ANTM
Contact our analyst Revita
63% upside, BUY
24th Nov 2020
Current price Rp1240
Target price Rp2020
24th Nov 2020
Current price Rp1240
Target price Rp2020
Gold sales surge
In 3Q20, gold sales rose significantly by 147% QoQ to 6967 kg, compared to 2Q20 growth of -45% QoQ. This was driven by an increase in demand because of the pandemic. In order to maintain services during Covid-19. ANTM continues to introduce new Logam Mulia Gold product marketing services like online sales transactions and gold buybacks through the Butik Emas Logam Mulia network spread across 11 cities in Indonesia. With the increase in gold price in 2020 and increasing public interest in safe haven investments, the company continues to conduct gold exploration activities in the IUP area, to provide positive returns for the company's future financial performance.
Continuing strategy
As mentioned in previous reports, in 2020, ANTM is focusing on the development of domestic market sales, especially Gold, inline with positive demand, as well as ferronikel and bauxite for export markets. Ferronikel sales are targeted at 27000 Tni, and 9M20 sales reached 19507 Tni, which is stable compared to 9M19’s 19703 Tni. Target Bauxite sales are 1.2 million wmt with 9M20 increasing by 18% YoY with 9M19 production volume of 1.1 million wmt. For nickel ore, the company no longer conducts export sales with a domestic market focus with target sales of over 1 million wmt. During 9M20, nickel ore sales were 1,04 million wmt up significantly compared to 2Q20’s nickle ore sales volume of 167000 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: 63% upside
Based on EV/EBITDA, we have a one year target price of IDR.2020/share or trading at 21x EV/EBITDA. With 63% upside, we recommended BUY.
In 3Q20, gold sales rose significantly by 147% QoQ to 6967 kg, compared to 2Q20 growth of -45% QoQ. This was driven by an increase in demand because of the pandemic. In order to maintain services during Covid-19. ANTM continues to introduce new Logam Mulia Gold product marketing services like online sales transactions and gold buybacks through the Butik Emas Logam Mulia network spread across 11 cities in Indonesia. With the increase in gold price in 2020 and increasing public interest in safe haven investments, the company continues to conduct gold exploration activities in the IUP area, to provide positive returns for the company's future financial performance.
Continuing strategy
As mentioned in previous reports, in 2020, ANTM is focusing on the development of domestic market sales, especially Gold, inline with positive demand, as well as ferronikel and bauxite for export markets. Ferronikel sales are targeted at 27000 Tni, and 9M20 sales reached 19507 Tni, which is stable compared to 9M19’s 19703 Tni. Target Bauxite sales are 1.2 million wmt with 9M20 increasing by 18% YoY with 9M19 production volume of 1.1 million wmt. For nickel ore, the company no longer conducts export sales with a domestic market focus with target sales of over 1 million wmt. During 9M20, nickel ore sales were 1,04 million wmt up significantly compared to 2Q20’s nickle ore sales volume of 167000 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: 63% upside
Based on EV/EBITDA, we have a one year target price of IDR.2020/share or trading at 21x EV/EBITDA. With 63% upside, we recommended BUY.
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