Indonesia Consumer: Dairy Sector Rides the Momentum
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Abstract
CITIC Securities Brokerage (Hong Kong) views Indonesia's dairy industry as being in recovery, with second-quarter 2026 daily sales at listed companies up 43% year on year. Growth is driven by new product launches, implementation of the free meal program, and capacity expansion. Consolidation is intensifying, exemplified by a potential transaction between Ultrajaya (ULTJ) and FrieslandCampina's Frisian Flag, while a supply gap persists in locally produced fresh milk. Yogurt displays the sector's strongest pricing power and is expected to grow 8% this year. Milk-powder costs are identified as the industry's biggest risk. Against this backdrop, Cimory stands out for sustained double-digit sales growth and EBIT growth, combined with a comparatively reasonable valuation, making it the preferred stock and top pick. The report's reasoning: new products and the free meal program drive demand; capacity expansion and industry consolidation improve the competitive landscape; and Cimory's consistent execution and valuation advantage underpin its status as first choice within Indonesian dairy.