Resilient earnings despite domestic softness

AKRA reported stable 3Q25 results with NPAT of IDR470bn (–24% qoq, +1% yoy). The decline was mainly timing-related on land sales, while core trading and utilities remained strong. In our view, the resilient performance underscores AKRA’s ability to sustain profitability despite moderated domestic activity and slowed JIIPE land monetization.

Trading and distribution drive stability

Trading and distribution revenue rose +11% yoy to IDR9.9tn in 9M25, supported by higher ASPs in petroleum and chemical products. Gross margin improved to 7.0% in 9M25 (vs. 6.6% in 9M24), reflecting efficient cost pass-through and pricing discipline. Segment profitability remained intact, with steady demand from industrial and mining clients, anchoring more than 90% of consolidated revenue.

Utilities momentum offsets land sales weakness

Utilities revenue surged +69% qoq and +112% yoy to IDR214bn in 9M25, signaling continued ramp-up at JIIPE. The rise reflects increased power and water consumption by tenants as industrial park activity normalizes. Although land sales fell 14% yoy, utilities and services revenue more than offset the shortfall, supporting recurring income growth and margin expansion.

Efficiency and strong cash generation

Group profitability remained robust with 9M25 gross profit up +18% yoy to IDR2.77tn and NPAT up +12% yoy to IDR1.65tn. Margins widened to 8.5% from 8.2% a year earlier, driven by mix improvement and stronger recurring contribution. Operational efficiency also strengthened: the cash conversion cycle improved to –16 days (see Fig. 2), led by higher payable days (106) and steady receivable discipline (72), reinforcing AKRA’s cash-rich balance sheet with net cash of IDR1.2tn.

Maintain Buy with TP of IDR1,700

We maintain a constructive view on AKRA, backed by its visible utilities business growth, stable trading income, and upcoming land sales. AKRA trades at an attractive valuation of 8.2x FY25F P/E with ROE of 21%, at -1.5SD of its historical PE/ROE average. Our SOTP-based TP of IDR1,700 is derived using a multiple 9x FY25F P/E for the trading and distribution business, a DCF valuation (10% WACC, 1% terminal growth) for manufacturing, logistics/ utilities, and a 30% discount to NAV for industrial estate.

Downside risks: 1) lower-than-expected volume for its trading and distribution business, and 2) unfavorable dynamics, with significant oil supply and lower commodity prices.

Fig. 2: Working capital efficiency drives cash generation

Fig. 3: AKRA's land sales

INVESTMENT RATINGS
A rating of ‘Buy’, indicates that the analyst expects the stock to outperform the Benchmark over the next 12 months. A rating of ‘Neutral’, indicates that the analyst expects the stock to perform in line with the Benchmark over the next 12 months. A rating of ‘Reduce’, indicates that the analyst expects the stock to underperform the Benchmark over the next 12 months. A rating of ‘Suspended’, indicates that the rating, target price, and estimates have been suspended temporarily to comply with applicable regulations and/or firm policies. Securities and/or companies that are labelled as ‘Not Rated’ or ‘No Rating’ are not in regular research coverage. Benchmark is Indonesia Composite Index (‘IDX Composite’). A ‘Target Price’, if discussed, indicates the analyst’s forecast for the share price with a 12-month time horizon, reflecting in part of the analyst’s estimates for the company’s earnings, and may be impeded by general market and macroeconomic trends, and by other risks related to the company or the market in general. 

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Jupriadi Tan (jupriadi.tan@verdhana.id)

David Tjahjadi (david.tjahjadi@verdhana.id)

Gerald Hugo (gerald.hugo@verdhana.id)