Analysts Nearly Double Price Forecast for Merdeka Battery on Profit Surge

JAKARTA, Investortrust.id — PT Merdeka Battery Materials Tbk (MBMA) is entering a phase of accelerated earnings growth as the Indonesian miner moves to monetize its downstream nickel assets and solidify its position in the global electric vehicle supply chain.

The strategic pivot has prompted BRI Danareksa Sekuritas to overhaul its valuation of the firm, nearly doubling its price target to Rp 940 (approximately $0.060) from a previous estimate of Rp 490 ($0.031). The revision anticipates a staggering jump in net profit to $176 million this year, up from an estimated $37 million in 2025.

This recalibration serves as a bellwether for Indonesia’s broader "downstream" industrial policy. By banning raw ore exports and forcing miners to build domestic refineries, the archipelago is attempting to transform from a mere commodity exporter into a specialized industrial hub. For MBMA, this transition is finally reaching the "pay-off" stage as refined products begin to dominate its balance sheet.

Efficiency and Pricing Power

Analysts Naura Reyhan Muclis and Andhika Audrey of BRI Danareksa Sekuritas noted that the improved outlook for 2026–2027 is underpinned by higher production volumes of high-grade nickel matte (HGNM) and a more resilient outlook for global nickel prices.

Recent discussions with MBMA management reveal that HGNM operations have resumed under a more lucrative contract structure. The company’s "payability"—the percentage of the London Metal Exchange (LME) price it actually receives—has climbed to 90%, up from 88%. This marginal increase in pricing power is expected to filter directly into the company’s bottom line.

On the upstream side, a new market-based pricing mechanism for limonite—a lower-grade nickel ore—took effect on January 1, 2026. Sold at roughly $20 per wet metric ton (wmt), the ore is expected to generate healthy margins of $10 to $11 per wmt.

Regulatory Hurdles and Operational Shifts

Despite the bullish outlook, the company faces bureaucratic complications. MBMA is currently awaiting the formal approval of its Work Plan and Budget (RKAB) from the Ministry of Energy and Mineral Resources. The RKAB is a mandatory annual regulatory filing in Indonesia that dictates a miner's production quotas; delays in these approvals have historically caused industry-wide bottlenecks.

Nevertheless, management remains confident it can secure the 25.3 million tons of ore—comprising roughly 8.8 million tons of saprolite and 16.5 million tons of limonite—required to feed its downstream refineries.

The first half of 2026 may see some seasonal headwinds as the company overhauls one or two of its Rotary Kiln Electric Furnace (RKEF) lines. However, analysts expect production to hit full stride in the latter half of the year as new projects, including PT ESG New Energy Material and PT Sulawesi Nickel Cobalt (SLNC), are consolidated into the group’s financial statements.

Capital Allocation and Valuation

To fund these expansions, MBMA—a subsidiary of PT Merdeka Gold Resources Tbk (MDKA)—plans to deploy roughly $400 million from internal cash reserves. This includes a $100 million injection into the ESG project and $300 million for SLNC.

Market data aligns with the optimistic brokerage sentiment. According to Investing.com’s quantitative models, MBMA’s "Fair Value" sits at Rp 868.23, suggesting a 15% upside from its current price of Rp 755. While the stock currently trades at a high P/E ratio of 153.4x, the market appears to be pricing in the dramatic earnings leap projected for the coming 24 months.

With an assumed nickel price of $17,500 per ton through 2026 and HGNM volumes targeted at 50,000 tons, MBMA is positioning itself as a primary beneficiary of the world’s appetite for battery grade materials.