Supply constraints & strong position in lucrative sector to drive growth. PT TIMAH Tbk (TINS), the world’s fifth-largest tin producer, contributing c.5% of global supplies with ~40% market share in Indonesia, is on course to regain its status as the second-largest global supplier. This will be accomplished through recent government initiatives to end domestic illegal tin mining, paving the way for production to rise 471% from 14k tonnes in 2025F to c.80k tonnes (TINS’ production back in 2019) in the medium-term (SSI 26F: 30kt). Despite this expected volume increased, tin prices are expected to remain strong due to supply disruptions in other major tin-producing countries like Myanmar and China. As global supply tightens coupled with resilient demand (Figure 26) from China, TINS stands to benefit from potential price hike (Figure 28), allowing for margin expansions and average earnings growth of 126% in 2026-27F.

 

New blood & regulatory reforms to jump start fundamental changes. The government's ongoing crackdown on illegal mining is key to upcoming fundamental operational improvements for TINS, particularly as it received transferred IDR 6–7tn worth of mining assets (tin blocks and six smelters) seized from illegal miners. In our view, to ensure successful asset transfers and eradication of illegal mining, the government has previously pre-empted a bold initiative back in May-25 by appointing Restu Widiyantoro, a former TNI officer, as president director to strengthen corporate governance. Hence, TINS aims to increase 2025F output to 30k tonnes (SSI: 13.3k tonnes), +114% YoY, marking strong recovery following weak 1H25 performance (Figure 19) on export halt.

 

Strong catalysts: structural changes, REE upside & attractive valuation.  We not only expect robust earnings growth, but also potential volume ramp-up on TINS' structural transformation from regulatory reforms and new management appointments (Figure 8). Thus, we initiate coverage on TINS with BUY and IDR 5,000 DCF-based TP, reflecting 2026F P/E of 14.8x (9% discount to the sector) and +74% upside potential. Further tailwinds stem from Rare Earth Elements (REE) development  given pilot project in Tanjung Ular, Bangka Barat. Additionally, our sensitivity analysis shows that for every 10% sales volume rise will cause 14% higher earnings and 36% hike in profitability for every 10% move in tin prices (Figure 33 – 34).