TINS
Contact our analyst Revita
60% upside, BUY
13th April 2023
Current price Rp 1005
Target price Rp1610
13th April 2023
Current price Rp 1005
Target price Rp1610
2022 profit down 20%
In 2022, TINS posted a net profit of IDR 1,041 trillion, down by -20% YoY compared to 2021’s IDR 1.3 trillion. The decease is the result of a decrease in operating performance as tin ore production fell -19% YoY to 20,079 tons. Tin metal production volume also fell -25% YoY to 19,825 tons. In addition, sales volume of tin metal also decreased by -22% YoY to 20,805 tons. We revise our production target based on the 2022 results, to +18% CAGR growth in the next 2 years. Going forward, we expect higher production volume, in line with company production targets. Low-cost tin ore production from offshore mining will continue to be the main focus which will help to improve profit margins despite volatility in tin average selling prices and uncertainties over the strength of demand.
Leverage decrease continues
Although TINS’ operation cash flow decreased by -23% YoY, total interest bearing debt in 2022 also decreased by -41% YoY to IDR 3 trillion due to a decrease in bank loans which declined by -51.7% YoY in 2022 to IDR 1.57 trillion. Bond debt also decreased -56.5% YoY to IDR 806 billion. We expect a continued downward trend of interest expenses in 2023F due to the lower liabilities.
Valuation: 60% upside
We revise our target price for TINS within one year to IDR. 1,610 / share or trading at 7.02x PER, With an 60% upside, our recommendation is BUY.
In 2022, TINS posted a net profit of IDR 1,041 trillion, down by -20% YoY compared to 2021’s IDR 1.3 trillion. The decease is the result of a decrease in operating performance as tin ore production fell -19% YoY to 20,079 tons. Tin metal production volume also fell -25% YoY to 19,825 tons. In addition, sales volume of tin metal also decreased by -22% YoY to 20,805 tons. We revise our production target based on the 2022 results, to +18% CAGR growth in the next 2 years. Going forward, we expect higher production volume, in line with company production targets. Low-cost tin ore production from offshore mining will continue to be the main focus which will help to improve profit margins despite volatility in tin average selling prices and uncertainties over the strength of demand.
Leverage decrease continues
Although TINS’ operation cash flow decreased by -23% YoY, total interest bearing debt in 2022 also decreased by -41% YoY to IDR 3 trillion due to a decrease in bank loans which declined by -51.7% YoY in 2022 to IDR 1.57 trillion. Bond debt also decreased -56.5% YoY to IDR 806 billion. We expect a continued downward trend of interest expenses in 2023F due to the lower liabilities.
Valuation: 60% upside
We revise our target price for TINS within one year to IDR. 1,610 / share or trading at 7.02x PER, With an 60% upside, our recommendation is BUY.
Previously
| tins_19_march_2018.pdf |
| tins_18_january_2018.pdf |
| tins_7_december_2017.pdf |
| tins_9_october_2017_.pdf |
