Bond Valuation
New issuances of Shelf-Registered Bond VII Phase II Year 2025 and Shelf-Registered Sukuk Mudharabah VI Phase II Year 2025. Currently, ADMF plans to issue new bond and sukuk tranches, with target proceeds of Rp1,200bn and Rp300bn, respectively. Both instruments will offer 1-yr, 3-yr, and 5-yr tenors, with the proceeds allocated for working capital. The book-building period is 16-29 Sep-2025, with offering coupon ranges of 5.50-6.10% for the 1-yr tenor and 5.65-6.60% for the 3-yr tenor, implying 28-88 bps and 35-130 bps of risk premiums above the current risk-free rate, respectively. Looking at the current yield curve and the fair risk premiums of ADMF bonds and the average AAA bonds, which we estimate at 50-58 bps, the new bond offerings will be attractive if they give coupon rates at 5.6% and 5.70% for the 1-yr and 3-yr tenors, respectively, or at the upper range of the offering coupon.
Key Credit Update:
New-booking is still under pressure, given that it was corrected by -19.2% YoY to Rp16.2tn as the Company still limited its lending disbursement amid volatility in the automotive market to get higher quality assets. However, ADMF s position in the finance industry has remained solid, as its new financing was still maintained among the top 3 in our coverage as per 1H25, after ASDF at Rp18.9tn in the second place. We expect ADMF s position to remain strong as one of the largest multi-finance players in Indonesia since it has strong relationships with major sole agents of motorcycles and cars throughout the country.
Solid 2Q25 net profit. Total revenues were corrected by -5.7% YoY to Rp4,717bn in 6M25, in line with our expectation, as it represented 50% of our FY25 forecast. The interest expenses only went down by -3.7% YoY to Rp625bn; hence, the net interest income decreased by -6.7% YoY to Rp3,182bn, aligned with our forecast (50% of FY25F). However, provision expenses have begun to ease, as it has declined by -19.9% YoY to Rp981bn. Thus, the net profit for 2Q25 has picked up by +16% QoQ, even though for 6M25, it still decreased by -21.4% YoY to Rp602bn. This was in line with our expectation, as the net profit for 6M25 represented 55% of our FY24 forecast.
Capital structure has remained the strongest among peers. ADMF s total equity at Rp11.4tn is the second-largest among finance companies under our coverage; hence, its capital structure is very strong, with a GR at 1.5x as of Jun-2025 compared to its peers range of 2.6 4.9x. With its strong capital, ADMF has ample room to support business expansion.
Solid financial flexibility with strong parent support. ADMF s ability to raise funds in bad times is unquestionable. Being a subsidiary of PT Bank Danamon Tbk. (subsidiary of MUFG Bank, Ltd.) has provided it with easy access to funding. Furthermore, ADMF is a listed company with AAA rating; hence, it can raise funds from the capital market, either from stocks or bonds. ADMF routinely raises funds through bond issuances, with an average of Rp4tn-5tn per year and a strong track record of meeting its interest payments and maturing bonds
Credit outlook: Stable
We have a stable credit view on ADMF, given its strong position in the market, solid capital structure, and sound financial flexibility, either for expansion or meeting its obligations. Key risks: 1) Tight competition amid a weak automotive market. 2) Adverse economy due to trade war issues, geopolitical tensions, and weakening commodity prices, leading to weak demand for automotive financing and rising NPF.
Bond Name
Obligasi Berkelanjutan VII Adira Finance Tahap II Tahun 2025 & Sukuk Mudharabah Berkelanjutan VI Adira Finance Tahap II Tahun 2025
Rating
idAAA & idAAA(sy) by Pefindo
Tenor & Coupon Indication
1 yr: 5.50% – 6.10%
3 yr: 5.65% – 6.60%
Issuance size target
Bonds: IDR 1.2 Trillion
Sukuk: IDR 300 Billion
Book Building Period
16 – 29 September 2025
Payment Date
16 Oct 2025 (Tentative)
<>
