1Q25 NAV fell to IDR 48.0 tn (-11.2% QoQ, +0.8% YoY). This drop was mainly due to unrealized losses in key portfolios stemming from MDKA, AADI, and ADRO, amid broader market pressures coupled with shifts in local government policies. MDKA’s revenue fell to USD 504 mn (-11.7% QoQ, -6.8% YoY), primarily attributed to lower copper and nickel ore volumes. Meanwhile, AADI, major contributor to SRTG’s dividend income, posted even weaker results, with revenue down to USD 1,164 mn (-11.4% YoY) and profit declining to USD 223 mn (-28.5% YoY). 1Q25 dividend income was relatively insignificant, as SRTG typically books most of its dividends mid-year. Nevertheless, we retain our full-year dividend forecast of IDR 1.7 tn, which should continue to support capital deployment. Despite these pressures, key portfolio assets present opportunities for recovery, with AADI poised to benefit from new coal royalty structure and MDKA progressing toward heap leach operations by late 2025—an initiative that could help offset recent mark-to-market losses.

Global economic slowdown and commodity plunge weigh on outlook. Since most of SRTG’s investments are in companies directly exposed to mining and natural resources, we remain cautious about ongoing pressure on commodity prices. Weak coal prices may have twofold impact: limiting dividend distributions from key holdings and slowing NAV recovery due to depressed share prices. Furthermore, global macroeconomic uncertainty—including muted GDP growth across key economies, elevated interest rates, and geopolitical instability—continues to weigh on sentiment and may affect investor confidence, potentially hampering near-term NAV recovery.

Projects to unlock future value, despite lower IDR 2,700 TP; Retain BUY. Despite declining NAV, we believe SRTG still offers strong growth potential, helped by MDKA’s upcoming projects to commence in 2H25. These projects, coupled with potential subsidiary IPOs, are expected to unlock value and contribute positively to SRTG’s NAV ahead. We retain BUY with lower target price of IDR 2,700, still implying 61% upside and reflecting 23% discount to SRTG’s NAV, despite our earnings downgrades (Figure 2). Risk to our call: Project delays of MDKA heap leach operations and IPO of subsidiaries.