Daily Brief Indonesia: Indo Tambangraya Megah and more

• Impending 10% Share Buyback: A significant near-term catalyst is the planned 10% share buyback, strongly supported by a robust balance sheet where cash reserves constitute approximately 67% of the company’s market capitalization.
• Superior Shareholder Returns vs. Cyclical Headwinds: ITMG has a strong track record of returning value to shareholders via high dividend yields. However, the company’s financial performance is currently impacted by a cyclical downturn in coal prices, which has compressed margins and reduced profitability from the peak levels of 2022.
• Strategic Transition Amidst ESG Pressure: As a pure-play coal miner, ITMG faces significant long-term risks from the global energy transition. The company has initiated a transformation by investing in renewable energy, but its earnings remain overwhelmingly dependent on the thermal coal market.

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