UNTR
Contact our analyst Revita
50% Upside, BUY
8th August 2022
Current price Rp 32500
Target price Rp 48,800
8th August 2022
Current price Rp 32500
Target price Rp 48,800
Targetting 13.43% revenue growth
As of 1H22, UNTR booked revenue of IDR 60.44 trillion or 62% growth YoY while bottom line profit continues to increase significantly, up 129% YoY helped by a slower increase in operating expenses of only 15% YoY. As of 1H2022, Construction machinery and Mining contracting are still the largest contributors to revenue at 29% and 33% respectively followed by coal mining 31%, gold mining 6%, and construction 1%. Komatsu's 1H22 heavy equipment sales volume increased 111.09% YoY to 2,873 units. Coal production decreased -13% YoY but the ASP increased 49% YoY which helped mining contracting revenue to increase by 29% in the 1H2022.Komatsu's sales target has been revised up after the 1H2022 to 4,800 units because of stronger demand in mining as coal demand increases, together with higher construction activity. Komatsu leads the heavy equipment market with a 28% market share. Based on 1H2022 results, we revise up our revenue target in 2022-2023F to a CAGR of 13.43% compared to 2021A.
As of 1H22, UNTR booked revenue of IDR 60.44 trillion or 62% growth YoY while bottom line profit continues to increase significantly, up 129% YoY helped by a slower increase in operating expenses of only 15% YoY. As of 1H2022, Construction machinery and Mining contracting are still the largest contributors to revenue at 29% and 33% respectively followed by coal mining 31%, gold mining 6%, and construction 1%. Komatsu's 1H22 heavy equipment sales volume increased 111.09% YoY to 2,873 units. Coal production decreased -13% YoY but the ASP increased 49% YoY which helped mining contracting revenue to increase by 29% in the 1H2022.Komatsu's sales target has been revised up after the 1H2022 to 4,800 units because of stronger demand in mining as coal demand increases, together with higher construction activity. Komatsu leads the heavy equipment market with a 28% market share. Based on 1H2022 results, we revise up our revenue target in 2022-2023F to a CAGR of 13.43% compared to 2021A.
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Coal mining continues as the prime profit contributor
In 1H2022, coal mining is still the biggest contributor to pretax profit at 47% followed by mining contracting at 24%. UNTR's coal mining business is run by PT Tuah Turangga Agung (TTA). Total coal sales volume in 1H2022 reached 5.8 million tons, down by 8% YoY from 1H2021’s 6.3 million tons, due to a temporary export ban in January 2022. However, due to the significant increase in the average coal selling price (ASP) of 170% YoY, the revenue from Coal Mining business increased by 149% yoy to IDR 18,7 trillion. We believe coal prices will keep coal mining as the biggest profit contributor in 2022F. Starting 2022, the company has consolidated revenue from its solar energy subsidiary, PT Energia Prima Nusantara which has installed 6.9 MWp of rooftop solar PVs and is targeting an additional 15 MWp this year.
Valuation: 50% upside potential
Our target price for UNTR is maintained at IDR 48,800, which is a valuation of 9.89x PER. With 50% upside potential, we maintain our BUY recommendation.
In 1H2022, coal mining is still the biggest contributor to pretax profit at 47% followed by mining contracting at 24%. UNTR's coal mining business is run by PT Tuah Turangga Agung (TTA). Total coal sales volume in 1H2022 reached 5.8 million tons, down by 8% YoY from 1H2021’s 6.3 million tons, due to a temporary export ban in January 2022. However, due to the significant increase in the average coal selling price (ASP) of 170% YoY, the revenue from Coal Mining business increased by 149% yoy to IDR 18,7 trillion. We believe coal prices will keep coal mining as the biggest profit contributor in 2022F. Starting 2022, the company has consolidated revenue from its solar energy subsidiary, PT Energia Prima Nusantara which has installed 6.9 MWp of rooftop solar PVs and is targeting an additional 15 MWp this year.
Valuation: 50% upside potential
Our target price for UNTR is maintained at IDR 48,800, which is a valuation of 9.89x PER. With 50% upside potential, we maintain our BUY recommendation.
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