Bumi Resource Minerals (BRMS)

A Steeper FY26F Recovery Path, But Near-Term Risks Largely Priced In

• 1H26 earnings missed, with net profit of US$12.9mn (-44.0% y-y), as lower production and constrained sales drove a 2Q26 loss.
• Mgmt’s FY26 target of 70-75koz appears challenging; we cut FY26–28F production to 60.9koz/81.6koz/158.2koz.
• Maintain Buy rating with lower TP of Rp700, reflecting weaker volume and ASPs, with CIL and underground ramp-up as catalysts.

1H26 earnings miss on lower production and sales

BRMS booked 1H26 revenue of US$95.8mn (-21.0% y-y), while net profit fell to US$12.9mn (-44.0% y-y), representing only 12.1%/13.2% of our FY26F/consensus estimates. The weak result was driven by a US$4.6mn net loss in 2Q26 (vs. profits in 1Q26: US$17.5mn; 2Q25: US$8.5mn), as revenue dropped to US$26.3mn (-62.0% q-q; -54.0% y-y). Gold production declined to 6.3koz (-57.4% q-q) as the River Reef pushback reduced mining activity and lowered head grade to 0.90g/t (vs. 1.42g/t in 1Q26). The quarter was further affected by slower gold sales due to temporary domestic market oversupply, while gold ASP softened to US$4,138/oz (-8.3% q-q).

CPM Recovery in 2H26, but FY26 Target Remains Challenging

Despite the weak quarter, we believe BRMS has passed its operational trough following the completion of the River Reef pushback in Jul26, allowing mining to resume with ore grades gradually normalizing through 2H26F. Sales visibility has also improved after CPM secured a gold offtake agreement with ANTM, which will purchase up to 120kg/month through Jun28, securing around 60–80% of normal monthly production. With 1H26 gold output at only 21.1koz, we believe the revised FY26F production guidance of 70–75koz appears challenging. However, the long-term investment case remains intact, supported by the 2,000tpd CIL expansion and 3.5–4.9g/t underground mining from 2H27F.

Maintain Buy with Lower TP of Rp700 on lower production and ASP

We maintain our Buy rating but lower our SOTP-based TP to Rp700 from Rp1,100, following cuts to our FY26F–28F forecasts. We reduce our gold production assumptions to 60.9koz/ 81.6koz/ 158.2koz and lower gold ASP assumptions to US$4,300/ US$4,300/ US$4,400 per oz, reflecting a slower production recovery after the weak 1H26 performance and lower gold price in 2Q26. This lowers our FY26F–28F net profit forecasts by 35.5%/ 26.7%/ 6.6%. While near-term earnings remain under pressure, we believe recent share price weakness has largely priced in these headwinds, with the 2,000tpd CIL expansion and underground mining continuing to underpin BRMS' medium-term growth outlook.

… Read More 20260804 BRMS