United Tractors: In-line core earnings with geothermal asset fully written off

Research evidence excerpt

United Tractors: In-line core earnings with geothermal asset fully written off

d gold in April

12/27E 3,793 4,334

2026. 2) In fact Q226 revenue grew sequentially with H126 at 50% of the consensus

12/28E 4,525 4,434

estimate, implying in line to a beat, given a seasonally stronger H2 than H1. The

EBITDA trend was the same, suggesting items below the operating line (one-offs) drove Igor Putra

the H126 NPAT miss. 3) Consensus may be failing to exclude the one-off items. Analyst

igor.putra@ubs.com

Our read on the fully written-off geothermal business +62-21-2554 7033

Positives:1) We believe the overhang of a potentially sizeable impairment expense was Timothy Handerson

removed after the geothermal impairment expenses of the past three quarters. 2) The Analyst

timothy.handerson@ubs.com

absence of geothermal, as the bulk of UNTR's renewable assets, may signal UNTR's more

+62-21-2554 5000

aggressive stance in achieving a higher-IRR but a lower-ESG project in the future.

Negative: The removal of the geothermal business may cast doubt on UNTR's future Tsubasa Sasaki

M&A capability and stance toward other existing low-earnings segments (eg, nickel, Analyst

tsubasa.sasaki@ubs.com

ACST, other renewables etc.).

+813-5208 6207

Valuation: Reiterate Buy and SOTP-based PT of Rp31,500

We like UNTR for its undemanding valuation and view its gold business as undervalued

amid strong gold prices, with a favourable production uptrend outlook. As we have

flagged, UNTR is a H226 proxy, given an improved operating environment and as

investors may begin to factor in a positive 2027 earnings growth outlook.

Highlights (Rpb) 12/23 12/24 12/25 12/26E 12/27E 12/28E 12/29E 12/30E

Revenues 128,583 134,427 131,301 103,269 108,290 120,033 126,633 136,134