ADRO - Twin Catalysts in 2H: Operational Momentum and Potential Yield Spike

KBVS Update
Monday, 7 September 2026

AADI – Twin Catalysts in 2H: Operational Momentum and Potential Yield Spike
(Maintain BUY; TP at IDR12,600)

■ AADI’s 1H26 revenue rose +6.1% YoY to USD2.55 bn and net profit increased +10.5% YoY to USD473.8 mn, representing 46.7%/46.4% of our FY26F revenue/net profit estimates.

■ Gross margin expanded to 30.7% from 29.0% in 1H25 and operating margin improved to 26.2% from 25.4%, as higher ASP and a relatively stable cash cost more than offset a higher strip ratio.

■ In 2Q26, production/sales volume rose +17.5%/+22.3% QoQ to 17.9Mt/18.4Mt, while a +15.2% QoQ increase in ASP to USD75.6/t and lower strip ratio of 3.82x drove net profit up +131.4% QoQ to USD330.7 mn.

■ We expect stronger 2H26 operations, supported by favorable weather and normalizing mining activity. while Kestrel disposal could unlock ~USD888 mn in upfront proceeds, enhancing the company's cash & dividend flexibility.

■ Maintain BUY with TP of IDR12,800/share, implying 13.8% upside and 5.5x FY26F P/E.

Regards,
Adolf R B Setiadi– KBVS Research Team