Daily Brief Indonesia: GoTo Gojek Tokopedia Tbk PT, Indika Energy, Bank Negara Indonesia Persero and more

• GoTo Gojek Tokopedia’s 3Q2023 results were far more illuminating and encouraging than the last 2Qs, with more progress towards adjusted EBITDA breakeven, with much more colour on its new initiatives.
• The company’s focus on budget consumers and more affordable product offerings are already expanding its TAM and improving product density and productivity, speeding progress towards productivity. 
• GoTo will continue to invest in growth, which may mean it misses its 4Q adjusted EBITDA breakeven target but it has reduced cash burn significantly giving it more breathing space.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We view Indika Energy’s ESG as “Adequate”, in line with its Environmental, Social and Governance scores. Controversies are “Immaterial” and Disclosure is “Adequate”.

• Bank Negara remains our top pick for its deep value attributes of low PE multiples and its very attractive PEG ratio, whilst improving post-provision returns and registering strong liquidity
• We also keep Bank Mandiri on a buy rating, for its premium returns and undemanding PE multiples; Bank Central Asia, albeit fully valued in our view, has impressive return
• Bank Rakyat again registered worsening pre-provision returns in 3Q23, along with cost of risk; its heavily MSME focused loan mix implies a high structural cost of risk going forward