TINS
Contact our analyst Revita
9.9% upside, Hold
11th May 2021
Current price Rp1825
Target price Rp2005
11th May 2021
Current price Rp1825
Target price Rp2005
Production declines
In 1Q21, TINS produced 5,025 tons of tin ore, down -67% yoy. 61% came from offshore, while the remaining 39% came from onshore mining. The offshore produced increased 25% yoy compared to an onshore decrease of -85%. Tin metal production was 5,220 tons, down -63% yoy. TINS also recorded a tin sales decease to 5,912 tons down -66% yoy. The average selling price increased significantly to USD/ton 24,968 compared to USD/tons 16,703 in 1Q20. We believe the decline in tin ore production especially from onshore mining was caused by weather as we expected. We maintain our 2021F target tin ore production of 30,000 tons which is down -24,5% YoY and tin metal production of 34,000 tons or -25,6% YoY due to the weather and also to help maintain a higher tin price. Although the tin selling price increased significantly during 1Q21, we maintain our tin price forecast for 2021 at an average USD 17,000/MT, we maintain our forecast for revenue this year to be lower by -24% YoY.
Profit Improvement
TINS is on track to improve their financial health and reduce interest expenses. During 2020, TINS de-leveraged to reduce interest payments. As a result, in 1Q21, TINS managed to reduce bank debt to IDR 3,6 trillion compared to IDR 4.22 trillion in 2020FY. TINS’ bottom line has improved to a net profit of IDR 10,34 billion compared to the previous year‘s net loss -IDR 413 billion. The improvement in the bottom line was caused by lower cost of raw materials (tin ore) down -70% yoy inline with significantly lower tin ore production in 1Q21. For 2021, we maintain our profit target, as we maintain our production and price targets
Valuation: 9,9% upside
We maintain our target price for TINS within one year of IDR. 2,005 / share or trading at 17x EV/EBITDA, it has increased 14% since our last TINS update on March 2021. With 9,9% upside left, our recommendation is HOLD.
In 1Q21, TINS produced 5,025 tons of tin ore, down -67% yoy. 61% came from offshore, while the remaining 39% came from onshore mining. The offshore produced increased 25% yoy compared to an onshore decrease of -85%. Tin metal production was 5,220 tons, down -63% yoy. TINS also recorded a tin sales decease to 5,912 tons down -66% yoy. The average selling price increased significantly to USD/ton 24,968 compared to USD/tons 16,703 in 1Q20. We believe the decline in tin ore production especially from onshore mining was caused by weather as we expected. We maintain our 2021F target tin ore production of 30,000 tons which is down -24,5% YoY and tin metal production of 34,000 tons or -25,6% YoY due to the weather and also to help maintain a higher tin price. Although the tin selling price increased significantly during 1Q21, we maintain our tin price forecast for 2021 at an average USD 17,000/MT, we maintain our forecast for revenue this year to be lower by -24% YoY.
Profit Improvement
TINS is on track to improve their financial health and reduce interest expenses. During 2020, TINS de-leveraged to reduce interest payments. As a result, in 1Q21, TINS managed to reduce bank debt to IDR 3,6 trillion compared to IDR 4.22 trillion in 2020FY. TINS’ bottom line has improved to a net profit of IDR 10,34 billion compared to the previous year‘s net loss -IDR 413 billion. The improvement in the bottom line was caused by lower cost of raw materials (tin ore) down -70% yoy inline with significantly lower tin ore production in 1Q21. For 2021, we maintain our profit target, as we maintain our production and price targets
Valuation: 9,9% upside
We maintain our target price for TINS within one year of IDR. 2,005 / share or trading at 17x EV/EBITDA, it has increased 14% since our last TINS update on March 2021. With 9,9% upside left, our recommendation is HOLD.
Previously
| tins_19_march_2018.pdf |
| tins_18_january_2018.pdf |
| tins_7_december_2017.pdf |
| tins_9_october_2017_.pdf |
