ITMG - 1H25 earnings missed on weak ASP

ITMG - 1H25 earnings missed on weak ASP Indo Tambangraya Megah (ITMG) posted a 2Q25 net profit of USD26 mn (-60.0% qoq, -61.4% yoy), bringing 1H25 to USD91 mn (-2.9% yoy), below our expectations (26%) and cons. (24.3%), mainly due to a lower ASP of USD74.5/ton (-7.7% qoq, -21.1% yoy) following the weakening coal benchmark price, particularly the ICI. This came despite higher production of 5.01 Mt (+14.1% yoy) and stable sales of 5.8 Mt (flat yoy), as weaker exports to China, Japan, and the Philippines offset gains in India and Bangladesh. Cost of revenue rose 2.3% qoq (-13.1% yoy) to USD351 mn, supported by lower mining costs, royalties, and coal purchases, while stripping ratio improved to 9.3 bcm/ton (-12.0% yoy). (Source: Company, KBVS Research) Comment : Strategically, ITMG acquired a 9.62% stake in Adhi Kartiko Pratama (NICE) for USD16 mn, marking its entry into nickel, but with earnings only at 26% of our FY25F, we see it prudent to revise our TP from IDR27,000/share lower to reflect the downside risk.