HTSC·2026-03-30 00:25Investment Rating - The report maintains a "Buy" rating for the following companies: Harbin Electric, Sanfeng Environment, Wangneng Environment, and Weiming Environmental [7][9]. Core Insights - Indonesia's electricity supply appears sufficient, but there is a structural electricity shortage due to inadequate grid coverage, leading to regional electricity deficits [4][12]. - Future increases in electricity prices in Indonesia are expected to be driven by adjustments in the energy structure, which will raise generation and operational costs, rather than an apparent electricity shortage [4][12]. - The report highlights the importance of coal as a strategic resource, with a projected increase in coal demand to 1.2 billion tons per year by 2035, driven by domestic needs and metal smelting industries [3][12]. Summary by Sections Investment Overview - The report identifies a need for an average of 3 GW of new coal power installations annually from 2025 to 2035 to ensure electricity supply security, despite the government's restrictions on new coal power plants [12][45]. - The energy transition in Indonesia will require a dual approach of increasing both coal and renewable energy installations to meet industrial electricity demands [12][45]. Demand Side - High-energy-consuming industries are driving electricity demand and GDP growth in Indonesia, with industrial electricity consumption expected to grow by over 10% annually from 2021 to 2024 [17][24]. Supply Side - The rapid growth of self-built power plants (IUPTLS) indicates the inadequacy of PLN's grid coverage, with self-built coal power capacity increasing by 168% from 2021 to 2023 [14][38]. - The report notes that despite a high reserve margin, regional disparities in electricity supply persist, particularly in industrial areas [24][38]. Energy Transition - The report emphasizes that coal remains an indispensable part of Indonesia's energy transition, with plans to add 39.1 GW of renewable energy capacity from 2025 to 2035, while still requiring significant coal power additions [45][59]. - The conflict between economic growth targets and carbon neutrality goals is highlighted, with the need for affordable base-load electricity from coal conflicting with the push for renewable energy [46][48]. Recommendations - The report recommends companies that are likely to benefit from the growing demand for electricity equipment and waste-to-energy projects in Indonesia, including Harbin Electric and Weiming Environmental [5][12].