PTRO
Contact our analyst Revita
35% upside. BUY
9th May 2023
Price Rp4620
Target price Rp6235
9th May 2023
Price Rp4620
Target price Rp6235
40% growth from contract mining in 1Q23
In 1Q23, contract mining revenue maintained double digit growth of 40% YoY. PTRO recorded higher operatioal activities in all projects with total overburden removal volume (OB) increasing 15.97% YoY to 28.46 million BCM and coal production increasing by 8.54% YoY to 3.94 million tons mainly from Central Cipta Murdaya (CCM) and Kartika Selabumi Mining (KSM) projects. As the major contributor to PTRO’s revenue, we estimate contract mining in 2023-2024F will maintain double digit growth. We forecast 2023-2024F contract mining revenue to grow 21% CAGR compared to 2022A.
Mantain higher margins
In the 1Q23, PTRO total revenue increased +34% YoY to USD 128.21 million on the back of higher Procurement, & Construction (EPS) and Contract mining sales, which grew 51.73% YoY and 40.17% YoY respectively.. PTRO also recorded bottom line, net profit of USD 2.96 million with direct cost and operating expenses up by +33% and 42% YoY respectively. We estimate net profit in 2023-2024F will grow by 26% CAGR compared to 2022A. We estimate PTRO will maintain its net profit margin at 10.47% in 2023F compared to 8.59% in 2022A. Going forward, PTRO will complete existing contracts and the value of 2023 new contracts will be much greater than 2022. PTRO will develop existing opportunities for mining services and also add new contracts for gold, nickel and bauxite mines. The company also plans to grow its value by repositioning it self as a mine owner in the future.
Valuation: 35% upside
Based on 1Q23 result adjustments, our TP within one year is IDR 6,235 which is a 6.93x PER. With 35% upside, we maintain our recommendation to BUY.
In 1Q23, contract mining revenue maintained double digit growth of 40% YoY. PTRO recorded higher operatioal activities in all projects with total overburden removal volume (OB) increasing 15.97% YoY to 28.46 million BCM and coal production increasing by 8.54% YoY to 3.94 million tons mainly from Central Cipta Murdaya (CCM) and Kartika Selabumi Mining (KSM) projects. As the major contributor to PTRO’s revenue, we estimate contract mining in 2023-2024F will maintain double digit growth. We forecast 2023-2024F contract mining revenue to grow 21% CAGR compared to 2022A.
Mantain higher margins
In the 1Q23, PTRO total revenue increased +34% YoY to USD 128.21 million on the back of higher Procurement, & Construction (EPS) and Contract mining sales, which grew 51.73% YoY and 40.17% YoY respectively.. PTRO also recorded bottom line, net profit of USD 2.96 million with direct cost and operating expenses up by +33% and 42% YoY respectively. We estimate net profit in 2023-2024F will grow by 26% CAGR compared to 2022A. We estimate PTRO will maintain its net profit margin at 10.47% in 2023F compared to 8.59% in 2022A. Going forward, PTRO will complete existing contracts and the value of 2023 new contracts will be much greater than 2022. PTRO will develop existing opportunities for mining services and also add new contracts for gold, nickel and bauxite mines. The company also plans to grow its value by repositioning it self as a mine owner in the future.
Valuation: 35% upside
Based on 1Q23 result adjustments, our TP within one year is IDR 6,235 which is a 6.93x PER. With 35% upside, we maintain our recommendation to BUY.
Previously
PTRO Apr2022
