ANTM
Contact our analyst Revita
7% upside, Hold
7th August 2020
Current price Rp840
Target price Rp900
7th August 2020
Current price Rp840
Target price Rp900
Development projects progress
The construction of the plant in East Halmahera (P3FH), is currently in the completion phase and installed capacity will be 13,500 tons of nickel in Ferronickel per year. Construction has reached 98% of completion as of 1H20 and P3FH is targeted to operate in 2H21. For the development of downstream bauxite, ANTAM continues to focus on building the Smelter Grade Alumina Refinery (SGAR) in Mempawah, West Kalimantan, which is being developed jointly with PT Indonesia Asahan Aluminium (Persero). This facility will have a processing capacity of 1 million tonnes per year (phase 1). Construction is targeted to be completed in 2022.
Focus on domestic sales
In 2020, ANTM will focus on the development of domestic market sales, except for Ferronikel which is sold 100% via export. In 1H20, ANTM’s feronickle sales are fully taken up by China, India, and South Korea. Sales and shipping to customers in export markets depends on the export trade restrictions in each country. For Gold, production comes from Pongkor and Cibaliung mines while sales are in the domestic market inline with positive demand seen through the Precious Metal Processing & Refinery Business Unit (UBPP LM). For nickel, ANTM is focusing on development the domestic market in line with strong demand as Ferronickel feed for the Pomalaa Plant in southeast Sulawesi. In 2Q20 ANTAM has been selling nickel ore to the domestic market supported by MESDM regulation No. 11/2020 issued on April 2020, which is expected to support the growth of the metal market inside the country (especially nickel) and ensure competitiveness for domestic mineral prices. Bauxite is used as ore feed for Tayan CGA Plant and sold to 3rd parties. Aluminum, through its subsidiary, Indonesia Chemical Alumina, is also sold to the operations of Tayan CGA. As of 1H20, gold sales grew-50% YoY or-45% QoQ (7915 Kg in 1H20/2818kg in 2Q20), Ferronikel grew -1% YoY or + 8% QoQ (13045 in 1H20/6867 Tni in 2Q20), Nickle ore grew-96% YoY (167606 Wmt at 1H20 and 2Q20), bauxite grew -8% YoY or 822% QoQ (565177 wmt in 1H20 /509900 in 2Q20). Alumina sales grew 59% YoY or -31% QoQ (40697 in 1H20/ 16635 at 2Q20).
Valuation: 7% upside
Based on EV/EBITDA, we have a one year target price of IDR.900/share or trading at 12x EV/EBITDA. With only 7% upside, we recommended HOLD.
The construction of the plant in East Halmahera (P3FH), is currently in the completion phase and installed capacity will be 13,500 tons of nickel in Ferronickel per year. Construction has reached 98% of completion as of 1H20 and P3FH is targeted to operate in 2H21. For the development of downstream bauxite, ANTAM continues to focus on building the Smelter Grade Alumina Refinery (SGAR) in Mempawah, West Kalimantan, which is being developed jointly with PT Indonesia Asahan Aluminium (Persero). This facility will have a processing capacity of 1 million tonnes per year (phase 1). Construction is targeted to be completed in 2022.
Focus on domestic sales
In 2020, ANTM will focus on the development of domestic market sales, except for Ferronikel which is sold 100% via export. In 1H20, ANTM’s feronickle sales are fully taken up by China, India, and South Korea. Sales and shipping to customers in export markets depends on the export trade restrictions in each country. For Gold, production comes from Pongkor and Cibaliung mines while sales are in the domestic market inline with positive demand seen through the Precious Metal Processing & Refinery Business Unit (UBPP LM). For nickel, ANTM is focusing on development the domestic market in line with strong demand as Ferronickel feed for the Pomalaa Plant in southeast Sulawesi. In 2Q20 ANTAM has been selling nickel ore to the domestic market supported by MESDM regulation No. 11/2020 issued on April 2020, which is expected to support the growth of the metal market inside the country (especially nickel) and ensure competitiveness for domestic mineral prices. Bauxite is used as ore feed for Tayan CGA Plant and sold to 3rd parties. Aluminum, through its subsidiary, Indonesia Chemical Alumina, is also sold to the operations of Tayan CGA. As of 1H20, gold sales grew-50% YoY or-45% QoQ (7915 Kg in 1H20/2818kg in 2Q20), Ferronikel grew -1% YoY or + 8% QoQ (13045 in 1H20/6867 Tni in 2Q20), Nickle ore grew-96% YoY (167606 Wmt at 1H20 and 2Q20), bauxite grew -8% YoY or 822% QoQ (565177 wmt in 1H20 /509900 in 2Q20). Alumina sales grew 59% YoY or -31% QoQ (40697 in 1H20/ 16635 at 2Q20).
Valuation: 7% upside
Based on EV/EBITDA, we have a one year target price of IDR.900/share or trading at 12x EV/EBITDA. With only 7% upside, we recommended HOLD.
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