Company Update / Coal / Click here for full PDF version
Author(s) : E rindra Krisnawan ; Reggie Parengkuan
- 1Q23 earnings was a strong beat (at 36/41% of ours/consensus FY23 estimates) on higher-than-expected sales volume and ASP.
- Nickel business' earnings rose 24% yoy in 1Q23, but missed our expectations due to lower nickel ASP and higher cost.
- We cut our FY23/24/25F earnings by 22/36/38% and cut SOTP -based TP to Rp2,000 on lower nickel earnings; reiterate Buy on attractive valuation.
1Q23 results beat from strong coal price and volumes
Despite lower coal price in 1Q23,
Soft ASP was more than offset by robust sales volume and lower cost
Cut FY23/24/25F earnings to reflect higher cost
We adjust cut our FY23/24/25F earnings estimate by 22/36/38% to reflect the following: 1) higher coal ASP of US$120/t in FY23F (vs.US$108/t previously). 2) higher cash cost of US$76/63/59 per tonne in FY23/24/25F (vs. US$51/47/44 previously). 3) higher royalty rate of 18% from 16% previously. 4) lower income from nickel associates on lower margin assumptions.
Maintain Buy at a lower SOTP -based TP of Rp2,000
We cut our SOTP -based TP to Rp2,000, mainly reflecting lower coal cash margin. We maintain our Buy rating on still attractive 3.8x FY23F EV/EBITDA (36% discount to 10-year mean). Key risks are lower coal and nickel prices.
Sumber : IPS