long-term contracts due to the implementation of the HBA (Coal Benchmark Price) as the export price standard. The Indonesia Mining Association (IMA) believes that an effective transition period of at least six months is needed following the issuance of Ministerial Regulation by the Ministry of Energy and Mineral Resources. The socialization of HBA as an export standard is also considered too short. Coal industry players were informed about this regulation on Wednesday (Feb 26), while it took effect on Saturday (Mar 1). (Kontan)

 

Multifinance: Financing Companies See Higher NPF, but Vehicle Repossessions Stay Low

The NPF of financing companies increased from 2.48% in 2023 to 2.7% in 2024, but vehicle repossessions remained low. CNAF kept its repossession rate stable at 0.3% in 2024 and just 0.1% in January, focusing on helping customers settle payments. Its NPF improved from 1.11% to 1.03%, aiming to stay below 1% this year. ACC also saw stable repossession trends, keeping its NPF below 1%. MUF balanced loan distribution and risk management, reducing its NPF from 1.48% to 1.36% in Jan25, staying well below the industry average. (Kontan)

 

Telco: Kemkomdigi Invites IBM to Invest in Indonesia’s Digital Ecosystem

Kemkomdigi has invited IBM, a U.S. based hardware and software provider, to participate in investing in Indonesia’s digital ecosystem. IBM is encouraged to engage in the development of cloud computing services, computing infrastructure, and data center operations to strengthen Indonesia’s digital competitiveness and accelerate its digital transformation. Kemkomdigi and IBM will hold further discussions to design an investment model and a mutually beneficial collaboration framework. (InvestorDaily)

 

CORPORATE

ERAA Optimistic as iPhone 16 Enters Indonesian Market

ERAA expects the iPhone 16 to boost its product portfolio and sales in Indonesia. The launch follows a memorandum of understanding (MoU) signed between Apple and the Ministry of Industry on Wednesday (26/2) regarding Apple’s investment commitment. With the anticipated issuance of the Domestic Component Level (TKDN) certificate, Apple is set to receive distribution approval. (Kontan)

 

MDKA Settles Maturing Bonds worth Rp764.95bn

MDKA has settled the principal and fourth interest payment of the Series A bonds from the Merdeka Copper Gold Sustainable Bonds IV Phase V 2024. The total settlement of the principal and fourth interest payment amounts to Rp764.95bn. According to MDKA, the funds used to settle the principal and interest payments were sourced from proceeds obtained through the issuance of MDKA Sustainable Bonds V Phase II 2025. Additionally, the company also utilized internal cash reserves. (Bisnis)

 

Toyota Astra Motor Records Strong Sales at IIMS 2025

PT Toyota-Astra Motor (TAM) secured 2,728 Vehicle Order Letters (SPK) at IIMS 2025, surpassing last year’s 2,540 SPK. The locally produced Kijang Innova Zenix Hybrid dominated sales, reflecting strong demand for hybrid vehicles due to competitive pricing and energy transition relevance (Kontan)

 

TPIA's Subsidiary Secures Rp2tr Credit Facility from BDMN

TPIA's subsidiary, PT Chandra Daya Investasi, has secured a credit facility worth Rp2tr from BDMN. In general, these funds will be used to support the overall operations and business development of CDI, while also strengthening the company's working capital to execute strategic projects. The facility granted to TPIA’s subsidiary is a committed term loan, which can be allocated for green asset projects, such as renewable energy, sustainable water and wastewater management, energy efficiency, and others. (Bisnis)