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■ Topline growth dragged down by 4W revenue decline of 10.2% YoY in 1Q25. In 1Q25, DRMA booked revenue of IDR 1.5tn (-1.6% QoQ, +9.4% YoY), slightly below our estimate (SSI: 24.0%) amid expected GDP headwinds. The 2W segment remained the main driver (+8.3% QoQ, +15.6% YoY, 63.4% of topline), boosted by new parts for Honda PCX and Stylo. Meanwhile, 4W revenue declined 10.2% YoY on weaker auto demand. GPM narrowed to 17.4% (4Q24: 18.4%) due to seasonality, IDR depreciation, and higher labor costs. Net profit came in at IDR 143bn (-14.7% QoQ, +7.0% YoY), slightly below estimates (SSI: 23.4%, Cons: 22.8%) with a margin of 9.8%.
■ Automotive industry sales growth to remain limited this year. We expect 2025F 4W sales to decline 4–5% to 820–840K units due to weak purchasing power and high interest rates, prompting some downtrading to 2W. However, motorcycle sales may remain soft in 2H25, weighing on DRMA’s growth despite new parts, EV-related expansion, and non-auto diversification. Margin pressure is also expected from IDR depreciation, with 30% of COGS USD-linked.
■ Partial upside from IDR 2.6tn Battery Energy Storage System project delayed. DRMA’s plan to join a Battery Energy Storage System (BESS) project for solar panels worth IDR 2.6tn (USD 160mn) has been delayed, with its stake in the JV with a Chinese partner still unclear. Following the government’s move to restructure the project for greater mutual benefit, DRMA’s battery pack assembly timeline remains uncertain. As such, the project is excluded from our forecasts. If DRMA secures a 20% stake, it could generate additional revenue of IDR 520bn (USD 31mn) and EBIT of IDR 104bn (USD 6.3mn).
■ Cut to HOLD on reached TP of IDR 1,000. We downgrade DRMA from BUY to HOLD, while maintaining our DCF-based TP at IDR 1,000 (WACC: 10.3%, terminal growth: 2.0%, 20% small-cap discount), implying 2025F P/E of 8.5x. This reflects our earnings downgrade (Figure 2) amid a challenging 2H25 auto outlook due to slowing GDP and weaker purchasing power. Despite this, we continue to like DRMA for: 1) its leadership in 2W parts and non-auto diversification, 2) strong ROE of 20.7% (vs. industry avg. 18.7%), and 3) a higher 2025 dividend payout of 35% (prev: 28%), lifting yield to 4.3%.
Samuel Sekuritas Indonesia is a leading Indonesian securities brokerage firm. Established in 1997, the firm has grown to become one of the most respected and trusted financial services companies in the country. With a wide range of services and products, Samuel Sekuritas Indonesia has become a trusted partner to many investors, both institutional and individual.
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The company has a strong research capability and is committed to providing its clients with up-to-date and reliable market analysis and recommendations. It also has a team of experienced and knowledgeable professionals who are dedicated to providing quality service to its clients. As a result, Samuel Sekuritas Indonesia has become a preferred partner for many investors in Indonesia.
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