PTBA
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37% upside, BUY
12th November 2021
Price Rp2680
Target price Rp3670
12th November 2021
Price Rp2680
Target price Rp3670
Sales on track
As of 9M21, PTBA’s coal sales volume increased 12% YoY to 20.9 mn tons from 18.6 mn tons in 9M20. PTBA is on track to achieve their 2021 production and sales volume targets of 29,5 mn tons and 30,7 mn tons. This represents a 13% yoy increases of sales in 9M21. Even though in 1Q21 there was a decrease in sales due to high rainfall in Tanjung Enim which affected operations. PTBA remains optimistic that 4Q21 production will improve in line with improved weather and better working hours. The 9M21 production has reached 92% of 2020FY’s forecast. PTBA continues to work on improving operations and to make efficiencies so that performance is maintained. We estimate coal production growth CAGR of 11% in 2022 compared to 2020FY.
3Q21 profit up 580% yoy
PTBA managed to record a significantly higher net profit as of 9M21 , up by 176% yoy to IDR. 4.77 trillion and for the 3Q21 alone, up 580% yoy or 134% QoQ. The profit achievement was supported by an increase in revenue of 51% YoY to IDR. 19.4 trillion. This performance is in line with the global and national economic recovery that boosted demand for coal and resulted in rising coal prices. We expect this will continue in 2022 as coal demand continues to improve as the global economy recovers further.
Power Plant progress
PTBA’s Coal–Based Methanol supply agreement with Pertamina and Air Product Chemical Inc as part of a downstream gasification project at Tanjung Enim has signed a cooperation agreement in Feb 2021. It will use 6 mn tons of coal to produce a target of 1,4 mn tons p.a. of methanol. Commercial operation is targeted for 2Q 2024. For the Power plant, South Sumatra Mine-8 PLTU with a capacity of 2x60 MW; as of 1Q21, progress has reached +/- 75,6% with a target commercial operation for unit 1 in 4Q20 and unit 2 in 1Q22.
Valuation: 37% upside potential
Our target price for PTBA is revised up to IDR 3,670, which is a valuation of 9,71x PER with 37% upside potential. We give our recommendation to BUY.
As of 9M21, PTBA’s coal sales volume increased 12% YoY to 20.9 mn tons from 18.6 mn tons in 9M20. PTBA is on track to achieve their 2021 production and sales volume targets of 29,5 mn tons and 30,7 mn tons. This represents a 13% yoy increases of sales in 9M21. Even though in 1Q21 there was a decrease in sales due to high rainfall in Tanjung Enim which affected operations. PTBA remains optimistic that 4Q21 production will improve in line with improved weather and better working hours. The 9M21 production has reached 92% of 2020FY’s forecast. PTBA continues to work on improving operations and to make efficiencies so that performance is maintained. We estimate coal production growth CAGR of 11% in 2022 compared to 2020FY.
3Q21 profit up 580% yoy
PTBA managed to record a significantly higher net profit as of 9M21 , up by 176% yoy to IDR. 4.77 trillion and for the 3Q21 alone, up 580% yoy or 134% QoQ. The profit achievement was supported by an increase in revenue of 51% YoY to IDR. 19.4 trillion. This performance is in line with the global and national economic recovery that boosted demand for coal and resulted in rising coal prices. We expect this will continue in 2022 as coal demand continues to improve as the global economy recovers further.
Power Plant progress
PTBA’s Coal–Based Methanol supply agreement with Pertamina and Air Product Chemical Inc as part of a downstream gasification project at Tanjung Enim has signed a cooperation agreement in Feb 2021. It will use 6 mn tons of coal to produce a target of 1,4 mn tons p.a. of methanol. Commercial operation is targeted for 2Q 2024. For the Power plant, South Sumatra Mine-8 PLTU with a capacity of 2x60 MW; as of 1Q21, progress has reached +/- 75,6% with a target commercial operation for unit 1 in 4Q20 and unit 2 in 1Q22.
Valuation: 37% upside potential
Our target price for PTBA is revised up to IDR 3,670, which is a valuation of 9,71x PER with 37% upside potential. We give our recommendation to BUY.
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