FROM EQUITY RESEARCH DESK

IDEA OF THE DAY

AKR Corporindo: 1Q25 Earnings In Line; Management Remains Cautiously Optimistic (AKRA.IJ Rp 1,185; BUY TP Rp 1,500)  

·         AKRA recorded net profit of Rp565bn (-5% yoy, 23% of our/cons, in line), driven by better petroleum margin and utilities revenue.

·         Management reiterates its net profit target of Rp2.4-2.6tr and land sales of ~100 ha in FY25F and is cautiously optimistic on this year’s outlook.

·         AKRA will propose final dividend of Rp50/share in the next AGM. Reiterate BUY with TP of Rp1,500.

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Bank Jago: 1Q25 Earnings: Positive Development from Its Higher-Risk Strategy (ARTO.IJ Rp 1,920; BUY TP Rp 3,400)

·         ARTO booked a robust NP of Rp60bn in 1Q25 (+41% qoq, +178% yoy) as less insurance coverage improved the NIM, offsetting the higher CoC.

·         CoC spiked to 4.7% in 1Q25 from 3.1% in 4Q24 due to seasonality and will be normalized from Apr25 onwards.

·         We tweaked our LT projection to account for higher NIM and higher CoC, resulting in a higher TP of Rp3,400; maintain Buy rating.

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Bank Tabungan Negara: 1Q25 Results: One-off Earnings Remedy from Changes in Accounting Treatment (BBTN.IJ Rp 940; BUY TP Rp 1,400)

·         BBTN reported a robust 1Q25 net profit of Rp904bn, forming 31% of our and 29% of consensus’ FY25F earnings driven by accounting changes.

·         NPL ratio continued to rise to 3.3%, with coverage dropping to 105%, as the non-subsidised mortgage NPL rose to 4.9% in 1Q25.

·         Maintain BUY with a higher TP of Rp1,400, reflecting higher ROE due to the accounting changes.

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Bank BTPN Syariah: 1Q25 Results: Better Asset Quality Supporting Earnings Growth Amid Asset Cleanup (BTPS.IJ Rp 1,140; BUY TP Rp 1,300)  

·         BTPS booked a net profit of Rp311bn in 1Q25 (+7% qoq, +18% yoy), driven by a lower CoC of 8.5% (-125bps qoq, -516bps yoy).

·         Despite the improving asset quality, the bank remained conservative in asset and earnings growth, retaining flat asset and earnings target.

·         Maintain Buy rating with a higher TP of Rp1,300. Key risk to our call includes changes in asset quality trend.

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Unilever Indonesia:  Recovery in Progress, But Too Early to Turn Positive; Downgrading Rating to Sell (UNVR.IJ Rp 1,750; SELL TP Rp 1,500)

·         Management expects continued improvement following the completion of price and inventory adjustments in 1Q25.

·         2Q25 will be a crucial period to assess sustainable progress, given expectations of sub-5% GDP growth and a seasonal slowdown.

·         Following share price rally from YTD low, we downgrade rating to Sell.  Key risk is earnings upside if performance and cost control continue.

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RESEARCH COMMENTARY

CMRY (Not Rated) - Posts Strong 1Q25 Results with 24% yoy Net Profit Growth

• CMRY reported solid 1Q25 revenue growth of 12.4% yoy, driven by the consumer products segment (+31% yoy), while dairy revenue declined 10.6% yoy. Despite a lower gross margin compared to 4Q24 and supported by lower opex-to-revenue ratio, CMRY delivered 1Q25 net profit of Rp480bn, up 24% yoy and 32% qoq.
• The 1Q25 net profit accounted for 28% of the consensus FY25 estimate, compared to 24–25% of full-year net profit typically seen in 1Q during 2022–2024. (Natalia Sutanto & Sabela Nur Amalina – BRIDS)

PGEO (Buy, TP Rp1,200) - 1Q25 Results: Core Profit Slightly In Line

·         1Q25 core profit grew +33% qoq to US$41mn, reaching 23%/26% of ours/cons estimate. Operation was largely stable, where its 2M25 power generation stood at 770GWh, -3.5% yoy.

·         PGEO recorded a -US$8.9mn forex loss from its JPY denominated LT loan, which brought net profit down to US$31mn, -34% yoy. However, core profit remains higher QoQ and YoY at US$41mn, +33% qoq and +12% yoy.

·         There was a different accounting treatment which made 4Q24 opex grew significantly to US$29mn in the audited FY24 report. (Timothy Wijaya - BRIDS)

UNTR (Buy, TP Rp31,000) - In Line Dividend Payout and Mar25 Operational Performance

UNTR AGM approved total of FY24 dividend of Rp2,151/share (final dividend of Rp1,484/share, translating to 6.4% yield). Payout ratio is 40%, in line with our expectation and company’s guidance.

Mar25 key operational performance:

·         Komatsu sales - Mar25: -5% mom; +38% yoy; 1Q25: +23% yoy (30% of our FY25F - ahead)

·         Mining contracting - Mar25 (OB+ Coal getting): -7% mom; -17% yoy; 1Q25: -11% yoy (21% of our FY25F – in line vs. 1Q: 21-23%)

·         Coal sales - Mar25: -16% mom; -24% yoy; 1Q25: -3% yoy (24% of our FY25F – in line)

Comment:

·         Mar25 operational performance, particularly for Pama, was affected by the shorter working hours (Ramadhan) and substantially higher rainfall levels during the month. Despite Pama’s 1Q25 volume of -11% yoy, we believe 1Q25 operational still came in line with our expectation considering the shorter working days and higher rainfall in March, with recovery prospect in Apr25 (normalizing working days).

·         Our checks with coal miners indicated that despite the drop in coal price (Newcastle at US$93/t) there is no plan yet to re-negotiate mining fee with Pama.

1Q25 earnings is due out on 29th April. (Erindra Krisnawan – BRIDS)

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