Bukit Asam (PTBA IJ)
N o v -1 7 D e c -1 7 D e c -1 7 J a n -1 8 F e b -1 8 F e b -1 8 M a r- 1 8 A p r- 1 8 A p r- 1 8 M a y -1 8 J u n -1 8 J u l- 1 8 J u l- 1 8 A u g -1 8 S e p -1 8 S e p -1 8 O c t- 1 8 N o v -1 8 PTBA-Rebase JCI Index-Rebase
3.2
22.1
7.5
0.2 Net Profit (RpBn) 2,006 4,476 6,080 6,578 6,639 EPS (Rp) 190 425 528 571 576 EPS Growth (%) (1.5) 123.1
24.3
8.2
0.9 Net Gearing (%) (19.6) (23.3) (32.9) (36.5) (38.9) PER (x)
24.4
10.9
8.8
8.1
8.1 PBV (x)
4.6
3.6
2.9
Year To 31 Dec 2016A 2017A 2018F 2019F 2020F
2.7 Dividend Yield (%)
1.2
1.2
6.3
9.1
9.8 EV/EBITDA (x)
17.3
7.9
7.4
7.0
7.1 Source: PTBA, IndoPremier Share Price Closing as of : 13-November-2018
E q u it y | I n d o n e s ia | C o m m o d it ie s
90 110 130 150 170 190 210
Revenue (RpBn) 14,059 19,471 21,674 24,668 27,325 EBITDA (RpBn) 2,959 6,575 8,028 8,626 8,646 EBITDA Growth (%) 7.7 122.2
14 November 2018 Results Note BUY (Unchanged)
Stock Data
Inalum (Persero) 65.0%
Target price (Rp) Rp5,800
Prior TP (Rp) Rp5,100
Shareprice (Rp) Rp4,650
Upside/downside (%) +24.7
Sharesoutstanding (m) 10,540 Marketcap. (US$ m) 3,311 Free float (%)
28.7 Avg. 6m dailyT/O (US$ m)
9.8 Price Performance
3M
6M
12M
Absolute (%)
12.9 26.0 108.1 Relative to JCI (%) 12.0 25.1 111.7 52w high/low (Rp) 4,890 - 2,155
Major Shareholders
Estimate Change; Vs. Consensus 2018F 2019F
Bukit Asam (PTBA IJ)
Latest EPS (Rp) 528 571 Vs. Prior EPS (%)
23.8
18.6 Vs. Consensus (%)
16.2
24.5 Source: Bloomberg
Frederick Daniel Tanggela
PT Indo Premier Sekuritas frederick.daniel@ipc.co.id
Strong earnings momentum to remain Solid 3Q18 performance as coal ASP improved. Additional earnings from DMO quota transfer could reach Rp500bn. We raise our earnings forecasts by 24%-19% for FY18F-19F. Buy with 25% upside to new TP of Rp5,800 (prev. Rp5,100).
Strong earnings as ASP increased. PTBA recorded strong performance in 3Q18 with earnings grew 50% qoq and 75% yoy to Rp1.35tn, allowing net profit to reach Rp3.93tn in 9M18, up 50% yoy, which inline with consensus expectation (75%) but above our forecast (80%) for FY18F. Strong earnings were mostly stemming from higher ASP of Rp842k per ton (+12.9% yoy) in 9M18. PTBA’s operating profit grew 11% qoq and 34% yoy to Rp1.65tn in 3Q18, which brought
9M18 operating profit to Rp5.17tn, up 40% yoy and represent 80% and 82% (above) of consensus and our forecasts for FY18F, respectively. Please note that PTBA’s reported 9M18 results had not included additional revenues from coal DMO transfer quota which currently remains on negotiation and verification process with the buyers and regulator.
Potential earnings from DMO quota transfer. On the last meeting, the management stated that PTBA’s excess DMO quota had reached 5mn tons by
9M18. We estimate by end of 2018, the company’s excess domestic market obligation (DMO) quota would reach ~6.3mn tons. Note that we have included additional earnings from DMO quota transfer in our new earnings estimate for FY18F-19F (Fig. 8). We forecast additional earnings (after tax) from DMO quota would reach ~Rp530bn in FY18F and ~Rp600bn in FY19F, assuming excess DMO quota of 25% (of total production volumes), quota transfer price of US$8 per ton and USD/IDR of Rp14,000.
Revise up earnings estimates. We raise our earnings forecast by 23.8% - 18.6% (Fig. 8) for FY18F-19F, respectively, as we included DMO quota transfer revenues and we revise up ASP estimates by 1.1% - 2.8% for FY18F-19F, respectively, given better than expected coal ASP in 9M18. We maintain our flattish coal price assumption for FY19F which translates to PTBA’s flat coal ASP of ~US$60 per ton for FY18F-19F. Nonetheless, we believe PTBA’s earnings performance would outperform its peers on the back of manageable stripping ratio and improvement in railway coal transport volumes.
Maintain Buy with 25% potential upside to new TP of Rp5,800. We maintain our Buy rating for PTBA with 25% potential upside to our new target price (DCF-based, WACC: 14.3%, TG: 2%) of Rp5,800 (prev. Rp5,100) which implies FY18F-19F P/E of 11.0x and 10.2x, respectively. Our new TP is derived from higher earnings estimates, roll-over base valuation year to 2019 and higher risk free rate assumption of 8.5% (prev. 7.5%).
- 62 21 5793 1170
Fig. 1: Production and railway transport volumes Fig. 2: ASP and EBITDA margin Production volumes Railway transports ASP (LHS) EBITDA Margin (RHS)
35
30.3 160
50%
29.1
30 37.0%
27.5 35.0% 26.4 140 33.8% 40%
25.7 31.6% 31.6%
24.2
23.5
25 120
30%
21.4 20.2% 20.0% 21.0%
19.6 17.2%
)
19.3 s
20 n 100
20% n
17.7 to o
16.4
81 t
15.8 r
15.1
14.8 e
80 10%
14.0 (m
15 p
12.9
12.8 $
11.9
61
62
62
60
60
11.5 US
53
54
60 0%
51
10
40
- 10%
5
20
- 20%
- 30% 2011 2012 2013 2014 2015 2016 2017 2018F 2019F 2020F 2012 2013 2014 2015 2016 2017 2018F 2019F 2020F
Source: PTBA, IndoPremier Source: PTBA, IndoPremier
Fig. 3: Stripping ratio (x) Fig. 4: Coal resources and reserves (m tons)
4.9
4 IPC
24
4.6
4.5
4.5
4.4
4.4
4.2
4.0
4.0
40 Ombilin 3.6 110 110
Tabalong Reserves 3.33b tons 290
Resources 8.26b tons 290
Peranap 670
Lahat 2,480
Tanjung 2,890 2011 2012 2013 2014 2015 2016 2017 2018F 2019F 2020F
Enim 4,690 Source: PTBA, IndoPremier
Source: PTBA Fig. 5: Coal sales, export vs domestic Fig. 6: EPS growth and net margin
Domestic Export EPS growth (LHS) Net margin (RHS) 300
40 100%
29.2
28.1 225
30
26.7
25.4
25.0 35%
24.3 80% 39% 41%
23.0 45% 45% 45% 45% 48% 47%
54% 150
20
16.3 123.1 14.8 60%
14.2
14.3 )
) (% (%
75
10
53.6 40% 24.3 65%
61%
9.4
8.2 59%
1.9
0.9 55% 55% 55% 55% 52% 53% 46%
20%
- 1.5
- 26.4
- 75
- 10 0%
2010 2011 2012 2013 2014 2015 2016 2017 2018F 2019F 2020F 2011 2012 2013 2014 2015 2016 2017 2018F 2019F 2020F Source: PTBA
Source: PTBA, IndoPremier
Fig. 8: 3Q18 results summary (Rp Bn)
9M18
9M17 % Y-Y
3Q18 % Q-Q % Y-Y vs. cons. vs. ours Revenues 16,036 13,222 21.3 5,511
15.4
29.5
72.2
77.6 COGS 9,368 8,175
14.6 3,267
11.3
28.0 Gross profit 6,667 5,047
32.1 2,244
21.8
31.8
72.9
77.2 G&A expenses 974 806
20.9 410
71.6
41.7 Selling expenses 664 621 7.0 215
9.1
21.5 Other 144
86
67.5 32 (58.1) (586.9)
Operating profit 5,174 3,706 39.6 1,651
11.4
34.3
79.8
82.1 Net interest inc. (exp) 111 (84) (232.2)
89 599.5 (666.3) Other 121 104
16.0 71 250.6
84.7 Pretax profit 5,406 3,726
45.1 1,810
19.5
44.7
76.1
80.7 Tax 1,411 1,062
32.9 436
18.0
30.5 Minority Interest
65
39
67.3 21 (0.3)
33.3 Net profit 3,930 2,626
49.7 1,354
20.3
50.1
75.1
80.0 GPM (%)
41.6
38.2
40.7 OPM (%)
32.3
28.0
30.0 Pretax mgn (%)
33.7
28.2
32.9 NPM (%)
24.5
19.9
24.6 Source: PTBA, IndoPremier
Fig 8. Earnings revisions FY18F FY19F (Rp Bn) old new (%) change old new (%) change
Coal ASP ($/ton)
59.4
60.0
1.1
58.6
60.3
2.8
25.8
25.8
29.2
29.2 - - Coal Sales Volumes (m tons) Revenues 20,664 21,674 4.9 23,989 24,668
2.8 Gross profit 8,637 9,564 10.7 10,207 10,823
6.0 Operating profit 6,302 7,833 24.3 7,081 8,423
18.9 Pretax profit 6,695 8,287 23.8 7,559 8,966
18.6 Net profit 4,912 6,080 23.8 5,545 6,578
18.6 Margins (%) GPM
41.8
44.1
2.3
42.6
43.9
1.3 OPM
30.5
36.1
5.6
29.5
34.1
4.6 Pretax mgn
32.4
38.2
5.8
31.5
36.3
4.8 NPM
23.8
28.1
4.3
23.1
26.7
3.5 Source: PTBA, IndoPremier
Year To 31 Dec (RpBn) 2016A 2017A 2018F 2019F 2020F Income Statement
Net Revenue 14,059 19,471 21,674 24,668 27,325 Cost of Sales (9,657) (10,965) (12,110) (13,845) (15,414) Gross Profit 4,401 8,507 9,564 10,823 11,911 SG&A Expenses (1,871) (2,608) (1,730) (2,400) (3,479) Operating Profit 2,531 5,899 7,833 8,423 8,432 Net Interest
53 81 266 329 380 Forex Gain (Loss) (10) (12) (13) Others-Net 150 122 198 226 250 Pre-Tax Income 2,734 6,102 8,287 8,966 9,049 Income Tax (709) (1,554) (2,111) (2,284) (2,305) Minorities (18) (71) (96) (104) (105) Net Income 2,006 4,476 6,080 6,578 6,639
Balance Sheet
3,675 3,555 5,690 6,905 7,886 Cash & Equivalent
2,285 5,344 5,948 6,770 7,499 Receivable
1,102 1,156 1,277 1,460 1,625 Inventory
1,288 1,063 1,183 1,346 1,491 Other Current Assets
8,350 11,118 14,097 16,482 18,502 Total Current Assets
7,516 7,466 8,210 9,043 10,132 Fixed Assets - Net Goodwill
1,315 1,905 2,245 2,645 3,117 Non Current Assets
18,577 21,987 26,126 29,822 33,485 Total Assets 958 208 208 208 208 ST Loans 539 886 1,119 1,246 Payable
3,065 3,328 3,704 4,216 4,670 Other Payables
481
91 Current Portion of LT Loans 5,043 4,513 4,891 5,544 6,124 Total Current Liab.
167
36
36
36
36 Long Term Loans 2,814 3,638 4,670 5,994 7,694 Other LT Liab. 8,024 8,187 9,597 11,574 13,854
Total Liabilities (944) (956) (956) (956) (956)
Equity 11,366 14,565 17,287 19,001 20,378
Retained Earnings 131 192 198 204 210 Minority Interest
10,552 13,800 16,528 18,248 19,631 Total SHE + Minority Int. Total Liabilities & Equity 18,577 21,987 26,126 29,822 33,485
Source: PTBA, IndoPremier
Year to 31 Dec 2016A 2017A 2018F 2019F 2020F Cash Flow
2,006 4,476 6,080 6,578 6,639 Net Income (Excl.Extraordinary&Min.Int) 428 677 194 203 214 Depr. & Amortization 631 3,297 2,601 1,732 1,439 Changes in Working Capital
(1,137) (6,035) (1,861) (722)
10 Others 1,928 2,415 7,015 7,791 8,302
Cash Flow From Operating (574) (677) (943) (1,051) (1,327)
Capital Expenditure 259 141 Others
(315) (536) (943) (1,051) (1,327) Cash Flow From Investing
(237) (881) Loans Equity
(611) (602) (3,357) (4,864) (5,262) Dividends
(163) (524) (584) (664) (736) Others
(1,011) (2,007) (3,941) (5,528) (5,998) Cash Flow From Financing 559 (119) 2,134 1,216 981
Changes in Cash
Financial Ratios
31.3
43.7
44.1
43.9
43.6 Gross Margin (%)
18.0
30.3
36.1
34.1
30.9 Operating Margin (%)
19.4
31.3
38.2
36.3
33.1 Pre-Tax Margin (%)
14.3
23.0
28.1
26.7
24.3 Net Margin (%)
11.3
22.1
25.3
23.5
21.0 ROA (%)
20.2
36.8
40.1
37.8
35.1 ROE (%)
19.1
35.9
41.8
39.8
37.1 ROIC (%)
50.4
71.5
95.1
94.1
95.3 Acct. Receivables TO (days)
0.0
0.0
0.0
0.0
0.0 Acct. Receivables - Other TO (days)
8.3
9.7
10.0
10.1
10.0 Inventory TO (days)
31.9
23.7
28.1
27.7
28.0 Payable TO (days)
0.0
0.0
0.0
0.0
0.0 Acct. Payables - Other TO (days)
15.2
2.4
1.5
1.3
1.2 Debt to Equity (%)
0.1
0.0
0.0
0.0
0.0 Interest Coverage Ratio (x) (19.6) (23.3) (32.9) (36.5) (38.9)
Net Gearing (%)
Source: PTBA, IndoPremier
Head Office PT INDO PREMIER SEKURITAS Wisma GKBI 7/F Suite 718 Jl. Jend. Sudirman No.28 Jakarta 10210 - Indonesia p +62.21.5793.1168 f +62.21.5793.1167
INVESTMENT RATINGS
BUY : Expected total return of 10% or more within a 12-month period HOLD : Expected total return between -10% and 10% within a 12-month period SELL : Expected total return of -10% or worse within a 12-month period ANALYSTS CERTIFICATION.
The views expressed in this research report accurately reflect the analysts personal views about any and all of the subject securities or issuers; and no part of the research analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in the report.
DISCLAIMERS
This research is based on information obtained from sources believed to be reliable, but we do not make any representation or warranty nor accept any responsibility or liability as to its accuracy, completeness or correctness. Opinions expressed are subject to change without notice. This document is prepared for general circulation. Any recommendations contained in this document does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. This document is not and should not be construed as an offer or a solicitation of an offer to purchase or subscribe or sell any securities. PT. Indo Premier Sekuritas or its affiliates may seek or will seek investment banking or other business relationships with the companies in this