Indonesia

• Pipeline construction for the SE-MGH 5–7 mmcf/d development is scheduled to begin in early 2026, with first gas expected in 1H26.
• Capex has been reduced further to US$2–3 mm (from US$2.5–4 mm), of which US$1.7 mm has already been spent.
• The subsequent North MGH development (incremental capex of ~US$1 mm) would lift total production to 7–10 mmcf/d.

• Dominant Market Leader with Strong Brand Equity: As the sole agent and exclusive distributor of TOTO products in Indonesia since 1978, Surya Pertiwi commands a leading position in the nation’s sanitary ware market, underpinned by the premium TOTO brand, which is synonymous with quality and reliability.
• Favorable Long-Term Industry Tailwinds: The company is well-positioned to capitalize on Indonesia’s positive demographic trends, including a growing middle class, rapid urbanization, and government-led infrastructure and housing initiatives, which are expected to drive sustained demand for sanitary and bathroom products.
• Attractive Shareholder Returns and Solid Financials: SPTO has a track record of consistent profitability and revenue growth, complemented by a generous dividend policy, offering investors a compelling combination of growth and income. The company’s high dividend yield is a key feature of its investment profile.

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• FY25 is the trough: weak smelter ramp (3–39%) and export ban drive losses; recovery depends on utilisation >50% in FY26.
• FY26 mining strong, smelter unclear: 220 kt Cu and 579 koz Au guided, but smelter repairs run through H1’26.
• Index risk rising: gold share <20% puts AMMN at high risk of GDX/MVGDX exclusion, with US$140–200m passive outflows.

• Strategic pivot to an asset-light model, exiting the competitive physical goods marketplace to focus on higher-margin digital products and services, is showing early signs of success with a return to net profitability in Q1 2025 and improving adjusted EBITDA.
• Dominant position in the Online-to-Offline (O2O) segment through its Mitra network remains the core competitive advantage, tapping into Indonesia’s vast and underserved traditional retail sector (‘warungs’) and driving a significant portion of revenue.
• Maintains a robust balance sheet with a substantial cash and liquid investments position, providing significant financial flexibility for future growth initiatives, investments, and navigating the intensely competitive Indonesian e-commerce landscape.

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• Integrated Omnichannel Ecosystem: Global Digital Niaga (Blibli) has built a comprehensive ecosystem combining e-commerce (Blibli), online travel (Tiket.com), and premium groceries (Ranch Market), aiming to capture a significant share of Indonesian consumer spending through an integrated online and offline strategy.
• Strong Revenue Growth but Persistent Losses: The company demonstrates a strong growth track record with a 13.6% year-over-year increase in revenue for FY2024. However, it continues to post significant net losses, with a net loss of IDR 2.53 trillion in 2024, highlighting the ongoing challenge of balancing aggressive growth with achieving profitability in a competitive market.
• Path to Profitability Focused on Margin Improvement: Management’s strategy is centered on improving margins by focusing on higher-margin product categories, enhancing its take rate, and leveraging synergies across its ecosystem to reduce customer acquisition costs. Recent financial quarters show progress in narrowing EBITDA losses, indicating that these strategies are beginning to yield results.

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• Path to Profitability in Focus: GoTo’s primary strategic objective is achieving profitability. The company has demonstrated progress towards this goal, reporting its first quarter of positive adjusted EBITDA in Q4 2023. This was achieved through a combination of revenue growth, operational efficiencies, and cost optimization measures across its business segments.
• Dominant Ecosystem in a High-Growth Market: GoTo operates the largest digital ecosystem in Indonesia, a country with a rapidly expanding internet economy. The company’s integrated platform spans on-demand services (Gojek), e-commerce (Tokopedia), and financial technology (GoTo Financial), creating a powerful network effect that captures a significant portion of consumer digital spending.
• Intensifying Competition and Regulatory Scrutiny: The competitive landscape in Indonesia’s technology sector is fierce, with major players like Grab and Shopee vying for market share. Additionally, the Indonesian government is actively developing its regulatory framework for the digital economy, which could introduce new compliance requirements and impact business operations.

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• Merdeka Gold Resources (EMAS) represents a pure-play investment in a significant, long-life gold asset, following its successful IPO in September 2025, which was the largest in Indonesia for the year.
• The company’s primary asset, the Pani Gold Project in Sulawesi, is a large-scale, low-cost mine with 1.9 million ounces of reserves and 7 million ounces of resources, poised to become one of Indonesia’s largest primary gold mines.
• While the project offers substantial long-term production growth, scaling to ~500,000 ounces per year by 2032, investors face near-term execution risks related to the project ramp-up and future funding requirements for the second phase expansion.

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• Dominant Player in a High-Growth Market: Cisarua Mountain Dairy (CMRY) is a leading producer of premium dairy and consumer food products in Indonesia, a market poised for significant growth driven by a rising middle class, increasing health consciousness, and urbanization. The company holds a dominant market share, particularly in the yogurt category.
• Robust Financial Performance and Strong Growth Track Record: CMRY has demonstrated an exceptional growth trajectory, with a 3-year revenue CAGR of 30.13% and a net income CAGR of 24.35%. This is underpinned by successful product innovation and expansion of its distribution network, leading to consistent margin expansion and strong free cash flow generation.
• Strategic Focus on Innovation and Distribution Expansion: The company’s strategy centers on continuous product innovation in both its dairy (Cimory brand) and consumer foods (Kanzler brand) segments, coupled with an aggressive expansion of its distribution channels, including modern trade, general trade, and its unique direct-to-consumer ‘Miss Cimory’ network. This dual focus is expected to sustain its growth momentum and market leadership.

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• In today’s Morning Views publication we comment on developments of the following high yield issuers: Medco Energi
• UST yields climbed 3-4 bps across the curve yesterday, amid heightened corporate supply after Alphabet Inc issued USD 25 bn of USD- and EUR-denominated bonds. The yield on the 2Y and 10Y UST rose 3 bps each to 3.61% and 4.11%, respectively.
• Equities climbed, supported by tech stocks after Amazon’s Cloud unit inked a USD 38 bn deal with OpenAI. The S&P 500 edged up 0.2% to 6,852, while the Nasdaq grew 0.5% to 23,835.

• Multi Bintang Indonesia (MLBI IJ) reported Q3FY25 YoY revenue/profit declines of 4.3%/5.8%. 9MFY25 revenues/profits were +2%/-5% YoY, due to a slight decrease in margins. 
• After a strong recovery in demand of 10% YoY in Q2, demand in Q3 was subdued at -4.3% YoY despite more substantial tourism numbers (10% YoY in Q3FY25, 12% Ytd)
• The stock trades at 10.7x FY25 PE, offers a 9.4% dividend yield, is net cash, and has a substantial ROCE of >70%. 

• Poised for a Cyclical Upswing: As a pure-play operator of luxury villas and hotels in Bali, BUVA is a direct beneficiary of the robust recovery and positive outlook for Indonesian tourism. International arrivals are projected to continue growing, driving demand for high-end accommodation.
• Operational Turnaround Amid Financial Volatility: The company has demonstrated a significant revenue recovery post-pandemic, with a 3-year revenue CAGR of 79.5%. However, profitability remains volatile, as evidenced by significant net losses in 2022 and certain quarters of 2023/2024, highlighting operational gearing and sensitivity to occupancy rates.
• Stretched Valuation and No Yield: The stock trades at a premium valuation with a P/E ratio of 141.3x. This expensive multiple, combined with a long-term history of negative market cap growth and a consistent no-dividend policy, suggests the market has priced in a significant portion of the anticipated recovery.

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• CMNP is an established toll road operator in Indonesia with a portfolio of concessions primarily located in strategic, high-traffic urban areas, positioning it to benefit from the country’s continued economic growth and urbanization.
• The company is embarking on significant expansion projects, notably the Harbour Road II, which is expected to drive future revenue growth. However, these projects also entail considerable execution and financing risks.
• Valuation appears attractive, with a low price-to-book ratio and a high Smartkarma value score. This is contrasted by a lack of dividend payments and potential corporate governance concerns related to concession extensions that are under investigation.

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• Unique Business Model with Social Impact: BTPS is the only Syariah bank in Indonesia focused exclusively on the productive poor/ultra-micro segment, specifically empowering women entrepreneurs. This high-touch, group-based lending model fosters financial inclusion for a large ‘unbankable’ population, creating a distinct market niche.
• Deteriorating Asset Quality and Profitability: The bank has faced significant challenges post-pandemic, with rising Non-Performing Financing (NPF) and higher credit costs (Cost of Credit – CoC). This has led to a sharp decline in profitability (ROE dropping from 23% to ~12%) and a significant de-rating of its valuation.
• Cautious Outlook with a Focus on Recovery: Management is prioritizing asset quality improvement over aggressive growth. While recent quarters show signs of stabilizing NPF and lower provisions, the recovery is expected to be gradual. The bank’s future performance hinges on its ability to manage credit risk within its vulnerable client base amidst macroeconomic uncertainties.

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• Company incurred a loss of 90 bn Rupiah in 3rq quarter or loss of 21.6 Rupiah per share. 
• Even though sales have declined for the first 9 months – inventory and receivables have increased indicating stress in working capital. 
• GP Margin is flat, selling expense as %ge of sales have increased as we think company is pushing economy products to compete with local players and maintain market share

• There are 2 constituent changes for the IDX30 Index, 5 changes for the LQ45 Index, and 7 changes for IDX80 Index to be implemented at the close on 31 October.
• The largest passive flows are expected in Dian Swastatika Sentosa, Bank Central Asia, Bank Mandiri, Emtek, Bumi Resources, Bank Syariah Indonesia, XLSMART Telecom Sejahtera and Medikaloka Hermina.
• With only 4 days to implementation, there could be relatively big moves on stocks that have large flow/impact from passive fund trading.

Key points (machine generated)

• United Tractors, founded in 1972 and listed in 1991, is Indonesia’s largest heavy equipment distributor with exclusive rights for brands like Komatsu and Scania.
• The company provides sales, parts, assembly, and repair services, and has diversified into mining and renewable energy sectors.
• Its subsidiary PAMA leads in mining services, while United Tractors manages coal and gold mining assets and invests in renewable energy projects.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.