2Q26 Result: The Trough Is Passing

Two Engines: A Stable Local Floor, Hollywood as the Swing

Revenue rose +39.6% QoQ and earnings swung back to a IDR 181bn NPATMI (from a IDR 8bn loss in 1Q). The 1H26 miss (PATMI -40% YoY) was purely a base effect: 2Q25's Jumbo drew 10.2mn versus 3.6mn for the top local title this quarter. This is content supply, not weak demand, and unit economics held firm (ATP +0.4% YoY, F&B SPH +4.2% YoY). The clearest signal: Movie/F&B EBIT swung from a IDR 20bn loss to IDR 240bn profit on IDR 425bn of incremental revenue, a ~61% incremental margin.

Reiterate BUY, TP Raised to IDR 150/sh

Maintain BUY, TP raised to IDR 160/sh (from IDR 150/sh), +61% upside. TP rises as we roll the basis to FY27F EPS (~IDR 11) and anchor the PE band on the current risk-free rate (8.3%), better reflecting the cost of equity. We stay BUY on: 1) a credible content-driven recovery into 2H26; 2) a well-covered ~5% dividend yield, with strong FCF supporting a ~100% payout for at least two years even in a bearish case; and 3) an undemanding valuation with limited downside, at ~10.7x FY26F PE and ~4.1x EV/EBITDA (among the cheapest globally despite top-tier ROE), with the de-rating from >20x at IPO already pricing out most growth. We read the depressed price as a technical overhang (foreign selling, thin ~8% free float vs BEI's 15% minimum), not a fundamental verdict. Investors are paid to wait, with the content recovery as free upside.

Banking Sector - Not-So-Convincing 5M24

Banking Sector - Not-So-Convincing 5M24

Mardy Sutanto

02 July 2024 - 03.50pm

Banking Sector - Not-So-Convincing 5M24

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Basic Industry

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Infrastructure

ISAT - Near-term pain, long-term gain