PTBA
Contact our analyst Revita
64% upside, BUY
29th June 2022
Price Rp4000
Target price Rp6560
29th June 2022
Price Rp4000
Target price Rp6560
Double digit sales growth
As of 1Q22 PTBA’s coal production volume reached 6.3 mn tons or 40% growth YoY, while sales volume increased 18% YoY to 7.0 mn tons from 5.9 mn tons in 1Q21. PTBA is on track to achieve their 2022 production and sales volume targets of 36.41 mn tons and 37.10 mn tons. We believe 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 +20% in 2022 compared to 2020FY.
1Q22 profit up 355%
PTBA managed to record a significantly higher net profit in 1Q22, up by 355% yoy to IDR 2.28 trillion compared to IDR 500.52 billion in 1Q21. The profit was supported by an increase in revenue of 105% YoY to IDR 8.3 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 1Q22, the average selling price of coal increased 73% YoY to IDR. 1,159,000/ton compared to IDR.670,000/ton in 1Q21. Sales demand increased significantly from India, Japan and South Korea with 149%, 106%, and 100% increases respectively. We expect this will continue in 2022 as the global economy recovers further, which will support higher coal prices. Going forward, we estimate coal price growth will slow YoY but that the higher price trend will be maintained.
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 years project in Tanjung Enim will bring in foreign invetment from APCI of USD 2.3 bilion. As for the power plant, South Sumatra Mine-8 PLTU, with a capacity of 2x60 MW, as of 1Q22, progress has reached +/- 96.57% with a target to be fully commercially operational during 2022.
Valuation: 64% upside potential
Our target price for PTBA is revised up to IDR 6,560, which is a valuation of 7.84x PER, with 64% upside potential. We recommend to BUY.
As of 1Q22 PTBA’s coal production volume reached 6.3 mn tons or 40% growth YoY, while sales volume increased 18% YoY to 7.0 mn tons from 5.9 mn tons in 1Q21. PTBA is on track to achieve their 2022 production and sales volume targets of 36.41 mn tons and 37.10 mn tons. We believe 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 +20% in 2022 compared to 2020FY.
1Q22 profit up 355%
PTBA managed to record a significantly higher net profit in 1Q22, up by 355% yoy to IDR 2.28 trillion compared to IDR 500.52 billion in 1Q21. The profit was supported by an increase in revenue of 105% YoY to IDR 8.3 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 1Q22, the average selling price of coal increased 73% YoY to IDR. 1,159,000/ton compared to IDR.670,000/ton in 1Q21. Sales demand increased significantly from India, Japan and South Korea with 149%, 106%, and 100% increases respectively. We expect this will continue in 2022 as the global economy recovers further, which will support higher coal prices. Going forward, we estimate coal price growth will slow YoY but that the higher price trend will be maintained.
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 years project in Tanjung Enim will bring in foreign invetment from APCI of USD 2.3 bilion. As for the power plant, South Sumatra Mine-8 PLTU, with a capacity of 2x60 MW, as of 1Q22, progress has reached +/- 96.57% with a target to be fully commercially operational during 2022.
Valuation: 64% upside potential
Our target price for PTBA is revised up to IDR 6,560, which is a valuation of 7.84x PER, with 64% upside potential. We recommend to BUY.
Previously