AADI - Post-IPO Powerhouse Igniting New Horizons

KBVS Update
Monday, 23 December 2024

AADI - Post-IPO Powerhouse Igniting New Horizons
(Initiate with a BUY; TP: IDR 14,175)

Strong Growth and Resillent Marginsn PT Adaro Andalan Indonesia Tbk (AADI) is set for gowth, with revenue is projected to hit USD6.6 bn in 2026F (+9.9% yoy), driven by steady coal prices, increased production, and contributions from the newly operational PLTU KPI. EBITDA is forecasted at USD1.8 bn (+11% yoy) in 2025F, with net profit reaching USD1.2 bn (+14.6% yoy), highlighting solid margins and growth momentum.

Robust Liquidity and Dividend Potential Operating seven coal assets with reserves of 917.4 mn tons and resources of 4.1 bn tons, AADI secures a mine life of up to 81 years. Despite capex peaking at ~USD400 mn in 2024F-2025F, cash is forecasted to grow from USD3.6 bn in 2024F to USD 4.8 bn in 2026F, with free cash flow increasing from USD432 mn in 2023 to USD1.7 bn in 2026F. Positioned as a dividend play, DPS is set to reach IDR1,100 by 2026F with a stable 43.5% DPR, reflecting ADRO’s ~50% DPR and ~20% yield in the past 2 years.

Unlocking Future Growth Valued at a 5.53x PE multiple, AADI’s fair value is estimated at IDR14,175 /sh, leveraging its earnings potential is backed by a competitive cost structure, strong liquidity, and operational resilience. With improving margins, growing dividends, and strategic expansions, AADI offers sustainable growth and attractive value for investors.

Regards,
Laurencia Hiemas - KBVS Research

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