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Stellar revenue growth through project ramp-ups and expansions beyond BUMI and coal. DEWA will undergo strong top line with 2025-27F CAGR of 20% supported by: (1) +50% YoY higher in-house overburden volumes to 150–160 mbcm at KPC and Arutmin in 2026. This will include the management’s business transformation of eliminating third party’s outsourcing, cancelling PAMA’s 26 mbcm share in KPC’s contract; and (2) expansions beyond BUMI with total target of ~100 mbcm p.a. within the next three years. DEWA has secured a coal contract in South Kalimantan as well as a non-coal contract in South Sulawesi, and is currently exploring other coal contracts with major local coal producers. This ramp-ups, coupled with successful transformation toward in-house contractor (96% of aggregate capacity), will raise DEWA’s total volumes to 163 mbcm (+77.6% YoY) in 2026F, reaching 194 mbcm (+19.2% YoY) by 2027F.
IDR 5tn syndicated bank loan to strengthen expansion and transformation initiatives. To anticipate expansion other internal initiatives, DEWA on 30 December 2025 has secured IDR 5tn in bank loans with 2.68% IndONIA (equivalent to 6.75% effective rate) from PT Bank Central Asia Tbk and PT Bank Mandiri Tbk. Of the total proceeds, approximately IDR 2.14tn will be allocated for refinancing, IDR 1.61tn for working capital, and the remaining IDR 1.25tn for capital expenditure, primarily to procure additional heavy equipment to support higher volumes going forward. Hence, we estimate DEWA’s net gearing will rise to around 53.2% in 2026F (2025F: 45.3%), but remaining manageable as Debt to EBITDA stands at 168.2% (Figure 15).
BUY — IDR 800 TP: Earnings upgrades reinforce valuation upside. At the current cycle, we reiterate our BUY recommendation with higher target price of IDR 800 (from IDR 350 per share), reflecting an upward revision to our 2025–27F earnings CAGR from 70% to 94% (Figure 2). We raise our 2025F earnings forecast by 20.9% on better-than-expected cost manageability, one-off income, and lower effective tax rate. For 2026–27F, we adopt more bullish stance as we factor in higher-than-expected volumes following additional clients beyond BUMI and coal-related contracts. Further upside could stem from potential gold resource discoveries in Gayo, Aceh. Key risks to our call: slower volume ramp-ups, fleet arrival delays, and prolonged Gayo resource development.
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