Indonesia

• Astra International (ASII IJ)‘s implied stub and simple ratio (Astra/United Tractors (UNTR IJ) are both around multi-year lows. Forward growth for deconsolidated ops appears strong. 
• Preceding my comments on Astra are the current setup/unwind tables for Asia-Pacific Holdcos.
• These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

• MSCI Inc (MSCI US) downgrade momentum on Indonesia has hit a pause, and it is unlikely to happen. 
• In the meantime, the earnings growth rate for mid- and large-cap stocks remains intact; hence, that makes some of the Indonesian stocks even cheaper from a PEG perspective. 
• Bank Rakyat Indonesia (BBRI IJ) pays 11% yield, Telkom Indonesia (TLKM IJ)has an asset spin off awaiting, while Astra International (ASII IJ) is trading at 6x PER with 8% dividend.

• Leading Diversified Property Developer in a Favorable Market: PT Ciputra Development Tbk (CTRA) is one of Indonesia’s largest and most diversified property developers with a strong brand reputation and a wide geographic footprint across 33 cities. The Indonesian property market is poised for growth, driven by a growing middle class, urbanization, and government infrastructure spending, creating a positive operating environment for CTRA.
• Strong Financial Performance and Attractive Valuation: The company has demonstrated a solid track record of revenue and earnings growth. For the full year 2025, CTRA reported a significant increase in both revenue and net income. The stock is currently trading at attractive valuation multiples, including a low Price-to-Earnings (P/E) ratio compared to its peers and the industry average, suggesting a potential undervaluation.
• Commitment to Shareholder Returns: CTRA has a consistent history of dividend payments and recently announced a 50% increase in its annual dividend. The company’s dividend yield is higher than the industry average, making it an attractive proposition for income-focused investors.

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• Bank Mandiri stands as Indonesia’s largest bank by assets, leveraging its state-owned status and extensive network to maintain a dominant position in the corporate and wholesale banking sectors.
• The bank’s digital transformation is a core strategic pillar, with its Livin’ by Mandiri (retail) and Kopra by Mandiri (wholesale) super-apps driving significant transaction growth and enhancing customer engagement.
• While facing persistent net interest margin (NIM) pressure and a high loan-to-deposit ratio, the bank demonstrates robust loan growth, strong asset quality, and a commitment to shareholder returns through a high dividend yield.

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• Current Indonesian government bond yield levels appear, in our view, to reflect many of the present macro-economic challenges; also, the central bank has been free to raise interest rates
• We keep Bank Mandiri on the buy list for its improving return trends, solid credit quality, attractive valuations and asset-sensitive qualities; it also has limited exposure to domestic government bonds
• We downgrade Bank Negara to a neutral from a buy, due to its underwhelming return trends, its limited asset-sensitivity and its high exposure to domestic government bonds

• Bank Rakyat Indonesia is coming out of a period of restructuring microloans going back to 2022, but this looks to be close to completion, with a renewed focus on quality.
• The bank is increasingly focused on growing its transactional business, aided by increased penetration of its BRIMO and Qlola digital banking platforms, also helping to drive CASA growth.
• Management remains optimistic about the 2026 outlook, with 1Q2026 exceeding guidance. BBRI has been impacted by foreign outflows from Indonesia, and valuations are exceedingly attractive, backed by. 12% dividend yield.

• As one of Indonesia’s largest state-owned banks, BNI is a key player in the nation’s economic development, with a strong focus on corporate and institutional banking.
• The bank is demonstrating robust loan growth, particularly in the corporate segment, but is facing significant Net Interest Margin (NIM) compression due to a competitive funding environment and rising costs.
• BNI offers a compelling dividend profile, characterized by a high current yield and a strong track record of dividend growth, making it attractive for income-focused investors.

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• What has changed since our ABM in May is the vulnerable ceasefire, which President Trump called it over, and the partial unwind of the oil-driven war premium.  
• The oil shock has partially unwound and growth data has held up but inflation and rates remain elevated for a different reason; a hawkish new Fed Chairman.
• We maintain our bearish stance on fixed rate bonds on elevated and volatile oil prices which should result in elevated rates. We remain positive in Asian credit fundamentals

• GTP (Djarum/TOWR) holds an irrevocable option to 51% control within five working days of listing — signed six months before the IPO, not by accident.
• FY23–25 revenue CAGR of 31% and ROE of 29% sit against a cash ratio of just 0.02x and negative FY25 free cash flow as the rental fleet was built.
• We initiate at HOLD, PT Rp580 (+5.5%): blended SOTP/target-P/E/DCF value leaves no margin for float risk, FX exposure or related-party concentration at Rp550.

• AKR Corporindo is a dominant private player in Indonesia’s downstream petroleum and basic chemicals distribution sector, underpinned by an extensive and integrated logistics and infrastructure network.
• Significant growth is anticipated from its industrial estate segment, particularly the Java Integrated Industrial and Port Estate (JIIPE), which is attracting major industrial tenants and benefiting from its Special Economic Zone (SEZ) status.
• The company demonstrates a strong commitment to shareholder returns, evidenced by a high dividend yield and a consistent history of dividend payments, supported by solid operating cash flow generation.

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• AKR Corporindo is a dominant private player in Indonesia’s downstream petroleum and basic chemicals distribution sector, underpinned by an extensive and integrated logistics and infrastructure network.
• Significant growth is anticipated from its industrial estate segment, particularly the Java Integrated Industrial and Port Estate (JIIPE), which is attracting major industrial tenants and benefiting from its Special Economic Zone (SEZ) status.
• The company demonstrates a strong commitment to shareholder returns, evidenced by a high dividend yield and a consistent history of dividend payments, supported by solid operating cash flow generation.

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• Disrupting Indonesian Fitness Infrastructure: Fit Hub scales an affordable US$~15/month tech-enabled gym model across standalone Indonesian outlets. Reaching over 120 locations and 400,000 members by early 2026, the company bypasses premium mall lease constraints to democratise access. With US$18.5m in venture backing led by Wavemaker Partners and East Ventures, the firm holds a definitive first-mover advantage in formalising a historically fragmented sector.

• Hyperlocal Density Unlocking Structural TAM: By targeting first-time gym-goers, who represented 50% of cohorts in 2023, the firm successfully expands the addressable market rather than merely capturing existing market share. Revenue scaled at a 162.5% four-year CAGR to US$28.5m in 2024. Margin accretion is now driven by layering high-yield ancillary services, such as Reformer Pilates and certified personal training, onto the established geographic network.

• Intensifying Value-Tier Competitive Rivalry: The primary operational headwind involves defending local market share against emerging low-cost tech-native entrants and established franchise operators like Anytime Fitness. Absolute profitability remains unproven, with 2024 EBIT margins sitting at negative 5.3%. The planned 2027 regional expansion into the Philippines introduces possible notable execution risk, threatening to dilute management focus before domestic unit economics achieve sustainable break-even.

• The company is a proxy for growth in the Indonesian aviation industry, which is expected to grow fast
• The business has a high margin, high ROE, and limited capital needs
• Stock trades at reasonable valuations, and management quality is very good