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>
<a href="https://www.smartkarma.com/entities/indo-tambangraya-megah-tbk-p" target="_blank" data-smartkarma-citation="entities:15891:1" rel="noopener">Indo Tambangraya Megah (ITMG IJ)</a> provides investors with fat dividends. We estimate from 2021-2023e, the company will have paid over 20,000 Rph (70% of the current share price) in dividends.</li>
<li>Despite these dividend payouts, cash on the balance sheet by the end of FY23e will easily exceed one bn USD or about 50% of the market capitalization.</li>
<li>Weak results/degrowth are expected due to unsustainably high coal prices in 2022. Nevertheless, there is a good case for future value as hefty dividends will continue to be paid.</li>
</ul>



Indo Tambangraya Megah (ITMG IJ) provides investors with fat dividends. We estimate from 2021-2023e, the company will have paid over 20,000 Rph (70% of the current share price) in dividends.
Despite these dividend payouts, cash on the balance sheet by the end of FY23e will easily exceed one bn USD or about 50% of the market capitalization.
Weak results/degrowth are expected due to unsustainably high coal prices in 2022. Nevertheless, there is a good case for future value as hefty dividends will continue to be paid.


ITMG Q2 2023 Weak But Stock At 20% Dividend Yield with ~50% of Mkt Cap In Cash

<ul>
<li>
<a href="https://www.smartkarma.com/entities/indo-tambangraya-megah-tbk-p" target="_blank" data-smartkarma-citation="entities:15891:1" rel="noopener">Indo Tambangraya Megah (ITMG IJ)</a> suffered a &gt;30% decline in market capitalization owing to the drastic drop in coal prices from 400 USD/ton to 160 USD/ton.</li>
<li>At a 1.9 bn USD market cap, the company can generate 700 mn USD profit at current coal prices/paying a 5000-6000 Rph dividend equating to a 20-25% yield. </li>
<li>Also, with 1.0 bn USD of net cash after accounting for the dividend liability (&gt;50% of the market capitalization is cash), there is an excellent margin of safety. </li>
</ul>



Indo Tambangraya Megah (ITMG IJ) suffered a &gt;30% decline in market capitalization owing to the drastic drop in coal prices from 400 USD/ton to 160 USD/ton.
At a 1.9 bn USD market cap, the company can generate 700 mn USD profit at current coal prices/paying a 5000-6000 Rph dividend equating to a 20-25% yield. 
Also, with 1.0 bn USD of net cash after accounting for the dividend liability (&gt;50% of the market capitalization is cash), there is an excellent margin of safety. 


ITMG - Q1 2023, Decline in Coal Prices And Increasing Costs Weigh on Profits, Yield Sturdy >20%

<ul>
<li>ITMG went ex-dividend yesterday, paying out a whopping 16.8% (6416 Rph/share) final dividend in addition to the interim dividend of 10.8% (4128 Rph/share), bringing the FY22 yield to &gt;27%.</li>
<li>After payment of the 474 mn USD final dividend and 223 mn USD tax liability, we estimate the company will have &gt;1.0 bn USD net cash (~33% mkt cap). </li>
<li>At current coal prices (NEX 190 USD/ton), the Indonesian coal producer trades on a 20% dividend yield for FY23 assuming a 65% dividend payout ratio (in line with historical payout).</li>
</ul>


ITMG went ex-dividend yesterday, paying out a whopping 16.8% (6416 Rph/share) final dividend in addition to the interim dividend of 10.8% (4128 Rph/share), bringing the FY22 yield to &gt;27%.
After payment of the 474 mn USD final dividend and 223 mn USD tax liability, we estimate the company will have &gt;1.0 bn USD net cash (~33% mkt cap). 
At current coal prices (NEX 190 USD/ton), the Indonesian coal producer trades on a 20% dividend yield for FY23 assuming a 65% dividend payout ratio (in line with historical payout).


ITMG: Ex-Dividend, Dividend Yield Compelling at 20% With 33% of the Market Cap in Cash

Shougang Fushan Resources / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/shougang-fushan-resources-group-ltd" target="_blank" data-smartkarma-citation="entities:19494:1" rel="noopener">Shougang Fushan Resources (639 HK)</a> trades at 4.5x/5.1x FY22e/23e with 50% of the market cap in cash and a 17.8%/15.8% FY23e/24e dividend yield (based on an 80% payout ratio).</li>
<li>Since our call in FY21, close to 64 cents of the share price (25% of the current share price value) has been returned as dividends making it a dividend machine. </li>
<li>We forecast at least another 70 cents of dividend for H2 FY22 and FY23, bringing the dividend in 3.5 years to more than half the current share price. </li>
</ul>



Shougang Fushan Resources (639 HK) trades at 4.5x/5.1x FY22e/23e with 50% of the market cap in cash and a 17.8%/15.8% FY23e/24e dividend yield (based on an 80% payout ratio).
Since our call in FY21, close to 64 cents of the share price (25% of the current share price value) has been returned as dividends making it a dividend machine. 
We forecast at least another 70 cents of dividend for H2 FY22 and FY23, bringing the dividend in 3.5 years to more than half the current share price. 


Fushan Energy: 50% of Mkt Cap in Cash / ~18% Dividend Yield / Great Returns Just in Dividends

GrafTech International Ltd / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/graftech-international-ltd" target="_blank" data-smartkarma-citation="entities:27124:1" rel="noopener">GrafTech International Ltd (EAF US)</a> results for Q4 2022 were worse than expected, and guidance for volumes down 50% in H1 2023e was shocking.</li>
<li>In summary, our intrinsic value was too aggressive, and there was a low margin of safety on the investment. Constant execution issues in a favorable environment didn't help our cause.</li>
<li>The stock isn't as cheap when trading at 11.1x/9.5x FY23e/FY24e. The deleveraging story now gets pushed out to the end of FY25. The investment is dead money for two years.</li>
</ul>



GrafTech International Ltd (EAF US) results for Q4 2022 were worse than expected, and guidance for volumes down 50% in H1 2023e was shocking.
In summary, our intrinsic value was too aggressive, and there was a low margin of safety on the investment. Constant execution issues in a favorable environment didn't help our cause.
The stock isn't as cheap when trading at 11.1x/9.5x FY23e/FY24e. The deleveraging story now gets pushed out to the end of FY25. The investment is dead money for two years.


Graftech: Deleveraging Story Moves Out Even Further / Dead Money

Indonesia

Indo Tambangraya Megah engages in coal mining and energy activities, producing thermal coal for power plants. The company is also involved in coal trading, fuel trading, energy marketing, electricity generation, mining contractor services, and solar rooftop installations. It was founded in 1987 and is headquartered in South Jakarta, Indonesia.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Indo Tambangraya Megah (ITMG IJ)

ITMG Q2 2023 Weak But Stock At 20% Dividend Yield with ~50% of Mkt Cap In Cash

ITMG declared a dividend of 2,660 Rph/share ( implying a dividend of 9% semi-annually or 18% annualized on the close price of September 1st). With...

Sameer Taneja

ITMG - Q1 2023, Decline in Coal Prices And Increasing Costs Weigh on Profits, Yield Sturdy >20%

ITMG trades at 3x PE on current spot coal prices, with >50% of the market capitalization in cash. The div yield is a sturdy 25% (65% payout ratio)....

Sameer Taneja

ITMG: Ex-Dividend, Dividend Yield Compelling at 20% With 33% of the Market Cap in Cash

At current coal prices (NEX 190 USD/ton), the Indonesian coal producer trades on a 20% dividend yield for FY23 assuming a 65% dividend payout...

Sameer Taneja

Fushan Energy: 50% of Mkt Cap in Cash / ~18% Dividend Yield / Great Returns Just in Dividends

Shougang Fushan Resources (639 HK) trades at 4.5x/5.1x FY22e/23e with 50% of the market cap in cash and a 17.8%/15.8% FY23e/24e dividend yield...

Sameer Taneja

Graftech: Deleveraging Story Moves Out Even Further / Dead Money

Graftech stock isn't as cheap when trading at 11.1x/9.5x FY23e/FY24e. The deleveraging story with the Monterrey incident gets pushed out to the end...

Sameer Taneja

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)