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PTBA

Contact our analyst Revita
30%  upside, BUY
24th October 2023
Price Rp2660
Target price Rp3450
Coal production remains double-digit
In 1H23, PTBA's coal production volume reached 18.8 million tons, a YoY growth of 18.2%, while sales volume increased by 19.2% YoY to 17.4 million tons. As of 1H23, railway volume has reached 15.5 million tons, a +16.5% YoY increase from 13.3 million tons in 1H22. The stripping ratio (SR) during 1H23 increased to 6.0x compared to 5.6x in 1H22. In 1H23, PTBA's export sales portion reached 41%, up from 35% in 1H22. Sales to Southeast Asia in 1H23 reached over 2 million tons, the second-highest after India, and will become an opportunity for further growth. We maintain our estimate of 2023F coal production volume at 40.8 million tons, in line with the company's guidance, representing a 10% YoY increase.

Lower 1H23 bottom line
As of 1H23, PTBA recorded a revenue increase of +2.4% to IDR 18.9 trillion due to a +19.2% increase in coal sales volume to 17.4 million tons, offsetting a lower average selling price (ASP) -14% YoY to IDR 1.1 million per ton. In 1H23, PTBA's net profit was lower, down -55% YoY to IDR 2.78 trillion compared to IDR 6.16 trillion in 1H22. The downtrend was supported by higher costs in coal railway services, up 43% YoY to IDR 4.05 trillion compared to IDR 2.83 trillion in 1H22. Total mining costs recorded a +21% YoY increase, with cash cost per ton up +21% YoY. Royalty costs increased significantly by +120% YoY during 1H23. We estimate that the bottom-line profit for this year will be lower, down -31% YoY from last year. We forecast that revenue will be impacted by a lower selling price compared to last year, despite production volume increases. We estimate that total revenue growth in CAGR during 2023-2024F will remain flat due to the predicted ASP downtrend and volatility, remaining stable until the end of 2025 with potentially high demand.

Valuation: 30%  upside potential
Based on the 1H23 results, we revise our target price for PTBA to IDR 3,450, which represents a valuation of 5x PER. With 30% upside potential, we maintain our recommendation to BUY.
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Previously
​PTBA Jun2023
​PTBA Mar2023
​PTBA Dec2022
​PTBA Aug2022
​PTBA Jun2022
​PTBA Nov2021
​PTBA May2021
​PTBA Nov2020
​PTBA, May 2020
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