TINS
Contact our analyst Revita
40% upside, BUY
8th September 2022
Current price Rp 1,505
Target price Rp2,110
8th September 2022
Current price Rp 1,505
Target price Rp2,110
1H22 profit up significantly
In 1H22, TINS posted a net profit of IDR 1,08 trilion or up by 301% yoy compared to 1H21’s IDR 270 billion. The increase is due to a higher tin price, but also lower operating costs. Tin ore production in 1H22 was 9,901 tons or down -14% compared to the same period last year when production was 11,457 tons. Of this, 39% or 3,829 tons came from onshore mining, while the remaining 61% or 6,072 tons came from offshore mining. 1H22 tin metal production fell by -26% to 8,805 tons from 1H21's 11,915 tons. 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 and this will help to improve profit margins. We maintain our 2022 tin production, revenue & profit targets.
Leverage decrease continues
TINS continues to reduce debt and therefore interest expenses. TINS’ net debt to equity in 1H22 has reduced to 0.16X compared to 1H21‘s 0.20X. Total Liabilities in 1H22 decreased -13% to IDR. 7.3 trillion compared to IDR. 8.4 trillion in 2021A. Bank loans and bonds payable in 1H22 decreased to IDR. 3,6 trillion from previously IDR. 5,1 trillion. We expect a continued downtrend of interest expenses in 2022F due to the lower leverage.
Valuation: 40% upside
We forecast a target price for TINS within one year of IDR. 2,110 / share or trading at 5,7x PER, With 40% upside, our recommendation is maintained as BUY.
In 1H22, TINS posted a net profit of IDR 1,08 trilion or up by 301% yoy compared to 1H21’s IDR 270 billion. The increase is due to a higher tin price, but also lower operating costs. Tin ore production in 1H22 was 9,901 tons or down -14% compared to the same period last year when production was 11,457 tons. Of this, 39% or 3,829 tons came from onshore mining, while the remaining 61% or 6,072 tons came from offshore mining. 1H22 tin metal production fell by -26% to 8,805 tons from 1H21's 11,915 tons. 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 and this will help to improve profit margins. We maintain our 2022 tin production, revenue & profit targets.
Leverage decrease continues
TINS continues to reduce debt and therefore interest expenses. TINS’ net debt to equity in 1H22 has reduced to 0.16X compared to 1H21‘s 0.20X. Total Liabilities in 1H22 decreased -13% to IDR. 7.3 trillion compared to IDR. 8.4 trillion in 2021A. Bank loans and bonds payable in 1H22 decreased to IDR. 3,6 trillion from previously IDR. 5,1 trillion. We expect a continued downtrend of interest expenses in 2022F due to the lower leverage.
Valuation: 40% upside
We forecast a target price for TINS within one year of IDR. 2,110 / share or trading at 5,7x PER, With 40% upside, our recommendation is maintained as BUY.
Previously
| tins_19_march_2018.pdf |
| tins_18_january_2018.pdf |
| tins_7_december_2017.pdf |
| tins_9_october_2017_.pdf |
