FROM EQUITY RESEARCH DESK

IDEA OF THE DAY

United Tractors: Earnings Risk from Pama Volumes and Weak Coal Price (UNTR.IJ Rp 21,475; BUY TP Rp 23,800)

  • Despite Pama’s improving May25 production volumes, 5M25 achievement remains well below FY25 target (at 37% of FY25).
  • We trimmed our FY25-27F estimates by -8%/-10%/-13% to reflect lower Pama’s production and weaker-than-expected coal price.
  • We Maintain Buy rating with lower SOTP-based TP of Rp23,800, as UNTR’s strong FCF generation remains intact.

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Macro Strategy: The Conduit for Liquidity

  • The current tight liquidity will hamper the effective transmission of lower policy rate cut throughout the financial system.
  • We assess liquidity conditions from 4 perspectives and find that higher fiscal spending will be the main catalyst for improvement.
  • With geopolitical tensions easing, focus is shifting back to trade policy, especially as the 90-day reciprocal tariff pause expires next week.

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MARKET NEWS

MACROECONOMY

Indonesia’s Headline Inflation Rose to 1.87% yoy in Jun25

Indonesia’s headline inflation rose to 1.87% yoy (0.19% mom) in Jun25, mainly driven by a 1.0% mom rise in rice prices—the fastest in a year. Despite the increase, demand-side pressures remained soft, with core inflation easing to 2.37% yoy and rising just 0.07% mom, the weakest pace in two years, still led by gold jewelry. Administered prices rose 1.34% yoy and volatile food prices 0.57% yoy. Year-to-date inflation reached 1.38%, largely due to gold jewelry and higher PAM water tariffs. (BPS)

 

Indonesia’s Trade Surplus Widened Sharply to US$4.3bn in May25

Indonesia’s trade surplus widened sharply to US$4.3bn in May25 from US$0.16bn the previous month, as exports jumped 9.7% yoy to US$24.6bn—the highest since Nov 2022—led by strong growth in manufacturing goods. Exports to the US remained resilient despite higher tariffs, with 5M25 growth accelerating to 18.5% yoy. Imports also rose 4.1% yoy to US$20.3bn, driven by non-oil and gas imports, including a record USD7.3bn in shipments from China. (BPS)

 

Indonesia Revises 2025 Budget, Widens Fiscal Deficit to 2.78% of GDP

Indonesia’s government has revised the 2025 state budget, lowering revenue and spending targets to 95% and 97% of the original posture, respectively. As a result, the fiscal deficit is projected to widen to Rp662tr, or 2.78% of GDP—up from the earlier estimate of 2.5%. The revision assumes 7.6% yoy nominal GDP growth, with state revenue at Rp2,865.5tr, tax revenue at Rp2,076.9tr, and state spending at Rp3,527.5tr. Real GDP growth is expected to range between 4.7%–5%. (Bloomberg)

 

Indonesia’s Manufacturing PMI Fell to 46.9 in Jun25

Indonesia’s Manufacturing PMI fell to 46.9 in Jun25, marking the third consecutive month of contraction. Weaker demand and output led to the sharpest drop in employment in four years, while stagnant exports, reduced purchasing, and declining backlogs further signaled broad-based weakness. Input cost inflation eased but cost pressures persisted, and business confidence sank to an eight-month low. (S&P)

 

US: ISM Manufacturing PMI Rises to 49 in Jun25

The ISM Manufacturing PMI edged up to 49 in June 2025 from 48.5 in May, compared to forecasts of 48.8, signalling economic activity in the manufacturing sector contracted for the fourth consecutive month. (Trading Economics)

 

US Job Openings Surge to 7.77mn in May25

The number of job openings in the US rose by 374,000 to 7.769 million in May 2025, the highest level since November 2024 and well above market expectations of 7.3 million. (Trading Economics)

 

SECTOR

Commodity Price Daily Update July 1, 2025

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Healthcare: Postponement of Co-Payment Implementation in Health Insurance

The implementation of a 10% co-payment scheme for health insurance policyholders, initially scheduled to take effect in January 2026, has been postponed. Instead, the Financial Services Authority will formulate new regulations by involving stakeholders and conducting consultations with the parliament. (Kompas)

 

SKK Migas Reports Oil Lifting Performance Reaches 94% of 2025 State Budget Target

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) reported that as of May 31, 2025, the average oil lifting reached 567,900 barrels of oil per day (bopd). According to SKK Migas, this figure remains below the target set in this year's State Budget (APBN), which is 605,000 bopd—representing a realization of 94%. (Bisnis)

 

CORPORATE

ACES Opens First Store in Seberang Ulu, Palembang

ACES continues to expand its business through the opening of its newest AZKO store in Plaju District, Palembang City, South Sumatra. This store marks the 252nd AZKO outlet nationwide, the 36th in the Sumatra region, and notably, the first to open on the Seberang Ulu side of Palembang. (Kontan)

 

PRDA Officially Acquires 30% Stake in Prodia StemCell Indonesia

PRDA has officially acquired shares of PT Prodia StemCell Indonesia (ProSTEM). ProSTEM is an affiliated company of PRDA engaged in stem cell-based regenerative therapy. Prodia acquired 69,512 shares, equivalent to a 30% ownership stake in ProSTEM. (Kontan)