External broker reports(aggregated public sources), BRI Danareksa Research

BRI Danareksa Research

External broker reports(aggregated public sources)

As a one-stop financial solution with the vision to be the most valuable securities house, BRI Danareksa Sekuritas (BRIDS) has maintained an excellent track record and extensive experience in the capital market as an underwriter, broker, and financial advisor for individual, institutional, foreign and domestic, private and government clients. Established in 1992, PT Danareksa Sekuritas is a securities company that performs activities as a securities broker, underwriter, or arranger and financial advisor.

Thematic (Sector/Industry)

<ul><li>We believe the supply surplus may be buffered by demand from batteries and SS; our FY24-25F Ni price assumptions at US$18k/17.5k/t</li><li>We see NPI demand remaining robust as global SS demand is expected to grow by 5%, implying 9.5% higher nickel demand in FY24F.</li><li>We resume coverage with an OW rating as we expect market balances to stabilize; our pecking order: NCKL&gt; MDKA&gt; MBMA&gt; ANTM&gt; INCO</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We believe the supply surplus may be buffered by demand from batteries and SS; our FY24-25F Ni price assumptions at US$18k/17.5k/tWe see NPI demand remaining robust as global SS demand is expected to grow by 5%, implying 9.5% higher nickel demand in FY24F.We resume coverage with an OW rating as we expect market balances to stabilize; our pecking order: NCKL&gt; MDKA&gt; MBMA&gt; ANTM&gt; INCOContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Metal Mining: Better earnings prospect from possible price bottoming (OVERWEIGHT)

<ul><li>The smooth elections bode well for stability, while the likelihood of a one-round Presidential election lowers market uncertainty.</li><li>In our view, potential positives from a Prabowo govt are the prospect of higher economic growth, aided fiscal expansion and the key programs.</li><li>We maintain our FY24-end JCI target of 7,830 and see themes to play ST sentiment on big caps, select metals and cons. discretionary proxies.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

The smooth elections bode well for stability, while the likelihood of a one-round Presidential election lowers market uncertainty.In our view, potential positives from a Prabowo govt are the prospect of higher economic growth, aided fiscal expansion and the key programs.We maintain our FY24-end JCI target of 7,830 and see themes to play ST sentiment on big caps, select metals and cons. discretionary proxies.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Possible Positive ST Sentiment from the Likelihood of a One-Round Presidential Election

<ul><li>While we expect LME nickel price to decline further in FY24F, we project NPI price will decouple and stabilize at US$14k/t.</li><li>Given view of stabilizing NPI prices and falling cost, we expect earnings outperformance for producers with volume growth.</li><li>We maintain sector OW and prefer nickel names with high volume growth improvements such as NCKL and MBMA.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

While we expect LME nickel price to decline further in FY24F, we project NPI price will decouple and stabilize at US$14k/t.Given view of stabilizing NPI prices and falling cost, we expect earnings outperformance for producers with volume growth.We maintain sector OW and prefer nickel names with high volume growth improvements such as NCKL and MBMA.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Nickel: Expect NPI Price to Decouple and Stabilize

<ul><li>Amid our expectation of stabilizing price and margin in 2H23, we see the sectors’ performance in 2H23 to be driven by volumes and thus, prefer producers with volume growth improvements namely MBMA, NCKL.</li><li>Expect nickel prices and producers’ margin to stabilize in 2H23.</li><li>Using China NPI price as a proxy, we noted that price have bottomed in USD13,182/ton in July 2023, following weakness since 2Q23 due to oversupply from Indonesia. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Amid our expectation of stabilizing price and margin in 2H23, we see the sectors’ performance in 2H23 to be driven by volumes and thus, prefer producers with volume growth improvements namely MBMA, NCKL.Expect nickel prices and producers’ margin to stabilize in 2H23.Using China NPI price as a proxy, we noted that price have bottomed in USD13,182/ton in July 2023, following weakness since 2Q23 due to oversupply from Indonesia. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Metal Mining - Expect nickel price and margins to stabilize, but volume will be key drivers in 2H23

Equity Bottom-Up

Merdeka Battery Materials / Equity Bottom-Up

<ul><li>FY24 result beat estimates as 4Q24 saw a turnaround to profitability of US$4.3mn from favorable commodity prices.</li><li>HNMI is temporarily shut down as it is loss making at current prices. The plant will operate subject to favorable pricing and contracts. </li><li>We lowered our FY25-27F earnings forecasts by -74%/-46%/-6% and TP to Rp490; reiterate Buy rating on upsides from growth projects.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

FY24 result beat estimates as 4Q24 saw a turnaround to profitability of US$4.3mn from favorable commodity prices.HNMI is temporarily shut down as it is loss making at current prices. The plant will operate subject to favorable pricing and contracts. We lowered our FY25-27F earnings forecasts by -74%/-46%/-6% and TP to Rp490; reiterate Buy rating on upsides from growth projects.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Merdeka Battery Materials (MBMA.IJ) Shutting Down HNMI for the Greater Good

Indonesia

PT Merdeka Battery Materials Tbk specializes in the mining and processing of strategic minerals, including nickel and cobalt, essential for electric vehicle (EV) batteries. The company operates through mining, manufacturing, and other segments, producing various nickel products and other metals. It was founded in 2019 and is headquartered in Jakarta Selatan, Indonesia.

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Merdeka Battery Materials (MBMA IJ)

Metal Mining: Better earnings prospect from possible price bottoming (OVERWEIGHT)

We believe the supply surplus may be buffered by demand from batteries and SS; our FY24-25F Ni price assumptions at US$18k/17.5k/t

BRI Danareksa Research

Possible Positive ST Sentiment from the Likelihood of a One-Round Presidential Election

We maintain our FY24-end JCI target of 7,830 and see themes to play ST sentiment on big caps, select metals and cons. discretionary proxies.

BRI Danareksa Research

Nickel: Expect NPI Price to Decouple and Stabilize

While we expect LME nickel price to decline further in FY24F, we project NPI price will decouple and stabilize at US$14k/t.

BRI Danareksa Research

Metal Mining - Expect nickel price and margins to stabilize, but volume will be key drivers in 2H23

Using China NPI price as a proxy, we noted that price have bottomed in USD13,182/ton in July 2023, following weakness since 2Q23 due to oversupply...

BRI Danareksa Research

Merdeka Battery Materials (MBMA.IJ) Shutting Down HNMI for the Greater Good

FY24 result beat estimates as 4Q24 saw a turnaround to profitability of US$4.3mn from favorable commodity prices. HNMI is temporarily shut down as...

BRI Danareksa Research

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