2Q26 preview: supported by higher hotel occupancy and PIM 5 contribution. In 2Q26, we expect MKPI to book 2Q26 revenue of IDR 697bn (+15.8% YoY; +3.6% QoQ), reaching 24.8%  of our FY26F aggregate estimate (1Q26: 24.0%) helped by incremental contribution from the newly operational PIM sz5, which commenced operations in Mar-26. On the bottom line, MKPI is expected to experience net profit of IDR 303bn (+28.1% YoY; +0.7% QoQ), or 24.4% of our FY26F aggregate estimate (1Q26: 23.6%) on the back of earnings resilience supported by defensive recurring income portfolio. In 1Q26, growth was mainly driven by solid recurring revenue at 77.6% (1Q25: 77.2%), led by higher shopping mall revenue of IDR 346bn (+7.3% YoY; +6.4% QoQ) on recently commissioned PIM 5, as well as the hotel segment, which reached IDR 63bn (+19.7% YoY; -14.3% QoQ) thanks to higher occupancy. However, apartment revenue delivered softer performance at IDR 39bn (-0.4% YoY; -2.8% QoQ), while the office segment at IDR 72bn (-0.2% YoY; +0.3% QoQ). 1Q26 net profit rose to IDR 293bn (+17.6% YoY; -16.0% QoQ), with YoY NPM rising to 43.6% (4Q25: 46.1%; 1Q25: 39.3%), in line with our estimate at 23.6% (3Y avg: 21.3%).

Recurring income to remain the main earnings pillar going forward. We expect recurring rental income to remain MKPI’s primary earnings contributor (figure 3), accounting for 78.3% of total revenue in FY26F and gradually increasing to 79.5% in FY27F and 80.0% in FY28F. The shopping mall segment is projected to still be the largest FY26F recurring income driver, contributing 65.4% of total rental revenue, supported by the addition of Pondok Indah Mall 5 (PIM 5), which contributed ~6,000 sqm of NLA (+3.5% of total mall NLA). Meanwhile, the office (13.7%), hotel (13.3%), and apartment (7.6%) segments are expected to continue providing resilient recurring income, supported by improving occupancy rates, higher ASPs, and sustained demand for premium-location assets despite the continued challenging macroeconomic environment. Accordingly, we project FY26F revenue to reach IDR 2.8tn (+7.8% YoY), while net profit is estimated at IDR 1.2tn (+10.8% YoY).

BUY with IDR 32,000 TP driven by active execution across core developments. We continue to favor MKPI given management’s strong commitment to accelerating its flagship projects in 2026F, particularly Pondok Indah Townhouse and Pondok Indah City Walk, which should benefit from solid demand within its integrated township ecosystem. MKPI is also focused on improving connectivity through the planned bridge linking PIM 3 and PIM 5. Meanwhile, MKPI is evaluating further expansion opportunities, including brownfield initiatives at PIM 1 as well as prospective greenfield projects such as Pondok Indah Residence 2. Accordingly, we maintain our BUY rating with TP of IDR 32,000 (46.6% upside potential). Our valuation reflects MKPI’s defensive earnings profile, underpinned by the highest recurring income contribution in the sector at 76.9% (sector: 30.5%) and robust ROAA of 12.4% (sector: 4.1%), supporting our applied 50% discount to RNAV. In addition, MKPI’s net cash balance sheet position provides resilience against interest rate fluctuations. Key downside risks include softer-than-expected rental growth and lower occupancy rates.