In his June 2 note, Chew notes that the Indonesian commodities sector has been under pressure since the Indonesian government’s proposed centralisation of commodity export controls.
However, thus far, there are no details on implementation, but centralisation or supervision could lead to incremental fees and tighter currency controls, points out Chew.
Even so, Chew is keeping his "buy" call on the stock and target price of 75 cents.
He is keeping his forecast that the company will produce a total of between 11.5 million and 12.5 million metric tonnes for this year, versus 12.5 million metric tonnes in FY2025.
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At the same time, coal prices have also increased over FY2025 levels, with 2QFY2026 prices at between 30 to 40% higher y-o-y.
Of equal significance is the completion of a 92-km road connecting the mines with a jetty which will not only help Geo Energy be more efficient moving coal for export, the road can also be leased to other miners.
"The trifecta boost in earnings from the higher coal prices, jump in coal production, and infrastructure income is on track," he says.
Geo Energy Resources shares as at 11.24 am changed hands at 47 cents, down 1.06% for the day.
