3Q25F Stays Flat, while Margins are Gearing Up to Rise
Following the gas supply disruption that triggered an “emergency status” for PGN on 15 Aug25, the momentum seen in 6M25 gas trading and transmission has begun to ease. This was reflected in 8M25 operational update, where trading volume softened to 830 bbtud (–2.2% YoY), with August dipping further to 808 bbtud (–4.4% MoM; –5.6% YoY). Meanwhile, transmission volume saw a sharper contraction, to 1,554 mmscfd (–8.6% MoM; –4.4% YoY), creating near-term headwinds, as the two segments account for c. 75% of total revenue. Against this backdrop, we forecast 3Q25F revenue at USD 2,827mn (–2.6% QoQ; –3.3% YoY), bringing 9M25F topline to USD 2,883mn (+2.4% YoY), broadly in line with our estimates, following a strong 2Q25. Margin-wise, improvements remain intact, with continued recovery in gas trading margins, reflected by a higher margin rate of approximately USD 2/mmbtu— supported by better gas distribution margins. This is coupled with the recent upward trend in Henry Hub prices, driven by winter price expectations. Furthermore, regasification volume also continued to rise, reaching 250 bbtud in 8M25 (vs. 239 bbtud in 1M25), further enhancing downstream contributions. As a result, 3Q25F earnings are projected at USD 85mn (+3.6% QoQ; +11.2% YoY), bringing 9M25F net profit to USD 230mn (–12.8% YoY), which is in line with our expectations and slightly below consensus.

A Glimpse at 1H25 and Earnings Revisions Ahead
After a shaky start in 1Q25, PGAS found its rhythm in 2Q25, offering a glimpse of recovery and renewed performance momentum. Revenue held steady, at USD 971mn (+0.5% QoQ; +9.2% YoY), bringing 6M25 topline to USD 1,938mn (+5.4% YoY), broadly in line with both our and cons. expectations. Margin recovery began to take shape, with 2Q25 net margin rising to 8.5%, helping PGAS close the first half with net profit of USD 144mn (–22.6% YoY)—in line with our view, though slightly below consensus (due to higher NCI contributions). A tale of 2 quarters, 1H25 reminding us that recovery is rarely linear—but underlying momentum is clearly building. In light of recent developments—including supply disruptions and margin fluctuations—we’ve made modest adjustments to our forecasts. We now project 2025F revenue at USD 3,794mn (+2.3% vs. previous; +0.1% YoY), and 2026F at USD 3,849mn (+2.8% vs. previous; +1.4% YoY), reflecting steadier trading volumes and gradual transmission recovery. These revisions lift our bottom-line expectations to USD 314mn in 2025F (+4.0% vs. previous; –7.6% YoY) and USD 328mn in 2026F (+7.7% vs. previous; +4.6% YoY), supported by margin resilience in distribution and increasing regasification contribution.

Maintaining HOLD, while raising TP to IDR 1,800/sh
On the back of potential margin recovery (despite pressure on gas trading volumes), we maintain our HOLD call on PGAS, while revising our TP upward, from IDR 1,670/sh to IDR 1,800/sh. This implies FY26F P/E of 7.9x, still below its +1 SD historical average, and reflects an upside potential of 11.5%. Key downside risks include supply disruptions, weaker oil and gas prices and lower-than-expected gas trading spread margins.

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