JAKARTA, [IFN] - Indonesia is one of the largest coal producer and exporter in the world. Between 70-80% of the total production is exported while the rest is sold in the domestic market.
Daewoo Securities research team said, though domestic sales are expected to increase after the 35,000MW power plant project is completed, the export market is still going to be the main driver for the industry.
However, the coal industry is currently facing hard times since the price dropped because of oversupply in the market and weak demand, especially from China which accounts for about half of total world coal consumption. Until yesterday, Newcastle 6000kc price decreased by 27% compared to the same period the previous year.
PT Bukit Asam (Persero) Tbk, the company offers services including exploration, exploitation, production, transportation and marketing of coal. The company also has a mining area of 66,414ha in South Sumatra, 2,950ha in West Sumatra and East Kalimantan 18.230. Revenue derived from coal (99.4%) and briquettes (0.6%).
Many Indonesian coal company suffered losses in 2014 unless PTBA. The Company recorded a 10.4% growth in net profit to 2.02 billion and revenues grew 16.7% to Rp13,08t trillion in 2014.
This performance was helped by the increase in ASP in the domestic market by 15% YoY and 50% seen from PTBA sold to domestic production, the company is able to generate a positive margin. Unlike its competitors, PTBA plans to increase production by 31% YoY to 21 metric tons.
The existence of growth opportunities in the domestic market making and exposure to the power generation business, making us see the positive catalyst for PTBA.
"However, we still see the risk of decline in prices in the domestic market as a result of the softening of global commodity prices are still ongoing. In addition, we also see an increase in IUP by the government will increase the burden on companies because all the mining regions PTBA has IUP," he said.
This year, PTBA sales volume target of 24 million tonnes, with the volume of production and purchase of coal from third parties 23.70 million tons.
Researchers recommend PTBA with the recommendation 'hold' with a target price of 12 months Rp10.975 (target P / E 13,4x).
"We feel the company more premium than its competitors but the background of weak macro and industry masi could weigh on stock prices," he said.
Daewoo Securities research team said, though domestic sales are expected to increase after the 35,000MW power plant project is completed, the export market is still going to be the main driver for the industry.
However, the coal industry is currently facing hard times since the price dropped because of oversupply in the market and weak demand, especially from China which accounts for about half of total world coal consumption. Until yesterday, Newcastle 6000kc price decreased by 27% compared to the same period the previous year.
PT Bukit Asam (Persero) Tbk, the company offers services including exploration, exploitation, production, transportation and marketing of coal. The company also has a mining area of 66,414ha in South Sumatra, 2,950ha in West Sumatra and East Kalimantan 18.230. Revenue derived from coal (99.4%) and briquettes (0.6%).
Many Indonesian coal company suffered losses in 2014 unless PTBA. The Company recorded a 10.4% growth in net profit to 2.02 billion and revenues grew 16.7% to Rp13,08t trillion in 2014.
This performance was helped by the increase in ASP in the domestic market by 15% YoY and 50% seen from PTBA sold to domestic production, the company is able to generate a positive margin. Unlike its competitors, PTBA plans to increase production by 31% YoY to 21 metric tons.
The existence of growth opportunities in the domestic market making and exposure to the power generation business, making us see the positive catalyst for PTBA.
"However, we still see the risk of decline in prices in the domestic market as a result of the softening of global commodity prices are still ongoing. In addition, we also see an increase in IUP by the government will increase the burden on companies because all the mining regions PTBA has IUP," he said.
This year, PTBA sales volume target of 24 million tonnes, with the volume of production and purchase of coal from third parties 23.70 million tons.
Researchers recommend PTBA with the recommendation 'hold' with a target price of 12 months Rp10.975 (target P / E 13,4x).
"We feel the company more premium than its competitors but the background of weak macro and industry masi could weigh on stock prices," he said.
Comments
Post a Comment