TINS
Contact our analyst Revita
16% upside, Hold
24th November 2021
Current price Rp1630
Target price Rp1900
24th November 2021
Current price Rp1630
Target price Rp1900
Production declines
In 9M21, TINS produced 17,929 tons of tin ore, down -48% yoy. 56% came from offshore, while the remaining 44% came from onshore mining. Tin metal production was 19,120 tons, down -49% yoy. TINS also recorded a tin metal sales decease to 19,059 tons down -58% yoy. The average selling price increased significantly 79% YoY to USD/ton 30,158 compared to USD/tons 16,832 in 9M20. The decline in tin ore production is caused by the Covid-19 pandemic and slower onshore tin mining. We estimate 2021F tin ore production of 30,000 tons which is down -24,5% YoY and tin metal production of 25,493 tons or -44.2% YoY due to the weather and also to help maintain a higher tin price. In line with the significantly higher tin selling price up to 9M21, we upgrade our tin price forecast for 2021 to an average USD 30,000/MT, while 2022’s tin price is expected to be lower than the current price.
Profit improves
TINS is on track to improve their financial health and reduce interest expenses. In 9M21, TINS plan to de-leverage to reduce interest payments has worked, with bank debt reduced to IDR 1,8 trillion compared to IDR 3,8 trillion in 9M20. TINS’ bond and ijarah non current portion as of 9M21 amounted to IDR. 806 billion compared to IDR.2,093 trillion in 9M20. TINS’ bottom line has improved to a net profit of IDR 612 billion compared to the previous year‘s net loss of -IDR 255 billion. The improvement in the bottom line was caused by lower cost of raw materials (tin ore) down -38% yoy inline with significantly lower tin ore production in 9M21. We estimate bottom line profit in 2021F due to lower production costs, cost efficiency along with a higher ASP but we maintain our lower production target. In addition, an Ausmelt furnace with a capacity of 400,00MT pa is expected to start commercial operation by Feb 2022.
Valuation: 16% upside
We maintain our target price for TINS within one year of IDR. 1900 / share or trading at 17x PER, With 16% upside, our recommendation is HOLD.
In 9M21, TINS produced 17,929 tons of tin ore, down -48% yoy. 56% came from offshore, while the remaining 44% came from onshore mining. Tin metal production was 19,120 tons, down -49% yoy. TINS also recorded a tin metal sales decease to 19,059 tons down -58% yoy. The average selling price increased significantly 79% YoY to USD/ton 30,158 compared to USD/tons 16,832 in 9M20. The decline in tin ore production is caused by the Covid-19 pandemic and slower onshore tin mining. We estimate 2021F tin ore production of 30,000 tons which is down -24,5% YoY and tin metal production of 25,493 tons or -44.2% YoY due to the weather and also to help maintain a higher tin price. In line with the significantly higher tin selling price up to 9M21, we upgrade our tin price forecast for 2021 to an average USD 30,000/MT, while 2022’s tin price is expected to be lower than the current price.
Profit improves
TINS is on track to improve their financial health and reduce interest expenses. In 9M21, TINS plan to de-leverage to reduce interest payments has worked, with bank debt reduced to IDR 1,8 trillion compared to IDR 3,8 trillion in 9M20. TINS’ bond and ijarah non current portion as of 9M21 amounted to IDR. 806 billion compared to IDR.2,093 trillion in 9M20. TINS’ bottom line has improved to a net profit of IDR 612 billion compared to the previous year‘s net loss of -IDR 255 billion. The improvement in the bottom line was caused by lower cost of raw materials (tin ore) down -38% yoy inline with significantly lower tin ore production in 9M21. We estimate bottom line profit in 2021F due to lower production costs, cost efficiency along with a higher ASP but we maintain our lower production target. In addition, an Ausmelt furnace with a capacity of 400,00MT pa is expected to start commercial operation by Feb 2022.
Valuation: 16% upside
We maintain our target price for TINS within one year of IDR. 1900 / share or trading at 17x PER, With 16% upside, 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 |
