Left Brain Right B - the DBS Vickers Securities Equities Research
Left Brain Right B - the DBS Vickers Securities Equities Research
Left Brain Right B - the DBS Vickers Securities Equities Research
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Regional Equity Strategy 4Q 2009<br />
Bukit Asam<br />
Bloomberg: PTBA IJ | Reuters: PTBA.JK<br />
BUY Rp14,800 JCI : 2,420.11<br />
Price Target : 12-Month Rp 18,550<br />
Potential Catalyst: Higher coal price<br />
Analyst<br />
Yusuf Winoto CFA +6221 3983 2668<br />
yusuf.winoto@id.dbsvickers.com<br />
Domestic play<br />
• Beneficiary of rising domestic demand<br />
• Projects are underway to boost production<br />
• Plenty of reserves to support growth<br />
• BUY with Rp18,550 TP.<br />
Price Relative<br />
Rp<br />
17,395<br />
15,395<br />
13,395<br />
11,395<br />
9,395<br />
7,395<br />
5,395<br />
3,395<br />
1,395<br />
Relative Index<br />
2005 2006 2007 2008 2009<br />
Tambang Batubara (LHS) Relative JCI INDEX (RHS)<br />
Forecasts and Valuation<br />
FY Dec (Rp bn) 2008A 2009F 2010F 2011F<br />
Turnover 7,216 10,097 10,781 12,168<br />
EBITDA 2,514 4,620 4,288 5,237<br />
Pre-tax Profit 2,552 4,485 3,814 4,210<br />
Net Profit 1,708 3,220 2,851 3,146<br />
Net Pft (Pre Ex.) 1,708 3,220 2,851 3,146<br />
EPS (Rp) 741 1,397 1,237 1,366<br />
EPS Pre Ex. (Rp) 741 1,397 1,237 1,366<br />
EPS Gth Pre Ex (%) 125 89 (11) 10<br />
Diluted EPS (Rp) 741 1,397 1,237 1,366<br />
Net DPS (Rp) 165 371 699 619<br />
BV Per Share (Rp) 1,735 2,762 3,300 4,047<br />
PE (X) 20.0 10.6 12.0 10.8<br />
PE Pre Ex. (X) 20.0 10.6 12.0 10.8<br />
P/Cash Flow (X) 19.2 10.3 11.2 9.6<br />
EV/EBITDA (X) 12.4 6.7 7.6 6.6<br />
Net Div Yield (%) 1.1 2.5 4.7 4.2<br />
P/Book Value (X) 8.5 5.4 4.5 3.7<br />
Net Debt/Equity (X) CASH CASH CASH 0.0<br />
ROAE (%) 50.2 62.1 40.8 37.2<br />
Earnings Rev (%): - - -<br />
Consensus EPS (Rp): 1,301 1,116 1,339<br />
ICB Industry : Energy<br />
ICB Sector: Coal<br />
Principal Business: Coal Mining<br />
431<br />
381<br />
331<br />
281<br />
231<br />
181<br />
131<br />
81<br />
Rising domestic demand. The 10,000MW coal-fired<br />
power plant expected to be completed by 2010 will<br />
raise coal demand by 35-40mn tons annually, on top of<br />
<strong>the</strong> current domestic consumption of c.50mn tons p.a.<br />
PTBA produces <strong>the</strong> type of coal that is suitable for use<br />
by power plants and its strong exposure to <strong>the</strong> domestic<br />
market (74% of total sales) will allow it to benefit<br />
directly from rising domestic demand.<br />
Boosting production with infrastructure and power<br />
plant projects. PTBA’s ongoing and future projects<br />
include enhancing its current transportation<br />
infrastructure (2 projects) and building up mine-mouth<br />
power plants (2 projects) that will utilize its vast coal<br />
reserves. These projects are slated for completion<br />
between 2012 and 2013, and will raise coal production<br />
by 36mn tons annually when fully completed. Note that<br />
PTBA has c.2bn tons of coal reserves and produces only<br />
14.5m tons (FY09F) p.a. Thus, PTBA is well positioned to<br />
capture <strong>the</strong> growing domestic coal market.<br />
Reiterate BUY recommendation. Our target price for<br />
PTBA of Rp18,550 implies 15x FY10 PE. This is derived<br />
based on DCF valuation, and assuming 12.6% WACC<br />
(ERP=5%, RF=9.5%, LTG=0%).<br />
At A Glance<br />
Issued Capital (m shrs) 2,304<br />
Mkt. Cap (Rpbn/US$m) 34,101 / 3,446<br />
Major Shareholders<br />
Govt. of Indonesia (%) 65.0<br />
Free Float (%) 35.0<br />
Avg. Daily Vol.(‘000) 5,860<br />
Source of all data: Company, <strong>DBS</strong> <strong>Vickers</strong>, Bloomberg<br />
Page 140<br />
www.dbsvickers.com<br />
Refer to important disclosures at <strong>the</strong> end of this report<br />
ed: SGC / sa: TW