1H25 Earnings miss, topline resilient, 2H catalyst intact
-          Earnings miss on weaker margins: MYOR booked 2Q25 net profit of IDR497bn (-28% QoQ; -15.9% YoY), bringing 1H25 earnings to IDR1.1tn (-32.3% YoY), tracking below ours/cons at 34%/39%. The earnings miss was driven by gross margin compression on higher raw material costs (esp. cocoa) and higher financing expenses from increased bank borrowings.
-          Top line growth intact: 2Q25 revenue came in at IDR7.9tn (-19.5% QoQ; +6.4% YoY), bringing 1H25 revenue to IDR17.8tn (+9.7% YoY), slightly below ours/cons at 44%, though seasonality was less supportive. By geography, 1H25 sales grew +8.2% domestically and +11.9% in exports. We see 1H results (~45% of FY25F earnings estimate) as in line, with ~55% of topline still expected in 2H.
-          2H25F outlook: We project a strong topline recovery in 2H, supported by the export peak in 4Q and early Lebaran in Mar-26 pulling forward domestic demand. That said, margin uplift will remain capped as ASP hikes are selective and soft commodity prices have yet to ease materially. With 4Q seasonally the most critical export quarter, we maintain our FY25F sales growth forecast of +10.8% YoY, which we see as achievable despite 1H margin headwinds.

Government spending sustains volume growth while input costs trend lower
For 2026F, we see twin tailwinds from fiscal spending and easing input costs. Indonesia’s growth outlook remains domestic-led, with the state budget allocating IDR508tn to social protection and IDR335tn to MBG, directly supporting low- and middle-income households that anchor FMCG demand. This underpins resilient volumes and deeper rural penetration. Exports should remain only marginally positive as post-pandemic restocking fades, with China and Thailand weighing, though resilience in the Philippines and Vietnam provides partial offset.
On the cost side, we expect a more favorable soft-commodity environment, in line with USDA and World Bank forecasts. Robusta should stabilize near USD4,000/ton, wheat is likely to remain stable at USD570/ton, while cocoa is expected to ease to USD9,000/ton (-13% YoY) as supply recovers, albeit with structural risks in West Africa. Meanwhile, CPO should stay resilient at MYR4,800/ton, supported by tight supply.
With better input dynamics and domestic demand tailwinds, we forecast FY25F/26F volume growth of +5.5%/+8.5% YoY and ASP growth of +5.0%/+1.5% YoY, translating into sales of IDR39.9tn/IDR44.0tn (+10.8%/+10.1% YoY). Margin recovery should begin in FY26F, lifting earnings from IDR3.0tn in FY25F to IDR3.5tn in FY26F (+0.7%/+15.7% YoY).

Maintain BUY call with TP of IDR2,800/sh
We expect FY26F to mark an inflection year for MYOR, supported by steady domestic consumption and gradual margin recovery as input costs ease. We maintain BUY with a slightly lowered TP of IDR2,800/sh (from IDR2,900), based on 18.0x FY26F PE (-0.5 stdv vs. 5-yr avg). Key risks include commodity price volatility, higher logistics costs, and softer macro conditions.

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