Indonesia

• Bottom line: BBNI is the only one of Indonesia’s four largest banks below book value (0.76x versus BMRI 1.34x, BBRI 1.48x, BBCA 2.76x); we rate it BULLISH, moderate-to-low conviction.
• What the price implies: at Rp3,430, a perpetual ROE of about 9.9% — below FY2025 normalized ROE of 12.89% and the 1H26 run-rate of roughly 12.7%–12.9%.
• Why conviction is low: funding, margin and capital pressure has not been shown to stop; scenarios are model assumptions, not forecasts, and do not show earning power has stabilized.

• PT Indonesia Kendaraan Terminal Tbk (IPCC IJ) operates as the primary specialized automotive roll-on/roll-off (RoRo) terminal operator in Indonesia, benefiting from a dominant market share at Tanjung Priok Port and an expanding operational footprint across key regional commercial hubs under the consolidated Pelindo Group.
• The company exhibits an elite financial profile characterized by high operating margins, a net-cash balance sheet, superior cash conversion (>95% Free Cash Flow to Net Income conversion), and sustained double-digit earnings growth (3-year EPS CAGR of 16.62%).
• With an attractive dividend yield of ~8.97%, low capital intensity, and structural volume drivers linked to Indonesia’s emerging status as a regional electric vehicle (EV) manufacturing and Completely Built-Up (CBU) export hub, IPCC offers institutional investors a high-quality cash-generative proxy for Indonesian automotive logistics.

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• PT Mulia Boga Raya Tbk (KEJU IJ) is Indonesia’s dominant processed cheese manufacturer, holding a commanding market share in the mass-market and food-service categories through its flagship Prochiz and TopChiz brands, bolstered by parent company Garudafood’s extensive nationwide distribution network.
• The company demonstrates a robust earnings growth trajectory, delivering a 15.2% 3-year EPS CAGR and an anticipated +20% EPS CAGR over FY25–28E, supported by structural dairy consumption growth, portfolio premiumization via its strategic Bel S.A. partnership, and capacity expansion from the newly commissioned Sumedang facility.
• While near-term margins face headwinds from global raw dairy commodity price volatility, IDR currency depreciation, and initial fixed-cost absorption from new plant operations, KEJU maintains a healthy balance sheet, resilient cash generation, and an attractive valuation profile relative to mid-cap FMCG peers.

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• Elnusa’s upstream business is structurally captive to Pertamina’s operational and budgetary priorities, with 78% of H1 2026 revenue derived from affiliates. True strategic independence is a myth; however, Elnusa’s robust downstream logistics division (Elnusa Petrofin) acts as a critical counter-cyclical cash stabilizer, accounting for 65% of group revenue in H1 2026.
• The rumored acquisition of Pertamina Drilling Services Indonesia (PDSI) is the primary strategic wildcard. While a valuation in the Rp3.4 to Rp5.0 trillion range would flip Elnusa from net cash to net debt, the transaction would be day-one earnings accretive, potentially lifting consolidated operating margins by 100 basis points and transforming Elnusa into an integrated drilling-and-services giant.
• TKDN (local content) compliance of over 40% is maintained not by avoiding foreign technology, but by acting as the localized gateway for global providers. Partnerships with players like Stryde for wireless nodes and SNF SA for polymer injection allow Elnusa to bypass import barriers and capture premium-margin projects under the state-mandated energy transition roadmap.

• PT Surya Dumai Industri Tbk (SUDI) is a legacy Indonesian wood-processing and plywood manufacturing conglomerate founded by the Fangiono family (Surya Dumai Group) that has ceased active timber and panel manufacturing operations since the mid-2000s due to severe raw material shortages and structural financial distress.
• Following its delisting from the Indonesia Stock Exchange (IDX) in 2008, the company has operated as an inactive public non-listed shell with persistent capital deficiency, accumulated losses, and nominal non-operating revenue derived strictly from incidental property leasing.
• In late 2025 and 2026, the company initiated a formal Go-Private corporate restructuring, executing a voluntary tender offer and share buyback led by founder Martias at an independent appraiser-evaluated price of Rp 1 per share to extinguish the remaining ~2.96% public float.

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• Puradelta Lestari (DMAS IJ) Industrial revenue surged 218% YoY to Rp1,744 Bn in 1H26, driven by data-center transactions that reached Rp1,676.6 Bn, or 93.6% of total sales.
• Sojitz Corp.’s 25% ownership provides strategic context to GIIC’s positioning, while DMAS is becoming an indirect beneficiary of Indonesia’s data-center build-out. 
• We test, through a forensic examination of DMAS’s land, recurring-income and balance-sheet economics, whether the stock can still support more than 25% upside after the market’s data-center repricing.

• Severe Operational and Top-Line Contraction: PT Cahaya Bintang Medan Tbk (CBMF IJ) has experienced an acute contraction in operating scale, with annual revenues dropping from IDR 79.47bn in FY20 to IDR 23.62bn in FY22, further deteriorating to sub-IDR 1bn quarterly revenue runs across 2023 (Q3 2023 revenue of IDR 380.12m) amid weak regional demand and distribution bottlenecks.
• Critical Profitability and Margin Degradation: Operating margins have deteriorated into steep deficits, with net income falling from IDR 5.29bn in FY20 to a net loss of IDR -1.59bn in FY22, culminating in deep quarterly operating deficits in 2023 (Q3 2023 gross margin of -881.33% and net loss of IDR -8.24bn) due to severe overhead under-absorption.
• Distressed Valuation Profile with Turnaround Uncertainty: Although CBMF reflects a maximum Smartkarma Value score of 5/5 due to deep optical discounts relative to net book value, the company’s lack of cash generation, zero dividend distributions (1/5 score), and operational distress indicate substantial uncertainty regarding fundamental recovery.

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• This is the sole agent of TOTO, a leading sanitary ware maker from Japan, in Indonesia.
• Business is a distribution business and earns steady Gross Profit Margins.
• Business is the number 1 player in Indonesia, earning steady gross margins, high ROE, and high net margins

• The Fed hiked 25 bps to 3.75-4.00% on 16-Sep as WTI returned near USD100/bbl; we expect Asian USD bond yields to stay elevated and spreads to widen into year-end. 
• We keep Asian USD bonds at Neutral at best and advise investors to favor floating rate bonds, Bond Laddering, duration below five years, and swap hedges on fixed rate positions. 
• We remain positive on Asian credit fundamentals and list 10 fixed rate picks yielding 7.4-10.8%, led by Avation at +233 bps over B-rated peers; we exclude China property.

• Sourcing Structure Overhaul Required: PT Indo Oil Perkasa Tbk (OILS) managed to improve gross margins to 7.3% in 6M26, achieving a gross profit of Rp 53.4 billion. However, the company remains structurally vulnerable to raw material volatility due to high reliance on a single primary supplier for over 50% of its copra feedstock, limiting its ability to hedge cost fluctuations dynamically over the next 4 quarters.
• PT Indo Kelapa Perkasa Divestment Was Capital Preservation: The April 19, 2025 share divestment of PT Indo Kelapa Perkasa (IKP), which reduced OILS’ ownership to 52%, was not a strategic exit but a necessary move to share the Rp 6.0 billion Capex burden with strategic partners amid a highly constrained corporate cash position of Rp 14.4 billion.
• Market Volatility Driven by Float illiquidity and IR Gaps: The Unusual Market Activity (UMA) issued by the Indonesia Stock Exchange (BEI) on September 8, 2026, highlights OILS’ systemic retail-driven volatility. With 47.85% tightly held by the family holding entity (PT Mandalindo Putra Perkasa) and a lean 35-person corporate structure, the management team dedicates less than 5% of its time to investor relations, leaving the stock vulnerable to speculative local trading groups.

• PT Yupi Indo Jelly Gum Tbk (YUPI IJ) is Southeast Asia’s premier gummy confectionery manufacturer, commanding dominant domestic market share in Indonesia and an established export footprint spanning over 50 countries.
• The company demonstrates exceptional profitability and cash conversion, boasting FY25 gross and net profit margins of 34.07% and 20.88% respectively, alongside an annualized free cash flow (FCFE) generation of IDR 821.6 billion and a 5.55% dividend yield.
• Trading at IDR 1,280—a substantial discount to its IDR 2,390 IPO price—YUPI presents an attractive risk-reward profile backed by institutional sponsor Affinity Equity Partners, ongoing capacity expansion at its Nganjuk facility, and steady premiumization into functional confectionery.

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• Indonesian thermal coal prices are trending higher, creating a constructive cyclical backdrop for domestic coal producers: Indo Tambangraya Megah (ITMG IJ) & Bukit Asam (PTBA IJ) 
• Indo Tambangraya Megah (ITMG IJ) combines the lowest valuation with substantial net cash, while Bukit Asam (PTBA IJ)  combines stronger observed cash conversion with deeper logistics and resource-duration advantages.
• We test, through a forensic examination of business economics and a value-investing lens, which company, if either, can offer more than 25% upside from current prices.

• Stagnant Revenue and Severe Margin Compression: PT Campina Ice Cream Industry Tbk (CAMP IJ) has seen top-line growth slow to a 3-year CAGR of 1.30% (reaching IDR 1.17T in FY2025), while net profit declined at a -14.89% CAGR to IDR 74.77B. Gross margins compressed from 53.05% in FY2023 to 48.52% in FY2025 due to elevated dairy/sugar raw material costs and heightened discounting across retail channels.
• Unleveraged Balance Sheet Provides Defensive Anchor: Despite operating headwinds, CAMP maintains an unleveraged balance sheet with solid net cash backing, supporting a Smartkarma Resilience score of 4/5. This robust liquidity profile insulates the firm against debt distress and funds ongoing point-of-sale freezer replacements without solvency risk.
• Competitive Squeeze and Free Cash Flow Contraction: Intense category rivalry from low-cost entrants (notably Aice and Joyday) and incumbent Unilever continues to limit Campina’s pricing power. Free cash flow contracted sharply from IDR 47.27B in FY2023 to IDR 2.30B in FY2025 (-71.71% 3-year CAGR), warranting a Neutral institutional stance pending volume re-acceleration and cost stabilization.

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• PT Ultrajaya Milk Industry & Trading Co. Tbk (ULTJ IJ) is Indonesia’s preeminent producer of aseptic dairy and ready-to-drink (RTD) beverages, controlling dominant market share in Ultra-High Temperature (UHT) milk (Ultra Milk) and RTD tea (Teh Kotak). The company’s competitive moat is anchored by iconic brand equity, an integrated supply chain, and an extensive nationwide ambient distribution network.
• Financial performance demonstrates strong margin expansion and cash conversion, with FY2025 net profit reaching IDR 1,353.3B (+19.1% YoY) at a 15.4% net margin, accelerating further into 1H2026 with quarterly net margins surpassing 20%. ULTJ maintains a fortress balance sheet characterized by a net cash position, negligible financial leverage, and robust free cash flow generation (IDR 1,219.2B in FY2025).
• At current price levels (IDR 2,060), ULTJ presents an attractive risk-reward profile, trading at ~11.6x trailing P/E and ~5.4x EV/EBITDA—a substantial discount to domestic consumer staple peers (ICBP, CMRY, MYOR). The investment case is reinforced by an outstanding dividend yield of 6.31% (IDR 130/share DPS) and structural tailwinds in Indonesian per-capita dairy consumption.

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• PT Indonesia Fibreboard Industry Tbk (IFII IJ) is a leading integrated wood-processing player in Indonesia, specializing in Medium-Density Fibreboard (MDF), High-Moisture-Resistant (HMR) boards, and veneer, supported by a scale facility in South Sumatra with ~450,000 m³/year capacity and strategic backing from the ADR Group and Japan’s SMB Kenzai Co., Ltd.
• The company demonstrates superior profitability and cash generation post-Line 2 commissioning, delivering 31-34% gross margins, robust EBITDA margins consistently exceeding 31-35%, and free cash flow generation exceeding IDR 300 billion in FY24 and FY25.
• Trading at an undemanding valuation of 5.5x EV/EBITDA, 1.5x P/B, and 13.7x P/E with a robust net cash balance sheet and a 3-year dividend CAGR of 40.10%, IFII offers institutional investors a defensive, high-cash-conversion exposure to regional timber processing and export recovery.

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• Integrated Coal Mining Services Platform: PT Samindo Resources Tbk (MYOH IJ) provides end-to-end open-pit mining services—encompassing overburden removal, coal extraction, coal hauling, and exploration drilling—primarily servicing tier-1 concessionaires such as PT Kideco Jaya Agung in East Kalimantan.
• Robust Free Cash Flow Generation & Unleveraged Balance Sheet: MYOH generated IDR 603.6bn in operating cash flow and IDR 561.1bn in free cash flow (FCFE) in 2025 (3-year FCF CAGR of 43.59%), supported by EBITDA margins of ~21-28% and disciplined capital allocation.
• Compelling Value and Capital Return Profile: Trading at an undemanding 1.8x EV/EBITDA, 0.4x EV/Sales, and 0.8x P/B with a 5.98% dividend yield, MYOH offers significant downside protection, though medium-term upside remains tethered to client concentration and open-pit mining weather dynamics.

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