Indonesia

• Merdeka Gold Resources (EMAS IJ) raised US$305m in its upcoming Hong Kong IPO
• It is the top pure-play gold producers in Asia, anchored by its flagship Pani Gold Mine located in Indonesia. 
• We have covered various aspects of the deal in our previous note. In this note, we will talk about the demand and trading dynamics.

• Market Leader with Strong Brand Equity: Sido Muncul is the largest herbal medicine manufacturer in Indonesia, commanding a dominant market share of approximately 72% for its flagship product, Tolak Angin. The company’s long-standing brands are top-of-mind for Indonesian consumers, providing a significant competitive advantage.
• Attractive Shareholder Returns and Financial Stability: The company exhibits a strong track record of shareholder returns, highlighted by a high dividend yield and a stable payout ratio. This is supported by a debt-free balance sheet, consistent free cash flow generation, and superior capital efficiency compared to peers.
• Favorable Industry Tailwinds: SIDO is well-positioned to capitalize on the growing Indonesian herbal medicine market, which is projected to experience robust growth. This growth is driven by increasing consumer preference for natural and traditional remedies, a trend further accelerated by a greater focus on health and wellness.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

• Buyback as Capital Return Signal 113mn share buyback (10% of o/s) approved Nov 2025; US$710mn net cash. Management signaling undervaluation; ~IDR 2.43tn headroom remains.
• Cheap at US$130/t Coal. At spot-equivalent NEX, ITMG trades 5.6x P/E and 1.7x EV/EBITDA. Every US$10/t adds ~US$63mn to net income.
• ~65% Payout = 11.6% Dividend Yield  Sustained ~65% payout since FY22; US$773mn returned. FY26e implies ~11.6% yield at $130/t, which is one of Indonesia’s highest.

• Despite the recent protest that pushed Jakarta Stock Exchange Composite Index (JCI INDEX) lower, Telkom Indonesia (TLKM IJ) share price held up. 
• One of the reasons is the share buyback plan of IDR 4 trillion, or around 1.3%-1.4% of the total outstanding shares. 
• The spin off entity, NeutraDC, has secured 100% commitment from its client, Gorilla Technology. 

• Merdeka Gold Resources (EMAS IJ) is looking to raise up to US$305m in its upcoming Hong Kong IPO.
• It is among the top pure-play gold producers in Asia, anchored by its flagship Pani Gold Mine located in Indonesia.
• In this note, we examine the IPO dynamics, and look at the firm’s valuation.

• Bank Central Asia (BBCA IJ)’s share price correction looks overdone, driven not by fundamentals but foreign outflows from Indonesia. A meeting with management confirmed a strong start to 2026
• Management is focused on developments with government policy, which could slow loan demand, although rising rates should have a positive impact on margins, especially given BCA’s high CASA ratio.
• The bank continues to be the leading transactional bank in Indonesia. Valuations are at multi-year lows, with returns remaining high, and with the support of a 5% dividend yield. 

• Bank Central Asia (BBCA IJ) share price plummeting offers a once-in-a-lifetime buying opportunity. 
• The last AGM decided that shareholders will receive 3 dividend payments this year that will attract both domestic and foreign investors. 
• BBCA should have more weightings in the MSCI Indonesia index in the mid term. 

• Merdeka Gold Resources (EMAS IJ) is looking to raise up to US$700m in its upcoming Hong Kong IPO.
• Positioned among the top pure-play gold producers in Asia, anchored by its flagship Pani Gold Mine located in Indonesia. 
• In this note, we look at the firm’s PHIP updates and valuation. 

• • 1Q26 production averaged 689 bbl/d, in line with prior indications.
• Volumes are expected to be above 700 bbl/d for the remainder of the year, supported by straightforward workovers using the existing rig.
• This is – consistent with our forecasts.

• Dominant Market Leader with Resilient Demand: Indofood CBP Sukses Makmur (ICBP) is a leading player in the Indonesian consumer branded products sector, holding a commanding market share of approximately 70% in the instant noodles category. Its flagship brand, Indomie, is globally recognized and enjoys strong consumer loyalty. The company’s defensive product portfolio, particularly instant noodles, demonstrates resilience during periods of weak purchasing power as it serves as an affordable meal option.
• Strong Financial Performance and Growth Outlook: The company has a solid track record of revenue growth and profitability. Future growth is expected to be driven by Indonesia’s favorable demographics, including a large, young population and a growing middle class, which fuels domestic consumption. Strategic initiatives include continuous product innovation, with over 50 new SKUs launched in the first nine months of 2025, and international expansion, notably through the acquisition of Pinehill Company to access markets in the Middle East and Africa.
• Key Risks and Valuation: ICBP faces risks from its dependency on imported raw materials like wheat and exposure to commodity price volatility (e.g., palm oil) and foreign currency fluctuations (IDR vs. USD). Intense competition and potential shifts in consumer preferences towards healthier options also pose threats. Despite these risks, the company’s valuation appears attractive, trading at a discount to its historical average.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

• Strategic Diversification into Sago and Renewables: ANJT is actively diversifying its revenue streams beyond palm oil by investing in sago production and renewable energy (biogas and geothermal). This strategy aims to mitigate the inherent volatility of the palm oil market and capitalize on growing demand for sustainable food and energy sources.
• Challenging Financial Performance Amidst Volatility: The company has experienced significant volatility in its financial performance. While 5-year growth metrics for revenue and net income are strong, the more recent 3-year compound annual growth rates (CAGRs) show sharp declines in net income (-35.6%) and EPS (-35.8%), reflecting operational challenges and commodity price fluctuations.
• Attractive Valuation with Underlying Risks: The company trades at what appears to be an attractive valuation, with a Price-to-Book ratio of 0.8x and a strong Smartkarma Value score of 4/5. However, this is set against a backdrop of high uncertainty, driven by commodity price risk, regulatory changes in Indonesia, and operational challenges such as adverse weather conditions.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

• Dominant Market Position and Strong Brand: Bank Central Asia (BCA) is the largest private bank in Indonesia, commanding a significant market share in transactional banking. Its strong brand recognition and extensive network of branches and ATMs create a loyal customer base and a significant competitive advantage.
• Robust Financial Performance and Superior Funding Franchise: BCA consistently delivers strong financial results, characterized by healthy loan growth, stable net interest margins, and high profitability. The bank benefits from a large and stable base of low-cost Current Account Savings Accounts (CASA), which contributes to its strong funding profile and profitability.
• Digital Transformation and Innovation: BCA is at the forefront of digital banking in Indonesia. Its continuous investment in digital platforms, such as myBCA and BCA mobile, enhances customer experience, improves operational efficiency, and attracts a growing base of digitally-savvy customers, particularly from the younger demographic.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

• Dominant Market Leader with Extensive Infrastructure: Telkom Indonesia is the largest telecommunications and network service provider in Indonesia, holding a commanding market share in both mobile (through its subsidiary Telkomsel) and fixed broadband services. Its vast and robust infrastructure, including an extensive fiber optic network and a significant number of telecommunication towers, creates high barriers to entry for competitors.
• Strategic Focus on Digital Transformation: The company is strategically shifting its focus from legacy services to digital connectivity, platforms, and services. This is encapsulated in its ‘Five Bold Moves’ strategy, which includes initiatives like Fixed-Mobile Convergence (FMC), expansion of its data center business, and development of digital IT services for the enterprise segment.
• Intensifying Competition and Margin Pressure: The Indonesian telecommunications market is characterized by intense competition, particularly from players like Indosat Ooredoo Hutchison and XL Axiata. This has led to price wars and pressure on Average Revenue Per User (ARPU), potentially impacting profitability.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

• As Indonesia’s largest private hospital network, Siloam is well-positioned to capitalize on the country’s favorable demographic trends and rising healthcare expenditure. Its scale and brand recognition provide a significant competitive advantage.
• The company is pursuing a revenue intensity-focused strategy, concentrating on developing centers of excellence for complex medical procedures to attract higher-value patients and strengthen its market leadership in the premium segment.
• While demonstrating strong top-line growth and improving profitability, key risks include potential margin pressure from the national health insurance (BPJS) scheme, increasing competition from other major hospital groups, and execution risks associated with its expansion plans.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.