MDKA - Mine the Future: BUY as the Growth Cycle Begins

KBVS Update
Wednesday, 23 July 2025

MDKA - Mine the Future: BUY as the Growth Cycle Begins 
(Maintain BUY; TP: IDR3,300/share)

■ 1Q25 Missed: Margin Pressure Deepens, Gold Resilient. MDKA’s 1Q25 results came in below expectations, posting a net loss of USD 4mn (vs. USD 11mn profit in 4Q24; USD 5mn loss in 1Q24), as margin compression weighed across key segments. Revenue declined to USD 502mn (-12.1% qoq, -7.2% yoy), missing estimates by 19.2% (KBVS) and 22.0% (cons.). The topline weakness was primarily driven by lower volumes, with nickel revenue down USD79 mn and copper down USD9 mn. Gold was the only bright spot, delivering strong growth and robust cash margins of USD 1,825/oz.

■ Scaling Gold Output, Advancing Copper, and Ramping Up Nickel. MDKA is entering a multi-year growth phase, driven by rising gold output from TB Gold and Pani (scaling to 300koz by 29F), upcoming copper production from TB Copper (by 27F), and near-term nickel momentum from AIM and HPAL ramp-ups, with gold revenue potentially reaching USD1.0bn and quarterly AIM contribution at USD30–50mn by 4Q25.

■ BUY with TP of IDR3,300 (+41% Upside). We revise our 25–27F forecasts to reflect margin gains from gold, improved nickel cost structure, and AIM ramp-up. While 25F earnings face pressure from investment phase, EBITDA is set to soar +131.4% in 26F on Pani’s full-year lift. We reiterate BUY with a higher TP of IDR3,300/share (from IDR3,200), based on DCF-SOTP led by TB Copper (56.2%) and Pani (18.8%)

Regards, 
Laurencia Hiemas - KBVS Research