Thursday, 18 November 2010

www.e-samuel.com

Bumi Resources (BUMI) BUY (Maintain)

Price : Rp2,600 Target Price: Rp3,250

Bakrie - Vallar Transaction

• Bakrie-Vallar reverse take over deal. London listed Vallar Plc, founded by Nathaniel JCI Index :
3,673
Rothschild and James Campbell will acquire 25% stakes of PT Bumi Resources (BUMI)
at Rp2,500/share and 75% stakes in PT Berau Energy (BRAU) at Rp540/share through Share issued (mn)

combination of cash and share swaps, amounting total US$3.0 bn. Vallar will pay 19,404

US$739 in cash and issue new shares total 142.4 mn (90.1 mn to swap with BUMI and Market Cap. (bn)
52.3 mn to swap with BRAU) at GBP 10/share. 56,607
12 Mth High/Low
• No change of control in BUMI level. Post transaction, Vallar Plc will be renamed Bumi
2,700/1,290
COMPANY UPDATE

Plc and Bakrie will be the single largest shareholder. Bakrie Group and Recapital will
Avg Daily Vol
hold 43% and 25% of Vallar, respectively. The deal is between Vallar and Bakrie Group
169mn
while BUMI is a target company. No major impact in BUMI as there’s no change of
control and operations in BUMI. Bakrie will have the right to nominate key directorial Free Float (%)
and managerial positions within the BOD of Bumi Plc ie: Indra Barkie as Chairman, Ari 49%
Hudaya as CEO and Andrew Bechkam as CFO. Nominal Value
Rp500
• Tender offer in BRAU. Mandatory offer will be made to the minority shareholders of Book value/share ‘10
BRAU and Vallar has intention to increase ownership in BUMI during 2011. The reverse US$0.092
take-over will require approval from BNBR shareholder.

• Maintain BUY, PT Rp3,250/share. We view positive on the deal and it will create Analyst:
positive sentiment toward BUMI and also BNBR. With shareholder that is listed on the
London Stock Exchange, we believe it will improve BUMI’s corporate governance and Christine Salim
(021)8370-1608 #115
credibility. Moreover, wider access to raise fund and enable company to refinance loan christine.salim@e-samuel.com
at lower interest rate and also access of backdoor listing. After the successful of non
pre-emptive right issuance, BUMI is still on track to de-leverage loan. Further loan
reduction will be from collection of receivable from asset sale. We maintain our
forecast pending to 3Q10 results. MAINTAIN BUY

Forecast and Valuation (at closing price Rp2,600)

Y/E Dec (US$mn) 08A 09E 10F 11F
Sales 3,378 3,219 3,867 4,686
EBITDA 1,199 1,092 1,459 1,843
Net Profit 372 191 334 483
EPS (US$) 0.019 0.009 0.017 0.025
EPS (Rp) 194 101 160 229
BV per share (US$) 0.060 0.076 0.092 0.114
EV/EBITDA (x) 9.7 6.6 5.9 4.6
P/E Ratio (x) 28.3 25.3 16.2 11.3
P/BV Ratio (x) 9.0 3.6 3.15 2.5
 Thursday, 18 November 2010
Christine Salim
(021)8370-1608 Ext 115
christine.salim@e-samuel.com

Figure 1. Bakrie – Vallar reverse take over deal

Source: Investor Daily

This document is for information only and for the use of the recipient. It is not to be reproduced or copied or made available to others. Under no
circumstances is it to be considered as an offer to sell or solicitation to buy any security. Any recommendation contained in this report may not be suitable for
2
all investors. Moreover, although the information contained herein has been obtained from sources believed to be reliable, its accuracy, completeness and
reliability cannot be guaranteed. All rights reserved by PT Samuel Sekuritas Indonesia.
 Thursday, 18 November 2010
Christine Salim
(021)8370-1608 Ext 115
christine.salim@e-samuel.com

BUMI
Mining

Profit and Loss Statement

Company Background
Yr-end Dec (US$mn) 08A 09E 10F 11F
Revenue 3,378 3,219 3,867 4,686 BUMI is the largest coal producer in Indonesia
and is among the top 10 largest thermal coal
Cost of good sold 1,766 2,116 2,030 2,372
producers in the world. BUMI is also ranks as the
Gross profit 1,613 1,104 1,837 2,314 lowest cost producers in the world.
Operating expenses 511 465 491 595
The company export market includes Japan, Asia,
Operating profit 1,102 638 1,346 1,718 Europe and South America as well as supplying
EBITDA 1,199 1,092 1,459 1,843 domestic market.
Other income (exp) (70) (120) (477) (463) BUMI has large coal reserves that can last for
Pretax profit 1,033 518 869 1,255 more than 20 years of production.

Tax 489 234 391 565

Min. interest 172 93 143 207
Shareholding Structure
Net profit 372 191 334 483
Bakrie & Brothers : 26.9%
Bank of NY : 7.1%
Balance Sheet Barclays Global Fund : 2.0%
Yr-end Dec (US$mn) 08A 09F 10F 11F Estimate Free Float : 64.0%
Cash 172 60 111 463
Current Assets 1,474 1,957 1,830 2,422 Price Chart
220
Fixed Assets (Net) 878 1,139 1,326 1,502 BUMI JCI
Other LT Assets 2,711 4,254 4,300 4,049 190

Total Assets 5,235 7,410 7,567 8,436 160

130
Current Liablilites 2,022 1,715 1,627 1,872
Bank Loan 948 3,469 3,385 3,552 100

LT Liablilites 745 629 648 668 70

Total Liabilities 3,716 5,813 5,660 6,092 40

May-10
Nov-09

Mar-10

Apr-10

Aug-10
Oct-09

Dec-09

Jan-10

Feb-10

Jun-10

Jul-10

Total Equity 1,165 1,471 1,776 2,210 Sep-10

Basic Assumption
Yr-end Dec (Rpbn) 08A 09F 10F 11F
Coal Production (mn ton) 52.8 63.1 67.0 75.0
Avg coal price (US$) 125.0 75.0 90.0 95.0
Avg selling price (US$) 73.8 63.1 67.2 70.5
Cash Cost (US$/MT) 31.1 29.5 29.5 29.8
Effective Tax Rate 8.7% 45.0% 45.0% 45.0%

This document is for information only and for the use of the recipient. It is not to be reproduced or copied or made available to others. Under no
circumstances is it to be considered as an offer to sell or solicitation to buy any security. Any recommendation contained in this report may not be suitable for
3
all investors. Moreover, although the information contained herein has been obtained from sources believed to be reliable, its accuracy, completeness and
reliability cannot be guaranteed. All rights reserved by PT Samuel Sekuritas Indonesia.
 Thursday, 18 November 2010
Christine Salim
(021)8370-1608 Ext 115
christine.salim@e-samuel.com

Recommendation History – Bumi Resources (BUMI)

Date Recommendation Closing Price Target

01 October 2010 BUY 2,225 3,250

01 Sept 2010 BUY 1,700 3,250

03 June 2010 BUY 1,840 3,250

06 April 2010 BUY 2,500 3,250

02 March 2010 BUY 2,325 3,625

14 January 2010 BUY 2,875 3,625

7 January 2010 BUY 2,700 3,625

15 Oct 2009 BUY 3,000 3,625

source : bloomberg

Recommendation Chart– Bumi Resources (BUMI)

source : bloomberg

This document is for information only and for the use of the recipient. It is not to be reproduced or copied or made available to others. Under no
circumstances is it to be considered as an offer to sell or solicitation to buy any security. Any recommendation contained in this report may not be suitable for
4
all investors. Moreover, although the information contained herein has been obtained from sources believed to be reliable, its accuracy, completeness and
reliability cannot be guaranteed. All rights reserved by PT Samuel Sekuritas Indonesia.