Buana Lintas Lautan (BULL IJ)

1Q26: A Transition Quarter; Expect Further Recovery in 2Q26 Onwards

• 1Q26 net profit of US$14mn (+141.6% y-y) came in below estimate at ~12% of FY26F given Aframax settlement lag.
• GPM expanded sharply to 42% (vs 1Q25: 28.2%), driven by structural decline in port charges on longer-haul ME voyages.
• confirm 2Q26F TCE-to-date more than 2x 1Q26 levels; stock pullback offers re-entry ahead of earnings inflection. 

1Q26: Transition quarter, below as estimated as expected

BULL reported 1Q26 net profit of US$14mn (22.4% q-q; +141.6% y-y), accounting for ~12% of our FY26F below estimates as anticipated, with bulk of ME conflict-driven rate uplift expected only from 2Q26F given the 1-2 month Aframax settlement lag. Revenue of US$44mn (+11.8% y-y) was supported by the Gas Segment’s first full-quarter LNG contribution of US$4.5mn (vs 1Q25: US$0.3mn). The key surprise was margin: GPM expanded to 42% (vs 1Q25: 28.2%), driven by a 36% y-y decline in port charges, a structural outcome of BULL’s pivot to longer-haul ME voyages. We view this cost repricing as sustainable; our FY26F GPM assumption of ~49% may prove conservative.

2Q26F Outlook: Mgmt. confirms TCE more than 2x 1Q26

On earnings call, mgmt. affirmed that 2Q26F average TCE (Time Charter Equivalent) to date is more than double 1Q26 levels, implying Aframax rate currently tracking near or above US$100k/day (vs 1Q26: US$56k/ day). We estimate 2Q26F standalone net profit could approach US$30-40Mn with estimated GPM at nearly 52% (Exh. 2). The US-Iran conflict has materially elongated trades routes (Middle East-China: 19 days vs 50 days from the US), multiplying effective ton-miles per voyage. On fleet, mgmt. reiterates a doubling vs. end FY25, with previously planned vessels contributing from 3Q26F, though no new acquisition was announced on the call. We treat this as execution of an existing plan, not a new catalyst. FPSO/ FSRU tenders remain medium-term upside not in our base case.

Maintain Buy; sharp pullback from TP creates re-entry opportunity

We maintain Buy rating with an unchanged DCF-based TP of Rp550, making no changes to our estimates. Our FY26F net profit of US$115mn is underpinned by sustained geopolitical ton-mile expansion and full-year LNG vessel scaling. The stock has pulled back to levels where we view as mispricing an accelerating earnings trajectory, as confirmed by mgmt. 2Q26F guidance. Key risks: 1) anker rate normalization, 2) customer concentration on UAE company; and 3) FPSO/FSRU non-award.

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