PTRO
Contact our analyst Revita
24% upside. BUY
6th April 2022
Price Rp2780
Target price Rp3460
6th April 2022
Price Rp2780
Target price Rp3460
Double digit growth from contract mining
As of 2021, contract mining revenue grew +42% YoY supported by an increase in overburden volume (OB) of +28% YoY and coal production growth of 19% YoY. Revenue from other businesses declined on a YoY basis. Revenue from EPC decreased -2.52% yoy to US$ 64.2 million and revenue from Logistic & support services also decreased -16.18% yoy to US$ 50.25 million. We estimate Contract Mining revenue growth of 26% CAGR 2021A to 2023F.
Signing more contracts
PTRO has signed an addendum to their cooperation agreement with PT Mekko Metal Mining with a new 5-year contract worth USD 100 Million for a bauxite project located inside PT Masmindo Dwi’s Awak Mas Gold mine project in South Sulawesi. PTRO also signed a 7-year US$ 183 milion contract with PT kartika Selabumi Mining for a coal project located in East kalimantan, and with PT central Cipta Murdaya, a 4 – year US$ 265 million contract. We believe these new contracts will support PTRO’s future revenue growth.
Maintaining margin
Despite higher costs in 2021 as a result of pre-operation costs to support new projects in coal and minerals, PTRO through its cost effectiveness and liability management strategy, has been able to maintain net margins as it has done historically. As of 2021, the net profit margin was 8.11% compared to 9.47% in 2020. We estimate the net profit margin will average 8.1% during 2021-2023F.
Valuation: 24% upside
We upgrade our TP within one year to IDR 3,460 which is a 5.62x PER. With 24% upside, we maintain our recommendation to BUY.
As of 2021, contract mining revenue grew +42% YoY supported by an increase in overburden volume (OB) of +28% YoY and coal production growth of 19% YoY. Revenue from other businesses declined on a YoY basis. Revenue from EPC decreased -2.52% yoy to US$ 64.2 million and revenue from Logistic & support services also decreased -16.18% yoy to US$ 50.25 million. We estimate Contract Mining revenue growth of 26% CAGR 2021A to 2023F.
Signing more contracts
PTRO has signed an addendum to their cooperation agreement with PT Mekko Metal Mining with a new 5-year contract worth USD 100 Million for a bauxite project located inside PT Masmindo Dwi’s Awak Mas Gold mine project in South Sulawesi. PTRO also signed a 7-year US$ 183 milion contract with PT kartika Selabumi Mining for a coal project located in East kalimantan, and with PT central Cipta Murdaya, a 4 – year US$ 265 million contract. We believe these new contracts will support PTRO’s future revenue growth.
Maintaining margin
Despite higher costs in 2021 as a result of pre-operation costs to support new projects in coal and minerals, PTRO through its cost effectiveness and liability management strategy, has been able to maintain net margins as it has done historically. As of 2021, the net profit margin was 8.11% compared to 9.47% in 2020. We estimate the net profit margin will average 8.1% during 2021-2023F.
Valuation: 24% upside
We upgrade our TP within one year to IDR 3,460 which is a 5.62x PER. With 24% upside, we maintain our recommendation to BUY.
Previously
