External broker reports(aggregated public sources), BRI Danareksa Research

BRI Danareksa Research

External broker reports(aggregated public sources)

As a one-stop financial solution with the vision to be the most valuable securities house, BRI Danareksa Sekuritas (BRIDS) has maintained an excellent track record and extensive experience in the capital market as an underwriter, broker, and financial advisor for individual, institutional, foreign and domestic, private and government clients. Established in 1992, PT Danareksa Sekuritas is a securities company that performs activities as a securities broker, underwriter, or arranger and financial advisor.

Thematic (Sector/Industry)

<ul><li>We expect the thermal coal market to remain in a supply-driven surplus in FY24, and expect the Newcastle coal price to moderate to US$120/t.</li><li>Based on our forecast, we project 13-29% net profit declines in FY24 for the coal miners and expect earnings to bottom out only in FY25.</li><li>We retain our Neutral rating on the sector on undemanding valuations and attractive dividend yields (9.1-28.4%) to cushion declining earnings.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We expect the thermal coal market to remain in a supply-driven surplus in FY24, and expect the Newcastle coal price to moderate to US$120/t.Based on our forecast, we project 13-29% net profit declines in FY24 for the coal miners and expect earnings to bottom out only in FY25.We retain our Neutral rating on the sector on undemanding valuations and attractive dividend yields (9.1-28.4%) to cushion declining earnings.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Coal Mining - FY24 Outlook: Soft demand and steady supply flow to drive further price normalization

<ul><li>We expect the thermal coal market to remain in a supply-driven surplus in FY24, and expect the Newcastle coal price to moderate to US$120/t. </li><li>Based on our forecast, we project 13-29% net profit declines in FY24 for the coal miners and expect earnings to bottom out only in FY25.</li><li>We retain our Neutral rating on the sector on undemanding valuations and attractive dividend yields (9.1-28.4%) to cushion declining earnings. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We expect the thermal coal market to remain in a supply-driven surplus in FY24, and expect the Newcastle coal price to moderate to US$120/t. Based on our forecast, we project 13-29% net profit declines in FY24 for the coal miners and expect earnings to bottom out only in FY25.We retain our Neutral rating on the sector on undemanding valuations and attractive dividend yields (9.1-28.4%) to cushion declining earnings. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Coal Mining | FY24 Outlook: Soft Demand and Steady Supply Flow to Drive Further Price Normalization

Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

Equity Bottom-Up

Indo Tambangraya Megah / Equity Bottom-Up

<ul>
<li>Newcastle coal prices have normalized from the highs of USD 450/ton (in September 2022) to current levels of USD 145/ton (a 68% correction from the peak). </li>
<li>From profits of 100 mn USD/month, we are now down to 90-100 mn USD/quarter. Despite this, the stock trades at 4.5x PE with a 15% dividend yield. </li>
<li>An added buffer of 850 mn USD of net cash represents 50% of the market capitalization. </li>
</ul>


Newcastle coal prices have normalized from the highs of USD 450/ton (in September 2022) to current levels of USD 145/ton (a 68% correction from the peak). 
From profits of 100 mn USD/month, we are now down to 90-100 mn USD/quarter. Despite this, the stock trades at 4.5x PE with a 15% dividend yield. 
An added buffer of 850 mn USD of net cash represents 50% of the market capitalization. 


ITMG IJ: A Healthy 15% Yield Despite the Coal Price Correction, With >50% Mkt Cap In Cash

<ul><li>Coal market’s Aug23 trade and inventory data in China and India indicated possible seasonal demand recovery may be under way.</li><li>Thus, we see a tactical opportunity in 4Q23 with preferred picks on ADRO (Buy, TP Rp4,500) and ITMG (Buy, TP Rp45,000) or HRUM (Buy, TP Rp2,700) for more high-beta plays.</li><li>We also see UNTR (Buy, TP Rp40,000) earnings to potentially outperform in 3Q23.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Coal market’s Aug23 trade and inventory data in China and India indicated possible seasonal demand recovery may be under way.Thus, we see a tactical opportunity in 4Q23 with preferred picks on ADRO (Buy, TP Rp4,500) and ITMG (Buy, TP Rp45,000) or HRUM (Buy, TP Rp2,700) for more high-beta plays.We also see UNTR (Buy, TP Rp40,000) earnings to potentially outperform in 3Q23.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Coal Mining - A Tactical Opportunity in 4Q23 on Possible Seasonal Demand Recovery

<ul><li>Gear UpDespite fiscal expansion in 2H, the government has a lower fiscal deficit target on higher revenues</li><li>Supporting domestic aggregate demand will remain key in in 2H23 and going into 2024</li><li>El Nino's return threatens the current disinflation trend, with rice and CPO prices being significant risks</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Gear UpDespite fiscal expansion in 2H, the government has a lower fiscal deficit target on higher revenuesSupporting domestic aggregate demand will remain key in in 2H23 and going into 2024El Nino's return threatens the current disinflation trend, with rice and CPO prices being significant risksContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Indonesia

PT Indo Tambangraya Megah Tbk operates as a coal exploration and mining company that provides energy and electricity support. The Company operates in Indonesia and supplies coal to the world energy market.

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Indo Tambangraya Megah (ITMG IJ)

Coal Mining - FY24 Outlook: Soft demand and steady supply flow to drive further price normalization

We expect the thermal coal market to remain in a supply-driven surplus in FY24, and expect the Newcastle coal price to moderate to US$120/t.

BRI Danareksa Research

Coal Mining | FY24 Outlook: Soft Demand and Steady Supply Flow to Drive Further Price Normalization

We think miners with higher exposure to the low-medium CV products shall fare better given the smaller projected decline in ASP. Our pecking order...

BRI Danareksa Research

ITMG IJ: A Healthy 15% Yield Despite the Coal Price Correction, With >50% Mkt Cap In Cash

Despite the recent coal price correction, ITMG trades at 4.5x PE &15% dividend yield. The cash buffer of 850 mn USD (50% of the market cap) also...

Sameer Taneja

Coal Mining - A Tactical Opportunity in 4Q23 on Possible Seasonal Demand Recovery

Coal market’s Aug23 trade and inventory data in China and India indicated possible seasonal demand recovery may be under way.

BRI Danareksa Research

Macro and Flows Tracker - Gear Up

Gear UpDespite fiscal expansion in 2H, the government has a lower fiscal deficit target on higher revenues. Supporting domestic aggregate demand...

BRI Danareksa Research

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