ANTM
Contact our analyst Revita
9% upside, Hold
9th February 2021
Current price Rp2780
Target price Rp3025
9th February 2021
Current price Rp2780
Target price Rp3025
Gold sales fell in 4Q20
In 4Q20, ANTM gold sales fell -1% QoQ or -5.2% YoY. Total gold sales in 2020 were 21,797 Kg or 15% above our estimate of 18,960 Kg. In 2020, ANTM focused on the growth of gold demand in the domestic market. We estimate that this year gold prices will still be affected by the volatility of gold demand, the threat of the US dollar as a safe haven, the development of Covid-19 cases, and the development of vaccinations
Maintaining strategy
As mentioned in previous reports, in 2020, ANTM is focusing on the development of domestic market sales, inline with positive demand, as well as ferronikel and bauxite for export. Ferronikel sales are targeted at 27,000 Tni, and in 4Q20 sales reached 6,639 Tni and 26,163 Tni for the full year 2020FY, which is stable compared to 2019’s 26,349 Tni. ANTM recorded unaudited bauxite production volume in 2020FY used for alumina production and sales to third parties of 1.55 million wmt and in the 4Q20 alone 255 thousand wmt with 4Q20 sales volume decreasing by 26% YoY or 29% QoQ. For nickel ore, the company no longer conducts export sales with a domestic market sales target of over 1 million wmt. During 4Q20, nickel ore sales were 2,086 million wmt up significantly compared to 3Q20’s nickle ore sales volume of 1,04 million wmt. Domestic nickel ore sales have been supported by the issuance of MESDM regulation No. 11/2020 as described in our previous report. In addition, other ANTM strategies are to keep production costs low, and preserve cash through negotiations with creditors, banks and suppliers. ANTM is also improving internal efficiencies in both business units and the head office.
Valuation: 9% upside
We adjust our valuation based on 4Q20 unaudited result, based on EV/EBITDA, we have a one year target price of IDR.3025/share or trading at 28x EV/EBITDA. With 9% upside, we recommended HOLD.
In 4Q20, ANTM gold sales fell -1% QoQ or -5.2% YoY. Total gold sales in 2020 were 21,797 Kg or 15% above our estimate of 18,960 Kg. In 2020, ANTM focused on the growth of gold demand in the domestic market. We estimate that this year gold prices will still be affected by the volatility of gold demand, the threat of the US dollar as a safe haven, the development of Covid-19 cases, and the development of vaccinations
Maintaining strategy
As mentioned in previous reports, in 2020, ANTM is focusing on the development of domestic market sales, inline with positive demand, as well as ferronikel and bauxite for export. Ferronikel sales are targeted at 27,000 Tni, and in 4Q20 sales reached 6,639 Tni and 26,163 Tni for the full year 2020FY, which is stable compared to 2019’s 26,349 Tni. ANTM recorded unaudited bauxite production volume in 2020FY used for alumina production and sales to third parties of 1.55 million wmt and in the 4Q20 alone 255 thousand wmt with 4Q20 sales volume decreasing by 26% YoY or 29% QoQ. For nickel ore, the company no longer conducts export sales with a domestic market sales target of over 1 million wmt. During 4Q20, nickel ore sales were 2,086 million wmt up significantly compared to 3Q20’s nickle ore sales volume of 1,04 million wmt. Domestic nickel ore sales have been supported by the issuance of MESDM regulation No. 11/2020 as described in our previous report. In addition, other ANTM strategies are to keep production costs low, and preserve cash through negotiations with creditors, banks and suppliers. ANTM is also improving internal efficiencies in both business units and the head office.
Valuation: 9% upside
We adjust our valuation based on 4Q20 unaudited result, based on EV/EBITDA, we have a one year target price of IDR.3025/share or trading at 28x EV/EBITDA. With 9% upside, we recommended HOLD.
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