ITMG
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Targeting 27% upside. Buy
12th April 2022
Price Rp 27,300
Target price Rp 34,725
12th April 2022
Price Rp 27,300
Target price Rp 34,725
Targetting higher production
ITMG’s 2021 coal production was down -2% YoY to 18.20mn tons due to heavy rainfall affecting all mine sites, as in the previous year. But in 4Q21, output increased to 4.9 mn tons compared to 3Q21 4.6 mn tons. 1Q22 production is expected at 3.8 mn tons compared to 1Q21, 4.0 mn tons with a higher strip ratio of 12.1x due to pre-strip activities at Trubaindo and void management activities at Embalut. We forecast total coal production in 2022 of 18.5 mn tons or flat yoy. In 2021, ITMG was able to achieve an ASP of USD 103.2 per ton as coal prices jumped in 2021, driven by the global economic recovery and a gradual return to normalcy. We estimate a lower average selling price (ASP) in 2022F, but we expect the price to remain high. We estimate 2022F-2023F revenue will be lower than 2021A from the lower ASP but we assume coal production growth will remain positive.
ITMG’s 2021 coal production was down -2% YoY to 18.20mn tons due to heavy rainfall affecting all mine sites, as in the previous year. But in 4Q21, output increased to 4.9 mn tons compared to 3Q21 4.6 mn tons. 1Q22 production is expected at 3.8 mn tons compared to 1Q21, 4.0 mn tons with a higher strip ratio of 12.1x due to pre-strip activities at Trubaindo and void management activities at Embalut. We forecast total coal production in 2022 of 18.5 mn tons or flat yoy. In 2021, ITMG was able to achieve an ASP of USD 103.2 per ton as coal prices jumped in 2021, driven by the global economic recovery and a gradual return to normalcy. We estimate a lower average selling price (ASP) in 2022F, but we expect the price to remain high. We estimate 2022F-2023F revenue will be lower than 2021A from the lower ASP but we assume coal production growth will remain positive.
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Maintaining higher margin
During 2021, ITMG was able to book a significantly higher margin and bottom line profit of USD. 476 million compared to USD.39 million previously. The increase in bottom line profit was due to the significant increase in coal prices along with good cost management. Despite higher fuel prices, production cost was USD. 42.9/ton compared to USD. 41.9/ton previously. Going forward, cost control will help ITMG to maintain production costs at this level. We estimate ITMG’s bottom line profit will continue to grow at a double digit rate of 21% this year.
Solid cash flow
ITMG was able to Increase cash in 2021FY to USD.691 million compared to USD. 231.5 million previously, driven by strong cashflow growth with cash generated from operating activites in 2021 increasing 3.5x yoy. With cost efficiency and prudent management, we expect solid future cash flows..
Valuation: 27% upside potential
We have a TP for ITMG of IDR 34,725, which would mean the shares valued at 15x PER. With 27% potential upside. We recommend BUY.
During 2021, ITMG was able to book a significantly higher margin and bottom line profit of USD. 476 million compared to USD.39 million previously. The increase in bottom line profit was due to the significant increase in coal prices along with good cost management. Despite higher fuel prices, production cost was USD. 42.9/ton compared to USD. 41.9/ton previously. Going forward, cost control will help ITMG to maintain production costs at this level. We estimate ITMG’s bottom line profit will continue to grow at a double digit rate of 21% this year.
Solid cash flow
ITMG was able to Increase cash in 2021FY to USD.691 million compared to USD. 231.5 million previously, driven by strong cashflow growth with cash generated from operating activites in 2021 increasing 3.5x yoy. With cost efficiency and prudent management, we expect solid future cash flows..
Valuation: 27% upside potential
We have a TP for ITMG of IDR 34,725, which would mean the shares valued at 15x PER. With 27% potential upside. We recommend BUY.
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