FROM EQUITY RESEARCH DESK

IDEA OF THE DAY

Metal Mining: Nickel Ore Premium Might be Here to Stay; Tin Price Rebound on Supply Tightness (NEUTRAL)

·         Jan25 tin exports declined -67% mom due to a delay in export permits, supporting tin price, though exports are back on track by mid-Feb.

·         Ni ore premium rises on a strong restocking phase, whilst NPI rose to US$12k/ton after Gunbuster downsized its operations.

·         We reiterate our Neutral rating on the sector, with TINS, NCKL, and ANTM as our top picks and winners from this situation.

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Telco: Meeting with Komdigi: Pressing on new auctions; Pending Regulations and Vendors' Response (OVERWEIGHT)

·         We hosted Komdigi representatives, who shared updates on pending 1.4GHz regulation as vendors finalize 5G TDD compatibility and costs.

·         Komdigi plans to hold 2.6GHz and 700MHz auctions in 2025, prioritizing 2.6GHz for 5G, while 3.5GHz remains unavailable until 2028.

·         We believe MNOs currently hold greater strengths than future BWA players and maintain our view on MNOs’ growth through FMC strategies.

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RESEARCH COMMENTARY

AUTO (Not Rated) - FY24 Results

·         AUTO recorded NP of Rp2.03tr in FY24 (+10% yoy, 109% of cons or above), driven by growth on income from associates (+9.5% yoy), which was able to offset declining margin (-40/-50 bps lower on GPM/EBITDAM) and lower revenue growth (only +2% yoy). 4Q24 NP reached Rp505bn (-1.8% qoq/-4.8% yoy).

·         Revenue reached Rp19.07tr (+2% yoy, 100% of cons or in-line) in FY24, with 4Q24 revenue reaching Rp4.9tr (-1.3% qoq/+7.5% yoy). This is in-line with the 4W recovery in 2H24 of 11% vs. 1H24, while AUTO 2H24 revenue was 7% higher vs. 1H24 revenue.

·         However, GPM and EBITDA margin declined, by 40bps and 50 ps respectively in FY24, mostly due to rising opex (+6% yoy, thus opex to revenue increased from 10.2% in FY23 to 10.6% in FY24). Some items that increase significantly: professional fees (+23% yoy) and repair & maintenance (+51% yoy).

·         Income from associates grew by 9.5% yoy to Rp1.03tr, mostly driven by Denso (+24% yoy), which able to offset declining growth on other smaller associates (GS Battery -8%, Akebono Brake -29% yoy, Inti Ganda Perdana -26% yoy).

·         AUTO is trading at a forward PER of 4.9x, at -1 std dev of its 5-year mean. (Richard Jerry, CFA & Sabela Nur Amalina – BRIDS)

INCO (HOLD, TP: Rp3,900) - FY24 Results

·         4Q revenue slightly grew to US$242mn, +5.2% qoq, though FY24 revenue saw a -23% yoy decrease, reaching 103%/100% of ours/cons estimate

·         INCO recorded a professional fee of US$8mn in 4Q24, which increased opex to US$17mn, +89% qoq and operating profits down to US$11mn, +17% qoq.

·         There was an asset revaluation on KNI call option of US$10.2mn in 4Q24, which brought pre-tax profits down to US$7mn, -68% qoq. The main changes on the revaluation is the LME nickel price assumption that was lowered to US$17.1-17.6k/ton from US$17.4-19.5k/ton

·         Thus, 4Q NP declined to US$7mn, -52% qoq, whilst FY24 NP also declined -79% qoq to US$58mn, reaching only 81%/76% of ours/cons estimate. (Timothy Wijaya – BRIDS)

SRTG (Not Rated) - KTA Notes

·         Saratoga’s blue-chip holdings include Adaro, AlamTri, Merdeka Copper Gold, and Tower Bersama, where monetization options like a dual listing or stake sale are being considered. In growth investments, key assets include MPMX (2W distribution), Samator Indo Gas (Indonesia’s largest industrial gas company, with CVC holding a 35% stake and a potential buyout), and Brawijaya Hospital, a premium chain with 7 hospitals in the pipeline, including a Taman Mini facility and an IPO target in 6-7 years. Other holdings include ZAP Clinic (100+ beauty clinics, expanding into skincare) and MGM Bosco Logistics (cold-chain provider adding one facility per year).

·         SRTG trades at a 53% NAV discount, driving a shift in IR strategy to improve market perception and liquidity. With a 9.7% free float, shareholder discussions focus on the valuation gap. Dividend income supports debt repayment and distribution, while MDKA and ADRO ramp up production, reducing the need for external fundraising. The focus remains on strategic monetization and expanding healthcare and logistics via Brawijaya and MGM Bosco.

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