Company Coverage
Central Omega Resources (DKFT IJ): Remains Resilient Despite Volume Cut
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Rp675
Rp820
+21.4%
Rp900
Analyst
Highlights
- Despite a 35% RKAB quota cut limiting 2026 sales to 1.93m wmt, higher nickel ore prices under the new HPM benchmark should support DKFT’s earnings, with net profit projected at Rp633b (+10.3% yoy).
- A potential Jul 26 RKAB revision could lift volumes. Meanwhile, Rp300b capex is allocated for IUP acquisitions and JO opportunities through MBR to support longer-term growth.
- Maintain BUY with a lower target price of Rp820.
Analysis
- 2026 swaps volume for price. Central Omega Resources (DKFT) delivered 2025 net profit of Rp573b (+56.6% yoy) on revenue of Rp1,576b (+7.9% yoy), with nickel ore sales up 16.6% yoy to 3.03m wmt and gross margin expanding 650bp to 49.7%. The 2026 RKAB quota was cut by around 35%, capping DKFT’s own sales target at 1.93m wmt. On the other hand, the new Harga Patokan Mineral (HPM) benchmark, which became mandatory on 15 April, and the limited RKAB quota across the nickel industry have driven the realised nickel ore prices sharply higher. 1Q26 revenue still rose 20.2% yoy to Rp506b and net profit jumped 72.9% yoy to Rp238b despite a 19.0% yoy drop in sales volume.
- Jul 26 RKAB revision is the swing factor. Management targets a return towards 4m tonnes for the Jul 26 revision. We forecast 2026 nickel ore sales at 1.93m wmt, in line with the 1.93m wmt RKAB base. Thus, we expect 2026 net profit of Rp633b (+10.3% yoy), slightly above management’s Rp629b target, before a step-up to Rp734b in 2027 as volumes are likely to improve.
- Rp300b earmarked for growth. Management has budgeted Rp300b of 2026 capex, weighted towards the mining business license (IUP) acquisition and joint-operation schemes in Sulawesi, and describes the budget as flexible given internal cash. The vehicle is Mega Buana Resources (MBR), a mining services entity holding a mining services business license (IUJP), which drew a Rp245b facility from Bank China Construction Bank Indonesia in 1Q26 and is in the final stages of due diligence with a joint operation partner.
Highlights
- Despite a 35% RKAB quota cut limiting 2026 sales to 1.93m wmt, higher nickel ore prices under the new HPM benchmark should support DKFT’s earnings, with net profit projected at Rp633b (+10.3% yoy).
- A potential Jul 26 RKAB revision could lift volumes. Meanwhile, Rp300b capex is allocated for IUP acquisitions and JO opportunities through MBR to support longer-term growth.
- Maintain BUY with a lower target price of Rp820.
Analysis
- 2026 swaps volume for price. Central Omega Resources (DKFT) delivered 2025 net profit of Rp573b (+56.6% yoy) on revenue of Rp1,576b (+7.9% yoy), with nickel ore sales up 16.6% yoy to 3.03m wmt and gross margin expanding 650bp to 49.7%. The 2026 RKAB quota was cut by around 35%, capping DKFT’s own sales target at 1.93m wmt. On the other hand, the new Harga Patokan Mineral (HPM) benchmark, which became mandatory on 15 April, and the limited RKAB quota across the nickel industry have driven the realised nickel ore prices sharply higher. 1Q26 revenue still rose 20.2% yoy to Rp506b and net profit jumped 72.9% yoy to Rp238b despite a 19.0% yoy drop in sales volume.
- Jul 26 RKAB revision is the swing factor. Management targets a return towards 4m tonnes for the Jul 26 revision. We forecast 2026 nickel ore sales at 1.93m wmt, in line with the 1.93m wmt RKAB base. Thus, we expect 2026 net profit of Rp633b (+10.3% yoy), slightly above management’s Rp629b target, before a step-up to Rp734b in 2027 as volumes are likely to improve.
- Rp300b earmarked for growth. Management has budgeted Rp300b of 2026 capex, weighted towards the mining business license (IUP) acquisition and joint-operation schemes in Sulawesi, and describes the budget as flexible given internal cash. The vehicle is Mega Buana Resources (MBR), a mining services entity holding a mining services business license (IUJP), which drew a Rp245b facility from Bank China Construction Bank Indonesia in 1Q26 and is in the final stages of due diligence with a joint operation partner.
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Rp675
Rp820
+21.4%
Rp900
Analyst
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