Indonesia Daily Focus September 10, 2026

Upgrade to BUY (from SELL) for Bukit Asam, with a renewed blended TP (DCF and exit multiple) of IDR3,870 while raising our FY26F/27F earnings estimates by 94%/64%. The upgrade is driven primarily by greater confidence in the feasibility of a higher volume outlook, with FY26F production targeted at c.49.5mn tonnes (+5% YoY) against 19.45mn tonnes delivered in 1H26.

This requires a 2H26 production run rate of c.5mn tonnes per month, which management has already achieved in each of the last two reported months. Management also expects FY27 volumes to remain broadly similar (as base scenario), while FY26F net profit of above IDR5tr (+92% YoY) is seen as achievable if ASP and fuel costs remain around recent levels. Management also expects FY27 volumes to remain broadly similar (as base scenario), while FY26F net profit of above IDR5tr (+92% YoY) is seen as achievable if ASP and fuel costs remain around recent levels.

Valuation still leaves room for recovery. The final TP equal to 5.8x of FY26-27F EV/EBITDA – the valuation still underestimates the volume recovery. Key risks are weaker coal price, higher fuel costs, and downstream capex competing with dividends (FY27F’s yield 12%, DPR at c.75%, in our view). This report marks the transfer of PTBA coverage from Farras to Fauzan.