May 18, 2025
How the Stars Align for Renewables

Market Commentary
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In a recent forum hosted by Makes & Partners in Indonesia, Presidential Special Envoy for Energy and Environment Hashim S. Djojohadikusumo and Danantara Indonesia CIO Pandu Sjahrir discussed the country's renewable energy initiatives.

Hashim highlighted the Indonesia's success in securing EUR 1.2bn in green financing from Germany’s KfW for sustainable electricity infrastructure. Meanwhile, Pandu emphasized the role of Danantara Indonesia in attracting global investors to support Indonesia’s green energy transition.

The forum underscored the government’s commitment to accelerating the energy transition through strong public-private collaboration and global investment partnerships.
 

The timing of ADRO's recent IDR 4tn share buyback announcement aligns strategically with Indonesia's intensified focus on renewable energy initiatives.

During the forum, Presidential Special Envoy for Energy and Environment Hashim S. Djojohadikusumo and Danantara Indonesia CIO Pandu Sjahrir discussed plans to develop 103 GW of power capacity over the next 15 years, with 75% sourced from renewables.
 

ADRO's valuation is significantly lower than renewable energy peers like PGEO and BREN. ADRO trades at a much lower PE ratio (TTM: 3.81 vs PGEO's 22.80 and BREN's 437.19) and price-to-book value (0.84 vs PGEO's 1.56 and BREN's extreme 98.27). This suggests ADRO is relatively undervalued despite operating in the same energy sector, possibly reflecting its coal-based legacy versus the market premium for renewables.
 

Hence, we reiterate our buy call on ADRO with TP of IDR 4,500 per share implying 6.7x 2025F PE.

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