ASII‘s revenue in 2Q25 increased by 0.9% YoY compared to 2Q24, primarily driven by growth in the Agribusiness segment, which rose by 34.6% YoY. During the 1H25 period, ASII’s revenue grew by 1.8% YoY to Rp162.86 trillion. Net profit in 1H25 fell by 2.2% YoY to Rp 15.52 trillion, although this reflected an improvement compared to the performance in 1Q25, supported by net profit growth of 23.8% QoQ in 2Q25.

The company’s diversification strategy facilitated revenue growth despite challenges in the automotive and mining sectors. Although ASII‘s car sales declined this year due to weakened consumer purchasing power and increased competition, it successfully maintained a market share above 53%.

In the mining sector, falling coal prices impacted the performance of the Heavy Equipment Manufacturing and Construction Equipment (HEMCE) segment. However, increased sales of heavy equipment and rising gold prices contributed positively to this segment’s growth. In the Agribusiness segment, a boost in production and higher crude palm oil (CPO) prices led to increased contributions.

We estimate ASII‘s revenue will grow moderately to Rp 335.99 trillion in FY25F (+1.5% YoY). The HEMCE segment remains the primary contributor, accounting for approximately 41.3% of ASII’s total revenue. Net profit is projected to reach Rp33.18 trillion in FY25F (-2.6% YoY). Net profit growth is expected to come primarily from the Financial Services, Agribusiness, Infrastructure, and Information Technology segments.

We are initiating coverage on ASII with a BUY recommendation and target price of Rp6,100 per share, using a DCF valuation approach (assuming WACC: 9.02% and TG: 1.9%). This target price reflects a PER25E valuation of 7.44x and a PBV25E of 0.90x, which are below the historical PE and PBV over the past five years of 8.6x and 0.94x, respectively.

By PHINTRACO SEKURITAS | Research
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