Bukit Asam BUY (unchanged)

Company Update | Coal | PTBA IJ | 26 August 2022

Stock Data
Target price Rp5,000
2Q22 results: beat on the back of solid
Prior TP Rp4,800 production
Current price Rp4,360
Upside/downside +15%  Stronger-than-expected 2Q22 sales volume and ASP aided 2Q22
Shares outstanding (mn) 11,521 revenue beat and offset slightly higher cash costs.
Market cap (Rp bn) 50,230  Strong 52% qoq production growth in 2Q22 was a key positive surprise,
Free float 34% reflecting lesser weather impact on its mine operation compared to peers.
Avg. 6m daily T/O (Rp bn) 224
 We raised FY22-23 estimates as we lifted sales volume estimates;
reiterate Buy rating with higher TP of Rp5,000.
Price Performance
3M 6M 12M 2Q22/1H22 earnings beat; superior earnings growth vs. peers
Absolute -0.7% 37.5% 107.6% PTBA recorded 1H22 net profit of Rp6.2tr (+246% yoy/+71% qoq), above
Relative to JCI -4.3% 32.9% 89.8% ours/consensus at 56%/53% of FY22 forecasts. 2Q22 net profit rose to
52w low/high (Rp) 2,080 – 4,630 Rp3.9tr (71% qoq/+204% yoy), aided by 25% qoq (+62% yoy) revenue
increase. The strong 2Q22 earnings ranked PTBA as the better performer
80% among coal peers in 2Q22 (vs. ITMG/HRUM +16/32% qoq net profit
70%
increase).
60%
50%
Strong 2Q22 volume, ASP more than offset higher cash cost
40%
30%
PTBA’s superior 2Q22 earnings growth was attributable to the 9% qoq
20% increase in sales volume, which in turn was made possible by solid
10%
production growth to 9.6Mt (+52% qoq/+9% yoy); 1H22 production grew to
0%
-10%
15.9Mt (+20% yoy or at 53% of our FY22F). We think this demonstrated the
lesser impact of high-rainfall weather condition in 1H22 to PTBA’s South
05-Feb

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25-Jun
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04-Jun
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06-Aug
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JCI Index PTBA IJ Sumatra-based operation (vs. peers Kalimantan-based mines). Combined
with strong ASP (at US$90/t, +56% yoy and 11% above our forecast), the
solid 2Q22 revenue drivers have more than offset 1H22 cash cost which
Major Shareholders
came at US$53/t (slightly above our forecast of US$51/t).
Indonesia Asahan Aluminium 65.9%
We raised FY22-24F forecasts on higher production
Taking into account the 2Q22 strong production volume, we have increased
our FY22 coal sales and production volume assumption to 34Mt (from 30Mt
prev.) and assumed 5% growth in FY23-FY24. Our coal price (Newcastle
benchmark) assumptions are unchanged at US$250/150 per tonne for
FY22/23. In sum, we raised our FY22/23/24 EPS forecast by 15/19/21%
respectively.
Raise our TP to Rp5,000 on higher earnings; maintain Buy rating
We raised our SOTP-based TP to Rp5,000 (from Rp4,800) to reflect higher
earnings forecast. We maintain our Buy rating on the prospect of intact
operational outlook in 2H22 and attractive 2.5x EV/ EBITDA of FY22F (vs.
10-year average of 5.2x). PTBA’s strong cashflow generation has resulted
in Rp11tr cash position in 1H22 which may translate to strong dividend
potential (FY23F dividend yield of 18.5%). Key risks are weaker coal prices
and production volume shortfalls.
Erindra Krisnawan, CFA
Financial Summary (US$ mn) 2020A 2021A 2022F 2023F 2024F
PT Indo Premier Sekuritas Revenue 17,325 29,261 38,535 37,355 38,924
erindra.krisnawan@ipc.co.id EBITDA 3,479 10,839 16,189 14,369 14,798
+62 21 5088 7168 ext. 718 Net profit 2,387 7,909 12,370 10,980 11,429
EPS growth -41% 231% 56% -11% 4%
ROE 14.2% 32.9% 40.8% 34.5% 32.8%
Reggie Parengkuan PER (x) 21.0 6.4 4.1 4.6 4.4
PT Indo Premier Sekuritas EV/EBITDA (x) 13.2 4.2 2.4 2.7 2.4
reggie.parengkuan@ipc.co.id Dividend yield 7.3% 1.7% 11.8% 18.5% 16.4%
IPS vs. consensus 103% 107% 144%
+62 21 5088 7168 ext. 714
Source: Company, Indo Premier Share price closing as of: 26 August 2022

Refer to Important disclosures in the last page of this report

 26 August 2022
Coal
Bukit Asam

Fig. 1: Forecast changes summary

Previous New Changes
Sum m ary of forecast changes 2022F 2023F 2024F 2022F 2023F 2024F 2022F 2023F 2024F
Sales 33,769 31,816 32,420 38,535 37,355 38,924 14% 17% 20%
COGS (16,688) (16,653) (16,999) (18,916) (19,374) (20,244) 13% 16% 19%
Gross profit 17,081 15,163 15,421 19,620 17,982 18,679 15% 19% 21%
Gross profit margin (%) 51% 48% 48% 51% 48% 48%
Opex (3,962) (4,122) (4,205) (4,528) (4,850) (5,092) 14% 18% 21%
EBIT 13,119 11,041 11,217 15,091 13,132 13,587 15% 19% 21%
EBIT margin (%) 39% 35% 35% 39% 35% 35%
Interest expenses (170) (181) (194) (170) (181) (194) 0% 0% 0%
Interest income 412 587 683 449 676 804 9% 15% 18%
Others 301 301 301 301 301 301 0% 0% 0%
Profit before tax 13,662 11,748 12,007 15,673 13,928 14,499 15% 19% 21%
Tax (2,732) (2,350) (2,401) (3,135) (2,786) (2,900) 15% 19% 21%
Minority interests (147) (139) (142) (168) (163) (170) 14% 17% 20%
Net incom e 10,782 9,260 9,464 12,370 10,980 11,429 15% 19% 21%
Source: Company, Indo Premier

Fig. 2: 1H22 earnings summary

IPS % of Cons % of
PTBA 1H22 Result 1H22 1H21 yoy% 2Q22 2Q21 yoy% 1Q22 qoq%
FY22F IPS FY22F cons
Revenue 18,423 10,291 79% 10,218 6,296 62% 8,205 25% 38,535 48% 41,564 44%
COGS (10,071) (6,745) 49% (5,317) (3,767) 41% (4,754) 12% (18,916) 53% (22,432) 45%
Gross profit 8,352 3,547 135% 4,901 2,529 94% 3,451 42% 19,620 43% 19,132 44%
Gross profit margin (%) 45% 34% 48% 40% 42% 51% 46%
Opex (1,394) (1,290) 8% (794) (707) 12% (600) 32% (4,528) 31% (4,102) 34%
EBIT 6,957 2,256 208% 4,106 1,822 125% 2,851 44% 15,091 46% 15,030 46%
EBIT margin (%) 38% 22% 40% 29% 35% 39% 36%
Interest income 208 99 111% 104 47 121% 104 0% 449 46%
Interest expenses (64) (51) 24% (39) (24) 60% (25) 59% (170) -37%
Profit from JV/associate 489 (14) -3510% 410 (92) -546% 79 422% 301 162%
Others 234 68 243% 220 (12) -2003% 14 1468% 0
Profit before tax 7,825 2,358 232% 4,802 1,741 176% 3,023 59% 15,673 50% 15,381 51%
Tax expenses (1,549) (549) 182% (827) (443) 87% (722) 15% (3,135) 49%
Tax rate 20% 23% 17% 25% 24% 20%
Minority interest (119) (30) 296% (94) (20) 367% (25) 272% (168) 71%
Net profit 6,157 1,779 246% 3,881 1,278 204% 2,275 71% 12,370 50% 11,583 53%
Net margin 33% 17% 38% 20% 28% 32% 28%

IPS % of PTBA % of
Operational sum m ary 1H22 1H21 yoy% 2Q22 2Q21 yoy% 1Q22 qoq%
FY21F IPS target target
Production volume (m tonnes) 15.9 13.3 20% 9.6 8.8 9% 6.3 52% 34.1 47% 36.4 44%
Sales volume (m tonnes) 14.6 12.9 13% 7.6 7.0 9% 7.0 9% 34.1 43% 37.0 39%
Domestic volume (m tonnes) 9.5 8.1 17% 4.8 4.1 18% 4.7 2% 16.1 59% N/A N/A
Export volume (m tonnes) 5.1 4.8 7% 2.8 2.9 -5% 2.3 21% 18.0 28% N/A N/A
ASP (Rp k/tonne) 1,262 798 58% 1,344 899 49% 1,172 15% 1,045 121% N/A N/A
COGS/tonne (Rp k/tonne) 690 523 32% 700 538 30% 679 3% 555 124% N/A N/A
Strip ratio (x) 5.6 5.2 8% 5.1 4.0 29% 6.3 -18% 4.2 134% 5.5 102%
Source: Company, Indo Premier

Page 2 of 6
Refer to Important disclosures in the last page of this report
 26 August 2022
Coal
Bukit Asam

Fig. 3: DCF valuation

Valuation sum m ary
Sum of PV of FCFF 53,371
Add: Cash & Marketable Sec 4,394
Less: Debt 6
Total value 57,759
Total Share (million) 11,521
Fair Value IDR 5,000
Current share price 4,360
Upside 15%
Source: Company, Indo Premier

Fig. 4: EV/EBITDA band

14.0

12.0

10.0

8.0 7.9
6.0
5.2
4.0

2.0 2.5

0.0
Aug-13
Aug-12

Aug-14

Aug-15

Aug-16

Aug-17

Aug-18

Aug-19

Aug-20

Aug-21

Aug-22
PTBA EV/EBITDA AVG +1STD -1STD

Source: Company, Indo Premier

Page 3 of 6
Refer to Important disclosures in the last page of this report
 26 August 2022
Coal
Bukit Asam

Income Statement 2020A 2021A 2022F 2023F 2024F

Net revenue 17,325 29,261 38,535 37,355 38,924
Cost of sales (12,759) (15,777) (18,916) (19,374) (20,244)
Gross profit 4,566 13,484 19,620 17,982 18,679
SG&A Expenses (2,132) (3,594) (4,528) (4,850) (5,092)
Operating profit 2,434 9,890 15,091 13,132 13,587
Net interest 230 98 280 495 610
Forex gain (loss) 0 0 0 0 0
Others 568 370 301 301 301
Pre-tax income 3,232 10,359 15,673 13,928 14,499
Income tax (824) (2,322) (3,135) (2,786) (2,900)
Minority interest (21) (128) (168) (163) (170)
Net income 2,387 7,909 12,370 10,980 11,429

Balance Sheet 2020A 2021A 2022F 2023F 2024F

Cash & equivalent 4,341 4,394 10,887 12,119 15,227
Receivable 1,579 3,100 3,211 3,113 3,244
Inventory 805 1,208 651 666 696
Other current assets 1,639 9,510 9,510 9,510 9,510
Total current assets 8,364 18,212 24,259 25,408 28,677
Fixed assets 7,864 8,321 9,249 9,835 9,823
Other non-current assets 7,829 9,591 9,591 9,591 9,591
Total non-current assets 15,692 17,912 18,840 19,426 19,414
Total assets 24,057 36,124 43,099 44,834 48,091

ST loans 107 4 4 4 4
Payable 697 1,270 1,351 1,384 1,446
Other payables 3,068 6,227 6,227 6,227 6,227
Current portion of LT loans 0 0 0 0 0
Total current liab. 3,872 7,501 7,581 7,614 7,676
Long term loans 6 2 2 2 2
Other LT liab. 3,239 4,367 4,367 4,367 4,367
Total liabilities 7,118 11,870 11,951 11,983 12,046

Equity 16,763 24,060 30,329 31,869 34,893

Retained earnings 15,521 22,113 28,383 29,922 32,946
Minority interest (16) 394 562 726 895
Total SHE + minority int. 16,939 24,254 30,692 32,394 35,588
Total liabilities & equity 24,057 36,124 42,642 44,377 47,634
Source: Company, Indo Premier

Page 4 of 6
Refer to Important disclosures in the last page of this report
 26 August 2022
Coal
Bukit Asam

Cash Flow Statement 2020A 2021A 2022F 2023F 2024F

Net income 2,387 7,909 12,370 10,980 11,429
Depr. & amortization 1,045 949 1,098 1,237 1,211
Changes in working capital (2,126) 6,063 (526) (115) 98
Others 2,208 (11,997) 1,221 394 (27)
Cash flow from operating 3,514 2,923 14,162 12,495 12,711
Capital expenditure (1,567) (1,343) (2,026) (1,823) (1,198)
Others 1,680 0 0 0 0
Cash flow from investing 114 (1,343) (2,026) (1,823) (1,198)
Loans (50) (107) 0 0 0
Equity 0 0 0 0 0
Dividends (3,651) (835) (5,932) (9,277) (8,235)
Others (382) (128) (168) (163) (170)
Cash flow from financing (4,083) (1,070) (6,100) (9,440) (8,405)
Changes in cash (456) 510 6,036 1,232 3,108

Key Ratios 2020A 2021A 2022F 2023F 2024F

Gross margin 26% 46% 51% 48% 48%
Operating margin 14% 34% 39% 35% 35%
Pre-tax margin 19% 35% 41% 37% 37%
Net margin 14% 27% 32% 29% 29%
ROA 10% 22% 29% 24% 24%
ROE 14% 33% 41% 34% 33%

Acct. receivables TO (days) 43 29 30 30 30

Inventory TO (days) 23 13 13 13 13
Payable TO (days) 25 23 26 26 26

Debt to equity 0.0 0.0 0.0 0.0 0.0

Interest coverage ratio (x) N/A N/A N/A N/A N/A
Net gearing (0.3) (0.2) (0.4) (0.4) (0.4)
Source: Company, Indo Premier

Page 5 of 6
Refer to Important disclosures in the last page of this report
 26 August 2022
Coal
Bukit Asam

INVESTMENT RATINGS
BUY : Expected total return of 10% or more within a 12-month period
HOLD : Expected total return between -10% and 10% within a 12-month period
SELL : Expected total return of -10% or worse within a 12-month period

ANALYSTS CERTIFICATION
The views expressed in this research report accurately reflect the analyst’s personal views about any and all of the
subject securities or issuers; and no part of the research analyst's compensation was, is, or will be, directly or
indirectly, related to the specific recommendations or views expressed in the report.

DISCLAIMERS
This research is based on information obtained from sources believed to be reliable, but we do not make any
representation or warranty nor accept any responsibility or liability as to its accuracy, completeness or correctness.
Opinions expressed are subject to change without notice. This document is prepared for general circulation. Any
recommendations contained in this document do not have any regard to the specific investment objectives, financial
situation and the particular needs of any specific addressee. This document is not and should not be construed as an
offer or a solicitation of an offer to purchase or subscribe or sell any securities. PT Indo Premier Sekuritas or its
affiliates may seek or will seek investment banking or other business relationships with the companies in this report.