Kiwoom Research | Industry Update - 30 September 2026 Coal Market Tightening Supports Earnings Growth, Led by Coal Production Key Takeaways - Coal Market Tightens : 2026 coal demand was revised up 1.2% y/y to 8.94 Bt, while global supply is expected to decline 0.7%, supported by high gas/LNG prices, El Niño, cooling demand, and lower hydropower generation. - China & India Support Demand : China remains the largest coal market, accounting for >50% of global consumption, while India’s coal imports for power generation rose 85.6% y/y in August, with ~80% sourced from Indonesia. - Indonesia Supply Discipline : Lower RKAB allocations and production could tighten seaborne coal supply in Asia and provide support for coal prices. - Coal Production Leads Earnings : Revenue reached Rp252.2tn (+10% y/y; +7% q/q), while profit rose 39% y/y and 28% q/q to Rp34.6tn, lifting NPM to 14% from 11%. - Coal Distribution Remains Solid : Revenue increased 6% y/y to Rp16.9tn, while profit rose 18% y/y and 51% q/q to Rp1.4tn, raising NPM to 8%. - Services Remain a Drag : Revenue grew 9% y/y to Rp30.0tn, but the segment remained loss-making with a Rp476bn loss. A recovery in profitability remains key to strengthening future earnings. Outlook We view the coal outlook as constructive, supported by tighter supply-demand conditions, particularly potential production cuts in Indonesia and stronger electricity demand from China and India. Earnings momentum remains primarily driven by the Coal Production segment, while a recovery in Oil, Gas & Coal Equipment & Services profitability will be an important catalyst for future earnings growth. Key risks include weaker coal prices, slower Chinese demand, higher global supply, and normalization in power demand and hydropower generation. Sukarno Alatas Equity Research KIWOOM SEKURITAS INDONESIA