Harum Energy (HRUM) Strengthens Nickel Business; Stock Recommendation Provided

PT Harum Energy Tbk (HRUM) is becoming increasingly aggressive in developing its nickel business, with a capital expenditure (capex) allocation of US$310 million set for 2026.

Sukarno Alatas, Senior Equity Research Analyst at Kiwoom Sekuritas Indonesia, stated that this move reflects the company’s strategic shift from coal towards battery-based mineral businesses. “HRUM’s strategy of allocating approximately US$310 million in capex for 2026, with a heavy focus on nickel, demonstrates a decisive transition from coal to the battery minerals sector,” he told Kontan on Friday (5/6/2026).

According to Alatas, with capex realisation remaining dominant in nickel through the first quarter of 2026, the company is positioning the commodity as its primary growth engine, while coal begins to serve as a supporting pillar. “An increase in nickel ore production to between 8 million and 10 million wmt could enhance revenue scale; however, profit contribution will depend heavily on operational efficiency and downstream integration,” he explained.

Nevertheless, he cautioned that such aggressive expansion could potentially squeeze margins in the short term due to high expansion costs, depreciation burdens, and potential increases in financing costs. Regarding risks, nickel price volatility and the dynamics of the global electric vehicle (EV) cycle remain key factors to monitor, alongside the successful execution of projects.

Furthermore, the target to reduce coal production to 2 million–3 million tonnes is expected to reduce cash flow stability in the short term. “The reduction in coal production also diminishes short-term cash flow stability, making profits more volatile,” he added.

Overall, Alatas views HRUM as a stock with high growth prospects, albeit accompanied by significant and cyclical risks. He has issued a ‘buy’ recommendation for HRUM shares with a price target of Rp 900 per share.