INTP
Contact our analyst Eka
BUY, 26% Upside
14th April 2025
Price Rp 4,830
Target price Rp 7,100
14th April 2025
Price Rp 4,830
Target price Rp 7,100
Sales volume recovery in February; Maintain Cautious Outlook for 2025
- Domestic cement demand rose 5% YoY to 4.6 million tons in February 2025, supported by more effective working days compared to the previous year. Growth was driven by bagged cement, with Java up 7.8% YoY and areas outside Java up 10.5% YoY.
- Bulk cement demand also increased in Java (+7.9% YoY) due to ongoing infrastructure and commercial projects. However, demand outside Java declined 20.7% YoY, mainly due to weaker volumes in Kalimantan as demand in the new capital city area normalized.
- Indocement’s February sales volume grew by 0.5% YoY to 1.32 million tons, slightly below the industry average due to heavy rainfall and flooding in key Java markets. Within the mix, bagged cement grew 3.3%, while bulk cement declined 5.9%.
- For full-year 2024, INTP’s cement sales rose 9.2% YoY to 20.49 million tons, partly boosted by the consolidation of Semen Grobogan, which was not included in 2023 data. This led to a market share increase to 29.7% in 2024 from 27.3% in 2023.
- Looking ahead, Q1 2025 demand is expected to soften, as Ramadan falls in March, typically leading to lower construction activity. For the full year, management is targeting 1%-2% demand growth, supported by:
- Private sector construction activity
- The 3 million new homes program
- Extended VAT subsidy for new home purchases
- Potential interest rate cuts
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Q4 2024 Results: Margin Expansion on Strong Volume and Cost Efficiency
Valuation: Maintain BUY with TP IDR 7.100
- INTP reported significant margin improvement in Q4 2024, driven by:
- Higher ASPs (+2.6% QoQ)
- Increased sales volume (+14.5% YoY)
- Efficiency programs and cost-saving measures
- Higher associate income
- Net profit surged 42.8% YoY and 50.8% QoQ to IDR 952 billion, with the net profit margin improving to 18.2% from 12% in Q3 2024. Gross profit rose 12.5% YoY and 10.8% QoQ to IDR 1.97 trillion, lifting the gross profit margin to 37.8%.
- Cost of revenue decreased by -0.4% YoY and -4.7% QoQ, supported by:
- Lower raw material costs (-6.5% YoY, -9.2% QoQ)
- Lower fuel and power costs (-7% YoY, -5.1% QoQ)
- Reduced packing costs (-8.3% YoY, -4.1% QoQ)
- The Grobogan plant in Central Java also helped reduce delivery, loading, and transportation costs.
Valuation: Maintain BUY with TP IDR 7.100
- INTP is forecasted to trade at 14.0x 2026F Price-to-Earnings, with a target price of IDR 7,100, implying 32% upside potential. We maintain our BUY recommendation on the stock.
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