Cement (Neutral/Maintain) - Strong June Cement Consumption Keeps 1H26 in Line with Our Forecast

Domestic cement consumption rose to 5.5mn tons in June 2026 (+3.8% MoM, +13.1% YoY), with bulk at 1.7mn tons (+6.4% MoM, +19.9% YoY) and bag at 3.9mn tons (+2.8% MoM, +10.4% YoY), on a low base, drier weather and faster infrastructure work. For 1H26, consumption grew +10.2% YoY to 29.9mn tons, 47% of our FY26F and within the 43-47% run rate, driven by SPPG for bag and KDMP, Sekolah Rakyat, Sumatra reconstruction and 3mn housing for bulk.

SMGR group volume was 3.2mn tons in June (-0.1% MoM, +11.9% YoY), as regional sales of 0.6mn tons (+21.3% YoY) offset softer domestic sales of 2.5mn tons (+9.8% YoY), with domestic share at 45.9% (-2.4ppt MoM). For 1H26, SMGR rose +5.6% YoY to 18.3mn tons (46.8% of FY26F), with share stable at 47.4%. INTP rose to 1.6mn tons (+13% MoM, +15.2% YoY), lifting share to 29.2% (+2.4ppt MoM), its best month this year, on earlier bag price adjustments and its mortar JV. For 1H26, INTP rose +5% YoY to 8.4mn tons (43.4% of FY26F), though share fell to 28.1% (-1.4ppt YoY).

We maintain Neutral and unchanged target prices, as 1H26 consumption came in line. 3Q is seasonally strongest, but we stay cautious on higher rates, spending rationalization, a weak rupiah, elevated energy prices, and possible El Nino food inflation. Upside risks include: 1) higher than expected consumption, 2) stronger first-tier market share, and 3) higher selling prices.