June 02, 2025
Strategic Leap Forward

Market Commentary
0 comments
DEWA has just announced a game changing strategic investment in heavy machinery from PT XCMG Group, worth an impressive IDR 942 bn. 

This investment is set to significantly strengthen operational capabilities by boosting internal production capacity, translating into greater efficiency in project execution.

From a financial standpoint, this move is expected to drive higher revenue, stronger profit margins, and a leaner cost structure over the medium to long term.
 

Our analyst believes this development strongly supports the company’s earnings trajectory. Not only did Dewa deliver solid earnings in 1Q, but the new fleet of heavy machinery adds another layer of confidence to the outlook.

Looking ahead, our analyst projects DEWA earnings to reach IDR 247 bn in FY25F (+1,415% YoY) and IDR 475 bn in FY26F (+92% YoY). In line with this, operating margin assumptions have been revised upward to 11% in FY25F and 13% in FY26F, from a previous estimate of 7%.

It’s also important to highlight that these forecasts do not yet account for any potential asset impairments related to aging equipment. Since such impairments are non-cash in nature, we believe they will not impact DEWA core profitability, which already shows strong signs of a structural turnaround.
  

Beyond the fundamentals, the chart below illustrates a compelling valuation story. At the current stock price (yesterday’s closing: IDR 167), DEWA remains undervalued, with a significant margin of safety between market price and its intrinsic value. This valuation gap represents not just a discount, but a clear buying opportunity.

Given the strong fundamentals and positive momentum, our analyst is raising the target price to IDR 350. We believe the target price is still significantly above the current level, making this an attractive window for investors seeking value and growth.
  

Comments


Contact Us
We are happy to answer any questions you may have
Address
Sahid Sudirman Center
Jalan Jend. Sudirman Kav.86, Lantai 12
Karet Tengsin, RT.10/RW.11
Daerah Khusus Ibukota Jakarta
10220