With RATU's successful IPO, unlocking USD 746.6mn in value, RAJA's growth trajectory gains momentum, further enhanced by its two high-margin projects: gas compressor project (USD 10mn revenue, USD 8mn EBITDA by 2026) and fuel pipe initiative (USD 18.7mn revenue, USD 16.7mn EBITDA by 2027 with 75% stake). In addition, we expect a potential gas block acquisition to boost 2027F EBITDA to USD 143mn (+74.9% YoY). Further down the road, blue ammonia commercial production in 2030 will serve as another future catalyst. While high financing costs may weigh on 2026 earnings (-10% YoY), RAJA projects’ full utilization rates coming on stream in 2027 should drive EPS growth +216% YoY. Reiterate our BUY call with IDR 5,000 (SOTP-based) TP, offering 31.9% upside potential.

RATU’s IPO and Upcoming Projects as Growth Drivers. RATU’s successful IPO, with +691.3% surge in stock price since its listing on 8 January 2025, unlocked USD 746.6mn in value for RAJA, positioning the parent company for a re-rating. Aside from RATU’s public listing, RAJA is preparing to work on two new projects: 1) gas compressor project, with potential 2026F revenue (USD 10mn) and EBITDA (USD 8mn); 2) fuel pipe initiative that is projected to contribute USD 18.7mn of revenue and USD 16.7mn of EBITDA in 2027. Supported by both projects, along with RAJA’s gas sales volume increase to 18.4 mmbtu (+2% YoY) with gas spread of USD 2.3/mmbtu, RAJA is set to book 2026 revenue of USD 289mn (+13.2% YoY).

Exploring Potential Large Gas Block Acquisition. RAJA’s growth strategy stems from new project initiatives or gas block M&As. It would appear that a potential gas block target yielding 330 MMscfd of production could serve as LNG export booster and energy security enhancer. If materialized, we expect RAJA to book additional EBITDA of USD 53.9mn, boosting 2027F EBITDA to USD 143mn (+74.9% YoY) and expanding EBITDA margin to 44%. However, the acquisition would increase RAJA’s net gearing to 2.6x, exerting short-term pressure on earnings due to higher financing costs.

2027F EBITDA growth >50%; BUY with Higher TP of IDR 5,000. Driven by potential gas block acquisition and two high-margin projects, we forecast RAJA’s 2026 EBITDA to reach USD 81mn (+13% YoY), before growing to USD 143mn (+74.9% YoY) in 2027. While 2026F earnings may dip to USD 21mn (-10% YoY) due to higher financing charges, full project utilization rates are expected to drive 2027F net income to USD 67mn (+216% YoY). We reiterate our BUY call on RAJA with a new TP of IDR 5,000 (SOTP-based), reflecting 23.3x 2025F EV/EBITDA and 31.9% upside potential. Downside risks: project execution, high-interest costs, Indonesia’s ever-changing political landscape could adversely affect future projects of the company.