Multi-horizon acquisitions: 7 blocks in 3 years with 2 blocks in 4Q25-1H26F. RATU is positioning itself for long-term expansions in stages through multi-horizon acquisition strategy ahead. In the short term (1–3 years), RATU will prioritize non-operating investments, focusing on acquiring large, but still currently undisclosed PSCs without assuming operational responsibilities. During this phase, RATU will act as participating interest holder, leveraging its capital to secure strategic stakes in major PSCs while minimizing operational responsibilities. In the medium term (3–5 years), the intention is to transition toward operating investments, targeting PSCs with smaller production scales where RATU can begin building hands-on operating capabilities. Over the long term (6–10 years), RATU aims to expand its operating footprint into larger-scale Indonesian PSCs, prioritizing assets with IRR > 10% and supported by 80:20 debt-to-equity capital structure. In our latest discussion with management, we learned that RATU currently has seven acquisition plans in its pipeline over the next three years, with potential deal sizes ranging from USD 10mn to USD 150mn each. In 4Q25–1H26F, RATU expects to finalize acquisitions of two blocks, with both transactions targeted for completion in 1H26.

 

Synergies with PP’s Barito Group ecosystem as positive catalyst. RATU’s April 2025 AGM marked the entry of new management with strong ties to the Barito Group, including Merly as commissioners in BREN, Star Energy Geothermal, and Chandra Daya Investasi (CDIA), and Adrian Hartadi, formerly of CDIA and PT Chandra Asri Pacific (Figure 12). Other evidence of PP’s involvement is CDIA’s USD 9.4mn (c.IDR 158bn) direct investment in RATU, c.5% ownership. Moreover, cross-shareholding connections between PP (via PTRO) and Happy Hapsoro (owner of RATU & RAJA; he holds 34.17% of PTRO shares through PT Caraka Reksa Optima) create unique alignment of interests, paving the way for operational synergies (Figure 4). Given historical premium valuations with average PER of 411x commanded by PP-linked stocks: BREN, CUAN, PTRO, and CDIA, we expect similar market confidence to be directed towards RATU.

 

SPEC-BUY rating with TP of IDR 20,000 (+75% upside) on MSCI Inclusion. We initiate with Speculative BUY on RATU and TP of IDR 20,000 per share, supported by potentially robust multi-year earnings growth underpinned by the company’s upcoming block acquisitions. We also expect positive share-price momentum following RATU’s inclusion in MSCI Small Cap Index during August 2025 rebalancing. From August to November 2025, foreign investors accumulated net buy of IDR 208bn. RATU’s 0.2% weighting in the MSCI Indonesia Small Cap Index could attract passive inflows of up to USD 34mn, or approximately IDR 573bn (using a USD/IDR 16,850 exchange rate assumption), based on our estimate. Downsides to our call include: (1) lower-than-expected oil prices, and (2) delayed timelines for new block acquisitions.