DOID
Contact our analyst Revita
Targeting 44% upside. BUY
3rd January 2023
Price Rp 306
Target price Rp440
3rd January 2023
Price Rp 306
Target price Rp440
Higher production volume
In 9M22, DOID had a much better operational performance in terms of overburden volume (OB) and coal production which increased 88% YoY and 63% YoY respectively. The overburden was the highest on record with an increase of 67% YoY in the 3Q22 alone. Quarterly volumes have increased almost 3x in the last 2 years showing a strong recovery. Quarterly coal production was the 2nd highest in the last 5 years (2Q22 was the highest) and increased by 62% YoY. Overburden removal amounted to 410.7 million bcm, a 77% increase YoY, while coal amounted to 63.6 million tonnes,a 64% increase YoY. In 2023, DOID is expecting a gradual ramp-up in volume from two new contracts secured in 2022 and contract extensions from their Australia operations. DOID increased their stake in Australian mining company Asiamet Resources Limited to USD 3 million, or 24.2% from 15.3%, to ensure cooperation in working on the Beruang Kanan Main (BKM) copper mine. We forecast DOID overburden volume and coal production in 2023F will grow 45% and 38% respectively CAGR compared to 2021A
Higher positive margin
DOID booked their highest quarterly revenue in 3Q22 with low rainfall hours and higher production which increased 9% QoQ or 52% YoY. EBITDA in 3Q22 was up by 42% YoY surpassing US$100mn for the first time in DOID’s history. EBITDA during 9M22 was up 83% YoY. The EBITDA margin continued to strengthen in 9M22 to a double digits 24%. As of 9M22, free cashflow remained negative but the 3Q22 free cashflow was positive at USD 61 mn, representing DOID’s best quarter in the last 2 years after clearing USD 68 mn of payables for equipment in 4Q21 and despite a lower tax refund of USD 15 mn during 9M22 than 9M21.
Valuation: 44% upside. Reiterate BUY
Weather is unpredictable, but with more new contracts secured, improvements in asset utilization and an expected supportive coal price, we remain optimistic on DOID growth. We are adjusting our target price of IDR. 440/shares or 7x PER, With 44% upside we reiterate our recommendation maintain BUY
In 9M22, DOID had a much better operational performance in terms of overburden volume (OB) and coal production which increased 88% YoY and 63% YoY respectively. The overburden was the highest on record with an increase of 67% YoY in the 3Q22 alone. Quarterly volumes have increased almost 3x in the last 2 years showing a strong recovery. Quarterly coal production was the 2nd highest in the last 5 years (2Q22 was the highest) and increased by 62% YoY. Overburden removal amounted to 410.7 million bcm, a 77% increase YoY, while coal amounted to 63.6 million tonnes,a 64% increase YoY. In 2023, DOID is expecting a gradual ramp-up in volume from two new contracts secured in 2022 and contract extensions from their Australia operations. DOID increased their stake in Australian mining company Asiamet Resources Limited to USD 3 million, or 24.2% from 15.3%, to ensure cooperation in working on the Beruang Kanan Main (BKM) copper mine. We forecast DOID overburden volume and coal production in 2023F will grow 45% and 38% respectively CAGR compared to 2021A
Higher positive margin
DOID booked their highest quarterly revenue in 3Q22 with low rainfall hours and higher production which increased 9% QoQ or 52% YoY. EBITDA in 3Q22 was up by 42% YoY surpassing US$100mn for the first time in DOID’s history. EBITDA during 9M22 was up 83% YoY. The EBITDA margin continued to strengthen in 9M22 to a double digits 24%. As of 9M22, free cashflow remained negative but the 3Q22 free cashflow was positive at USD 61 mn, representing DOID’s best quarter in the last 2 years after clearing USD 68 mn of payables for equipment in 4Q21 and despite a lower tax refund of USD 15 mn during 9M22 than 9M21.
Valuation: 44% upside. Reiterate BUY
Weather is unpredictable, but with more new contracts secured, improvements in asset utilization and an expected supportive coal price, we remain optimistic on DOID growth. We are adjusting our target price of IDR. 440/shares or 7x PER, With 44% upside we reiterate our recommendation maintain BUY
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