Vale Indonesia (INCO.JK): Good Set of 2Q26 Results; 2H26 Ramp-Up Remains Key Catalyst

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Vale Indonesia (INCO.JK): Good Set of 2Q26 Results; 2H26 Ramp-Up Remains Key Catalyst

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29 Jul 2026 14:11:42 ET │ 12 pages

Vale Indonesia (INCO.JK)

Good Set of 2Q26 Results; 2H26 Ramp-Up Remains Key Catalyst

CITI'S TAKE

Buy INCO reported a solid 2Q26 NPAT of US$60.8mn, up

+39%QoQ/+17.6xYoY, representing 45%/50% of Citi's/Street's FY26E, Price (29 Jul 26 16:00) Rp4,640

which we deemed as in-line considering the back-end-loaded 2H ramp- Target price Rp9,600

up. The stronger quarter was primarily driven by higher nickel ore sales Expected share price 106.9% (+139%QoQ/+37xYoY), +1%QoQ higher nickel-in-matte sales volume return

despite the lag (+19%QoQ production volume following Furnace-3 rebuild Expected dividend yield 0.8%

completion), alongside a +4%QoQ increase in ASP to US$14,765/t. Expected total return 107.7%

Despite continued inflationary pressure across key energy inputs,

Market Cap Rp48,904,600M including HSFO, diesel and coal, nickel-in-matte cash cost improved

US$2,708M 4%QoQ to US$10k/t, highlighting better operating leverage as throughput

normalized. While nickel ore sales remained below the company’s

approved RKAB pace amid ongoing infrastructure readiness at Bahodopi

and Pomalaa, we view these as temporary execution bottlenecks rather Ryan DavisAC

than structural constraints. With nickel-in-matte production normalizing, +62-21-2924-9218

additional RKAB allocation (subject to approval) post July's revision ryan1.davis@citi.com

window, and downstream projects continuing to progress, we believe

INCO’s medium-term growth trajectory remains intact. Maintain Buy.

2Q26 Operational Snippets — INCO reported 16.2kt of nickel-in-matte production

in 2Q26, up +19%QoQ following the completion of the Furnace-3 rebuild in June,