MBMA’s net profit dropped by -61.8% QoQ to USD 13.78 million in 3Q24. This issue arises from lowered production and negative margins in the High-Grade Nickel Matte (HGNM).

Mining exploration has increased to achieve the demand for 9 million wmt limonite ore annually, driven by the presence of High-Pressure Acid Leach (HPAL) plants at PT ESG (“PT ESG New Energy Material”) and PT Meiming (“PT Meiming New Energy Material”) in 2025.

Opportunity to provide batteries for electric vehicles (EVs). MBMA has successfully produced 164,985 tonnes of acid and 225,036 tonnes of steam, while its two HPAL plants with GEM Co., Ltd. are set to optimally produce Mixed Hydroxide Precipitate (MHP) in 2025.

This advancement will allow MBMA to maintain its market share and revenue streams through enhanced downstream operational capabilities, acquisition of nickel processing facilities, product diversification, and expansive nickel ore resources.

We estimate MBMA’s fair value at Rp525 (implying 32.17x/2.2x expected P/E and P/BV). This positive outlook is driven by the expected additional sales of more than 25,000 tonnes of Mixed Hydroxide Precipitate (MHP), cost efficiency, and optimization of mining explorations. Therefore, we maintain our buy rating for MBMA with a potential upside of 77.46%.

By PHINTRACO SEKURITAS | Research
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