- \n
- ResInvest deal validates MBJ at infrastructure multiple. <\/strong>On 11 May 2026, the Group secured a binding term sheet with Resource Invest AG to invest in MBJ at a valuation of US$1.5bn. At Geo\u2019s 71.3% pre-deal effective interest, MBJ alone is attributable at US$1,069.5mn, exceeding the entire current market capitalisation and providing a third-party market-validated benchmark for our methodology refinement.<\/li>\n<\/ul>\n\n\n\n
\n\n\n\n1Q26 Reflects Expected Back-Loaded Production; Coal Price Recovery On Track<\/strong><\/h2>\n\n\n\n
1Q26 revenue of US$95.8mn, fell 42% YoY, and net profit of US$4.0mn align with the back-loaded production profile pending MBJ commissioning. ICI4 has rebounded sharply from a 1Q26 average of US$52.38\/t to US$66.00\/t (10 May 2026), with M42 Futures forecasting ~US$65\/t for the rest of 2026 and 2027, and McCloskey projecting US$67-68\/t over the 15-year outlook. Our model retains a conservative ASP path below these levels.<\/p>\n\n\n\n
\u00a0<\/div>\n\n\n\nCoking Coal Optionality Flagged But Not In Base Case<\/strong><\/h2>\n\n\n\n
The 1 April 2026 binding term sheet to acquire a majority stake in PT Harfa Taruna Mandiri positions Geo for entry into the premium hard coking coal market, commanding 3-4x thermal coal pricing. We view this as identified upside pending due diligence completion and definitive agreement.<\/p>\n\n\n\n
\u00a0<\/div>\n\n\n\nValuation & Action<\/h2>\n\n\n\n
We raise our target price to S$1.27<\/strong> (from S$1.02), maintaining our OUTPERFORM<\/strong> rating on Geo Energy. We maintain a DCF framework with two refinements: MBJ is removed from the operating DCF and marked at the ResInvest deal value (US$1.5bn \u00d7 Geo\u2019s pre-deal 71.3% effective interest) and marine logistics was added into the DCF at Geo\u2019s 51% economic interest.<\/p>\n\n\n\n
\u00a0<\/div>\n\n\n\nRisks<\/h2>\n\n\n\n
Key risks include (i) global coal price volatility undermining the ASP recovery thesis; (ii) execution risk on the ResInvest definitive agreement and potential delays beyond 3Q26 \/ 1Q27; (iii) MBJ commissioning timeline slippage beyond July 2026; (iv) the new 1%-5% Indonesian coal export duty effective Jan 2026 and any further DMO \/ HPB regime changes and (v) due diligence outcomes on the coking coal acquisition.<\/p>\n\n\n\n
\u00a0<\/div>\n\n\n\n
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