FROM EQUITY RESEARCH DESK

IDEA OF THE DAY

Astra International: A More Gradual Recovery Path; Lowering Estimates and TP (ASII.IJ Rp6,050; BUY TP Rp6,850)

• Post 1Q26 miss, near-term visibility remains limited amid macro uncertainty, soft Auto demand, and RKAB uncertainty for UNTR.
• We expect FY26F recovery to be more gradual, with Auto demand, Martabe restart, and Pama volume recovery as key swing factors.
• Maintain Buy, Tactical (3M): N, with TP lowered to Rp6,850 as valuation remains undemanding, but hinging on better near-term catalystst.

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Macro Strategy: The Stability Push

• Stability is taking priority as BI tightens liquidity, supports SRBI inflows, and stabilizes long end yields through intervention.
• MoF’s BSF revival strengthens stability, absorbing bond volatility, though price distortion and liquidity risks need monitoring.
• Warsh’s framework could steepen the US yield curve, pressuring EM flows and domestic long end yields

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

 

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RESEARCH COMMENTARY

BBTN (Buy, TP: Rp1,500) - Loan Factory Site Visit

• Visited BTN’s centralized “Loan Factory” operation with c.230 staff handling end-to-end mortgage processing nationally across all products. The structure is divided into three pillars: credit operations, risk, and collateral/appraisal.

 

• BBTN’s loan Factory is product-agnostic, unlike peers that typically separate operations by product line. This potentially improves scalability and operational flexibility.

 

• Current workflow:

1. Data inflow
2. Data processing & validation (field verification), parallel with,
3. Appraisal & collateral validation
4. Credit Analyst & Approval (Underwriting)
5. Signing & disbursement

Management targets ~5 working days from data entry to approval, while disbursement timing remains customer-dependent.

 

• The operation is already highly automated, with management estimating ~85% of processes machine-driven. Headcount additions are not planned unless application volumes rise materially.

 

• Data entry currently handled by 43 officers with capacity of ~1,000 files/day (~25 applications/officer/day). Validation team consists of only 7 personnel supervising ~160 field verification staff nationwide.

 

• Fraud mitigation and underwriting controls appear increasingly digitized:

• Remote-area risk controls can be conducted via image verification.
• Fraud Detection System (FDS) reportedly achieves ~95% accuracy based on internal backtesting.
• Loans below Rp750mn can proceed directly into decision engine automation.
• AI deployment is expected to increasingly replace manual document and verification work, including DVO/contact verification and bank statement checking.

 

• Management sees AI primarily as an operational efficiency and customer experience tool rather than pure growth driver. The strategy is to redeploy back-office staff into sales functions, particularly CASA acquisition. Management target to reallocate 385 back-office employees this year with estimates only ~50% may ultimately fit sales roles.

 

• Current rejection rate is intentionally high at 20–30%(“reject by design”), with May MTD at 26.3%, reflecting tighter risk filtering amid softer property demand.

 

• Key rejection stages:

1. Duplicate applications
2. Negative SLIK history / prior write-offs (auto reject)
3. Internal scoring thresholds
4. LTV non-compliance

Some borderline SLIK cases (e.g. mild historical delinquencies) can still be manually adjusted.

 

• Property market slowdown is impacting application inflow. BTN is attempting to offset weaker primary mortgage demand by pushing secondary mortgages, although management acknowledged the segment carries higher delinquency risk if underwriting discipline weakens.

 

• Developer ecosystem segmentation remains important:

• Titanium-tier developers can receive instant approval treatment.
• Different LTV treatments apply across Gold/Silver/Bronze tiers.

 

• Consumer loan NPL currently stands at ~2.8%. Management guides for improvement toward ~2.5% by year-end, with “best effort” potentially reaching low-2% range. Weakest asset quality remains within private-sector payroll borrowers, particularly middle-to-lower income segments.

 

• Financial targets from management:

• Lower cost of credit (CoC) via stronger origination quality
• Lower BOPO through operational efficiency
• NIM guidance around 3.7–3.75% by year-end
• Sale of distressed commercial property assets to REIT with estimated value of Rp0.8-1.0tr

 

• Operations management highlighted potential manpower efficiency improvements of up to 25% through automation and process redesign.

 

• Another strategic focus is increasing customer profitability beyond single-product mortgages through personalization and cross-selling initiatives.

 

• BTN is also centralizing collateral/document management through dedicated record centers in Surabaya, Semarang, Bandung, and Gandul (Greater Jakarta), with additional centers under development. RFID tracking has been implemented for physical document monitoring.

 

• Management emphasized that mortgage vintages booked over the last three years have shown materially better quality, enabling more timely certificate/document processing. (Victor Stefano – BRIDS)

MARKET NEWS

MACROECONOMY

Indonesia’s Consumer Confidence Index Rose Marginally to 123.0 in Apr26

Indonesia’s Consumer Confidence Index rose marginally to 123.0 in April 2026 from 122.9 in March, remaining firmly in optimistic territory. The increase was supported by improved perceptions of current economic conditions, particularly job availability and durable goods purchases. However, consumer expectations softened slightly, reflecting a more cautious outlook on income, employment, and business conditions over the next six months. Higher-income households continued to show stronger spending intentions, while lower-income groups remained relatively cautious toward durable goods consumption. (Bank Indonesia)⁠

 

SECTOR

Commodity Price Daily Update May 11 , 2026

Automotive: Indonesia’s Car Wholesales Rose 55% yoy in Apr26

Indonesia’s car wholesales rose 55% yoy (+31.8% mom) to 80,776 units in April 2026, while retail sales increased 30.2% yoy (+13.7% mom) to 75,730 units. Cumulatively, Jan–Apr 2026 wholesales reached 289,787 units (+12.5% yoy) and retail sales climbed 6.9% yoy to 287,581 units. By brand, Toyota remained the market leader with 86,270 units sold in 4M26, followed by Daihatsu (48,280 units), Mitsubishi Motors (24,279 units), Suzuki (24,154 units), and BYD (17,098 units). (Bisnis)

 

CORPORATE

FORE Targets Opening 100+ New Outlets in 2026 FORE is targeting aggressive growth this year, with a focus on significantly increasing both revenue and net profit. The company has also started expanding its business portfolio through the launch of Fore Donut in late 2025. For 2026, FORE aims to open more than 100 new outlets across its Fore Coffee and Fore Donut networks. (Kontan)   TLKM Launches PUK-PUK 1 Subsea Cable System TLKM, through its operating company PT Telekomunikasi Indonesia International (Telin), has inaugurated the PUK-PUK 1 Cable System in collaboration with PNG DataCo Limited to accelerate digital connectivity in eastern Indonesia and Papua New Guinea. The subsea cable system stretches around 850 km from Jayapura to Madang (PNG), comprising 30 km in Indonesia, 50 km from the border to Vanimo, and 770 km from Vanimo to Madang. Through this infrastructure, Indonesia is expected to establish a new digital connectivity route linking the Asia-Pacific region to broader global telecommunications networks. (Kontan)