Fig. 1: ALII – segment and margin quarterly breakdown

Fig. 2: ALII - Peers comparison

The sequence of ALII’s services is as follows: 

Fig. 4: ALII - Business model

• From mine to river barge (180ft fleet)

The company utilizes 180-feet barges with an average annual capacity of 1,800 MT to transport coal from the Belayan river to the Intermediate Stockpile on the Mahakam river. As of FY24, the company owns 49 units and charters 15 additional barges.

• From river barge to ISP

The ISP owned by a subsidiary, MCT, is located on the side of the Mahakam River and is used to transfer the coal transported from river barges to sea barges. ISP is equipped with infrastructure and heavy equipment, such as excavators, grab cranes, dozers, wheel loaders, and conveyor belt.

The company currently has one unit and will expand to two units by FY26, namely ISP in Kota Bangun (KB ISP). Apart from meeting the coal volume requirement, KB ISP is located closer to its mine site compared with MCT ISP, which will improve efficiency, total fuel cost and the number of trips required, reducing the trip to 4 days (compared to MCT ISP), according to management.

• From ISP to ocean barge (300ft fleet)

The company operates 300-feet sea barges with an average capacity of 7,500 MT to transport coal from the ISP to domestic end-user jetties or mother vessels for export. Barges are supported by two assist tugs, which facilitate berthing operations at ports and jetties for both river and sea barges. We project the fleet to grow from 12 in FY24 to 49 units by FY28F, contributing 72% of coal barging revenue in FY28F.

• From ocean barge to FTU

FTU is a loading and unloading vessel used to move coal cargo to larger capacity carrier vessels such as the Mother Vessel. The company currently has an FTU located in East Kalimantan with a capacity of 20kt per day and is capable of moving coal to Supra-max mother vessels in three days, Panamax mother vessels in four days and Cap Size vessels in seven days. We forecast the company will have two FTUs in FY27F. 

Secured growth through long-term barging contract with KBN’s doubling production plan

As of 2Q25, ALII’s 70% revenue is derived from its transportation service related to Kuta Bara Nusantara (KBN, unlisted) coal mine. ALII’s main purpose is to fulfill the rising barging demand, taking out KBN coal to its end customer via its river barging, ISP, ocean barge and FTU. As such, ALII has a secured long term life-of-mine barging contract for KBN.

KBN is a low-cost, high-growth coal producer that aims to boost output five-times to 20Mt within four years (from 4Mt in FY25F). Currently, KBN owns two active production mines namely PT Guruh Putra Bersama (GPB) and PT Ade Putra Tanrajeng (APT).

• GPB, established in 2011, operates an open-pit coal mine in Desa Gunung Sari, Tabang, with a concession area of 3,205ha and 61Mt of reserves with a calorific value (CV) of 3,600–3,800 kcal/kg. GPB targets to ramp up its production to ~3Mt by 2027F.

• APT, founded in 2008, manages a 4,061ha mining area in the same region, with over 281Mt of coal reserves and 603Mt of resources with a calorific value (CV) of 4,030–4,200 kcal/kg. APT began production in 2018, and aims to ramp up to 17Mt by the next four years.

Fig. 5: KBN's APT and GPB

Financial analysis and forecasts

Overall, ALII has three important segments, namely barging, loading unloading, and floating loading. In 2024, ALII booked IDR921bn of revenue, of which IDR614mn was from the barging segment, IDR230bn from the loading/ unloading segment, and IDR77bn from the floating loading segment.

In terms of accounting, coal barging and floating loading are booked into one segment and is the main driver for the company (i.e., it accounted for 63% of overall revenue in 2Q25, with the rest coming from the loading/unloading segment).

As of 2024, ALII operated 49 tugboats, 49 river barges (180 ft), one floating transshipment unit (FTU), and one ISP. By the end of 2025, ALII targets 56 sets of tugs and 57 sets of 180ft barges. ALII is targeting further expansion to 70 barges and two FTUs by 2028 to meet KBN’s growing production. In addition, in order to finish the transportation chain and fulfil customer needs, ALII will charter 180ft and 300ft barges, based on demand, for ISP, FTU and end customers. 

Fig. 6: ALII’s number of 180ft barge trajectory

Fig. 7: ALII’s barging, FTU and ISP volume trend

Financials and key operational assumptions 

• Pricing: For 180ft and 300ft barging, they are based on a tier pricing which is tied to the ICI-4 index. We assume ICI 4 coal price of USD42/45/t for FY25F/FY26F, translating into ASP of IDR82,250 /t for 180ft and IDR75,500/t for 300ft in FY25F. As for ISP, we assume an ASP of IDR80k/t.

• Costs: For owned fleet, major barging costs mainly comprised fuel/contractor which we assume at 50%/35% contribution, with the remaining made up by other costs that include depreciation. Contractor costs are negotiated by the company and charged for every trip made. For ocean barge (300ft), the company still uses third-party services and charged via time charter contracts. For ISP, we expect costs per ton to increase in 2026F following the early completion of KB ISP, then to decline in 2027F thanks to economies of scale. We expect KB ISP to increase the company’s overall loading/unloading segment’s margins going forward as it is located near the mine.

• Number of fleet: We forecast ALII to expand its 180ft fleet from 57 to 70 units by FY28F driven by the growing needs of coal transport volume from KBN coal mine. For 300ft, we expect ALII to expand from 8 to 49 units by FY28F

• Transported volume: We forecast ALII to grow its 180ft coal transport from 2.7Mt in 2024 to 4Mt in FY25F, eventually targeting to reach 7.5Mt in FY28F (25% CAGR for FY25F-FY28F), considering the volume ramp-up of KBN’s coal mine from 4Mt in FY25F to 18Mt in FY28F. 

• Fig. 8: ALII – key operational assumptions table

  

• We expect ALII to book a revenue CAGR of 50% for FY25F-FY28F.

• Capex: We expect ALII to have an annual capex of IDR383-500bn in FY26F-FY27F mostly to support the ISP expansion in Kota Bangun (KB) and adding new tug and barge.

• Dividend: With the company’s capex cycle ending in FY27F, we expect a dividend payout of 70% starting 2027F, translating into a 10.5% yield. 

Fig. 9: ALII's revenue trend and forecasts (2021-2028F)

Fig. 10: ALII's earnings trend and forecasts (2021-2028F)

Fig. 11: ALII – Profitability trend (2021-2028F)

Fig. 12: ALII - EBITDA, Net debt, and ROE trend

Valuation: Attractive growth profile

We initiate coverage of ALII with a Buy rating and a TP of IDR850, based on a DCF valuation (10% WACC) implying 15.6/10.5x FY26F/FY27F PE. ALII deserves a premium valuation due to its high earnings growth amid low coal price conditions. As such, we expect ALII to disburse more dividend amounting to 10% yield in 2027F. Key risks include coal price volatility, regulatory changes, unfavorable weather, and delays in project execution. 

Risks and sensitivity

1. Coal price volatility: ALII’s earnings are sensitive to coal price movements, especially ICI-4, which is commonly used as a benchmark by its clients and their barging rates. Therefore, any downturn in coal prices could reduce client production and pressure ALII’s rate realization. We estimate every 1% decrease in ICI-4 could decrease our earnings estimates by ~1.4%.

2. Changes in regulation: Any change in policy could material affect ALII’s client base and indirectly impact the company’s operations. For instance, Domestic Market Obligation (DMO) policy, export levies, or royalty hikes could reduce coal output, thereby lowering barging volume.  

3. Project execution: Timely execution of ALII’s infrastructure expansion, including additional barges or jetty upgrades, is critical for future growth. Therefore, any delay or cost overrun could impact capacity and profitability. 

Fig. 14: ALII - Sensitivity analysis

Fig. 15: ALII - Shareholder and corporate structure

ESG

ALII IJ demonstrates its commitment to environmental, social, and governance (ESG) principles through responsible land utilization, adherence to environmental management standards, and implementation of sustainable construction practices. The company prioritizes waste reduction, energy efficiency, and the use of eco-friendly building materials in its property development projects. Socially, ALII engages with local communities by creating employment opportunities, supporting social infrastructure, and maintaining high occupational health and safety standards. From a governance perspective, the company upholds strong board oversight, transparent disclosure practices, and compliance with Indonesia’s corporate governance regulations, ensuring business integrity and long-term stakeholder value creation.

Industry: Global coal balance to remain steady

The International Energy Agency (IEA) expects the second half of 2025E to deliver a rebound in global coal demand, offsetting a sub-1% dip in 1H and keeping 2025F broadly flat vs 2024, with a range-bound setup into 2026F. China remains the biggest swing factor. While coal inventories continue to build (historically driven by higher imports), China’s 8M25 imports fell ~12% y-y, normalizing after 2024’s record surge, as domestic production recovered (+5% y-y), meeting incremental demand and reducing seaborne needs (see Fig. 17 and Fig. 18). As a result, the IEA forecasts China’s total demand to soften ~0.5% in 2025E, reflecting a weakened industrial coal use on subdued manufacturing, while coal-to-chemicals remains relatively resilient. Nonetheless, the IEA forecasts China demand to rebound ~0.9% to ~5 Bt in 2026E, with the power sector as the primary driver amid rising electricity needs and the slower pace of renewable deployment. It also projects coal-fired generation to recover slightly in 2026E after a 2025 dip, and growth in coal-conversion to continue. 

Fig. 17: China increase 7M25 local production (5% y-y)

Fig. 18: Domestic ramp-up trims China import demand

Fig. 19: China's coal imports by country in 2024 vs 8M25

Domestic demand to offset softer China demand. The IEA forecasts Indonesia’s local coal demand to expand ~7% to ~268 Mt in 2025E, driven by higher power generation and the continued ramp-up of energy-intensive smelting capacity (nickel, copper, alumina). In 2026E, domestic demand is forecast to rise by a further ~16 Mt as new industrial loads come online and PLN’s coal dispatch stays elevated, keeping coal as the reliability backstop amid uneven hydro/renewables output. The captive CFPP fleet is set to add ~11 GW of capacity, according to Global Energy Monitor (GEM) projections, and using a planning rule of ~4 Mt per 1 GW per year this pipeline implies an incremental ~45 Mt of domestic demand by FY28E.

Fig. 20: Indonesia to add 11GW captive coal-fired power plant (CFPP) capacity

Fig. 21: Metal and non-metal CFPP capacity: Nickel sector (metal) and industrial parks to drive CFPP capacity growth

Indonesia coal production: record 2024, cyclical pullback in 2025F cushioned by domestic burn.
Indonesia, the world’s third-largest producer of coal, lifted output by ~8% to ~836 Mt in 2024, supported by firm domestic demand and strong exports, particularly from China. In 1H25, production declined by 8% y-y, reflecting softer international prices (notably in China) and weather-related disruptions, as seen in the lower 7M25 exports (see Fig. 22 and Fig. 23); for 2025F, the IEA expects output to slip below ~800 Mt as weaker China-bound exports and a recovery of China’s own production reduces seaborne pull.  

Fig. 22: Indonesia coal production quarterly (2019 - 2025F)

Fig. 23: Indonesia's coal exports down 7% y-y (7M24 vs 7M25), by major country

Following the 2022 peak, Newcastle coal prices normalized to ~USD100/t by early 2025, still above pre-COVID levels. Price volatility has eased over the past six months, reflecting a more stable market. Despite expected supply growth, strong demand from China, India, and ASEAN, along with elevated global cash costs, have supported prices.

Fig. 24: ICI price