Bukit Asam (PTBA IJ)

Transcription

1 Equity Research Results Note Thursday,19 April 2018 BUY Maintain Last price (IDR) 3,480 Target Price (IDR) 3,600 Upside/Downside +3.4% Previous Target Price (IDR) 3,600 Stock Statistics Sector Bloomberg Ticker Coal Mining PTBA IJ No of Shrs (mn) 10,871 Mkt. Cap (IDRbn/USDmn) 37,830/2,748 Avg. daily T/O (IDRbn/USDmn) 80.6/5.9 Major shareholders (%) Indonesia Asahan Aluminium 65.0 Estimated Free Float 35.0 EPS Consensus (IDR) 2018F 2019F 2020F Danareksa Consensus Danareksa/Cons PTBA relative to JCI Index Source : Bloomberg Bukit Asam (PTBA IJ) Higher coal prices sustained earnings Bukit Asam (PTBA) has reported net profits of IDR1,451bn in 1Q18 (-21.6% qoq, but +66.6% yoy). While we believe that the quarterly decline in net profits owes to a higher stripping ratio, the strong yearly earnings mainly reflect: a) higher coal prices and b) strong coal production. The results beat our forecast and consensus estimates. We maintain our BUY recommendation on the stock given expectations of strong coal production growth in 2018 which will sustain earnings. Higher production costs and a higher tax rate led to lower quarterly net profits. The company reported 21.6% qoq lower net profits of IDR1,451bn in 1Q18. This mainly reflects: a) lower revenues (-8% qoq), b) higher production costs - which we believe were due to a higher stripping ratio, and c) a higher tax rate of 29.1% in 1Q18 (4Q17: 20.7%). Lower operating expenses (-57.2% qoq) helped to cushion against a further decline in net profits. Strong net profits on higher coal prices and higher production. Net profits soared by 66.6% yoy in 1Q18. This was mainly attributable to: a) higher coal prices and b) higher coal production (on the back of greater railway capacity). The company indicated that coal production jumped by 17% yoy to 5.3mn tonnes, while coal sales volume increased by 15.8% yoy to 6.3mn tonnes. The 1Q18 figure is within the management s expectation as it is 24.3% of the full year target of 25.9mn tonnes. Set to book strong earnings in The capping of the coal price at USD70/tonne for the DMO to PLN is expected to impact the ASP and adversely affect the company s performance in 2Q18. Moreover, we expect the higher stripping ratio and higher crude oil prices to increase the cash cost of production further. Nonetheless, we still expect PTBA to book strong earnings in 2018 owing to: a) higher production capacity given higher railway capacity and b) a higher sales contribution from high calorific coal which will boost the company s ASP. Maintain BUY with a target price of IDR3,600 (based on DCF valuation with a WACC of 11.9% and long-term growth of 3%). We like the company given: a) its abundant reserves and b) diversification into power plants. The main downside risk relates to further unfavorable government policies concerning domestic coal prices. Our TP implies 8.5x 2018F PE. Key Financials Year to 31 Dec 2016A 2017A 2018F 2019F 2020F Revenue (IDRbn) 14,059 19,471 20,700 22,605 24,245 EBITDA (IDRbn) 2,876 6,569 6,571 6,791 6,588 EBITDA Growth (%) (3.0) Net profit (IDRbn) 2,006 4,476 4,623 4,838 5,089 x Stefanus Darmagiri EPS (IDR) (62-21) EPS growth (%) (1.5) BVPS (IDR) , , , ,141.5 stefanus.darmagiri@danareksa.com DPS (IDR) PER (x) PBV (x) Dividend yield (%) EV/EBITDA (x) See important 12.6 disclosure 5.4 at the back 5.0 of this report Source : PTBA, Danareksa Estimates

2 Exhibit 1. Revenues and Growth Exhibit 2. Net Profits and Growth Exhibit 3. Margins Exhibit 4. Gearing Level Exhibit 5. 1Q18 Results above expectation Financial performance 1Q17 4Q17 1Q18 qoq, % yoy, % 1Q17 1Q18 yoy, % Net sales, IDRbn 4,547 6,249 5,749 (8.0) ,547 5, COGS, IDRbn (2,855) (2,789) (3,167) (2,855) (3,167) 10.9 (1 Gross profit, IDRbn 1,692 3,460 2,582 (25.4) ,692 2, Opex, IDRbn (470) (1,267) (542) (57.2) 15.4 (470) (542) 15.4 ( Operating profit, IDRbn 1,223 2,192 2,040 (6.9) ,223 2, Pretax profit, IDRbn 1,218 2,375 2,080 (12.4) ,218 2, Net profit, IDRbn 871 1,851 1,451 (21.6) , Gross margin, % (10.4) Operating margin, % Net margin, % (4.4) Source: Danareksa Sekuritas estimates See important disclosure at the back of this report 2

3 Exhibit 6. Income Statement Revenue 14,059 19,471 20,700 22,605 24,245 COGS (9,657) (10,965) (11,874) (13,442) (14,575) Gross profit 4,401 8,507 8,826 9,163 9,670 EBITDA 2,876 6,569 6,571 6,791 6,588 Oper. profit 2,531 5,899 6,101 6,185 6,588 Interest income Interest expense (149) (104) (103) (103) (103) Forex Gain/(Loss) Income From Assoc. Co s Other Income (Expenses) (37) (34) (34) (34) (34) Pre-tax profit 2,697 6,068 6,265 6,560 6,903 Income tax (673) (1,521) (1,566) (1,640) (1,726) Minority interest (18) (71) (75) (82) (88) Net profit 2,006 4,476 4,623 4,838 5,089 Core Net Profit 2,006 4,476 4,623 4,838 5,089 Exhibit 7. Balance Sheet Cash & cash equivalent 3,675 3,555 7,798 6,577 5,814 Receivables 2,285 5,344 2,269 2,477 2,657 Inventory 1,102 1,156 1,526 1,728 1,873 Other Curr. Asset 1,288 1,063 1,063 1,063 1,063 Fixed assets - Net 6,088 6,199 9,788 13,232 16,384 Other non-curr.asset 4,139 4,670 4,808 4,952 5,173 Total asset 18,577 21,987 27,252 30,029 32,964 ST Debt 1, ,000 1,500 1,000 Payables ,419 1,606 1,741 Other Curr. Liabilities 3,065 3,328 3,227 3,016 2,831 Long Term Debt Other LT. Liabilities 2,231 3,094 3,094 3,094 3,094 Total Liabilities 8,024 8,187 10,320 9,796 9,246 Shareholder'sFunds 10,421 13,608 16,664 19,884 23,280 Minority interests Total Equity & Liabilities 18,577 21,987 27,252 30,029 32,964 See important disclosure at the back of this report 3

4 Exhibit 8. Cash Flow Net income 2,006 4,476 4,623 4,838 5,089 Depreciation and Amort Change in Working Capital (72) (3,417) 4,838 (935) (875) OtherOper. Cash Flow (404) 603 (221) (431) (447) Operating Cash Flow 1,875 2,334 9,709 4,078 4,516 Capex (301) (685) (4,050) (4,050) (3,900) Others Inv. Cash Flow Investing Cash Flow (113) (351) (3,872) (3,660) (3,571) Net change in debt (353) (1,271) New Capital Dividend payment (611) (602) (1,567) (1,618) (1,693) Other Fin. Cash Flow (239) (229) (27) (20) (14) Financing Cash Flow (1,203) (2,102) (1,594) (1,638) (1,708) Net Change in Cash 559 (119) 4,242 (1,221) (763) Cash - begin of the year 3,115 3,675 3,555 7,798 6,577 Cash - end of the year 3,675 3,555 7,798 6,577 5,814 Exhibit 9. Key Ratios Year to 31 Dec 2016A 2017A 2018F 2019F 2020F Growth (%) Sales EBITDA (3.0) Operating profit Net profit (1.5) Profitability (%) Gross margin EBITDA margin Operating margin Net margin ROAA ROAE Leverage Net Gearing (x) (0.1) (0.2) (0.3) (0.2) (0.2) Interest Coverage (x) Source : PTBA, Danareksa Estimates See important disclosure at the back of this report 4

5 See important disclosure at the back of this report 5