Paul Chew of PhillipCapital has kept his “buy” recommendation on Geo Energy Resources (Geo Energy) following the recent release of its 1HFY2026 results ended June 30.

“1HFY2026 results were within our expectations with both revenue and PATMI at 36% and 37% of our FY2026 forecast respectively,” says Chew in his Aug 31 report.

While production in 1HFYF2026 saw a decline of 42% y-o-y to 3.8 million metric tonnes (MT), Chew says that production will be shifting to the newly completed infrastructure, Marga Bara Jaya (MBJ).

The 92km US$190 million ($241 million) MBJ integrated infrastructure is completed and running since July and has a capacity of 25 million MT.

“The older Tanah Bumbu Resources (TBR) mine also underwent a pit expansion. Nonetheless, sales target for FY2026 of between 11.5-12.5 million MT remains unchanged,”Chew states.

From Chew’s perspective, he expects Geo Energy to transport 4 million MT of coal produced utilising MBJ in 2HFY2026 while his estimate for FY2027 stands at 11 million MT. “The extra capacity of the infrastructure will generate toll and jetty fees,” Chew adds.

Looking ahead, Chew expects a major recovery in 2HFY2026 for Geo Energy as production is expected to surge to around 8.2 million MT. Apart from higher production volume, the upward trend of coal selling price (ICI4), which has been 53% higher y-o-y so far in 3QFY2026, is expected to support Geo Energy’s recovery as well.

At the same time, Chew sees Geo Energy’s cash cost to decline at TRA mine due to the productivity of MBJ. “Atlas Road is only accessible for 1 round trip per day. MBJ can at least double to 2 trips with larger trucks,” Chew claims.

As such, Chew is maintaining his FY2026 forecast earnings for Geo Energy with a “buy” recommendation and unchanged discounted cash flow (DCF) target price of 75 cents.

“With the infrastructure completed, earnings visibility for Geo Energy has been de-risked and FY2027 is expected to be a milestone for the company,” Chew concludes.

As at 1.19pm, shares of Geo Energy were trading 0.5 cents higher, or up 0.94% at 53.5 cents.