ITMG
Contact our analyst Revita
20th March 2023
Price Rp 38275
Target price Rp 46100
Price Rp 38275
Target price Rp 46100
Production Target 17 million tons
ITMG’s 4Q22 coal production was down -6.52% QoQ, below the target at 4.3 million tons from 4.6 million tons in 3Q22 due to extreme weather and flooding at Jorong mine. 1Q23 production is targeted lower from seasonal weather and with no contribution from Embalut mine. In total 2022FY, coal production was 16.6 million tons, below our target 16.8 million tons and coal sales volume declined -1.04% YoY to 18.9 million tons. The average selling price (ASP) in 4Q22 achieved USD 198/ton, -6% QoQ or 38% YoY as coal prices remained strong during 4Q22 due to global supply-demand dynamics in Australia. We maintain our estimate for ITMG’s coal production volume for 2023 at 17 million tons while the price is expected to remain at the current high levels.
ITMG’s 4Q22 coal production was down -6.52% QoQ, below the target at 4.3 million tons from 4.6 million tons in 3Q22 due to extreme weather and flooding at Jorong mine. 1Q23 production is targeted lower from seasonal weather and with no contribution from Embalut mine. In total 2022FY, coal production was 16.6 million tons, below our target 16.8 million tons and coal sales volume declined -1.04% YoY to 18.9 million tons. The average selling price (ASP) in 4Q22 achieved USD 198/ton, -6% QoQ or 38% YoY as coal prices remained strong during 4Q22 due to global supply-demand dynamics in Australia. We maintain our estimate for ITMG’s coal production volume for 2023 at 17 million tons while the price is expected to remain at the current high levels.
Sign up now to trade; what you want, when you want, where you want.
Maintaining high margin
Net profit in 2022 was USD 1,200 million, significantly higher than the full year 2021FY’s USD 476 million with 4Q22 net profit at USD. 306 million or down -29% QoQ or +50% YoY. The increase in bottom line profit came from higher coal prices along with good cost management, despite royalty and fuel price increases. EBITDA was USD 442 million in 4Q22 down -30% QoQ or +14% YoY resulting in a solid cash increase from USD 691 million in 4Q21 to USD USD. 1.430 million in 4Q22. The EBITDA margin in 2022FY was 49%. We estimate the average margin in 2023-2024 will be 45%, from a lower Average selling price due to less favorable coal prices than in 2022. Going forward, we expect cost control will help ITMG maintain production costs at this level. We estimate ITMG’s bottom line margin in 2023F will be at 29% compared to 33% in 2022FY.
Valuation: 20% upside potential
We revise our TP for ITMG of IDR 46,100, which would mean the shares valued at 6.5x PER. With 20% upside potential within one year, we recommend to BUY
Net profit in 2022 was USD 1,200 million, significantly higher than the full year 2021FY’s USD 476 million with 4Q22 net profit at USD. 306 million or down -29% QoQ or +50% YoY. The increase in bottom line profit came from higher coal prices along with good cost management, despite royalty and fuel price increases. EBITDA was USD 442 million in 4Q22 down -30% QoQ or +14% YoY resulting in a solid cash increase from USD 691 million in 4Q21 to USD USD. 1.430 million in 4Q22. The EBITDA margin in 2022FY was 49%. We estimate the average margin in 2023-2024 will be 45%, from a lower Average selling price due to less favorable coal prices than in 2022. Going forward, we expect cost control will help ITMG maintain production costs at this level. We estimate ITMG’s bottom line margin in 2023F will be at 29% compared to 33% in 2022FY.
Valuation: 20% upside potential
We revise our TP for ITMG of IDR 46,100, which would mean the shares valued at 6.5x PER. With 20% upside potential within one year, we recommend to BUY
Previously
