J.P. Morgan ASEAN Metals: The Investment Case for Nickel Ore Sellers Strengthens; Raise ANTM Target Price to IDR6,000/share
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J.P. Morgan remains constructive on the Indonesian nickel sector, emphasizing that the investment case for nickel ore sellers is strengthening. The bank raised its target price for Aneka Tambang (ANTM IJ) to IDR 6,000 per share (from IDR 5,670), implying approximately 49% upside, while trimming targets for Vale Indonesia (INCO IJ) and Merdeka Copper Gold (MDKA IJ).
The bullish outlook for ANTM is driven by tightening ore supply and favorable regulatory adjustments. As of March 31, only 240 million wet metric tons of nickel ore quotas were approved, falling short of the initial guidance of 260-270 million tons and significantly below Indonesia's estimated annual demand of 330-340 million tons. This supply deficit has pushed spot prices above $70 per wet ton.
Additionally, the government adjusted the domestic price reference (HPM) formula, increasing the correction factor by 13% and incorporating other mineral values. This revision benefits high-grade saprolite sellers like ANTM, which transact at market prices. Conversely, low-grade limonite sellers face margin compression as market prices fall below the new reference thresholds, triggering higher royalties.
ANTM's gold refining business provides further earnings visibility. Monthly gold sales recovered from 1 ton in 4Q25 to roughly 3 tons in 1Q26, with management expecting volumes to accelerate to 4-5 tons per month in 2H26. Based on current spot prices, ANTM's annualized monthly net profit could reach IDR 16 trillion, far exceeding consensus estimates of IDR 9 trillion. Meanwhile, INCO and MDKA face pressure from squeezing HPAL margins due to rising sulfur and ore costs, warranting their target reductions.