Decent NPAT growth of 7.4%, dividend yield of 10%, and modest 9.9x FY26F P/E; maintain Buy
MLBI has an opportunity to gain further market share
Our channel checks at key alcoholic beverage players’ operations reveal that Orang Tua (OT, unlisted), one of the largest alcoholic firms in Indonesia, has undergone a major organizational restructuring over the past two years, leading to its substantial A&P budget reduction. OT is striving to centralize and tighten its promotion expenses at sales officers’ level, pivoting to less aggressive sales strategies than previously. We believe MLBI by capitalizing on this situation has been gaining share, and we see this trend persisting on the back of the company’s strong brand power and distribution networks. We think OT probably holds the largest share in Indonesia’s overall alcoholic beverage market, spanning wine, beer, and spirits products; however, for the beer market alone, it might be the second- or third-biggest player after MLBI.
Batam holds strong market potential
Jakarta, Surabaya, and Bali are the main markets for the alcoholic beverages business, given mushrooming entertainment business activities (i.e., bars, cafes, and restaurants) as well as high income per capita. Another emerging area is Batam; the city has a fast-growing entertainment business as well as growing tourist visitations, especially from Singapore, due to short distance advantage and a stronger SGD/IDR exchange rate; this area has also more tourist-friendly regulations, making cost of doing business for alcoholic business cheaper. Our channel checks suggest that Singaporeans love global brands, which drove Carlsberg (under Delta Djakarta [DLTA IJ, Not rated]) to become the best-selling product there; we think MLBI can accelerate the sales of its global brand, Heineken, going forward.
Maintain Buy with a higher TP of IDR9,050, implying 51.5% upside
We revise our NPAT forecasts by +5%/+6% for FY26F/FY27F, driven by potential market share gain. We maintain our Buy rating with a new TP of IDR9,050 (up from IDR8,650), using an unchanged target P/E of 15x FY26F (-0.2SD to its five-year mean). Currently, the stock is trading at 9.9x FY26F P/E with dividend yield of 10.1%. Downside risks include low liquidity; this can be overcome to some extent if management decides to meet free float requirement of 15%, vs only has 9.7% currently.
Company profileMLBI is Indonesia’s largest brewery company, with 56% market share by revenue. The company has an extensive portfolio of alcoholic and non-alcoholic drinks. Bir Bintang holds the biggest market share (29%) in the lager beer segment, followed by Bintang Zero (7%), Heineken (5%) and Bintang Radler (3%). The company’s non-alcoholic products are Green Sands, Strong Bow, Bintang Zero and Bintang Radler Zero. Bali, Jakarta and Greater Jakarta are the main sales contributors for MLBI, with the biggest distributor in Bali accounting for c.25% of the top-line in FY19.
Valuation MethodologyOur target price of IDR9,050 is based on FY26F target P/E of 15x (-0.2SD of its five-year-mean). The benchmark index of the stock is JCI Index.
Risks that may impede the achievement of the target priceDownside risk would be its poor liquidity issue.
ESGMLBI’s board is among the most independent in Indonesia’s consumer sector, in our view. The company was among the first in the country to install solar panels in all its factories and has won several social and environmental awards. The company has streamlined large-scale operations and uses high-quality raw material to produce its beverages.
Fig. 1: MLBI – Sales growth trend
Source: Company data, Verdhana estimates
Fig. 2: MLBI – NPAT growth trend
Source: Company data, Verdhana estimates
Fig. 3: Annual international visits to Batam
Source: BPS, Verdhana research
Fig. 4: Batam international visits by country (2025)
Source: BPS, Verdhana research
Fig. 5: MLBI – Ownership chart
Source: KSEI, Verdhana research
Fig. 6: MLBI – Forward P/E band
Source: Verdhana estimates
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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