Merdeka Battery Materials (MBMA.JK) 20Q2 Operational Result - Margin Trends Diverged Across the Value Chain

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Merdeka Battery Materials (MBMA.JK) 20Q2 Operational Result - Margin Trends Diverged Across the Value Chain

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02 Aug 2026 18:15:00 ET │ 12 pages

Merdeka Battery Materials (MBMA.JK)

2Q26 Operational Result - Margin Trends Diverged Across the Value

Chain

CITI'S TAKE Buy

Price (31 Jul 26 16:00) Rp505MBMA delivered decent 2Q26 operational result, although earnings

Target price Rp1,000 quality across business lines diverged following implementation of

Indonesia’s new nickel ore HPM pricing. The standout remained SCM Expected share price 98.0%

mining, where the revised pricing formula drove a step-change in ore return

profitability. Saprolite cash margin expanded to US$26.7/wmt from just Expected dividend yield 0.0%

US$4.0/wmt last quarter despite higher royalty and fuel costs, while Expected total return 98.0%

limonite margin also edged higher to US$10.4/wmt. Conversely, the Market Cap Rp54,537,687M

higher ore transfer price compressed downstream economics, with NPI US$3,031M

cash margin halving qoq to US$1,981/tNi and HGNM slipping into

negative margin. Operationally, execution remained robust as mining

volumes continued to ramp, ESG resumed production following the

tailings disruption, and SLNC advanced toward first MHP production in Ryan DavisAC

2H26. Looking into 2H26, we expect attention to shift toward SLNC +62-21-2924-9218

commissioning, ESG reaching nameplate capacity by August, and the ryan1.davis@citi.com

group’s ability to optimize downstream costs with elevated sulphur price

and the new HPM regime. Maintain Buy.

Ore Mining : Upstream economics stepped into a different league – SCM continued

to deliver another strong quarter as production ramp-up and the revised nickel ore

pricing framework materially improved profitability. Saprolite production increased