A record first half, and management raised the bar

AKRA posted a record 1H26 net profit of IDR1.43tn (+21% yoy), with revenue coming in at IDR30.8tn (+44% yoy). Gross profit grew +17% yoy to IDR2.28tn, led by a sharp JIIPE swing (segment GP +62% yoy) while trading GP rose +8% yoy. Management raised FY26 guidance, expecting it to continue at the current pace (~21% yoy). AKRA’s 1H26 free cash flow of IDR3.4tn was higher than its FY25 free cash flow.

Trading gross profit near record highs

Trading and distribution revenue grew +44% yoy to IDR28tn (petroleum +39%, chemical +26%), with segment gross profit up +8% yoy to IDR1.56tn, among the company’s highest half-year results. The one soft spot, 2Q trading GP which was down -10% qoq, reflects retail losses that management expects to recoup in 2H26E. We read the drag as timing, and not structural.

JIIPE (Java Integrated Industrial and Ports Estate, unlisted) is the drive engine – land sales the swing, utilities the accelerator

JIIPE drove the first-half results, with revenue +116% yoy and segment GP +62% yoy to IDR590bn, lifting the estate’s contribution to group GP to 26% (from 19% in 1H25). The company booked 58ha of land sales across three buyers, and a domestic flour/wheat processor Xinyi Glass Group (868 HK, Not rated), the company’s Chinese chemical tenant, contributed land sales revenue +139% yoy in 1H26. Utilities revenue grew +37% yoy to IDR427bn despite soft Freeport activity. Management targets the smelters ramp-up production from around September and flagged a potential doubling toward IDR2tn in FY27. It also expects a ~120ha anchor tenant (starting 3Q26E) to underpin its 90–100ha/year target.

Cash flow is the real story, and it self-funds the LNG venture

The under-appreciated part in our view is cash generation: 1H26 free cash flow reached IDR3.4tn – above AKRA’s annual FCF in prior years – and net cash widened to IDR4.0tn. A cash conversion cycle of -14 days keeps AKRA as a capital-light and high-ROE distributor (ROE 22%, net gearing -0.24x, D/E 0.3x), and we believe this is how its funds grow without recourse to shareholders. On the FSRU (Floating Storage and Regasification Unit) JV with BW LNG (Unlisted) and the 170,000 cbm of HD Hyundai Heavy Industries (329180 KS, Buy) newbuild, management provided three assurances – no rights issue, no change to dividend policy, and no balance-sheet burden – targeting a minimum 15% IRR and first gas in 2H29. This de-risks the capex overhang, in our view.

Maintain Buy and TP of IDR1,700

Despite the challenges across multiple decades, we believe AKRA has proven its execution capabilities in expanding its business – with a strong moat in each segment (e.g., infrastructure & scale). We maintain our Buy rating and TP of IDR1,700 (based on 13x FY26F P/E). The stock is currently trading at a 9x FY26F P/E. Risks to our call include: lower-than-expected trading volume, unfavorable oil supply/price dynamics, lower chemical ASP, and delayed JIIPE customer acquisition.

Fig. 1: AKRA IJ – record first half, earnings +21% yoy

AKRA IJ (IDR bn)	1Q25	2Q25	1Q26	2Q26	q-q %	y-y %	1H25	1H26	y-y%	% Ours	% Cons
Revenue	10,256	11,162	12,941	17,902	38%	60%	21,418	30,843	44%	70%	61%
Trading & distribution	9,575	9,914	11,836	16,192	37%	63%	19,489	28,028	44%
JIIPE	51	587	417	959	130%	63%	638	1,376	116%
Land Sales	-	537	373	914	145%	70%	537	1,286	139%
Utilities	185	127	218	208	-4.7%	64%	311	427	37%
Others	445	534	470	542	16%	1.5%	979	1,012	3.3%
COGS	9,329	10,136	11,836	16,725	41%	65%	19,466	28,561	47%
GP	927	1,026	1,105	1,177	6.5%	15%	1,952	2,282	17%	52%	51%
Trading & distribution	752	693	823	738	-10%	6.5%	1,444	1,560	8.0%
JIIPE	(75)	440	(7.5)	597	na.	36%	365	590	62%
EBIT	678	778	811	865	6.7%	11%	1,456	1,676	15%	49%	48%
EBITDA	843	944	1,005	1,097	9.1%	16%	1,788	2,102	18%	53%	52%
Pretax	734	831	883	971	10%	17%	1,565	1,854	18%	51%	50%
NP	565	615	656	774	18%	26%	1,180	1,431	21%	53%	52%
Margins %	1Q25	2Q25	1Q26	2Q26			1H25	1H26
GP	9.0%	9.2%	8.5%	6.6%			9.1%	7.4%
Trading & distribution	7.8%	7.0%	7.0%	4.6%			7.4%	5.6%
JIIPE	-148%	75%	-1.8%	62%			57%	43%
Others	56%	-20%	62%	-29%			15%	13%
EBIT	6.6%	7.0%	6.3%	4.8%			6.8%	5.4%
EBITDA	8.2%	8.5%	7.8%	6.1%			8.3%	6.8%
Pretax	7.2%	7.4%	6.8%	5.4%			7.3%	6.0%
NP	5.5%	5.5%	5.1%	4.3%			5.5%	4.6%
Balance sheet IDR bn	1Q25	2Q25	1Q26	2Q26
Cash	5,065	4,045	7,283	8,866
Total asset	32,641	31,795	37,063	39,295
Total debt	4,782	4,921	4,999	4,895
Net debt (cash)	(283)	876	(2,284)	(3,972)
ROE % ttm	18%	20%	20%	21%
Gearing (x)	0.4	0.4	0.4	0.4
Net gearing/(cash), x	(0.02)	0.06	(0.14)	(0.24)

 

Fig. 2: 1H26 FCF of IDR3.4tn tops every prior full year

 

Fig. 3: Highest first-half net profit on record

 

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)