ANTM
Contact our analyst Revita
43% upside, Buy
17th October 2023
Current price Rp1810
Target price Rp2580
17th October 2023
Current price Rp1810
Target price Rp2580
Gold sales down 13% in 2Q23
As of 2Q23, gold sales volume decreased by -13% QoQ to 6,285 Kg, while the average selling price (ASP) slightly increased by +3% QoQ. In 2Q23, ANTM's unaudited gold production volume reached 291 Kg, a slight decrease of -4% QoQ. As in previous years, in 2023, ANTM remains focused on developing its domestic customer base, aligning with the increasing public awareness of investing in gold and growing demand. We conservatively estimate gold sales volume in 2023 at 29,156 kg, a decrease of -12% YoY or down -24% from our initial estimate, despite ongoing high public interest in gold, and after adjusting for current global risk factors. We believe ANTM's strategy of developing a customer base in the domestic market will continue to increase public awareness of investing in gold.
Continuing doube digit nickel production growth
ANTM's unaudited nickel ore production volume reached 6.81 million wmt, a 55% YoY increase. The unaudited nickel ore production volume slightly decreased by -0.03% QoQ in 2Q23 to 3.41 million wmt but increased significantly by +130% YoY compared to 2Q22 when it was 1.48 million wmt. The growth in nickel ore sales volume during 1H23 increased by +106% YoY to 6.27 million wmt, compared to sales volume in 1H22 of 3.04 million wmt. The growth in 1H23 production was influenced by demand recovery and normalization of nickel prices. We expect higher future nickel demand from electric vehicles to remain on track and forecast nickel production and sales volume to grow by +68% and +81% YoY, respectively, in 2023.
Targeting 10% growth in bottom line profit
ANTM's profit in 1H23 was IDR 3.8 trillion, a +24% YoY increase. This was supported by ANTAM's efforts to optimize the performance of its production and sales of nickel, gold, and bauxite-based products amidst challenging global economic conditions, and despite lower growth expectations for base metals and precious metal commodities throughout 1H23. In the next two years (2023-2024), we estimate ANTM's net profit will grow at a CAGR average of 10% compared to 2022FY, as we expect ANTM 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: 43% upside
We have adjusted our valuation based on 1H23 audited results. We have downgraded our one-year target price to IDR 2,580/share, which implies a valuation of 13x PER. With 43% upside, we maintain our recommendation to BUY.
As of 2Q23, gold sales volume decreased by -13% QoQ to 6,285 Kg, while the average selling price (ASP) slightly increased by +3% QoQ. In 2Q23, ANTM's unaudited gold production volume reached 291 Kg, a slight decrease of -4% QoQ. As in previous years, in 2023, ANTM remains focused on developing its domestic customer base, aligning with the increasing public awareness of investing in gold and growing demand. We conservatively estimate gold sales volume in 2023 at 29,156 kg, a decrease of -12% YoY or down -24% from our initial estimate, despite ongoing high public interest in gold, and after adjusting for current global risk factors. We believe ANTM's strategy of developing a customer base in the domestic market will continue to increase public awareness of investing in gold.
Continuing doube digit nickel production growth
ANTM's unaudited nickel ore production volume reached 6.81 million wmt, a 55% YoY increase. The unaudited nickel ore production volume slightly decreased by -0.03% QoQ in 2Q23 to 3.41 million wmt but increased significantly by +130% YoY compared to 2Q22 when it was 1.48 million wmt. The growth in nickel ore sales volume during 1H23 increased by +106% YoY to 6.27 million wmt, compared to sales volume in 1H22 of 3.04 million wmt. The growth in 1H23 production was influenced by demand recovery and normalization of nickel prices. We expect higher future nickel demand from electric vehicles to remain on track and forecast nickel production and sales volume to grow by +68% and +81% YoY, respectively, in 2023.
Targeting 10% growth in bottom line profit
ANTM's profit in 1H23 was IDR 3.8 trillion, a +24% YoY increase. This was supported by ANTAM's efforts to optimize the performance of its production and sales of nickel, gold, and bauxite-based products amidst challenging global economic conditions, and despite lower growth expectations for base metals and precious metal commodities throughout 1H23. In the next two years (2023-2024), we estimate ANTM's net profit will grow at a CAGR average of 10% compared to 2022FY, as we expect ANTM 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: 43% upside
We have adjusted our valuation based on 1H23 audited results. We have downgraded our one-year target price to IDR 2,580/share, which implies a valuation of 13x PER. With 43% upside, we maintain our recommendation to BUY.
Previously