Trimegah Bangun Persada (NCKL IJ)
Mining Segment Leads Growth; KPS Ramp-Up to Drive 2H26F Earnings
- 2Q26 earnings were in line with revenue of +47.7% y-y on stronger mining volumes, despite cost pressures.
- Raise FY26/27F net profit estimates by 2.7%/8.0%, mainly on higher saprolite ASP and NPI volumes from KPS Phase 3.
- Maintain Buy at Rp1,300 TP, with KPS ramp-up and HPAL normalization supporting 2H26F earnings.
2Q26 Growth Led by Mining, Processing Still Under Pressure
NCKL delivered a solid 2Q26, with revenue of Rp10.3tr (+51.1% q-q; +47.7% y-y) and net profit of Rp3.1tr (+14.4% q-q; +26.9% y-y), bringing 1H26 revenue/net profit to Rp17.1tr/Rp5.8tr respectively. This represents 53%/54% of our FY26F estimates and 48%/53% of consensus, keeping earnings broadly in line with expectations. The quarterly improvements were driven by higher nickel ore (+101.0% q-q; +142.2% y-y) supported by stronger ore sales volumes and ASPs, alongside higher RKEF sales volumes (+16.6% q-q/+18.7% y-y) following KPS’ ramp-up. However, margins remained pressured by higher royalty, diesel and processing costs, particularly sulfur.
KPS Ramp-Up and HPAL Normalization to Support 2H26F Earnings
Looking ahead, we see 2H26 earnings to be supported by KPS Phase 3 ramp-up toward ~150kt contained Ni of FY26F output, alongside normalization of HPAL volumes. Mgmt. maintained its combined HPL/ONC sales target at ~120kt contained Ni, with 1-2 vessels of 2Q26 shipments carried over into 3Q26F, providing potential volume uplift in the quarter. The higher HPM formula should provide a full-quarter uplift to mining margins from 3Q26, although we expect higher sulfur costs to increasingly flow through as inventory buffers deplete. Hence, we view 2H26F as a volume and associate-earnings recovery story, rather than broad-based margin expansion.
Maintain Buy Rating with Unchanged TP of Rp1,300.
We raise our FY26F/27F revenue estimates by 5.6%/6.3% to Rp34.1tr/Rp36.5tr and net profit by 2.7%/8.0% to Rp11.0tr/Rp12.3tr, mainly reflecting higher saprolite ASP and NPI volumes, partly offset by lower nickel/NPI prices and higher costs. For FY28F, revenue rises 5.2%, while net profit remains broadly unchanged at Rp13.0tr. We retain our Buy rating and unchanged Rp1,300 TP based on our SOTP valuation, implying 2026F P/E of 7.4x (mean std.dev 3 years). However, we believe the earnings upside is insufficient to change our SOTP valuation, given project execution risks, prolonged sulfur cost pressures, and RKAB uncertainty.
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