TINS
Contact our analyst Revita
22% upside, BUY
30th March 2021
Current price Rp1640
Target price Rp2005
30th March 2021
Current price Rp1640
Target price Rp2005
Production decreases
In 2020, TINS produced 39,757 tons of tin ore, down 51,79% yoy, 71,35% came from in land mining, while the remaining 28,65% came from offshore mining. Tin metal production was 45,698 tons, down 40,18% yoy. While production was low,TINS used up its tin metal inventory, so TINS managed to record sales of tin metal of 55,782 tons down 17,61% yoy. The average selling price was USD17,215 down by 8,72% yoy. In 2021F, TINS targets tin ore production of 30,000 tons down -24,5% YoY and tin metal production 34,000 tons or -25,6% YoY due to weather changes and to help maintain a higher tin price which will help maintain TINS performances. With lower production, TINS inventory is expected to decline further which will reduce operational costs and working capital. With tin prices expected to be at an average USD 17,000/MT in 2021, we estimate revenue this year will be lower by -24% YoY.
Ausmelt Furnace progress
To date, the Ausmelt furnace smelter project located in Muntok Bangka Barat, has reached 39% completion with a capacity target of 40,000 MT / year of crude tin. This project is expected to be commercial by Feb 2022. In addition to Ausmelt, TINS is also working on rare earth projects. Currently, the company is looking for strategic partners to work on the projects.
Reducing borrowing cost
TINS is improving their financial health and reducing interest expenses. During 2020, TINS de leveraged to reduce interest payments. As a result, in 2020, TINS managed to reduce bank debt to IDR 4.22 trillion, down from IDR 8.79 trillion in 2019. In addition, TINS also managed to pay off bonds and sukuk which matured in September 2020 amounting to IDR 600 billion. Thus, total interest-bearing debt decreased by IDR 4.82 trillion. TINS net loss in 2020 was -Rp 341 billion or lower than the previous year‘s -IDR 611 billion. Going forward, TINS will continue to reduce bank loans, continue to explore for resources and focus on technology development.
Valuation: 22% upside
We have a target price for TINS within one year of IDR. 2,005 / share or trading at 17x EV/EBITDA, with 22% upside. Our recommendation is BUY.
In 2020, TINS produced 39,757 tons of tin ore, down 51,79% yoy, 71,35% came from in land mining, while the remaining 28,65% came from offshore mining. Tin metal production was 45,698 tons, down 40,18% yoy. While production was low,TINS used up its tin metal inventory, so TINS managed to record sales of tin metal of 55,782 tons down 17,61% yoy. The average selling price was USD17,215 down by 8,72% yoy. In 2021F, TINS targets tin ore production of 30,000 tons down -24,5% YoY and tin metal production 34,000 tons or -25,6% YoY due to weather changes and to help maintain a higher tin price which will help maintain TINS performances. With lower production, TINS inventory is expected to decline further which will reduce operational costs and working capital. With tin prices expected to be at an average USD 17,000/MT in 2021, we estimate revenue this year will be lower by -24% YoY.
Ausmelt Furnace progress
To date, the Ausmelt furnace smelter project located in Muntok Bangka Barat, has reached 39% completion with a capacity target of 40,000 MT / year of crude tin. This project is expected to be commercial by Feb 2022. In addition to Ausmelt, TINS is also working on rare earth projects. Currently, the company is looking for strategic partners to work on the projects.
Reducing borrowing cost
TINS is improving their financial health and reducing interest expenses. During 2020, TINS de leveraged to reduce interest payments. As a result, in 2020, TINS managed to reduce bank debt to IDR 4.22 trillion, down from IDR 8.79 trillion in 2019. In addition, TINS also managed to pay off bonds and sukuk which matured in September 2020 amounting to IDR 600 billion. Thus, total interest-bearing debt decreased by IDR 4.82 trillion. TINS net loss in 2020 was -Rp 341 billion or lower than the previous year‘s -IDR 611 billion. Going forward, TINS will continue to reduce bank loans, continue to explore for resources and focus on technology development.
Valuation: 22% upside
We have a target price for TINS within one year of IDR. 2,005 / share or trading at 17x EV/EBITDA, with 22% 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 |
