Daily Brief Indonesia: Merdeka Gold Resources, Barito Renewables Energy, Chandra Asri Petrochemical, DCI Indonesia Tbk PT and more

• Largest IPO 2025: EMAS IJ raised ~USD 281m, 4.6× oversubscribed, spun off from MDKA to fund Sulawesi’s Pani Gold Project.
• Asset Scale: Pani holds 1.9 Moz reserves, 7 Moz resources; production to ramp from 145 koz (2026) to ~500 koz (2032).
• Valuation & Risks: IPO EV ~USD 3.2 bn; ~8–9× EV/EBITDA during 2026–29 heap leach, falling to ~2–3× at 2032 steady-state; execution, funding risks remain.

• Market Leader with Strong Growth Pipeline: Barito Renewables (BREN) is Indonesia’s largest geothermal energy producer with 885 MW of installed capacity, positioning it as a key beneficiary of the country’s push towards renewable energy. The company has a clear expansion strategy to add 112 MW of capacity through new units and retrofitting projects, aiming for a total capacity of 1,300 MW by 2028.
• Exceptional Profitability and Stable Cash Flows: The company exhibits very high and stable EBITDA margins, consistently above 84%, driven by operational excellence with capacity factors exceeding 90% and long-term power purchase agreements that provide revenue stability.
• Extreme Valuation Presents Significant Risk: Despite strong fundamentals, BREN trades at exceptionally high valuation multiples (e.g., EV/EBITDA of ~145x, P/B of ~149x) that are significantly above its closest domestic peer, Pertamina Geothermal Energy (PGEO), and global industry averages. This premium suggests market expectations may be disconnected from fundamentals, posing a considerable risk to investors.

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• Dominant Market Position with Integrated Operations: Chandra Asri is Indonesia’s largest and sole integrated petrochemical producer, operating the country’s only naphtha cracker. This provides a significant competitive advantage through economies of scale and control over the value chain, from upstream olefins to downstream polyolefins and other chemical products.
• Strategic Expansion to Capture Domestic Growth: The company is embarking on a major expansion with its second petrochemical complex (CAP2), which is expected to nearly double its production capacity. This expansion is strategically timed to capitalize on Indonesia’s significant petrochemical deficit and the government’s push for industrial self-sufficiency, aiming to reduce reliance on imports.
• Challenging Financial Performance Amidst Industry Headwinds: Despite its strong market position, Chandra Asri has faced financial headwinds, reflected in negative net income and operating cash flow in recent years. The broader Southeast Asian petrochemical industry is grappling with oversupply, particularly from China and the Middle East, and margin pressures due to volatile feedstock prices.

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• Market Leader in a High-Growth Sector: DCI Indonesia is the leading data center provider in Indonesia with a significant market share of approximately 32%, positioning it as a prime beneficiary of the country’s rapid digitalization and projected tripling of data center capacity by 2027.
• Exceptional Financial Performance: The company has demonstrated robust financial growth, with a revenue CAGR of 28.3% (2018-23) and superior profitability, boasting an EBITDA margin exceeding 60%, which outperforms global peers.
• Premium Valuation and High Expectations: While operational performance is strong, the stock trades at a significant premium with a P/E ratio well over 100x. This valuation reflects high market expectations for sustained, aggressive growth, posing a risk if execution falters or market dynamics shift.

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