Flash Note TB Bukit Asam

PTBA IJ / PTBA.JK
20 September 2010

BUY
Long Term Contract with PLN Price : Rp18,500
Target Price : Rp22,000

Key Financial and Valuation Metrics

Year-end 31-Dec 2008 2009 2010F 2011F 2012F

Revenue (Rp bn) 7,216 8,948 8,628 11,082 13,063
Net profit (Rp bn) 1,708 2,728 1,901 2,915 3,427
EPS (Rp) 741 1,184 825 1,265 1,487
EPS growth (%) 124.6 59.7 -30.3 53.4 17.6
DPS (Rp) 371 592 412 633 744
Dividend yield (%) 2.0 3.2 2.2 3.4 4.0
P/E Ratio (x) 25.0 15.6 22.4 14.6 12.4
EV/EBITDA (x) 15.6 10.5 15.2 9.4 7.7
Return on Equity (%) 50.2 56.2 31.8 40.4 37.3
Net Gearing (%) net cash net cash net cash net cash net cash

Source: Company and NISP Sekuritas

• 20-year contract for 14.5mn tons per year coal supply. TB Bukit Asam has signed a 20-year contract to supply
an additional 14.5 mn tons of coal per year to Perusahaan Listrik Negara (PLN). This is a massive increase as the
company currently only supplies 8.1mn tons coal to PLN, 6.1mn tons of which are conveyed to Suralaya power plant
with the balance for Tarahan and Bukit Asam power plants.

• TB Bukit Asam to supply more than 20mn tons of coal per year to PLN. With this new contract, total coal
that will be conveyed to PLN may reach 22.6mn tons a year, which secures demand for TB Bukit Asam’s coal. PLN
signed this contract to match its roadmap target where it requires an annual coal consumption of 95.3mn tons a year
in 2014, 133.6% higher from its current annual consumption of 40.8mn tons per year. The increase is due to the
commencement of several power plants with total capacity of 16,477 MW.

• Requires completion of current projects. TB Bukit Asam agreed to deliver such a sizable amount of coal as soon
as the company concluded its logistic expansion projects. Currently the company is still working to expand the
capacity of three projects. They are: 1) existing railway project, 2) the Tanjung Enim – Lampung railway project and
the most recent one, 3) the Tanjung Enim – Palembang railway project.

• Contract could be utilized to finance project. There are no further details regarding this new contract, thus, we
still need to wait more insight from the company. Nevertheless, despite the lack of further details, we see this
contract is very positive for TB Bukit Asam as the company could use the contract to obtain funding for its projects.
As in the case of the agreement between TB Bukit Asam and Kereta Api Indonesia (KAI), the TB Bukit Asam contract
helped KAI to obtain financing, which were then used to add locomotives and wagons for TB Bukit Asam existing
railway projects.

• Positive for TB Bukit Asam. As such, with this secured demand for its coal and potential for securing additional
funding, the contract would help TB Bukit Asam to complete its railway projects on time. The company’s new railway
projects for Tanjung Enim – Lampung and Tanjung Enim – Palembang are scheduled to commence in 2014.

• Buy. In all, this contract brings TB Bukit Asam a step closer to obtaining adequate access to its abundant coal
reserves. Thus, we still maintain Buy on this counter.

Bagus Hananto
bagus@nispsekuritas.com
62-21-8379 5238 ext.7311
TB Bukit Asam

Exh. 1: PLN Power Plant Projects

Thermal Power Plant MW Schedule Thermal Power Plant MW Schedule
Suralaya 625 2010 Asam - Asam 130 > 2014
Indramayu 900 2010 Pangkalan Bun 14 > 2014
Rembang 630 2010 New Kaltim 250 > 2014
Paiton 7 660 2010 Pulang Pisau 120 > 2014
Lontar 945 2011 Muara Jawa 200 > 2014
Pelabuhan Ratu 1,050 2011 New Kalsel 200 > 2014
Pacitan 630 2011 North Sulawesi 2 50 > 2014
Cirebon 660 2011 Gorontalo 62 > 2014
Paiton 3 815 2012 Molotabu 20 > 2014
Tanjungjati B 3 - 4 1,320 2012 North Sulawesi 1 50 > 2014
Celukan Bawang 130 2012 Kotamobagu 40 > 2014
Tanjung Awar - Awar 700 2012 Barru 100 > 2014
Adipala 660 2012 South Sulawesi 1 200 > 2014
Central Java 2,000 2012 Talakar 1 200 > 2014
Talakar 2 200 > 2014
Meulaboh 200 2010 - 2014
Pangkalan Susu 840 2010 - 2014
Tarahan 200 2010 - 2014
Simpang Belimbing 227 2010 - 2014
Pesisir Sumbar 224 2010 - 2014
Riau 200 2010 - 2014
Banjarsari 200 2010 - 2014
South Sumatera 2 225 2010 - 2014
Mine Mouth South Sumatera 1 300 2010 - 2014
Mine Mouth Riau 1 300 2010 - 2014

Source: Media

2
TB Bukit Asam

PT NISP Sekuritas
Puri Imperium Building (Head Office)
Office Plaza Unit G. 2, 3, 5
Jl. Kuningan Madya Kav. 5-6, Kuningan
Jakarta 12980 Indonesia
Phone. (021) 8379 5238 (hunting)
Fax. (021) 8379 5240
Email: info@nispsekuritas.com
Website: www.nispsekuritas.com

Research Team
+62 21 83795238
Bagus Hananto Deputy Head of Research bagus@nispsekuritas.com Ext 7311
Lyana Margareth Equity Analyst lyana.margareth@nispsekuritas.com Ext 7327
Ariawan Fixed Income Analyst ariawan@nispsekuritas.com Ext 7711
Yuni Pratiwi Research Assistant yuni.pratiwi@nispsekuritas.com Ext 7338

Branches
Phone: Fax:

Jl. Pluit Kencana Raya No. 59

Pluit Jakarta (021) 6667 5050 (hunting) (021) 6667 5051
Jakarta Utara 14450

Wisma HSBC, 3A Floor

Bandung Jl. Asia Afrika No. 116 (022) 426 7288 (022) 426 8009
Bandung 40261

Intiland Tower, 1st Floor Suite 7

Surabaya Jl. Panglima Sudirman 101-103 (031) 547 1213 (031) 547 1314
Surabaya 60271

Medan Jl. Bogor No. 51, Medan (061) 415 4512 (061) 456 4753

Rating Definitions
BUY : We expect this stock to give total return of above 15% over the next 12 months.
HOLD : We expect this stock to give total return of between -15% and 15% over the next 12 months.
SELL : We expect this stock to give total return of -15% or lower over the next 12 months.

DISCLAIMER:

This report was produced by PT NISP Sekuritas, a member of the Indonesia Stock Exchange (IDX). The Information contained in this report
has been obtained from public sources believed to be reliable and the options, analysis, forecasts, projections and expectations contained in
this report are based on such information and are expressions of belief only. No representation or warranty, express or implied, is made that
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