SMGR
Contact our analyst Eka
3rd December 2025
BUY 17.4% Upside
Price Rp 2810
Target price Rp 3300
BUY 17.4% Upside
Price Rp 2810
Target price Rp 3300
Softer demand while ASP improves
- Domestic cement demand declined -3.8% YoY to 6.08 million tons in October 2025, despite a slight improvement in Java’s bag segment (+0.5% YoY). Demand outside Java weakened -2.1% YoY, while bulk cement sales contracted more sharply (-8.7% YoY in Java and -13.2% YoY outside Java). The weakness reflects softer construction activity and an earlier-than-usual rainy season — particularly notable as October is historically the peak sales month.Year-to-date (Jan–Oct), domestic sales fell -3.2% YoY to 50.68 million tons, reflecting weak purchasing power and slower infrastructure execution.
- SMGR’s domestic cement sales declined -2.0% YoY to 3.04 mt in October 2025 amid muted demand, while export volumes dropped -27.2% YoY to 370,964 tons. Total group sales in October contracted -3.0% YoY to 3.59 mt.For Jan–Oct 2025, SMGR’s domestic sales fell -5.7% YoY to 24.41 mt, while exports remained strong, rising +19.4% YoY to 5.41 mt. Total group sales declined -1.9% YoY to 31.04 mt.
- ASP showed improvement in Q3 2025, particularly in fighting-brand and export segments, while bag cement ASP remained stable.Supported by better pricing, SMGR booked IDR 9.69 trillion in Q3 2025 revenue — up +21.9% QoQ, though still -1.9% YoY. For 9M 2025, sales declined -3.8% YoY to IDR 25.3 trillion.
- Given the current demand environment and ongoing delays in project execution, cement sales in Q4 2025 are expected to follow a similar trend to Q3 2025.
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Q3 2025: Positive bottom line
- After recording a loss in Q2 2025, SMGR posted a net profit of IDR 74.9 billion in Q3 2025, though still down -66% YoY. For 9M 2025, net profit fell -84% YoY to IDR 114.8 billion.
- Cost of revenue increased +1.5% YoY and +22.9% QoQ, with COGS per ton rising +1.6% YoY and +4.8% QoQ to IDR 765,565, reflecting higher variable costs driven by fuel prices (+5.4% YoY).Gross profit declined -14.1% YoY but rose +17.8% QoQ to IDR 1.85 trillion, with the gross margin slipping to 19.1%.
- Operating expenses decreased -9.5% YoY but rose +7.5% QoQ, mainly from lower transportation and promotion costs. Operating income fell -37.7% YoY, but improved +308% QoQ to IDR 219 billion.
- With ASP increases implemented in September and November, SMGR’s profitability is expected to continue improving into year-end.
- We maintain our BUY recommendation with a higher target price of IDR 3,300, representing +17.4% upside, based on a 41x 2026F PE. This reflects expectations of a gradual recovery in margins and domestic demand over the next year.
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