FLASH | Perusahaan Gas Negara

Company Update | 22 July 2020

Mandiri Sekuritas Analyst

Read-Across From Operational Data in May---Jun-20
Henry Tedja The latest May–Jun operational data disclosures suggest a potential revenue beat
+6221 5296 9434 in 2Q20 given the faster gas demand recovery and higher revenue run-rate
henry.tedja@mandirisek.co.id
compared to our assumptions. Should the trend sustain, we see upside to our 2020
Adrian Joezer distribution volume forecast of 770 BBTUD. Reiterate Buy.
+6221 5296 9415
adrian.joezer@mandirisek.co.id
Recovery in progress, with operational data beating our 2Q20 estimates. With 758
BBTUD of gas distribution volume in Jun-20 (+14.2% MoM), we estimate 2Q20 gas volume
could achieve 741 BBTUD. Transmission volume also increased 4.1% MoM in Jun-20 to
Sector: Oil & Gas 1,233 MMSCFD, which should translate to 1,238 MMSCFD of gas volume in 2Q20. Upstream
lifting also increased 26.1% MoM in Jun-20 to 19,462 BOEPD, which should imply 17,364
BOEPD of oil and gas lifting in 2Q20. Other business segments, such as gas regasification,
BUY LPG processing, and oil transportation, also shared the similar trend.

Current Price Rp1,155 We highlight that PGN benefits from businesses reopening that triggers gas demand
Target Price Rp1,700 (+47.2%) recovery from industrial customers. To note, most of PGN’s distribution areas have
52-wk range Rp2,460 - Rp605 welcomed either new normal or Large-Scale Social Distancing (PSBB) transition in Jun-20.
Additionally, average Indonesian Crude Price (ICP) also increased to USD 36.7/bbl in Jun-20
Stock Data vs. USD 25.7/bbl in May-20 and USD 20.7/bbl in Apr-20. This allows Saka Energi to increase
its oil lifting, as the current ICP price has been higher than its production costs at USD 7
Bloomberg Code PGAS IJ -25/bbl, we estimate. All in, PGN’s revenues (ex. Others and Gas Regasification businesses)
Mkt.Cap (Rp bn/US$ mn) 27,999 / 1,899 in 2Q20 could beat our estimates by 8.5% higher, assuming the average selling prices of
Issued Shares (mn) 24,242 both gas and oil are in-line with our estimates.
Avg. Daily T/O (Rp bn/US$ mn) 146.1/9.9

Retain BUY rating. In the absence of a re-lockdown, we think gas demand could recover
faster than our estimate, providing upside potential to our distribution volume forecast at
Key Financials 770 BBTUD in FY20. We maintain our BUY rating on PGAS, which trades on 8.6x 2021 PE,
implying 32.7% discount to its LTA.
2020F 2021F 2022F
EPS 0.4 0.9 1.3
PE (x) 18.5 8.9 6.5 FIGURE 1. OPERATING METRICS SUMMARY
PBV (x) 0.7 0.7 0.7 vs.
Jun-19 May-20 Jun-20 % MoM % YoY 2Q20 2Q20F
EV/EBITDA (x) 6.6 5.3 4.9 Mansek's
Distribution Volume
EPS Growth (%) 56.4 109.1 38.4 851 664 758 14.2% -11.0% 741 711 4.2%
(BBTUD)
Div. Yld (%) 2.2 4.5 6.2
Transmission Volume
ROAE (%) 4.1 8.2 10.7 2,006 1,184 1,233 4.1% -38.5% 1,238 1,150 7.7%
(MMSCFD)
Upstream Lifting
25,333 15,433 19,462 26.1% -23.2% 17,364 9,430 84.1%
(BOEPD)
Regasification
114 82 83 1.2% -27.2% 81 12 N.A.
(BBTUD)
LPG Processing (TPD) 723 8 163 N.A. -77.4% 58 8 630.3%
Oil Transportation
7,860 10,294 10,131 -1.6% 28.9% 10,375 9,397 10.4%
(BOPD)
Source: Company Data, Mandiri Sekuritas Research estimates

Please see important disclosure at the back of this report Page 1 of 2

 Mandiri Sekuritas A subsidiary of PT Bank Mandiri (Persero) Tbk
Menara Mandiri Tower I, 25th floor, Jl. Jend. Sudirman Kav. 54 – 55, Jakarta 12190, Indonesia
General: +62 21 526 3445, Fax : +62 21 527 5374 (Equity Sales)

RESEARCH
Adrian Joezer Head of Equity Research, Strategy, Consumer adrian.joezer@mandirisek.co.id +6221 5296 9415
Tjandra Lienandjaja Deputy Head of Equity Research, Banking tjandra.lienandjaja@mandirisek.co.id +6221 5296 9617
Ariyanto Kurniawan Automotive, Coal, Metal Mining, Chemical ariyanto.kurniawan@mandirisek.co.id +6221 5296 9682
Kresna Hutabarat Telecom, Media kresna.hutabarat@mandirisek.co.id +6221 5296 9542
Lakshmi Rowter Healthcare, Consumer, Retail lakshmi.rowter@mandirisek.co.id +6221 5296 9549
Robin Sutanto Property, Building Material robin.sutanto@mandirisek.co.id +6221 5296 9572
Edbert Surya Construction, Transportation edbert.surya@mandirisek.co.id +6221 5296 9623
Silvony Gathrie Banking, Research Assistant silvony.gathrie@mandirisek.co.id +6221 5296 9544
Riyanto Hartanto Poultry, Research Assistant riyanto@mandirisek.co.id +6221 5296 9488
Henry Tedja Research Assistant henry.tedja@mandirisek.co.id +6221 5296 9434
Wesley Louis Alianto Research Assistant wesley.alianto@mandirisek.co.id +6221 5296 9510
Leo Putera Rinaldy Chief Economist leo.rinaldy@mandirisek.co.id +6221 5296 9406
Imanuel Reinaldo Economist imanuel.reinaldo@mandirisek.co.id +6221 5296 9651

INSTITUTIONAL SALES
Silva Halim Managing Director silva.halim@mandirisek.co.id +6221 527 5375
Lokman Lie Head of Equity Capital Market lokman.lie@mandirisek.co.id +6221 527 5375
Andrew Handaya Institutional Sales andrew.handaya@mandirisek.co.id +6221 527 5375
Feliciana Ramonda Institutional Sales feliciana.ramonda@mandirisek.co.id +6221 527 5375
Henry Pranoto Institutional Sales henry.pranoto@mandirisek.co.id +6221 527 5375
Kevin Giarto Institutional Sales kevin.giarto@mandirisek.co.id +6221 527 5375
Sharon Anastasia Tjahjadi Institutional Sales sharon.tjahjadi@mandirisek.co.id +6221 527 5375
Talitha Medha Anindya Institutional Sales talitha.anindya@mandirisek.co.id +6221 527 5375
Angga Aditya Assaf Institutional Sales angga.assaf@mandirisek.co.id +6221 527 5375
Ilona Carissa Institutional Sales Ilona.simanungkalit@mandirisek.co.id +6221 527 5375
Kusnadi Widjaja Equity Dealing kusnadi.widjaja@mandirisek.co.id +6221 527 5375
Edwin Pradana Setiadi Equity Dealing edwin.setiadi@mandirisek.co.id +6221 527 5375
Jane Theodoven Sukardi Equity Dealing jane.sukardi@mandirisek.co.id +6221 527 5375
Michael Taarea Equity Dealing michael.taarea@mandirisek.co.id +6221 527 5375

RETAIL SALES
Andreas M. Gunawidjaja Head Retail Equities andreas@mandirisek.co.id 6221 5296 9693
Boy Triyono Jakarta boy.triyono@mandirisek.co.id 6221 5296 5678
Iedprima Intan Maradi Online Jakarta intan.maradi@mandirisek.co.id 6221 5296 9516
Ruwie Medan ruwie@mandirisek.co.id 6261 8050 1825
Linawati Surabaya linawati@mandirisek.co.id 6231 535 7218
Maulidia Osviana Lampung maulidia.osviana@mandirisek.co.id 62721 476 135
Aidil Idham Palembang aidil.idham@mandirisek.co.id 62711 319 900
Dhanan Febrie Handita Bandung dhanan.handita@mandirisek.co.id 6222 426 5088
Yuri Ariadi Pontianak yuri.ariadi@mandirisek.co.id 62561 582 293
Yogiswara Perdana Yogyakarta yogiswara.perdana@mandirisek.co.id 62274 560 596
Achmad Rasyid Bali achmad.rasyid@mandirisek.co.id 62361 475 3066
www.most.co.id care_center@mandirisek.co.id 14032

INVESTMENT RATINGS: Indicators of expected total return (price appreciation plus dividend yield) within the 12-month period from the date of the last
published report, are: Buy (15% or higher), Neutral (-15% to15%) and Sell (-15% or lower).

DISCLAIMER: This report is issued by PT. Mandiri Sekuritas, a member of the Indonesia Stock Exchanges (IDX) and Mandiri Sekuritas is registered and
supervised by the Financial Services Authority (OJK). Although the contents of this document may represent the opinion of PT. Mandiri Sekuritas, deriving its
judgement from materials and sources believed to be reliable, PT. Mandiri Sekuritas or any other company in the Mandiri Group cannot guarantee its
accuracy and completeness. PT. Mandiri Sekuritas or any other company in the Mandiri Group may be involved in transactions contrary to any opinion herein
to make markets, or have positions in the securities recommended herein. PT. Mandiri Sekuritas or any other company in the Mandiri Group may seek or will
seek investment banking or other business relationships with the companies in this report. For further information please contact our number
62-21-5263445.

ANALYSTS CERTIFICATION: Each contributor to this report hereby certifies that all the views expressed accurately reflect his or her views about the
companies, securities and all pertinent variables. It is also certified that the views and recommendations contained in this report are not and will not be
influenced by any part or all of his or her compensation.