MDKA recorded FY24 revenue of US$2.24 billion, representing a 31.2% YoY increase compared to US$1.71 billion in FY23. This growth was primarily driven by the nickel segment, which contributed 82.4% of total revenue through PT Merdeka Battery Materials Tbk (MBMA), with revenue rising 38.9% YoY to US$1.84 billion (vs. FY23: US$1.33 billion).

Operational efficiency at the three RKEF smelters (CSID, BSID, and ZHN) successfully reduced the cash cost of Nickel Pig Iron (NPI) by 6.86% QoQ to US$10,037/ton in 4Q24 (vs. 3Q24: US$10,776/ton).

Gold production in 4Q24 reached 35.82 koz, (+17.37% QoQ; +21.41% YoY), in line with an increase in the average selling price (ASP) of 11.06% QoQ to US$2,672/oz (vs. 3Q24: US$2,406/oz).

Looking ahead, gold production is projected to continue increasing through the Pani Gold Project, which is targeted to reach peak annual production of 500,000 ounces.

Management Guidance for FY25 : the gold segment is projected to produce 100,000–110,000 oz per year with a competitive cash cost of US$1,100–1,200/oz, copper production is targeted at 11,000–13,000 tons, with a significant expected reduction in cash cost to US$1.60/lb. Meanwhile, the nickel segment will maximise margins by producing Nickel Pig Iron (NPI), targeting 80,000–87,000 tons per year with a controlled cash cost below US$11,000/ton.

Using a Sum-of-the-Parts (SOTP) valuation method, with a required rate of return of 9.20% and a terminal growth rate of 1.46%, we estimate MDKA’s fair value to be at Rp2,510 (implying 10.03x/2.66x expected EV/EBITDA and P/BV).