XA Update Report | PT Avia Avian Tbk. (AVIA) — Here Comes The Growth – Delivering Double Digit Growth Amid Challenges
By Leonardo Lijuwardi (Senior Analyst) & Gwenda Deanita (associate)
5-May-2026
AVIA started the year on a strong note, recording 1Q26 sales of IDR 2.3T (+16.8% YoY) and fulfilling 28.1% of our FY26 estimates. The architectural segment grew 15.7% YoY, supported by robust volume growth (+12.6% YoY & +5.7% QoQ), while the trading segment recorded sales of IDR 463B (+21.6% YoY &), bringing net income to IDR 503B in 1Q26 (+12.6% YoY). ASP increased by 2.7% YoY throughout 1Q26 and will continue two price hike of 7–10% in April and May. On margins, gross margin compressed modestly to 44.9%. Net margin declined to 21.3% (1Q25: 22.1% & 4Q25: 21.3%), broadly in line with the gross margin movement, as operating cost efficiency remained intact with total costs as a percentage of sales improving to 74.8% (1Q26) from 76.3% in FY 2025. Key downside risks include IDR depreciation, rising raw material prices and weak purchasing power. We keep “Buy” recommendation with TP of IDR 560 / share.
🔹 1Q26 Performance: Robust Volume Growth in Architectural
• Strong Growth in Architectural Despite Fewer Working Days. Architectural segment recorded a double-digit sales growth to IDR 1.89T (+15.7% YoY) with strong sales volume of 53,296 MT (+12.6% YoY & +5.7% QoQ), driven by robust execution across AVIA’s wholly-owned DCs and continued market share gains. Notably, this segment also benefited from a demand pull-forward in late March, as customers stocked up ahead of anticipated price increases amid rising oil prices and geopolitical tensions. Despite a fewer working day count due to the Lebaran holiday, architectural segment continued to outperform the broader retail market.
• Trading goods remains robust with stable margin. The trading goods segment recorded sales of IDR 463B in 1Q26 (1Q25: IDR 381B | Quarterly basis: +21.5% YoY; -10.1% QoQ, 4Q25: IDR 515B), contributing 20% of total sales. GPM remains stable at 18.9%.
• ASP started to increase in 1Q26 to offset the rising raw material price. We see that AVIA has increased its ASP during the quarter by 2.7% YoY. Management noted that they implemented 2 price hike during April and May, each 7-10%, primarily driven by surging oil-linked input costs (solvents, plastic packaging and resins) and compounded by a weakening IDR. However, demand remained resilient in April supported by a low base effect, as April-25 had fewer working days due to the Lebaran holiday. Despite price increase, architectural volume still grew at a double-digit rate, reflecting a confidence in AVIA’s products.
🔹 Strong Inventory & Cost Management to Sustains Margin in The Next Quarter
• Sufficient inventory to cover the next two months and has secured adequate supply. While market prices for key oil-related raw materials have risen sharply, the actual cost impact is cushioned by contract lag effects and existing inventory. Together with pricing adjustments implemented in April and May, this should keep the gap between costs and ASP manageable, allowing margins to remain relatively stable. AVIA also reflects a prudent cost management, resulting in a stable cost structure.
🔹 Well Positioned to Capture The Shift in Customer Preferences
• Winning the wallet shift. AVIA is well-positioned to capture consumers shift toward more affordable options. Its product portfolio enables seamless downtrading within the same brand, preserving customer loyalty while sustaining volumes. This is further reinforced by strong brand trust and distribution reach, allowing AVIA to capture market share from smaller players that are more vulnerable to demand softness. As pricing pressures persist, the downtrading trend is likely to continue, positioning AVIA as a relative winner in a challenging consumer environment.
🔹 Recommendation “Buy” at Level IDR 560 / Share (Potential Upside +42.9%)
• NHKSI Research maintain its recommendation “Buy” rating for AVIA with the unchanged target price of IDR 560 / Share, which implies an 18.1x Forward-PE 2026 (Average Last 3 Years). Despite the economic uncertainty, particularly the contraction in purchasing power, along with the still sluggish and weak building materials sector, AVIA’s performance is resilient, as shown by the increase in market share and sales volume, controlled and efficient cost structure, strong balance sheet and distribution network expansion, providing a strong foundation for better profitability. AVIA’s valuation is still inexpensive considering its position as a market leader in Indonesia’s paint and coatings industry and is discounted compared to other global players in similar industries.
• Downside risks include IDR depreciation and ongoing geopolitical tension, which started to elevate the prices of some raw materials; the still-weak purchasing power; the competitiveness in the wall-paint segment; and the ASP increase which could affecting demand.
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NH Korindo Sekuritas Indonesia berizin dan diawasi Otoritas Jasa Keuangan (OJK). Untuk informasi lebih lanjut, anda dapat menghubuni CS kami via email CSO@nhsec.co.id
