Equity Research

Company Update

Friday, 11 February 2022

Not Rated TBS Energi Utama (TOBA IJ)

Reshaping goals
Last price (IDR) 1,590 TOBA plans to reshape its core business that focuses on renewable energy in the
next few years and targets 80% of its revenues to be generated by its green
Stock Statistics business in 2025 through renewable energy power plants and the development
Sector Coal Mining of an EV 2W Ecosystem in Indonesia. With the coal-related business being phased
Bloomberg Ticker TOBA IJ out, we expect TOBA’s valuation to continue to re-rate as its coal mine will no
No of Shrs (mn) 8,049 longer contribute to revenues in 2025 and the company will be valued as an ESG
Mkt. Cap (IDRbn/USDmn) 12,799/883 beneficiaries’ company.
Avg. daily T/O (IDRbn/USDmn) 7.0/0.5
The green energy business will replace coal. TOBA is an integrated energy
Major shareholders (%) company with businesses encompassing coal mining, power plants and
Highland Strategic 61.9 plantations. As of 9M21, coal mining related businesses contributed 83% of
Toba Sejahtera 10.0
TOBA’s total revenues. Its coal mining business currently produces around 14
mn tons with total coal reserves that could sustain mining operations for
Estimated free float 12.3
another 3 – 4 years. The company plans to let its coal mine be mined out and it
INDY relative to JCI Index has no plans to improve its reserves base as its strategy is to restructure its
revenues. TOBA’s management seeks a contribution from its renewables and
EV 2W business of around 50% by 2024F, improving further to around 80% by
TOBA [LHS] Relative to JCI [RHS]
2025 as its coal mine will no longer contribute to the company’s revenues.
2,000 250
1,800
200
1,600
1,400
150
Plans to be carbon neutral by 2030. The company’s serious efforts to re-shape
1,200
1,000 100
its core business and transform itself into a renewables energy company was
800
600
50 marked by the divestment of its ownership in Paiton Energy in August 2021 with
400
200
0 the reinvestment of cash flow generated by fossil fuels back in the green
- -50
business (EV & Renewables). The company plans to be carbon neutral by 2030
by phasing out its coal mining business.

Source : Bloomberg
Engaged in the EV 2W business with a solid partner. TOBA set up a JV company
named Electrum with Gojek to develop the EV 2W business in Indonesia. The
first step in pursuit of this target is the MoU signed with Gogoro. The required
capex to develop the EV 2W ecosystem will be around USD700 mn and TOBA’s
portion will be USD350 mn as the company owns 50% of Electrum. Currently,
the company is at the stage of introducing this e-scooter to Gojek riders through
a rental scheme.

Expect the valuation to re-rate further. At this stage, we are of the view that
TOBA deserves premium valuation compared to its coal miners peers as the
company will no longer be valued as a coal company in the next 2-3 years. Thus,
we expect TOBA’s valuation to re-rate further and have an ESG beneficiaries’
company valuation.
Key Financials
Year to 31 Dec 2018A 2019A 2020A 9M20A 9M21A
Hasan Barakwan Revenue (USDmn) 438 526 332 275 287
(62-21) 5091 4100 – ext 3530 EBITDA (USDmn) 100 73 29 36 36
EBITDA Growth (%) 35.7 (27.2) (60.8) (32.1) (0.4)
hasan.barakwan@brids.co.id
Net profit (USDmn) 38 27 25 30 34
x EPS (USDcents) 0.0047 0.0033 0.0031 0.0037 0.0042
BVPS (USDcents) 0.03 0.03 0.04 0.04 0.04
PER (x) 0.0 (29.7) (7.5) 52.4 15.8
PBV (x) 23.4 33.2 35.9 29.9 25.8
EV/EBITDA (x) 4.1 3.3 3.0 2.9 2.8
Source : HRUM, Danareksa Estimates
bridanareksasekuritas.co.id See important disclosure at the back of this report 1
 Exhibit 2. Current business segments

Source: Company

Exhibit 3. Post 2021, the company focus to become a green company

Source: Company

bridanareksasekuritas.co.id See important disclosure at the back of this report 2

 Exhibit 4. Renewable projects pipeline Exhibit 5. Power plants projects across Indonesia

Source: Company Source: Company

Exhibit 2. Plan to develop EV 2W ecosystem

Source: Company

bridanareksasekuritas.co.id See important disclosure at the back of this report 3

 Exhibit 8. Income Statement
Year to 31 Dec (USDmn) 2018A 2019A 2020A 9M20A 9M21A
Revenue 438 526 332 275 287
COGS (314) (434) (296) (229) (244)
Gross profit 124 92 36 46 43
EBITDA 100 73 29 36 36
Oper. profit 88 64 13 30 25
Interest income (6) (20) (22) (16) (18)
Interest expense 1 (1) (0) 1 1
Forex Gain/(Loss) - - - - -
Other Income (Expenses) 13 20 52 35 43
Pre-tax profit 97 63 42 50 51
Income tax (29) (19) (6) (4) (6)
Minority interest 30 17 11 16 11
Net profit 38 27 25 30 34
Core Net Profit 97 63 42 50 51

Exhibit 9. Balance Sheet

Year to 31 Dec (USDmn) 2018A 2019A 2020A 9M20A 9M21A
Cash & cash equivalent 57 21 25 20 62
Receivables 20 16 13 14 18
Inventory 50 43 24 33 19
Other Curr. Asset 15 4 9 5 12
Fixed assets - Net 42 37 32 36 28
Other non-curr.asset 318 513 669 645 658
Total asset 502 635 772 753 796

ST Debt 17 18 44 40 39
Payables 45 32 14 16 21
Other Curr. Liabilities 55 42 38 48 63
Long Term Debt 138 240 344 311 322
Other LT. Liabilities 32 38 41 39 31
Total Liabilities 286 371 481 454 476
Shareholder'sFunds 183 210 234 238 264
Minority interests 32 54 57 62 57
Total Equity & Liabilities 502 635 772 753 796

bridanareksasekuritas.co.id See important disclosure at the back of this report 4

 Exhibit 10. Key Ratios
Year to 31 Dec 2018A 2019A 2020A 9M20A 9M21A
Growth (%)
Sales 41.1 19.9 (36.8) (22.5) 4.2
EBITDA 35.7 (27.2) (60.8) (32.1) (0.4)
Operating profit 37.3 (27.6) (80.1) (36.3) (14.5)
Net profit 0.0 (29.7) (7.5) 52.4 15.8
Profitability (%)
Gross margin 28.3 17.4 10.8 16.8 15.0
EBITDA margin 23.8 22.9 13.9 13.1 12.5
Operating margin 20.2 12.2 3.8 10.7 8.8
Net margin 8.6 5.1 7.4 10.7 11.9
ROAA 7.5 6.6 3.8 3.9 4.4
ROAE 17.5 11.1 8.9 10.0 11.0
Leverage
Net Gearing (x) 0.5 0.9 1.2 1.1 0.9
Interest Coverage (x) 17.6 3.6 1.3 2.2 2.0

Source : TOBA, Danareksa Estimates

bridanareksasekuritas.co.id See important disclosure at the back of this report 5

bridanareksasekuritas.co.id See important disclosure at the back of this report 6