Indonesia Commodities, Consumers and Astra US marketing feedback – repricing of equity risk premiums

Research evidence excerpt

Indonesia Commodities, Consumers and Astra US marketing feedback – repricing of equity risk premiums

Benny Kurniawan, CFA AC Asia Pacific Equity Research

(62-21) 5291 8024 08 June 2026 J P M O R G A N

benny.kurniawan@jpmorgan.com

understood if the gov’t levied a special windfall tax from the profitable sectors in the

country. On the bright side, the Indonesian government today announced that the gross-

split mechanism will not apply to minerals and existing laws (royalty based) will stay (see

our report on PSC here). The government will instead increase quotas provided, which

we think is a win-win solution for investors and government revenue collection.

• Astra. Investors are keen to better understand the outcome of the latest strategic review.

Not many investors appreciated the scant headline details (link to our report) that were

provided, having expected a similar playbook to other Jardine companies. However, we

find that investors are generally in agreement with our OW view on Astra following

further discussion on the stock. Investors have under-appreciated Astra’s USD cashflow

through UT and AALI, offsetting the potential weakness from other business lines. The

auto business’ manufacturing arm also has decent export exposure, which we believe

mitigates the weakness in the local distribution business. More importantly, the double-

digit TSR commitment is almost double what Astra delivered in 2016-2025.

• Other sectors & stocks: Investors we spoke with remain keen on the banking sector,

especially on the valuation angle and asked if our Indonesia strategy view differs from

covering analyst Harsh Modi’s relatively bearish stance. Unfortunately, we do not have

a very differentiated view to offer and in general we are in agreement with Harsh.