Indonesia's tax gap widens as finance minister takes aim at offending Chinese firms

The drastic production cut is a reflection of Indonesia's strategy of "prioritizing price over quantity" and intervening in coal prices by virtue of its dominant market position. If global supply shrinks significantly, major buyers such as China and India may be forced to accept a premium, allowing Indonesia to maintain its high foreign exchange earnings and help local coal companies preserve their profit margins. This policy will have a complex impact on the coal sector of the Indonesian stock market: from the revenue level, the enterprise mining volume restrictions will directly lead to a decline in sales, if the coal price increase is not enough to offset the rate of decline in sales, corporate revenue may be under pressure; from the level of profits, if the success of the cuts in production to drive up the international price of coal, coupled with the optimization of equipment, fuel and other operating costs due to the decline in production, the enterprise profit margins are expected to expand.

At the same time, this policy will also trigger the market's "survival of the fittest."Institutional investors will be more favorableStrong cost control and abundant high-calorie coal reservesof enterprises. Investors need to be alert to multiple potential risks: first, the approval process for the revision of the Work Plan and Budget Costs is time-consuming, and there is uncertainty in the production quotas of enterprises, which may trigger price volatility of coal stocks at the beginning of the year; second, if the economic growth of major consuming countries, such as China and India, slows down in 2026, the demand for coal declines, superimposed on the reduction of production in Indonesia, there may be a"Volume and price" of the unfavorable situation; Third, large funds may adjust the portfolio, the funds from the coal sector to banks or new energy and other areas of more growth potential.