ITMG - Less Coal Today, Longer Mine Life Tomorrow

KBVS Update
Wednesday, 11 March 2026

ITMG - Less Coal Today, Longer Mine Life Tomorrow — But Not Enough to Stay BUY
(HOLD from BUY; TP: IDR25,000/share)

■ FY25 In Line With Consensus but Below KBVS Estimates. ITMG booked FY25 net profit of USD191 mn (-49% yoy), in line with consensus but only 54.6% of our estimates due to ASP compression to USD76/ton (-20% yoy). 4Q25 showed recovery with gross margin rebounding to 30% and net profit rising 52% qoq to USD60 mn on stronger 6.8 Mt sales volume.

■ FY26 Outlook Constrained by RKAB, Higher Tax, and DMO Risk. We assume FY26F production of 12.7 Mt with ~3.8 Mt third-party sourcing. Combined with higher ETR and potential DMO expansion, we forecast FY26F revenue of USD1,318 mn (-30% yoy) and net profit stabilizing at ~USD152-156 mn through FY26-28F.

■ Downgrade to HOLD as Structural Headwinds Emerge; Valuation Supported by Cash. We downgrade ITMG from BUY to HOLD and cut TP by 7% to IDR25,000 after revising FY26 outlook on three pressures: a ~40% RKAB production cut to 12.7 Mt (vs ~22 Mt prior), PP 18/2025 lifting ETR to 32.2%, and potential DMO hike to 30% at PLN-capped USD70/ton. Our SOTP-DCF TP (to reserve depletion 2044) implies FY26F multiples of 10x PE and 2.7x EV/EBITDA, with ITMG’s USD808 mn net cash providing a valuation floor despite weaker earnings visibility.

Regards, 
Laurencia Hiemas - KBVS Research