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MDKA - Earnings turnaround in 2024 from higher production

Benyamin Mikael 28 November 2023

KBVS Update
Tueday, 28 Nov 2023

MDKA - Earnings turnaround in 2024 from higher production

1. MDKA booked USD26.4 mn of net profit in 3Q23, a turnaround from losses in 2Q23. Despite the profit turnaround in 3Q23, MDKA still recorded a net loss of USD23.77 mn in 9M23. We view 9M23 performance is still in-line with street’s estimate of a net loss of USD7.05 mn for FY23, which implies to USD16.7 mn of profit in 4Q23.

2. Despite this positive development, we remain cautious over the 4Q23 challenging outlook, primarily attributable to nickel prices downtrend.

3. We forecast MDKA to book USD2.45 bn of revenue in 2024 (+44.9% yoy), primarily driven by higher sales volume of its mining products as well as the commencing production of the AIM project. We also anticipate MDKA’s earnings to turn positive at USD103 mn in ‘24F as profitability improves amid bigger revenue scale.

Reinitiate BUY with TP of IDR2,960 based on SOTP valuation, implying 9.9x ‘24x EV/EBITDA.

Regards, 
Benyamin Mikael - KBVS Research team

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