Indonesia

• Market Leader Facing Margin Pressure: Arwana Citramulia is a dominant player in the Indonesian ceramic tile market, particularly in the low-to-medium segment, commanding a significant domestic market share. However, recent financial performance indicates a trend of compressing margins and declining net income, driven by rising input costs, particularly for natural gas, and intense competition.
• Robust Dividend Yield Amidst Market Headwinds: The company offers a compelling dividend yield, supported by a consistent payout history. This provides a degree of downside support for the stock, although the dividend’s 3-year compound annual growth rate (CAGR) has been slightly negative, reflecting recent earnings pressure.
• Industry Growth Supported by Favorable Demographics and Government Policy: The Indonesian ceramic tile market is poised for long-term growth, underpinned by favorable demographics, urbanization, and government initiatives in housing and infrastructure. However, the industry faces challenges from import competition, particularly from China, and volatility in energy prices.

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• Matahari is the market leader in Indonesia’s department store segment, but faces significant headwinds from weakening consumer purchasing power and intense competition from e-commerce and fast-fashion players.
• The company is undergoing a strategic transformation, rebranding its corporate entity to PT MDS Retailing Tbk to reflect a shift towards a multi-concept retail network, including new formats like SUKO and ZES, alongside its core department stores.
• Despite a challenging top-line environment and declining growth metrics, the company maintains a high dividend yield and is focused on operational efficiencies, including store portfolio optimization and opex reduction, to preserve profitability.

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• Strong Growth Trajectory Driven by Aggressive Store Expansion: PT Daya Intiguna Yasa Tbk (MR.DIY Indonesia) is on a rapid growth path, primarily fueled by its aggressive nationwide store expansion strategy. The company has been consistently opening new stores, significantly increasing its footprint across Indonesia, including in tier-2 and tier-3 cities. This expansion has been a key driver of its impressive revenue and net profit growth.
• Resilient Business Model with a Focus on Value: MR.DIY’s value proposition of “Always Low Prices”resonates well with the Indonesian consumer base, particularly amidst rising living costs. This focus on affordability, combined with a wide range of home improvement and household products, has contributed to strong customer traffic and transaction volumes.
• Favorable Industry Dynamics Underpinning Future Growth: The Indonesian home improvement market is poised for continued growth, supported by factors such as a growing middle class, increasing urbanization, and rising disposable incomes. Government initiatives in housing and infrastructure development further bolster the long-term outlook for the sector.

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• Sido Muncul (SIDO IJ) 7-8% dividend yield is relatively stable, funded from the defensive business with low capex. 
• The banks, including Bank Rakyat Indonesia (BBRI IJ) , Bank Mandiri Persero (BMRI IJ), also pay high dividend yields but come from recovery yields as the share price dropped. 
• SIDO’s 0.33% weight on MSCI makes it less affected compared to the big banks from the foreign outflow as of now. 

• Dominant Omnichannel Ecosystem in a High-Growth Market: Sociolla, through its parent Social Bella, has established a leading ‘content-community-commerce’ ecosystem in Indonesia’s rapidly expanding beauty and personal care market. Its integrated model, which combines a popular e-commerce platform, a rapidly growing network of physical stores, and engaging digital content, creates a significant competitive advantage and fosters strong customer loyalty.
• Proven Growth and Path to Profitability: The company has demonstrated a strong growth trajectory, backed by substantial funding from prominent investors like Temasek and L Catterton. Critically, management has reported achieving EBITDA profitability in the first quarter of 2024, signaling a sustainable business model that balances aggressive expansion with financial discipline.
• Strategic Expansion and Untapped Potential: Sociolla is aggressively expanding its physical retail footprint into second and third-tier cities across Indonesia, tapping into underserved markets. Furthermore, its early-stage expansion into Vietnam and plans for other Southeast Asian markets present a significant long-term growth runway.

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• ALVA is a key player in Indonesia’s burgeoning electric two-wheeler market, a sector poised for significant growth driven by strong government support and favorable macroeconomic trends. The company is a subsidiary of PT Ilectra Motor Group (IMG), which is part of the publicly listed energy company PT Indika Energy Tbk.
• The company has a strong focus on technology and building an integrated electric vehicle ecosystem, including smart connectivity features in its electric motorcycles and partnerships for charging infrastructure. This positions ALVA to capture a significant share of the tech-savvy urban commuter market in Indonesia.
• While ALVA is well-funded and strategically positioned, it faces considerable risks, including intense competition from both local and international players, the challenge of building out a nationwide charging infrastructure, and navigating the evolving regulatory landscape for electric vehicles in Indonesia.

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• Pioneering Supply Chain Digitization and Embedded Finance: AwanTunai is at the forefront of digitizing Indonesia’s vast and traditionally cash-based Fast-Moving Consumer Goods (FMCG) and staple food supply chain. By providing Software-as-a-Service (SaaS) solutions for inventory management and online ordering, coupled with embedded financing, the company is empowering Micro, Small, and Medium Enterprises (MSMEs) to streamline operations and access crucial working capital.
• Targeted Focus on an Underserved Market: The company has a laser focus on Indonesian MSMEs, particularly the millions of ‘warungs’ (small family-owned shops) that form the backbone of the country’s retail sector but have historically been unbanked or underbanked. This targeted approach allows AwanTunai to tailor its products and services to the specific needs of this significant market segment, creating a strong value proposition and fostering deep customer relationships.
• Strong Growth Trajectory and Investor Confidence: AwanTunai has demonstrated significant growth, evidenced by a substantial increase in its user base, transaction volumes, and successful funding rounds. The company has attracted investment from notable international and regional investors, including Norfund, MUFG Innovation Partners, and OP FinnFund, underscoring the market’s confidence in its business model and future prospects. The company is reportedly EBITDA positive and on a path to profitability.

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• Fuse Teknologi Indonesia is a leading insurtech company in Indonesia, pioneering a B2A2C (Business-to-Agent-to-Consumer) model that leverages a large network of agent partners to distribute insurance products through its ‘Fuse Pro’ mobile platform.
• The company has demonstrated exponential growth in Gross Written Premium (GWP), reaching over IDR 3 trillion in 2023, a 160-fold increase since its inception in 2017. This growth is driven by strategic partnerships with over 40 insurance companies and key digital ecosystem players like Tokopedia and Grab.
• With a strong foothold in Indonesia, Fuse is actively expanding its presence across Southeast Asia, with operations already established in Vietnam, Thailand, and Malaysia, aiming to address the region’s low insurance penetration rate.

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• Honest is a fintech company poised to disrupt the Indonesian credit card market by targeting the vast, underserved population with a user-friendly, mobile-first platform.
• The company’s key value proposition lies in its simplified and rapid application process, transparent fee structure with no annual charges, and features designed to promote financial health among new-to-credit consumers.
• Backed by significant strategic investors, including Japanese financial services giant Orico and Mizuho Bank, Honest is well-capitalized to fund its aggressive growth strategy, which includes product expansion into corporate cards and co-branded offerings.

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• Kredivo Group is a leading digital financial services provider in Southeast Asia, with a strong foothold in Indonesia’s Buy Now, Pay Later (BNPL) market. The company is strategically expanding its product suite and geographic reach, notably through the acquisition of Krom Bank in Indonesia and Timo Digital Bank in Vietnam, transitioning towards a full-stack digital banking model.
• The company’s growth is propelled by a large and underbanked population in its target markets, a proprietary AI-driven credit scoring model, and an expanding network of online and offline merchant partners. Management is targeting aggressive revenue growth, driven by increased lending volumes and new revenue streams from its digital banking operations.
• Key risks to the outlook include intensifying competition from regional super-apps and other fintech players, evolving regulatory frameworks in Southeast Asia that could impact pricing and operational flexibility, and macroeconomic volatility that may affect consumer credit quality.

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• Mekari has established itself as a leading Software-as-a-Service (SaaS) provider in Indonesia, offering an integrated suite of cloud-based business automation tools for HR, payroll, accounting, tax, and CRM. Its strong focus on the underserved Small and Medium Enterprise (SME) segment provides a significant runway for growth.
• The company’s growth strategy is characterized by a combination of organic expansion and strategic acquisitions, such as Desty and Jojonomic, which have broadened its product portfolio and market reach. This ‘one-stop-shop’ approach creates high switching costs for its clients and provides a competitive advantage.
• While operating in the high-growth Indonesian digital economy, Mekari faces intense competition from both local and international players. Its future success will depend on its ability to maintain technological leadership, effectively integrate its various platforms, and demonstrate a clear path to profitability amidst a price-sensitive market.

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• Strategic Pivot to Fintech: Moladin is undergoing a significant strategic shift, de-emphasizing its capital-intensive used-car marketplace to focus on the higher-margin automotive financing business. This pivot, anchored by its financing arm, PT Moladin Finance Indonesia (MOFI), is aimed at achieving full-year net profitability by 2026.
• Expansive Ecosystem and Network: The company has built a substantial ecosystem encompassing a large network of agents and micro-dealers across Indonesia. This network, which at one point included over 150,000 agents, serves as a crucial distribution channel for its financing products and a source of deal flow for its marketplace.
• Strong Investor Backing Amidst Market Challenges: Moladin has successfully raised significant capital from prominent investors like DST Global, Sequoia Capital India, and Northstar Group. However, the company has also faced operational challenges, including market saturation and high costs, which led to significant layoffs in 2023 and necessitated the strategic pivot.

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• Pintu is a leading, mobile-first cryptocurrency exchange in Indonesia, well-positioned to capitalize on the country’s rapidly growing digital economy and high crypto adoption rates.
• The company has demonstrated strong growth, backed by significant venture capital funding from prominent investors, and has a user-friendly platform tailored for the Indonesian retail market.
• Regulatory changes in Indonesia, with the Financial Services Authority (OJK) taking over supervision, present both opportunities for increased legitimacy and challenges in terms of compliance and competition.

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• Shipper is a rapidly growing, technology-driven logistics platform in Indonesia, well-positioned to capitalize on the country’s booming e-commerce market. The company offers an integrated ecosystem of services, including a third-party logistics (3PL) aggregator, warehousing, and fulfillment services, primarily targeting small and medium-sized enterprises (SMEs).
• The company is backed by a strong consortium of venture capital investors, having raised approximately $132 million in funding. This capital provides a significant runway for technological development and network expansion across the Indonesian archipelago.
• While the growth opportunity is substantial, Shipper faces considerable risks, including intense competition from established local players and the logistics arms of major e-commerce platforms, high operating costs inherent in the Indonesian market, and the challenges posed by the country’s fragmented geography and underdeveloped infrastructure.

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• If Barito Renewables Energy (BREN IJ)  is to be excluded from the index, the larger caps i.e. banks are expected to receive the subsequent reallocation of inflows. 
• The outflows so far (YTD) mainly came from active managers; thus, more could come from passive flows. 
• If Vietnam were to be included in the MSCI Emerging Markets Index (MXEF INDEX), the weighting would likely be small, therefore, with negligible impact on Indonesia’s weighting. 

• PT Kokoh Inti Arebama Tbk (KOIN) is a building materials distributor in Indonesia, primarily focused on ceramic tiles. The company is a subsidiary of SCG Distribution Co., Ltd.
• The company has faced significant financial challenges, reporting consistent net losses and thin-to-negative margins over the past three years. Revenue has been stagnant, and both operating and free cash flow are highly volatile and frequently negative.
• While the long-term outlook for Indonesia’s construction and ceramic tile market is positive, driven by urbanization and infrastructure projects, KOIN’s ability to capitalize on this growth is uncertain given its weak financial performance and intense competition.

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• Established Market Leader with Strong Parental Support: Adira Dinamika Multi Finance (ADMF) is one of Indonesia’s largest multi-finance companies, primarily focused on automotive financing. Its position is significantly strengthened by its status as a subsidiary of PT Bank Danamon Indonesia Tbk, and ultimately part of the Mitsubishi UFJ Financial Group (MUFG), which provides substantial financial and operational backing.
• Strategic Diversification and Digitalization: While automotive financing remains its core, ADMF is actively diversifying into non-automotive segments like multipurpose and durable goods financing. The company is also heavily investing in digital platforms such as Adiraku and momobil.id to enhance customer acquisition, streamline processes, and adapt to shifting consumer behavior towards digital transactions.
• Attractive Shareholder Returns Amidst Macro Headwinds: The company has a strong track record of returning capital to shareholders, evidenced by a high dividend yield. However, it faces risks from a potential economic slowdown, Rupiah volatility, and increased competition. Fitch Ratings recently revised the company’s outlook to Negative, mirroring the sovereign rating outlook, which could impact funding costs.

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• Strategic Acquisition by MUFG and Adira: The recent acquisition by Mitsubishi UFJ Financial Group (MUFG) and its subsidiary Adira Finance is set to significantly bolster Mandala’s market position, providing access to a lower cost of funds, a wider network, and enhanced operational capabilities.
• Focused Niche in a Growing Market: Mandala has a well-established presence in the motorcycle financing market, particularly outside of Java, targeting the unbanked and underbanked population. This segment is poised for growth, driven by Indonesia’s economic expansion and the increasing demand for affordable transportation.
• Navigating Macroeconomic Headwinds: The company faces challenges from weakening consumer purchasing power, rising credit risks, and intense competition. Future performance will depend on its ability to maintain asset quality through prudent risk management and leverage synergies from its new majority shareholders to improve efficiency.

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• MAPI is a dominant lifestyle retailer in Indonesia, well-positioned to capture the growth of the nation’s expanding middle and upper-income consumer base with a diversified portfolio of over 150 world-class brands.
• The company is pursuing an aggressive omnichannel growth strategy, focusing on expanding its physical store footprint, particularly for its high-growth ‘Active’ and ‘F&B’ segments, while simultaneously scaling its digital presence, which now accounts for over 10% of revenue.
• Financial performance shows robust top-line growth, though margin fluctuations and dependency on consumer sentiment present key challenges. Valuation appears reasonable compared to regional peers, offering a compelling entry point for investors with a positive view on Indonesian consumption.

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• Premium Positioning with Aggressive Expansion: SRAJ operates a network of seven premium hospitals under the Mayapada brand, targeting the middle-to-upper income segment in key Indonesian urban centers. The company is pursuing an aggressive expansion strategy, aiming to increase its bed count by 42% to approximately 1,750 by 2027, including a new international hospital in Batam to capture medical tourism.
• Challenging Financials and Extreme Valuation: Despite revenue growth, the company has a track record of net losses and negative free cash flow, with deteriorating margins in the most recent year. The stock trades at exceptionally high valuation multiples (EV/Sales, P/B) compared to its peers, suggesting significant market expectations are priced in.
• Favorable Industry Tailwinds vs. Execution Risks: SRAJ is poised to benefit from Indonesia’s underpenetrated and growing healthcare market, driven by rising incomes, an aging population, and government initiatives like the national health insurance scheme (BPJS). However, its aggressive expansion plans carry significant execution and financial risks, especially given its recent unprofitability and reliance on future growth to justify its current valuation.

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• Adi Sarana Armada (ASSA IJ) is an integrated people and mobility player, with exposure to car leasing, used car sales, and vehicle auction, with an increasingly integrated end-to-end logistics business. 
• Core growth is being driven by logistics business Cargo Share, making up more than half of revenues and profits, but the auto-related businesses are gaining share in used cars. 
• ASSA remains optimistic about 2026, with guidance for +5%-10% growth in revenues and double-digit profit growth, with at least a 40% dividend payout. Valuations are attractive with solid dividend support.

• Government Crackdown on Illegal Mining to Drive Volume Recovery: The Indonesian government’s intensified efforts to curb illegal tin mining are expected to redirect ore flows to legal channels, significantly benefiting Timah as the state-backed producer. This is anticipated to drive a substantial production rebound and allow the company to regain its position as a top global supplier.
• Favorable Tin Market Fundamentals: The global tin market is experiencing a structural deficit, with demand outpacing supply. This is driven by increasing consumption in high-growth sectors like electronics, semiconductors, AI, and renewable energy. This supply-demand imbalance is expected to support strong tin prices, enhancing Timah’s revenue and profitability.
• Strategic Initiatives to Enhance Value: Timah is focused on downstream expansion into tin solder and chemicals, as well as the development of rare earth elements (REE) from its mining by-products. These initiatives, coupled with a new management team focused on improving corporate governance, are poised to unlock additional value and diversify revenue streams.

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• Rapid Growth Trajectory in a Booming Market: Fore Kopi is aggressively expanding its store footprint in the fast-growing Indonesian coffee market, which is projected to grow at a CAGR of 11% until 2030. The company’s revenue growth has been substantial, driven by new store openings and a focus on the ‘premium affordable’ segment.
• Tech-Enabled Business Model Driving Efficiency: Leveraging a mobile-first, data-led approach, over 50% of sales are transacted through its app. This digital integration allows for personalized marketing, operational efficiency, and supports a high-throughput, small-format ‘grab-and-go’ store model, enhancing unit economics.
• Strategic Diversification and International Expansion: Following a successful domestic rollout, Fore has entered the Singaporean market and is diversifying its product offerings with the launch of ‘Fore Donut’ and a non-coffee line for younger consumers called ‘Fore Junior’. This strategy aims to capture new market segments and increase revenue per customer.

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• Strong Earnings Growth Trajectory: The company has demonstrated a robust recovery and growth in profitability, with a 3-year Net Income CAGR of 42.47% and a 3-year EPS CAGR of 42.46%, indicating significant operational improvements and earnings power.
• Attractive Valuation Relative to Peers: GDYR trades at a notable discount to its regional peers on key valuation metrics, including P/E, P/B, and EV/Sales ratios. This suggests a potential valuation gap that could attract value-oriented investors.
• Challenging Market Dynamics: Despite strong earnings, the company operates in a highly competitive Indonesian tire market and faces risks from raw material price volatility and foreign exchange fluctuations. This is reflected in a declining market capitalization trend over the last decade.

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• Dominant Market Leader Expanding into New Growth Verticals: Erajaya is the largest and most trusted distributor and retailer of mobile devices in Indonesia, and is strategically diversifying into higher-growth, higher-margin lifestyle segments including active lifestyle, food & nourishment, and beauty & wellness.
• Attractive Valuation with Strong Growth Profile: The company exhibits a robust history of revenue and earnings growth, yet trades at a significant valuation discount to its regional peers. Future growth is expected to be driven by consistent store expansion and a more favorable business mix.
• Navigating Margin and Macro Headwinds: While the core business operates on thin margins typical of retail, the strategic pivot towards lifestyle products is expected to enhance profitability. Key risks include weaker consumer purchasing power, Rupiah depreciation, and intense competition.

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• ANTM is a diversified, state-backed Indonesian mining company with a strong, vertically integrated business model focused on nickel and gold, which are its primary revenue drivers. The company is well-positioned to capitalize on the growing demand for nickel in the electric vehicle (EV) battery sector and sustained safe-haven demand for gold.
• The company has demonstrated robust financial performance, with significant year-over-year growth in revenue and net income, culminating in a record-breaking first quarter in 2026. This performance is underpinned by strong commodity prices, particularly a structural uplift in nickel ore realizations, and a recovery in gold trading.
• Key risks to the outlook include high sensitivity to volatile global commodity prices, significant regulatory uncertainty within Indonesia’s evolving mining policy landscape, and rising operational cost pressures that could impact future profitability.

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• A spike in oil prices usually leads to a spike in credit spread of risky assets.
• We expect rising oil prices to boost inflation worldwide. G-3 rates have been low and we expect rates to start increasing towards the second half of 2026.
• Countries such as Indonesia and Malaysia should benefit from an oil spike while India, the Philippines, and Thailand could suffer from margin compression.

• Perusahaan Gas Negara (PGAS) is Indonesia’s largest natural gas transportation and distribution company, holding a dominant market share of over 91% and operating an extensive pipeline network, positioning it as a critical player in the nation’s energy infrastructure.
• The company demonstrated a strong financial recovery in the first quarter of 2026, with improved margins and profitability that successfully counteracted lower revenues and volumes, as highlighted by Maybank Research.
• Key forward-looking risks include potential demand destruction from elevated energy prices impacting industrial clients, and the significant financial and reputational overhang from the ongoing Gunvor arbitration process.

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• Indonesia’s internet penetration rate is quite high, but most of it is powered by smartphone data. Broadband internet penetration is still quite low. 
• Solusi Sinergi Digital Tbk PT (WIFI IJ) will expand in Java and ex-Java as well; the economics of owning broadband are clearly favorable to smartphone data. 
• A couple of foreign institutions have invested in WIFI, validating the investment thesis. Valuation has normalized as well, making it more palatable to invest. 

• Bank Pan Indonesia (PNBN) is a well-established commercial bank in Indonesia with a history dating back to 1971. It provides a comprehensive range of banking products and services to individual and business customers.
• The bank’s strategy is focused on expanding its digital footprint to meet the growing demand for online banking solutions, while also concentrating on improving asset quality, particularly in the corporate segment. A key strategic shift involves increasing its exposure to the higher-yielding commercial and consumer loan segments.
• The Indonesian banking sector is poised for modest recovery and growth, supported by expected interest rate cuts and government initiatives. However, the industry is characterized by an oligopolistic structure, with a few large banks dominating the market.

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• • FY25 production averaged 846 bbl/d, in line with prior indications.
• • Pipeline equipment for the SE–MGH tie‑in is now onsite, and construction has commenced.
• First gas is expected around the end of 2Q26.

• Emtek is a diversified Indonesian conglomerate transitioning from a traditional media powerhouse to an integrated digital ecosystem, with core segments in Media & Digital, Healthcare, and Financial Services.
• The company is strategically positioned to capitalize on Indonesia’s rapidly growing digital economy, driven by rising internet penetration and digital media consumption. Key digital assets include the Vidio streaming platform and a significant stake in e-commerce firm Bukalapak.
• Financial performance has shown a strong recovery in the most recent full year, with significant revenue and net income growth, though quarterly results exhibit volatility. Future growth is contingent on the successful monetization of its digital platforms and managing intense competition in the OTT and fintech spaces.

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• Gudang Garam is a dominant player in the Indonesian kretek cigarette market, possessing strong brand equity and an extensive distribution network. However, the company faces significant long-term headwinds.
• Financial performance has been challenged, with a multi-year trend of declining revenue and net income, alongside margin compression. Recent quarters show some stabilization but high volatility remains.
• The primary risks stem from a stringent and unpredictable regulatory environment, particularly regarding excise tax hikes, coupled with increasing health consciousness and intense competition from established peers.

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