The prospects for PT Vale Indonesia Tbk (INCO) remain bright in the long term, in line with the strengthening trend of global nickel prices. Several company expansions support this prospect to boost financial performance.

BRI Danareksa Sekuritas analyst Stefanus Darmagiri said that the nickel business continued to shine, despite a drop in this commodity's selling price in 2020. However, in 2021, the selling price of nickel is expected to recover and increase, so that Vale Indonesia's net profit this year is expected to be better.

"Expectations of a better selling price prompted BRI Danareksa Sekuritas to revise the average nickel selling price target this year from US$17 thousand per ton to US$18 thousand per ton. Meanwhile, the projected average selling price of nickel in 2022 is maintained at US$18 thousand per ton," he said in Jakarta, Tuesday (23/3).

The improving prospects for Vale Indonesia, according to Stefanus, are supported by several projects. The company is currently holding a feasibility study for the RKEF processing facility in Bahodopi, Central Sulawesi.

"The company also collaborates with partners from China to build NPI and HPAL processing facilities made from nickel liomite in Pomalaa, Southeast Sulawesi. "The delay in the construction of electric furnace four will be the most crucial thing for the company this year," he explained.

Furthermore, Vale Indonesia's management indicated that the construction was delayed from its original target in May 2021 due to the Covid-19 pandemic. The difficulty of sending materials from abroad due to the pandemic caused the delay.

"With this delay, the company is recalculating the estimated volume of nickel in matte production this year," said Stefanus.

Meanwhile, the solid nickel selling price prompted BRI Danareksa Sekuritas to revise Vale Indonesia's net profit target for 2021 from US$132 million to US$152 million. BRI Danareksa Sekuritas has revised its target price for INCO's share up from Rp6,000 to Rp6,800 with a recommendation to maintain buying.