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ITMG

Contact our analyst Revita
Significant upside potential
8th June 2023

Price Rp 23525
Target price Rp 46100

1Q23 production 3.8 million tons
ITMG’s 1Q23 coal production reached 3.8 million tons, meeting the company's target despite seasonal heavy rainfall. The company aims to increase production to 4.1 million tons in 2Q23, with expectations of more favorable weather and increased output from Indominco and Trubaindo. However, the average selling price (ASP) in 1Q23 was down by 24% QoQ due to volatile demand and supply. We maintain our estimate for ITMG’s coal production volume for 2023 at 17 million tons, but expect prices to remain at the current lower levels.






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Maintaining double digit margins
ITMG recorded net sales of USD 686 million in 1Q23, a 7% increase from the previous year, while net income fell by -14% YoY to USD 183 million. The decline in revenue and net profit was due to the decrease in ASP by -24% YoY, influenced by lower benchmark prices., ITMG has a strong balance sheet with USD 1.5 billion of cash and their cost management program and declining fuel prices resulted in a decline in total costs excluding royalty from $81 per ton in 4Q22 to $72 per ton. Royalty costs also decreased to $25 per ton, down by -12% QoQ following the global price decrease. We maintain our estimate that ITMG’s bottom line margin in 2023F will be at 29%, compared to 33% in 2022FY.

Valuation: significant upside potential
ITMG’s target price remains at IDR 46,100, which translates to a 6.5x PER. With significant upside potential within one year, we recommend a BUY.

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Previously
ITMG Dec2022
​ITMG Sep2022
​ITMG Apr2022
​ITMG Dec2021
​ITMG Jan2021
​ITMG Aug2020
​ITMG Jun2020
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