UNTR
Contact our analyst Revita
16% upside
11th June 2021
Current price Rp 22,600
Target price Rp 26,235
11th June 2021
Current price Rp 22,600
Target price Rp 26,235
Targetting flat revenue
In 1Q21, despite a decrease in the top line of -2.3% YoY, UNTR was able to grow the bottom line by +2.4% YoY to IDR. 1.8 trillion supported by a decrease in operating expenses and other income of -6% YoY and -91% YoY respectively. The largest contributor to 1Q21 sales at 44% was PAMA Mining, but a -15% revenue decrease resulted in a decrease in total 1Q21 revenue to IDR. 17.8 trillion or -2.27% YoY. In 1Q21 coal sales volume rose +3.57% YoY but ASP (average Selling Price) fell -17.64% driven by USD depreciation. Komatsu's 1Q21 heavy equipment sales volume increased +11.51% YoY to 688 units from 617 units in 1Q20. Komatsu's sales revenue fell -7.64% YoY to 1.595 trillion due to a decrease in ASP of -17.17% YoY due to USD deprecation. UD truck sales volume increased from 73 units to 129 units and Scania products increased from 64 units to 126 units. The total revenue of construction machinery was flat at IDR. 4,3 trillion in 1Q21. Komatsu's sales target in 2021 has increased to 2,500 units compared to the initial target of 1,700 units, driven by demand improvements in mining and construction during 1Q21. We estimate sales in 2021 will be supported by increased demand for coal amid rising coal prices and a rise in the construction sector. Total revenue is targeted at flat growth of 0.5% YoY to IDR. 60.67 trillion in 2021 despite the decline in 1Q21.
In 1Q21, despite a decrease in the top line of -2.3% YoY, UNTR was able to grow the bottom line by +2.4% YoY to IDR. 1.8 trillion supported by a decrease in operating expenses and other income of -6% YoY and -91% YoY respectively. The largest contributor to 1Q21 sales at 44% was PAMA Mining, but a -15% revenue decrease resulted in a decrease in total 1Q21 revenue to IDR. 17.8 trillion or -2.27% YoY. In 1Q21 coal sales volume rose +3.57% YoY but ASP (average Selling Price) fell -17.64% driven by USD depreciation. Komatsu's 1Q21 heavy equipment sales volume increased +11.51% YoY to 688 units from 617 units in 1Q20. Komatsu's sales revenue fell -7.64% YoY to 1.595 trillion due to a decrease in ASP of -17.17% YoY due to USD deprecation. UD truck sales volume increased from 73 units to 129 units and Scania products increased from 64 units to 126 units. The total revenue of construction machinery was flat at IDR. 4,3 trillion in 1Q21. Komatsu's sales target in 2021 has increased to 2,500 units compared to the initial target of 1,700 units, driven by demand improvements in mining and construction during 1Q21. We estimate sales in 2021 will be supported by increased demand for coal amid rising coal prices and a rise in the construction sector. Total revenue is targeted at flat growth of 0.5% YoY to IDR. 60.67 trillion in 2021 despite the decline in 1Q21.
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Gold pretax income contribution hike
As of 1Q21, the contribution of pretax income from gold mining increased to 37% from 25% in 1Q20. UNTR's Gold mines business is operated by PT Agincourt Resources (PTAR). PTAR operates Martabe gold mine located in South Tapanuli, North Sumatera. As of 1Q21, Total sales volume of gold equivalent from Martabe was 95.3 (000 ounces), up 1% compared to 94.8 (000 ounces) in 1Q20. Gold mining recorded net revenue of IDR. 2.2 trillion up 15% YoY. The ASP (Average Selling Price) for Gold was USD. 1,659 per ounce compared to USD. 1,448 per ounce in 1Q20. Gold sales volume in 2021 is targeted at 342 (000 ounces) compared to 320 (000 ounces) in 2020. We believe UNTR’s bottom line earnings this year will be driven primarily from gold mining as the contribution increases.
Valuation: 16% upside potential
Our target price for UNTR is IDR 26,235, which is a valuation of 14,71x PER with 16% upside potential. We have a HOLD recommendation.
As of 1Q21, the contribution of pretax income from gold mining increased to 37% from 25% in 1Q20. UNTR's Gold mines business is operated by PT Agincourt Resources (PTAR). PTAR operates Martabe gold mine located in South Tapanuli, North Sumatera. As of 1Q21, Total sales volume of gold equivalent from Martabe was 95.3 (000 ounces), up 1% compared to 94.8 (000 ounces) in 1Q20. Gold mining recorded net revenue of IDR. 2.2 trillion up 15% YoY. The ASP (Average Selling Price) for Gold was USD. 1,659 per ounce compared to USD. 1,448 per ounce in 1Q20. Gold sales volume in 2021 is targeted at 342 (000 ounces) compared to 320 (000 ounces) in 2020. We believe UNTR’s bottom line earnings this year will be driven primarily from gold mining as the contribution increases.
Valuation: 16% upside potential
Our target price for UNTR is IDR 26,235, which is a valuation of 14,71x PER with 16% upside potential. We have a HOLD recommendation.
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