Equity Research

Company Update

Monday,06 March 2023

BUY Indo Tambangraya (ITMG IJ)

Maintain
Last price (IDR)
Target Price (IDR)
Upside/Downside
Previous Target Price (IDR)
Stock Statistics
Sector
Bloomberg Ticker
No of Shrs (mn)
Mkt. Cap (IDRbn/USDmn)
Avg. daily T/O (IDRbn/USDmn)
Major shareholders (%)
Banpu Minerals
Estimated Free Float
Estimated free float
EPS Consensus (USDcents)
2023F
Danareksa 71.8
Consensus 70.5
Danareksa/Cons
ITMG relative to JCI Index
Solid Operational Targets
37,950 ITMG targets total production this year at around 16.6 - 17 mn tons, or similar to
45,000 last year’s achievement of 16.6 mn tons. We are aware that ITMG’s financial
+18.6% performance in 2023 will be burdened by lower ASP and a higher stripping ratio
compared to last year. Nonetheless, we remain of the view that ITMG is still
50,000
attractive during the dividend season. Maintain BUY.
Coal Mining No overhang anymore. Yesterday, ITMG held an analyst meeting to discuss the
ITMG IJ
company’s expected performance in FY23. The company targets total
production this year of around 16.6 - 17 mn tons, or similar to last year’s
1,130
achievement of 16.6 mn tons. Regarding sales volume, the company targets
42,881/2,803
slightly higher volume at 21.5 - 22 mn tons or still in line with our forecast (our
117.9/7.7
forecast: 22 mn tons). For 1Q23’s production, the company expects a lower
figure of around 3.8 mn tons (-11.6% qoq) as the company is still cautious on
65.1
challenging weather in this period with a higher stripping ratio of around 11.8x
(vs 11x in 4Q22).
31.9
34.7
Higher allocation on green field projects. ITMG targets 2023 capex of USD84.3
mn, up 133% and higher than last year’s USD36 mn. The company has allocated
2024F 2025F the majority of its capex on supporting existing coalmines (USD39.9 mn or 47%
51.3 37.0 of the total 2023 capex). Another major capex allocation is on its TRUST
42.9 20.8 segment at USD18.7 mn (22% of capex) and green field projects (the allocation
1.8 19.5 77.8
on green field projects has increased to 21.3% of capex from previously below
1% of the FY22 total capex). The company stated that the green field projects
are to monetize assets such as GPK, NPR and TIS.

A potentially very high dividend yield. This is despite expectations that ITMG’s
financial performance in 2023 will be burdened by lower ASP and a higher
stripping ratio compared to last year. In our view, the company remains
attractive during the current dividend season. The AGM is scheduled to be held
at the end of March and we expect the company to deliver dividends early April.
Our conservative payout ratio estimate of just 50% suggests that ITMG could
deliver a final dividend yield of around 10%. Last year, ITMG delivered a 70%
payout, and if we use the same payout as last year, ITMG’s dividend yield would
be around 18%.
Maintain BUY with a TP of IDR45,000. At this stage, we maintain our 2023-
Source : Bloomberg 2024 earnings forecasts as the company’s targets are pretty much in-line with
ours. Our TP of IDR45,000 still offers 21.2% upside from the current share price.
Maintain BUY.
Key Financials
Year to 31 Dec 2021A 2022A 2023F 2024F 2025F
Revenue (USDmn) 2,077 3,636 2,948 2,664 2,739
EBITDA (USDmn) 861 1,758 1,212 877 644
EBITDA Growth (%) 429.7 104.2 (31.1) (27.6) (26.5)
Net profit (USDmn) 475 1,199 811 579 418
x Hasan Barakwan EPS (USDcents) 42.1 106.1 71.8 51.3 37.0
EPS growth (%) 1,104.5 152.3 (32.4) (28.6) (27.9)
(62-21) 5091 4100 ext. 3530
BVPS (USDcents) 107.0 173.0 207.5 227.0 241.2
hasan.barakwan@brids.co.id DPS (USDcents) 9.4 47.6 40.8 31.8 22.8
PER (x) 5.9 2.3 3.5 4.8 6.7
PBV (x) 2.3 1.4 1.2 1.1 1.0
Dividend yield (%) 3.8 19.2 16.4 12.8 9.2
bridanareksasekuritas.co.id EV/EBITDA (x) See important
2.7 disclosure
0.9 at the back1.0of this report
1.2 1
1.3
Source : ITMG, Danareksa Estimates
 Exhibit 1. Revenues and Growth Exhibit 2. Net Profits and Growth

Source: Company, BRI Danareksa Sekuritas estimates Source: Company, BRI Danareksa Sekuritas estimates

Exhibit 3. Margins Exhibit 4. ITMG transformation targets

Source: Company, BRI Danareksa Sekuritas estimates Source: Company, BRI Danareksa Sekuritas estimates

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

 Exhibit 5. Income Statement
Year to 31 Dec (USDmn) 2021A 2022A 2023F 2024F 2025F
Revenue 2,077 3,636 2,948 2,664 2,739
COGS (1,160) (1,742) (1,624) (1,682) (1,983)
Gross profit 917 1,894 1,324 982 756
EBITDA 861 1,758 1,212 877 644
Oper. profit 791 1,683 1,147 810 577
Interest income 3 9 13 18 20
Interest expense (3) (3) (1) 0 0
Forex Gain/(Loss) 0 0 0 0 0
Income From Assoc. Co’s 0 0 0 0 0
Other Income (Expenses) (170) (143) 0 0 0
Pre-tax profit 621 1,545 1,158 828 597
Income tax (146) (345) (348) (248) (179)
Minority interest 0 0 0 0 0
Net profit 475 1,199 811 579 418
Core Net Profit 475 1,199 811 579 418

Exhibit 6. Balance Sheet

Year to 31 Dec (USDmn) 2021A 2022A 2023F 2024F 2025F
Cash & cash equivalent 691 1,430 1,984 2,284 2,585
Receivables 198 289 186 154 121
Inventory 62 96 89 83 81
Other Curr. Asset 37 94 94 94 94
Fixed assets - Net 166 151 158 136 112
Other non-curr.asset 512 580 574 560 546
Total asset 1,666 2,640 3,084 3,310 3,539

ST Debt 10 37 34 23 23
Payables 115 154 223 240 308
Other Curr. Liabilities 240 395 395 395 395
Long Term Debt 26 13 0 0 0
Other LT. Liabilities 74 91 91 91 91
Total Liabilities 465 690 744 750 818
Shareholder'sFunds 1,209 1,955 2,345 2,565 2,725
Minority interests (8) (5) (5) (5) (5)
Total Equity & Liabilities 1,666 2,640 3,084 3,310 3,539

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

 Exhibit 7. Cash Flow
Year to 31 Dec (USDmn) 2021A 2022A 2023F 2024F 2025F
Net income 475 1,199 811 579 418
Depreciation and Amort. 76 64 65 66 0
Change in Working Capital 29 63 179 55 0
OtherOper. Cash Flow 0 (34) (12) (17) (20)
Operating Cash Flow 580 1,292 1,043 683 398

Capex 226 (40) (30) (30) 0

Others Inv. Cash Flow 25 0 13 18 20
Investing Cash Flow 251 (40) (17) (12) 20

Net change in debt (11) (11) (11) (11) 0

New Capital 0 44 0 0 0
Dividend payment (106) (538) (461) (360) 0
Other Fin. Cash Flow (3) (3) (1) 0 0
Financing Cash Flow (119) (508) (473) (371) 0

Net Change in Cash 712 743 553 300 418

Cash - begin of the year 231 691 1,430 1,984 2,284
Cash - end of the year 691 1,430 1,984 2,284 2,585

Exhibit 8. Key Ratios

Year to 31 Dec 2021A 2022A 2023F 2024F 2025F
Growth (%)
Sales 75.2 75.1 (18.9) (9.6) 2.8
EBITDA 429.7 104.2 (31.1) (27.6) (26.5)
Operating profit 661.4 112.7 (31.9) (29.3) (28.8)
Net profit 1,104.5 152.3 (32.4) (28.6) (27.9)
Profitability (%)
Gross margin 44.1 52.1 44.9 36.9 27.6
EBITDA margin 41.4 48.3 41.1 32.9 23.5
Operating margin 38.1 46.3 38.9 30.4 21.1
Net margin 22.9 33.0 27.5 21.7 15.3
ROAA 33.7 55.7 28.3 18.1 12.2
ROAE 46.1 75.8 37.7 23.6 15.8
Leverage
Net Gearing (x) (0.5) (0.7) (0.8) (0.9) (0.9)
Interest Coverage (x) 294.2 501.7 1,042.7 2,210.3 0.0

Source : ITMG, Danareksa Estimates

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

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