Bukit Asam (PTBA IJ)

Volume-Driven Growth; Dividend Supports Return

• We raise our FY26/27F EPS est. by 53.9%/51.3%, mainly reflecting higher coal ASPs, while projecting sales of 48.1/51.0Mt.
• Kramasan expansion and mine-mouth sales support volume growth; mgmt’s cost initiatives to mitigate coal price normalization.
• Maintain Buy rating with a higher TP of Rp3,480, implying 6% price upside and 10% yield, despite limited scope for rerating.

FY26 volumes constrained, with stronger growth prospects in FY27

PTBA's FY26 coal deliveries remain constrained by delays in the Kramasan unloading terminal, although mgmt. is seeking alternative capacity from KAI to support shipments. Indicative FY26 volumes comprise 28Mt through Tarahan, 8Mt through Kertapati, 7Mt from mine-mouth and 4Mt through Kramasan. We forecast FY26F sales of 48.1Mt (vs. mgmt’s 49.5Mt). For FY27, PTBA plans to apply for a 53Mt RKAB, with Kramasan volume expected to rise to 9Mt. We forecast sales growth of 6% yoy in FY27/ 28F to 51.0/ 54.1Mt, supported by additional capacity.

Mine-mouth sales and cost initiatives could support margins

PTBA is expanding mine-mouth sales through additional PLN offtake, currently at around 250kt/ mo, implying 1.75Mt in FY26. Management indicates these sales are priced on a cost-plus basis, hence potentially supporting better margins. A cement producer is reportedly also taking additional volumes under a similar arrangement. We view management changes positively, particularly the stronger engagement with KAI and greater focus on operating costs. The reduction in high-cost trucking volumes could further support efficiency.

Higher coal ASP assumptions drive earnings upgrades

We raise our FY26/27F coal ASP forecasts by 27.4%/19.3%, reflecting our thermal coal price outlook. Combined with modest volume revisions, our new assumptions lift FY26/27F net profit forecasts by 53.9%/51.3% to Rp5.4/4.4tr. Nevertheless, we forecast earnings to decline by 18% yoy in FY27F as coal ASPs and margins normalize.

Dividends support returns despite limited rerating potential

We maintain our Buy rating with a higher DCF-based TP of Rp3,480 and an dividend yield of 10%. PTBA currently trades at 7.8x forward P/E, close to +1SD of 5-year mean. Elevated capex remains a constraint, with FY26 spending guided at Rp3.6tr and further major investments expected in FY27-28, mainly for the planned Mempawah power plant. We expect capex to normalize from FY29 in our DCF assumptions. Key risks are Kramasan delay, weaker coal prices, lower dividend payouts.

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