Thursday, November 21st, 2024

Indonesia Stock Market Outlook: 9M24 Earnings Review and JCI Target Adjustment for 2024-2025






Indonesia Strategy: Comprehensive Analysis of 9M24 Results

Indonesia Strategy: Comprehensive Analysis of 9M24 Results

Date: November 6, 2024

Broker: PT Maybank Sekuritas Indonesia

Introduction

The 9M24 results of Indonesian companies have shown a mix of performances, with some beating expectations and others falling behind. This detailed analysis covers the financial outcomes of various listed companies under Maybank’s coverage, providing insights into their performance and future outlook. Here, we delve into the specifics of each sector and company, ensuring a comprehensive understanding of the current market dynamics.

Summary of Earnings

Out of 34 companies covered, 8 (25%) exceeded expectations, 14 (41%) were in line, and 12 (35%) fell short. Despite weaker 9M24 earnings, 3Q24 results have generally met expectations, leading to a slight reduction in the JCI year-end target to 7,900 points. The 2025 JCI target is set at 8,600 points, anticipating a 7.3% YoY net profit growth.

Banking Sector

BBCA

BBCA reported 9M24 earnings of IDR 41.1 trillion, up 13% YoY, in line with expectations. The growth was driven by a healthy Net Interest Margin (NIM) of 5.9% and robust lending growth of 14.5% YoY. Asset quality remained stable at 2.1%.

BBRI

BBRI’s 9M24 earnings of IDR 45.1 trillion, a 2.4% YoY increase, fell short of expectations due to asset quality issues and a shift to corporate lending, which pressured NIM. Loan growth was below industry average at 8.2% YoY.

BBNI

BBNI achieved 9M24 earnings of IDR 16.3 trillion, up 4% YoY, meeting expectations. The bank saw a healthy NIM improvement to 4.4% and lending growth of 9.5% YoY, focusing on quality lending to minimize risks.

BMRI

BMRI reported 9M24 earnings of IDR 42.0 trillion, up 8% YoY, in line with estimates. The bank’s lending growth outpaced competition at 20.8% YoY but faced short-term challenges in NIM due to higher funding costs.

BRIS

BRIS posted 9M24 earnings of IDR 5.1 trillion, up 22% YoY, meeting expectations. Financing growth was at 15% YoY, with significant fee income growth of 30% YoY.

BNGA

BNGA’s 9M24 earnings of IDR 5.1 trillion, a 5% YoY increase, aligned with expectations. The bank focused on improving asset quality and profitability, with credit costs staying around 1% in 9M24.

Consumer Sector

AMRT

AMRT’s 9M24 earnings of IDR 2.4 trillion, up 10% YoY, missed expectations due to lower net margin and seasonal factors affecting 3Q24 earnings.

ICBP

ICBP reported 9M24 profit of IDR 8.1 trillion, up 15% YoY, including FX gains. The company’s core profit grew robustly, with sales growth visible across all segments. Despite seasonality, profit margins remained healthy.

INDF

INDF’s 9M24 earnings of IDR 8.8 trillion, up 24% YoY, slightly missed expectations due to lower sales. The company’s performance was dragged by flattish commodity-related and distribution sales.

KLBF

KLBF’s 9M24 earnings of IDR 2.4 trillion, up 15% YoY, missed expectations due to gross profit margin pressures across all segments.

MYOR

MYOR’s 9M24 core earnings of IDR 2.1 trillion were flat YoY, disappointing expectations due to lower gross margin. 3Q24 earnings plunged due to EBIT margin underperformance, despite strong sales traction.

HMSP

HMSP’s 9M24 earnings of IDR 5.2 trillion, a 16% YoY decline, missed expectations due to sales volume decline and fierce competition from smaller cigarette manufacturers.

UNVR

UNVR’s 9M24 earnings of IDR 3.0 trillion, down 28% YoY, missed expectations due to weak sales and profit margin estimates. 3Q24 earnings continued to contract due to price instability.

GGRM

GGRM’s 9M24 earnings of IDR 992 billion, down 78% YoY, disappointed due to weak purchasing power and consumers downtrading to cheaper hand-rolled cigarettes.

MAPI

MAPI’s 9M24 earnings of IDR 1.3 trillion, down 8% YoY, aligned with expectations. 3Q24 earnings grew 8% YoY, driven by strong sales performance across segments.

LPPF

LPPF’s 9M24 earnings of IDR 622 billion, down 1% YoY, met expectations. Despite weak 3Q24 sales, the company managed to deliver positive SSSG.

ROTI

ROTI’s 9M24 earnings of IDR 249 billion, up 8% YoY, exceeded expectations. The company successfully launched affordable products amid weak purchasing power.

RALS

RALS’ 9M24 earnings of IDR 253 billion, down 1% YoY, met expectations. The company managed a profit in 3Q24 despite a non-festive season and weak purchasing power.

Healthcare Sector

HEAL

HEAL’s 9M24 earnings of IDR 468 billion, up 34% YoY, met expectations. Despite softer 3Q traffic, the company expects a stronger 4Q24.

SILO

SILO’s 9M24 earnings of IDR 943 billion, up 10% YoY, met expectations. The company experienced lower traffic growth compared to peers, potentially driven by downtrading demand.

MIKA

MIKA’s 9M24 earnings of IDR 873 billion, up 27% YoY, missed expectations due to softer 3Q traffic. The company revised down its top-line growth guidance but maintained margin targets.

Telco, Media, and Tower (TMT) Sector

MSTI

MSTI’s 9M24 net income of IDR 312 billion, up 63% YoY, met expectations. Revenue growth was driven by hardware sales, despite a slight contraction in gross margin.

TLKM

TLKM’s 9M24 core profit of IDR 18.2 trillion, excluding unrealized losses, met expectations. Revenue growth was modest due to soft purchasing power and competition, but the company has capacity to improve its network.

ISAT

ISAT’s 9M24 net profit of IDR 3.9 trillion, up 39% YoY, missed expectations due to lower revenue. However, EBITDA was in line with forecasts.

MTEL

MTEL’s 9M24 net income of IDR 1.5 trillion, up 7.1% YoY, met expectations. The company is expected to benefit from MNO expansion in ex-Java regions.

New Economy Sector

GOTO

GOTO’s 9M24 revenue of IDR 11.6 trillion, up 11% YoY, exceeded expectations. The company’s ODS revenue grew significantly, and management remains optimistic about achieving Adjusted EBITDA BEP target in FY24.

BUKA

BUKA’s 9M24 topline missed expectations, with an operating loss widening due to unrealized losses and other expenses. However, the company remains cash-rich, with substantial financial income.

Metal & Mining Sector

ADRO

ADRO’s 9M24 earnings of IDR 1.2 trillion, slightly down YoY, exceeded expectations. The company is expected to sustain solid performance with the seasonal increase in coal demand.

ANTM

ANTM’s 9M24 earnings of IDR 2.3 trillion, down 21% YoY, exceeded expectations. The company is expected to continue strong performance in 4Q24, driven by additional RKAB approval.

INCO

INCO’s 9M24 earnings of USD 51 million, down 77% YoY, missed expectations. The company plans to sell nickel ore in 2025, expecting to secure an attractive premium over the benchmark.

Utilities Sector

JSMR

JSMR’s 9M24 net profit of IDR 3.3 trillion, down 45% YoY, exceeded expectations. Excluding deferred tax gains, net income was in line with forecasts.

Automotive Sector

ASII

ASII’s 9M24 earnings of IDR 25.9 trillion, up 1% YoY, exceeded expectations. The company’s performance was driven by United Tractors’ outperformance and strong 2W sales, offsetting weakness in the 4W market.

Conclusion

The 9M24 results highlight a mixed performance across various sectors in Indonesia. While some companies have exceeded expectations, others have faced challenges in meeting their targets. The insights provided here offer a comprehensive understanding of the current market dynamics and future outlook for these companies.


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