FROM EQUITY RESEARCH DESK

IDEA OF THE DAY

Darma Henwa: Insourcing and Efficiency to Drive Robust FY25-27F Earnings Growth; Initiate Coverage with Buy Rating (DEWA.IJ Rp 190; BUY TP Rp 300)

• DEWA has executed plans to revamp its fleet of heavy equipment through a Rp2.6tr loan and a vendor-financing deal with XCMG.
• We project its earnings to grow by 54% CAGR over 25-27F driven by lower subcontractor exp. as it substitutes outsourced services with own fleet.
• We initiate coverage with a Buy rating and DCF-based TP of Rp300 from COGS efficiencies resulting in margin improvement.

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

 

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

 

RESEARCH COMMENTARY

BI surprise rate cut: a potential boost for sentiment, but growth remain ST focus

• BI’s surprise 25bps policy rate cut should support positive sentiment for the market as JCI has historically demonstrated a clear inverse relationship with the policy rate, with +21% return during the last FY16-18 (125bps) rate cut. 
• On rate outlook, our macro team now sees potential shift toward an optimistic case, where it sees potential four rate cuts in 2025, totalling 100 bps for the year. This, combined with expected acceleration in government spending, should drive growth recovery in 2H25.
• Nonetheless, limited positive reaction post the rate announcement from overall market and interest-sensitive sectors indicate that investors’ ST concern remain focus on the earnings outlook.
• Our latest FY25F EPS growth projection of 3% and consensus 12-months forward forecast of 6% should be well priced in at current valuation of 13.2x PE (-0.9SD from 10-year mean). However, weak 2Q25 industry volumes (cement, 4W, 2W) along with soft Apr-May25 results from banks, indicate possible 2Q25 earnings negative surprise and downside risk to estimates.
• We retain our FY25-end JCI target of 7,350 for now, based on our EPS growth of 3% and 13.5x forward PE. We continue to like the Telcos (ISAT, TLKM, EXCL), Consumers (ICBP) and selected banks (BBCA, BTPS) as our preferred picks in 2H25.

 

Historical sector winners

• During the FY16-18 rate cut period, return for big cap (LQ45: +32%) outpaced small cap (SMC Index: +21%). In terms of sectors, banks have demonstrated the highest inverse relationship during FY16-18 cut (+74-108% return), followed by JSMR (+25%), ASII (+18%).
• In the property sector, our analyst observed that policy rate cuts have historically translated to reduction in discount to RNAV despite limited impact to marketing sales. 
• Banks with higher portion of TD are potential winners:  Our Banks analyst Victor Stefano sees that rate cut will benefit banks with a higher portion of TD more, such as BBTN (52%), BRIS (38%), and BBRI (36%). This could also alleviate pressure on BMRI and BBNI which have c. 40% of their CA deposit in the special rate category.  In terms of loan yield, BBCA and BBRI have the upper hand with their fixed/floating rate of 50/12% and 60/7% of total loans, respectively. (Erindra Krisnawan – BRIDS)

 

MARKET NEWS

MACROECONOMY

Bank Indonesia Cut the BI Rate by 25bps to 5.25% Bank Indonesia cut the BI Rate by 25bps to 5.25%, citing low inflation, a stable Rupiah, and the need to support growth as loan expansion slowed to a two-year low of 7.77% yoy. Despite ample liquidity, banks remain cautious, parking funds in SBN and SRBI, prompting BI to push yields lower to encourage lending. With dovish guidance, clearer US tariff direction, and stronger fiscal spending, we now see room for four rate cuts in 2025, totalling 100bps. (BI, BRIDS)

 

SECTOR

Commodity Price Daily Update July 16, 2025

CORPORATE

CMRY Uses Rp1.44tr of IPO Funds for Expansion

CMRY has utilized Rp1.44tr of its IPO proceeds as of June 30, 2025. The funds were allocated for production capacity expansion (Rp910.8bn), distribution growth (Rp285.8bn), and working capital (Rp251.06bn). Out of the Rp3.58tr net IPO funds, the remaining Rp2.12tr is currently placed in deposits, checking accounts, and bonds with interest rates ranging from 0.20% to 7%. (Emiten News)

 

DATA Secures Rp250bn Credit Facility from BCA

DATA has secured a Rp250bn local credit facility (current account loan) from PT Bank Central Asia Tbk. with a one-year tenor to strengthen its liquidity and support its working capital needs. The transaction is classified as a material transaction, as the credit facility value is equivalent to 95% of DATA’s total equity. (Bisnis)

 

DGWG Inaugurates Carbamate-Based Pesticide Plant in Banten

DGWG has officially opened its third manufacturing facility—a 4.5-hectare carbamate-based pesticide plant in Cikande, Banten. With an initial production capacity of 2,000 metric tons of active ingredients (expandable to 5,000 metric tons of finished pesticide), the US$20mn plant strengthens DGWG’s upstream presence in agrochemicals. The mgmt. stated the facility supports national food security and is aimed at both domestic and export markets. DGWG plans to increase capacity to 15,000 metric tons annually within three years. (Kontan)

 

SMGR Boosts Supply Chain with AI and Digital Tools

SMGR has adopted AI and digital technology to streamline distribution and improve supply reliability. The upgrades cut data processing time to 2 hours and raised order fulfillment by 1.16% (118,000 tons) from Nov24 to Feb25, while enabling smarter stock monitoring and demand forecasting. (Emiten News)

 

TikTok Shop ‘Mall’ by Tokopedia Sees 4x Seller Growth in 1H25

TikTok Shop by Tokopedia’s ‘Mall’ segment—home to verified brands and top-rated sellers—recorded a more than fourfold increase in seller numbers in 1H25 vs. 2H24. According to mgmt., the platform boosts visibility and trust for sellers, offering perks like exclusive badges and access to major campaigns. Top-performing categories included fashion, beauty, and food, with standout products such as women’s sneakers, lipsticks, and sambal. Some local brands saw transaction growth of over 15x during the period. (Kontan)