United Tractors: Near term policy risk from export centralization; cut PO

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United Tractors: Near term policy risk from export centralization; cut PO

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United Tractors

Near term policy risk from export

centralization; cut PO

Reiterate Rating: BUY | PO: 28,000 IDR | Price: 22,500 IDR

Cut PO to IDR28,000 following industry de-rating 15 June 2026

United Tractors (UT) share price corrected 22% since May (vs JCI -13%), following MSCI Equity

rebalance, policy uncertainty (centralization of commodity export) and fiscal pressure

with sharp IDR depreciation. We revise up 2026-28E earnings by 13% on average given

Key ChangesIDR depreciation. However, we cut our PO to IDR28,000 (was IDR34,000), lower coal biz

27E target P/E to 5x (from 8x) and lower gold & nickel biz 27E target P/E to 10x (from (Rp) Previous Current

11x) due to peer group de-rating. We maintain a positive view on UT, seeing it to benefit Price Obj. 34,000 28,000

from higher coal price and energy security theme. In our view valuation is very attractive 2026E EPS 3,775 4,111

at 5x 27E P/E with ~10% dividend yield. Reiterate Buy rating. 2027E EPS 3,871 4,441

2028E EPS 4,069 4,696

2026E EBITDA (m) 28,565,890 30,099,458Continued policy uncertainties to weigh on sentiment

The centralization of commodity exports in Indonesia signals a more interventionist 2027E EBITDA (m) 26,808,418 29,330,528

policy backdrop, with mixed implications for coal and CPO producers. While tighter state 2028E EBITDA (m) 28,461,643 31,203,306

control may improve long-term coordination, near-term execution risks – around export

channels, pricing, and contract terms – could disrupt volumes and delay customer Jessie Lo >>

Research Analyst

spending. The policy has already triggered industry pushback, with implementation Merrill Lynch (Singapore)

details still lacking clarity.