DAILY INSIGHTS EQUITY RESEARCH

Thursday, 31 August 2006 MINING /1H06 RESULTS

SELL
Unchange Timah
Price Rp1,740
Target Price Rp1,200
Downgrade
Very poor performance
Reuters Code TINS.JK
News & comments:
Bloomberg Code TIN SIJ
No. of shares (mn) 503.3 · TINS posted sales of Rp1,729bn (+8% yoy) in 1H06 driven by the stronger-than-expected
Market cap (Rp bn) 875.7 performance of its coal business. The coal business posted Rp287bn in sales which almost
(US$ mn) 96 reached out FY06 target of Rp295.1bn.
Weight in JCI (%) 0.1 · Performance of the tin business, despite flat sales volume and prices, was slightly worse than
3mo Avg. daily T/O (US$ mn) 0.4 expected, driven by higher unit costs dragging down the unit margin by 35%. As inland
Price (Rp) production was down and offshore production was up in an environment of firmer tin prices,
12 mos Hi/Lo 2,525/1,480 we suspect the main driver for the increase in costs was higher fuel costs. As such, the net profit
was down by 75% to Rp24bn.
PER - 2006F (x)
12 mos Hi/Lo 47.3/24.5 · We will upgrade our forecasts to reflect higher tin prices and the higher contribution from the
EV/EBITDA - 2006F (x) coal business, but we maintain our SELL call with a YE06 target price of Rp1,200 due to the
12 mos Hi/Lo 9.8/6.2 unclear future business prospects.

Key Financial 06F/07F

Net Gearing, % 10.1/3.8 Exhibit 1. 1H06 results
ROAA, % 1.0/0.8
ROAE, % 1.8/1.3
1H05 1H06 yoy 2006F A/F 1Q06 2Q06 qoq
% % %
Price Relative to JCI (%)
1 mo -5.2 Average exchange rate, Rp/US$ 9,392 9,228 -1.7 9,475 97.4 9,329 9,098 -2.5
3 mos -14.0 Tin ore production, Ton Sn
6 mos -32.0 Inland 19,549 15,154 -22.5 28,000 54.1 6,717 8,437 25.6
12 mos -27.2 Offshore 3,749 5,382 43.6 12,000 44.9 2,738 2,644 -3.4
Total 23,298 20,536 -11.9 40,000 51.3 9,455 11,081 17.2
USD/IDR - YE (Rp)
2005 9,830 Tin metal sales, M tons 19,364 19,083 -1.5 40,000 47.7 9,614 9,469 -1.5
2006F 9,997 Average tin price, US$/Mton 8,221 8,120 -1.2 8,000 101.5 7,629 8,614 12.9
Tin COGS, US$/Mton 6,814 7,201 5.7 7,132 101.0 6,351 7,973 25.5
Margin, US$/Mton 1,407 919 -34.7 868 105.9 1,278 641 -49.8
Major shareholders (%)
Govt. of Indonesia 65 Sales, Rp bn 1,607 1,729 7.7 3,274 52.8 810 920 13.6
Est. free float 35 Gross profit, Rp bn 269 200 -25.6 315 63.4 107 94 -12.2
Operating profit, Rp bn 147 68 -53.8 39 175.7 47 21 -55.7
Net profit, Rp bn 97 24 -75.2 27 88.9 12 12 7.8
Rp TINS (LHS) Relative to JCI (RHS) (%)
3,000 10
Margins, %
2,500 0
Gross margin 9.6 5.9 10.1 10.7 11.8
Operating margin 5.2 2.0 1.2 4.7 2.6
2,000 -10 Net margin 3.4 0.7 0.9 1.2 1.6

1,500 -20 Source: Danareksa Sekuritas & Company

1,000 -30
Year end to Dec, Rp bn 2004 2005 2006F 2007F 2008F
5/3/2006

6/7/2006
8/31/2005
10/5/2005

11/9/2005

1/18/2006

2/22/2006
3/29/2006

7/12/2006

8/16/2006
12/14/2005

Revenue, Rp bn 2,812 3,396 3,274 3,442 3,571

Net profit, Rp bn 178 107 27 20 6
Core profit, Rp bn 238 145 30 23 13
EPS, Rp 353 214 53 40 13
Isnaputra Iskandar, CFA
EPS growth, % 387.5 (39.6) (75.0) (24.3) (68.9)
(62-21) 350 9888 ext. 3504
Core EPS, Rp 472 289 60 46 25
isnaputra@danareksa.com
Core EPS growth, % 93.7 (38.8) (79.1) (24.5) (44.7)
PER, x 4.9 8.1 32.6 43.1 138.3
Core PER, x 3.7 6.0 28.9 38.2 69.1
Danareksa research reports are also PBV, x 0.6 0.6 0.6 0.6 0.6
available at Reuters Multex, First Call EV/EBITDA, x 2.1 3.2 7.1 7.0 8.1
Direct and Bloomberg. Yield, % 7.3 9.3 4.9 1.2 0.9

www.danareksa.com
31 August 2006 DAILY INSIGHTS

Shareprice and Recommendation

Date 3-Apr-06 30-May-06 31-Aug-06
Rec SELL SELL SELL
Price Target, Rp 1,500 1,500 1,200
3,500

3,000

2,500
S
2,000
S
1,500 S

1,000

500

-
9/1/2003

3/1/2004

11/29/2004

11/28/2005
12/1/2003

5/31/2004

8/30/2004

2/28/2005

5/30/2005

8/29/2005

2/27/2006

5/29/2006

8/28/2006

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