FROM EQUITY RESEARCH DESK

IDEA OF THE DAY

Equity Strategy: A Relative Safe Haven Amid Trade War, But Growth Remains a Risk

• We believe Indonesia’s stronger fundamentals should help weather the trade war, though the risk remains on IDR volatility and slowing growth.
• The consumer sector is vulnerable to weaker IDR, but the 2018 experience showed companies' ability to sustain margins.
• We continue to see the JCI to trade at a range of 5.9-6.7k and advise investors to stick with the defensive names.

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RESEARCH COMMENTARY

MIDI (Buy, TP: Rp540) – Divest Its 70% Stake in LWS to AMRT ·         On April 8, 2025, MIDI signed a Conditional Sale and Purchase Agreement (CSPA) to divest its 70% stake in Lancar Wiguna Sejahtera (LWS – Lawson) to SAT, with a total transaction value of Rp200.46bn. The transaction does not qualify as a conflict of interest or material transaction (i.e., less than 20% of MIDI’s equity); therefore, it does not require prior approval from the EGM. The transaction will become effective upon approval from LWS shareholders, followed by the signing of the notarized share purchase deed no later than Jun25. ·         Based on the appraisal report, the market value of the transaction object was Rp194.74bn. ·         Following the LWS divestment, MIDI will focus on its core business segments and utilize the proceeds to support operations and further expansion. ·         Alfamidi reported 1Q25 same-store sales growth (SSSG) of +12.46% yoy, despite the high base in the same period last year. Stores outside Java remained the main driver of growth. In 1Q25, MIDI opened 34 new Alfamidi stores, with 79% of them located outside Java.   Comments: ·         Starting in Mar23, MIDI provided a capital injection to LWS totaling Rp550bn, which supported aggressive Lawson store openings from 2H22 through 9M24. ·         Based on our rough calculation, the divestment value is close to the book value, taking into account the losses from Lawson’s operation in 2023-24. ·         Following the completion of this transaction, MIDI is expected to deliver improved performance, driven by the solid growth of its Alfamidi stores. (Natalia Sutanto & Sabela Nur Amalina – BRIDS)

 

MARKET NEWS

MACROECONOMY

U.S. Tariffs Surge to 125% on China Amid Global Retaliation

US higher reciprocal tariffs went into effect yesterday, including 104% tariffs on Chinese goods. China retaliated with 84% tariffs on US goods. The EU has also approved retaliatory tariffs on approximately EUR21bn (US$23.2bn) worth of US goods. However, just hours after levies against roughly 60 of America's trading partners kicked in, Trump said he was authorising a universal "lowered reciprocal tariff of 10%" as negotiations continue and announced a 90-day pause for countries hit by higher US tariffs, but a trade war with China escalated. At the same time, he increased tariffs on goods from China to 125%, accusing Beijing of a "lack of respect" after it had retaliated by saying it would impose an 84% tarriff on US imports. (Bloomberg, BBC)

 

SECTOR

Commodity Price Daily Update Apr 9, 2025

Auto Financing Slows as Consumer Demand Weakens

Weak consumer purchasing power has led to a decline in financing for multifinance companies, especially in the automotive sector. Adira Finance’s financing dropped to Rp7.9tr in 1Q25, down from Rp11tr last year, prompting a shift toward non-automotive segments. WOM Finance also experienced a 7.14% decline and is now relying on multipurpose loans, which make up 82% of its portfolio. In contrast, CNAF recorded a 22% growth in financing, mainly driven by the strong demand for used car loans. (Kontan)

 

Government Raises Income Cap for Subsidized Housing in Jabodetabek

The government has increased the income cap for subsidized housing in Jabodetabek to Rp12mn for singles (before: Rp7mn), and Rp13mn for families (before: Rp8mn), responding to the region's high living costs. This policy aims to expand access for more groups, including journalists and laborers, under the national housing program. The change is based on income data from BPS and will be formalized on April 21, 2025. It’s expected to boost subsidized housing demand, with the potential for 30,000 units for journalists alone. (Kompas)

 

CORPORATE

EXCL Traffic Surged by 21% During Eid Holiday

EXCL reported a 21% increase in data service traffic during the period of March 28–April 6, 2025, compared to regular days before Ramadan. During the Ramadan and Eid period, service traffic was primarily driven by streaming, which rose by 17%, followed by file access with a 16% increase, web browsing rose 12%, and gaming rose 46%. Regionally, the highest data traffic surge was recorded in Central Java, which saw a 44% rise compared to regular days. (Kontan)

 

ITMG to Distribute Final Dividend of US$153mn

ITMG declared a final dividend of US$153mn, or Rp2,245 per share (yield: 9.9%), during its Annual General Meeting on April 9, 2025. The company approved a total cash dividend of US$243mn for FY24, representing a 65% payout ratio from its net profit of US$374mn. An interim cash dividend of US$90mn (Rp1,228 per share) was distributed on September 25, 2024. (Bisnis)

 

TSPC Subsidiary Sells Stake in Tempo Retailindo Kreasi

TSPC's subsidiary, PT Barclay Products (BP), sold a 50% stake (2,500 shares) in PT Tempo Retailindo Kreasi (TRK) to PT Tempo Realty (TR) for Rp1.1bn on April 8, 2025. The sale was formalized through a notarial deed in Jakarta and involves TR, an affiliate of TSPC's parent company, PT Bogamulia Nagadi. (Emiten News)