FROM EQUITY RESEARCH DESK

IDEA OF THE DAY

Healthcare: Navigating The Implementation of KRIS (OVERWEIGHT)

• Plans to implement KRIS by Jun25 remain on-track. DJSN is finalizing new JKN Tariff, while MoH plans to change INACBG to iDRG.
• KRIS and CoB could be an opportunity to further expand hospitals’ revenue/patient yet risks loom on gov’t policy execution.
• We maintain OW rating in the sector as Indo hospitals’ profitability consistently improving in an underserved market. Top Picks MIKA.

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Poultry: Less tax paid, more chicken on the plate! (OVERWEIGHT)

• PMK Number 10 of 2025 grants income tax incentives for employees in select labor-intensive sectors with monthly incomes capped at Rp10mn.
• The estimated PPh DTP of Rp479bn would cover 0.4% of the annual supply for broiler meat, suggesting a positive but limited impact.
• Maintain OW rating on sound fundamentals and cheap valuations. Pecking order: MAIN, JPFA, CPIN.

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RESEARCH COMMENTARY

ARNA (Not Rated): FY24 Result (Inline)

• ARNA recorded 4Q24 net profit of Rp 110b (-2% qoq/+19% yoy), which bring FY24 net profit to Rp 426b (-4% yoy, 100% of cons or inline)
• Revenue grew by 1% qoq/17% yoy to Rp 710b, thus FY24 revenue reached Rp 2.6t (+8% yoy, 100% of cons or inline)
• 4Q24/FY24 GPM declined by 30 bps qoq/-250 bps yoy, while 4Q24 OPM improved by 20 bps qoq due to lower expense, despite OPM in FY24 basis still declined by 230 bps. Plant 2A, which was shut down due to upgrades in 1Q24, just reactivated by Oct-24, which drags the margin. Furthermore, transportation costs also increased from 7.7% of net sales in FY23 to 8.2% in FY24 due to rising white body sales portion, which is larger and heavier than usual red body tiles
• We are still waiting for more operational data. Based on our last concall, ARNA targets 12% sales vol growth, 15% revenue growth, and 16% earnings growth. (Richard Jerry, CFA & Sabela Nur Amalina – BRIDS)

MARKET NEWS

MACROECONOMY

Bank Indonesia Kept the BI Rate at 5.75%

BI kept the BI Rate at 5.75%, in line with consensus but diverging from our rate cut expectation. Despite the emergence of several factors supporting easing measures, including an accelerated rate cut. BI opted to maintain its rate, citing persistently high global uncertainty and once again prioritizing stability. (Bank Indonesia)

 

UK Inflation Rate Accelerated to 3% in Jan25

The annual inflation rate in the UK accelerated sharply to 3% in January 2025, the highest since March 2024, from 2.5% in the previous month and above forecasts of 2.8%. (Trading Economics)

 

SECTOR

Commodity Price Daily Update Feb 19, 2025

Automotive: Government Confirms Tax Incentives for Electric Motorcycles

President confirmed tax incentives for electric motorcycles, replacing the previous Rp7mn subsidy. Coordinating Minister stated the government would cover certain taxes, similar to the VAT reduction for electric cars. Details on the incentive amount and timeline are yet to be announced. (Oto Detik)

 

Banks: QRIS Fees to Be Free of Charge

Bank Indonesia will implement a 0% fee for QRIS transactions at certain public service merchants, KRL and tourist attractions. The fee is being reduced from 0.4% to 0% exclusively for merchants classified as Public Service Agencies (BLU) and Public Service Obligations (PSO). This policy will take effect on March 14, 2025. (Bisnis)

 

Healthcare: Ministry of Health States There Will Be No More Type D Hospitals in the Future

The Director-General of Pharmaceuticals and Medical Devices at the Ministry of Health revealed that, moving forward, the government has set a priority target to ensure all hospitals in Indonesia are at least Type C, with no more Type D hospitals, especially in rural areas. She mentioned that around 62 hospitals in remote regions will be built to address the gaps in healthcare services in several areas. (Investor Daily)

 

Toll Road: Government Plans Over 10% Toll Discount for Eid Travel

The Public Works Ministry is coordinating with toll road operators to offer a toll discount exceeding 10% during the 2025 Eid travel period. Discussions focus on the discount rate and timing to manage peak traffic congestion. (Bisnis)

 

Technology: Indonesian Government Plans to Create Open-Source AI

The Indonesian government is working on an AI model inspired by the open-source AI DeepSeek. This initiative will be presented to the President within two weeks. The AI model will support both English and Indonesian. (TechInAsia)

 

CORPORATE

BBNI Partners with APP Group to Develop Supply Chain Financing

BBNI has signed a Supply Chain Financing (SCF) Cooperation Agreement with APP Group, as part of its efforts to support the business sector and strengthen the relationship between financial institutions and clients. This agreement aims to provide easier access to financing for debtors, particularly those involved in the supply chain. Through the SCF scheme, the bank can help companies obtain the necessary funding to streamline production and distribution processes by providing working capital more quickly and efficiently. (Emiten News)

 

BRIS Custodian Assets Reach Rp115tr as of Jan25

As of January 2025, BRIS is entrusted with managing assets under custody (AUC) exceeding Rp115tr, growing 28% yoy. BRIS stated that the AUC will continue to increase this year, in line with its efforts to strengthen the treasury business and promote sharia-based capital market services for its clients. (Investor Daily)

 

ISAT Directors Accumulate Shares Amid Price Decline

The directors of ISAT collectively purchased ISAT shares amid a decline in the company’s stock price. Vikram Sinha, President Director & CEO of Indosat, acquired 1.16mn shares on February 13, 2025, at prices ranging from Rp 1,700 to Rp 1,735. Following this purchase, his share ownership increased from 2.99mn to 4.15mn, raising his voting rights to 0.0129% from 0.0093%. (Kontan)

 

JPFA Partners with Garuda to Introduce Premium Products

JPFA has partnered with GIAA to introduce its premium products. As part of this collaboration, JPFA will provide its premium probiotic chicken product, Olegud. GIAA will use Olegud as an ingredient for flight meals served to its passengers. Three flight meal options made with Olegud will be offered to passengers: steamed chicken rice, honey-glazed chicken, and Hong Kong-style grilled chicken. This partnership between the two companies will be implemented on the Jakarta-Singapore flight route, starting from February 25, 2025, until Aug25. (Binsis)

 

PRDA Set to Take Proline Public

PRDA is planning to take its business entity, PT Prodia Diagnostic Line (Proline), public through an IPO. The IPO is targeted to take place within the next two to three years. Proline is a business unit of Prodia Group operating in the In Vitro Diagnostics (IVD) industry. (Kontan)