TINS
Contact our analyst Revita
24% upside, BUY
13 September, 2023
Current price Rp 850
Target price Rp1050
13 September, 2023
Current price Rp 850
Target price Rp1050
1H23 tin production decline: -18% YoY
In the first half of 2023, tin production saw large -18% year-on-year decrease. Sales volume also decreased by -16% YoY. Additionally, tin ore production volume decreased by -22% YoY. This drop in production volume can be attributed to adverse weather conditions in the first half of 2023 and the response to a decline in the selling price of tin metal during the same period. Despite these challenges, the company maintains its production target, remaining optimistic about achieving a 19% compound annual growth rate (CAGR) in volume over the next two years. Looking ahead, we anticipate higher production volumes, aligning with the company's production targets.
1H23 revenue down -39% YoY
As of the first half of 2023, TINS' revenue experienced a substantial -39% year-on-year decrease. This decline was primarily driven by a -16% drop in sales volume and a significant 35% YoY decrease in the average selling price (ASP) to USD 26,828 per ton, compared to USD 41,110 per ton in the first half of 2022. The weakened ASP was a result of weak global demand and abundant stock on the LME (London Metal Exchange). Despite a -10% YoY reduction in operating expenses and a big decrease in other income, net profit plummeted by -98% YoY. Based on the first-half results of 2023, we are revising our revenue target for 2023-2024, forecasting a -1% CAGR growth compared to 2022FY due to unfavorable fluctuations in the average selling price of tin. We believe that the focus on low-cost tin ore production from offshore mining will continue to enhance profit margins, even amidst volatility in tin selling prices and uncertainties regarding demand strength.
Leverage decrease continues
Despite a -77% YoY decrease in operational cash flow during the first half of 2023, TINS' total interest-bearing debt also decreased by -13% YoY to IDR 2.725 trillion. This reduction was driven by a -56.6% YoY decline in bonds to IDR 806 billion, offset slightly by higher bank loans of IDR 1.29 trillion, an increase of 0.62% YoY. We anticipate a continued decline in interest expenses for 2023F-2024F due to the reduced liabilities.
Valuation: 24% upside
Based on the results of the first half of 2023, we are revising our one-year target price for TINS to IDR 1,050 per share, with a price-to-earnings ratio (PER) of 10x. This represents a 24% upside potential, and our recommendation is to BUY.
In the first half of 2023, tin production saw large -18% year-on-year decrease. Sales volume also decreased by -16% YoY. Additionally, tin ore production volume decreased by -22% YoY. This drop in production volume can be attributed to adverse weather conditions in the first half of 2023 and the response to a decline in the selling price of tin metal during the same period. Despite these challenges, the company maintains its production target, remaining optimistic about achieving a 19% compound annual growth rate (CAGR) in volume over the next two years. Looking ahead, we anticipate higher production volumes, aligning with the company's production targets.
1H23 revenue down -39% YoY
As of the first half of 2023, TINS' revenue experienced a substantial -39% year-on-year decrease. This decline was primarily driven by a -16% drop in sales volume and a significant 35% YoY decrease in the average selling price (ASP) to USD 26,828 per ton, compared to USD 41,110 per ton in the first half of 2022. The weakened ASP was a result of weak global demand and abundant stock on the LME (London Metal Exchange). Despite a -10% YoY reduction in operating expenses and a big decrease in other income, net profit plummeted by -98% YoY. Based on the first-half results of 2023, we are revising our revenue target for 2023-2024, forecasting a -1% CAGR growth compared to 2022FY due to unfavorable fluctuations in the average selling price of tin. We believe that the focus on low-cost tin ore production from offshore mining will continue to enhance profit margins, even amidst volatility in tin selling prices and uncertainties regarding demand strength.
Leverage decrease continues
Despite a -77% YoY decrease in operational cash flow during the first half of 2023, TINS' total interest-bearing debt also decreased by -13% YoY to IDR 2.725 trillion. This reduction was driven by a -56.6% YoY decline in bonds to IDR 806 billion, offset slightly by higher bank loans of IDR 1.29 trillion, an increase of 0.62% YoY. We anticipate a continued decline in interest expenses for 2023F-2024F due to the reduced liabilities.
Valuation: 24% upside
Based on the results of the first half of 2023, we are revising our one-year target price for TINS to IDR 1,050 per share, with a price-to-earnings ratio (PER) of 10x. This represents a 24% upside potential, and our recommendation is to BUY.
Previously
| tins_19_march_2018.pdf |
| tins_18_january_2018.pdf |
| tins_7_december_2017.pdf |
| tins_9_october_2017_.pdf |
