PTBA
Contact our analyst Revita
51% upside, BUY
30th August 2022
Price Rp4340
Target price Rp6560
30th August 2022
Price Rp4340
Target price Rp6560
Double digit sales growth
As of 1H22 PTBA’s coal production volume reached 15.9 mn tons or 20% growth YoY, while sales volume increased 13% YoY to 14.6 mn tons. PTBA is on track to achieve their 2022 production and sales volume targets of 36.41 mn tons and 37.10 mn tons. We maintain our belief that better working hours combined with better weather in recent months will improve production and sales volumes so that the company can achieve these target. Going forward, PTBA continues to work on improving operations so that performance is maintained. We adjust our coal production CAGR growth forecast to +11% by 2023 compared to 2021FY.
1H22 profit up 246%
PTBA managed to record a significantly higher net profit in 1H22, up by 246% yoy to IDR 6.16 trillion compared to IDR 1.18 trillion in 1H21. The profit was supported by an increase in revenue of 79% YoY to IDR 18.4 trillion. This performance is helped by the global and domestic economic recovery which boosted demand for coal and resulted in higher coal prices. As of 1H22, the average selling price of coal slightly decreased -5% YoY to IDR. 749,000/ton compared to IDR.787,000/ton in 1H21. Sales came 65% from the domestic market, India 18%, South Korea 4%, Thailand 3%, China 3%, Cambodia 2%, and others 5%. PTBA also expanded their sales in the European markets with shipments to Italy and other European countries. Coal prices surged after the start of the war in Ukraine but are expected to moderately decline in 2023. We estimate coal price growth will slow YoY but that the higher price trend will be maintained. We adjust our profit forecast for 2022 to IDR 12 trillion and then in 2023 we expect a decline to IDR 9.4 trillion following the lower price growth YoY that will cause revenue to decline moderately. We also maintain our cash cost/ton expectation in 2022F at -9% YoY after the 1H22 cash cost/ton declined slightly -5%YoY.
Power Plant progress
PTBA’s Coal–Based Methanol supply agreement with Pertamina and Air Product Chemical Inc (APCI) as part of a downstream gasification project at Tanjung Enim held a groundbreaking in January 2022. This 20 year project in Tanjung Enim will bring in foreign invetment from APCI of USD 2.3 bilion. Progres on the power plant, South Sumatra Mine-8 PLTU, with a capacity of 2x60 MW, as of 1H22, has reached +/- 96.57% with a target to be fully commercially operational by the end of 2022.
Valuation: 51% upside potential
Our target price for PTBA is maintainef at IDR 6,560, which is a valuation of 7.83x PER. With 51% upside potential, we maintain our recommendation to BUY.
As of 1H22 PTBA’s coal production volume reached 15.9 mn tons or 20% growth YoY, while sales volume increased 13% YoY to 14.6 mn tons. PTBA is on track to achieve their 2022 production and sales volume targets of 36.41 mn tons and 37.10 mn tons. We maintain our belief that better working hours combined with better weather in recent months will improve production and sales volumes so that the company can achieve these target. Going forward, PTBA continues to work on improving operations so that performance is maintained. We adjust our coal production CAGR growth forecast to +11% by 2023 compared to 2021FY.
1H22 profit up 246%
PTBA managed to record a significantly higher net profit in 1H22, up by 246% yoy to IDR 6.16 trillion compared to IDR 1.18 trillion in 1H21. The profit was supported by an increase in revenue of 79% YoY to IDR 18.4 trillion. This performance is helped by the global and domestic economic recovery which boosted demand for coal and resulted in higher coal prices. As of 1H22, the average selling price of coal slightly decreased -5% YoY to IDR. 749,000/ton compared to IDR.787,000/ton in 1H21. Sales came 65% from the domestic market, India 18%, South Korea 4%, Thailand 3%, China 3%, Cambodia 2%, and others 5%. PTBA also expanded their sales in the European markets with shipments to Italy and other European countries. Coal prices surged after the start of the war in Ukraine but are expected to moderately decline in 2023. We estimate coal price growth will slow YoY but that the higher price trend will be maintained. We adjust our profit forecast for 2022 to IDR 12 trillion and then in 2023 we expect a decline to IDR 9.4 trillion following the lower price growth YoY that will cause revenue to decline moderately. We also maintain our cash cost/ton expectation in 2022F at -9% YoY after the 1H22 cash cost/ton declined slightly -5%YoY.
Power Plant progress
PTBA’s Coal–Based Methanol supply agreement with Pertamina and Air Product Chemical Inc (APCI) as part of a downstream gasification project at Tanjung Enim held a groundbreaking in January 2022. This 20 year project in Tanjung Enim will bring in foreign invetment from APCI of USD 2.3 bilion. Progres on the power plant, South Sumatra Mine-8 PLTU, with a capacity of 2x60 MW, as of 1H22, has reached +/- 96.57% with a target to be fully commercially operational by the end of 2022.
Valuation: 51% upside potential
Our target price for PTBA is maintainef at IDR 6,560, which is a valuation of 7.83x PER. With 51% upside potential, we maintain our recommendation to BUY.
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