ADRO - 9M24 outperforming, awaiting AAI developments

ADRO - 9M24 outperforming, awaiting AAI developments Adaro Energy Indonesia (ADRO) reported a 3Q24 net profit of USD404 mn (-0.1% qoq, +17.1% yoy), totaling USD1.2 bn for 9M24 (-3% yoy), with coal mining and trading making up 70.3% of PBT. This exceeded expectations (KBVS: 103.86%; Cons: 96.02%). Despite these results, we maintain our last target price of IDR3,200, advising against portfolio additions at this time. After the AAI spin-off announcement, ADRO’s share price saw a YTD high but has since declined by 4.46% as some investors took profits, aligning with a potential dividend yield of 32.6-35%. We await further insights from the 3Q24 earnings call on the AAI divestment’s impact, especially as ADRO retains 173 mn tons of metallurgical coal assets, poised to generate substantial cash flow by 2030 from its renewable energy ventures. (Source : Company, KBVS Research)