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> reported strong Q2 2022, with profits of 247 mn USD up 225% YoY, and coal prices averaging 202 USD/ton for the quarter (inline). </li>
<li>The only disappointment was volumes which came in at 3.9 mn tons, down 20.5% YoY. The company guided sequential improvement in coal production for Q3 2022 to 4.6 mn tons. </li>
<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> is 2.6x PE FY22e, with 28% of its market capitalization in cash and a dividend yield of 28% based on a 70% payout ratio.</li>
</ul>



Indo Tambangraya Megah (ITMG IJ) reported strong Q2 2022, with profits of 247 mn USD up 225% YoY, and coal prices averaging 202 USD/ton for the quarter (inline). 
The only disappointment was volumes which came in at 3.9 mn tons, down 20.5% YoY. The company guided sequential improvement in coal production for Q3 2022 to 4.6 mn tons. 

Indo Tambangraya Megah (ITMG IJ) is 2.6x PE FY22e, with 28% of its market capitalization in cash and a dividend yield of 28% based on a 70% payout ratio.


ITMG - Insights from the Q2 2022 Presentation

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>There are 3 changes each for the IDX30 Index and LQ45 Index and 11 changes for the IDX80 Index at the upcoming rebalance to be implemented on 29 July.</li>
<li>There is passive inflow on <a href="https://www.smartkarma.com/entities/bank-jago-tbk-pt" target="_blank" data-smartkarma-citation="entities:31094:1" rel="noopener">Bank Jago Tbk PT (ARTO)</a> due to index inclusion, and on <a href="https://www.smartkarma.com/entities/bank-rakyat-indonesia-persero" target="_blank" data-smartkarma-citation="entities:484:1" rel="noopener">Bank Rakyat Indonesia (BBRI)</a> and <a href="https://www.smartkarma.com/entities/bank-central-asia-tbk-pt" target="_blank" data-smartkarma-citation="entities:440:1" rel="noopener">Bank Central Asia (BBCA)</a> due to capping changes.</li>
<li>With only 4 days to implementation, there will be relatively big moves on stocks that have large flow/impact from passive fund trading.</li>
</ul>


There are 3 changes each for the IDX30 Index and LQ45 Index and 11 changes for the IDX80 Index at the upcoming rebalance to be implemented on 29 July.
There is passive inflow on Bank Jago Tbk PT (ARTO) due to index inclusion, and on Bank Rakyat Indonesia (BBRI) and Bank Central Asia (BBCA) due to capping changes.
With only 4 days to implementation, there will be relatively big moves on stocks that have large flow/impact from passive fund trading.


IDX30/​LQ45 Index Rebalance: Big Inflows on ARTO, BBRI, BBCA; Outflows on GOTO, TLKM, BMRI

<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> is a 2.3 bn USD company with ~880 mn USD net cash adding &gt;100 mn USD of free cash flow a month.</li>
<li>At a 103 USD/ton ASP the company made a 475 mn USD profit for 2021. We estimate prices are easily around 200 USD/ton for the company in the current environment.</li>
<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> has a track record of paying &gt;70% of its profits as dividends since 2009 ( implying a yield of 37% for FY22 ). </li>
</ul>



Indo Tambangraya Megah (ITMG IJ) is a 2.3 bn USD company with ~880 mn USD net cash adding &gt;100 mn USD of free cash flow a month.
At a 103 USD/ton ASP the company made a 475 mn USD profit for 2021. We estimate prices are easily around 200 USD/ton for the company in the current environment.

Indo Tambangraya Megah (ITMG IJ) has a track record of paying &gt;70% of its profits as dividends since 2009 ( implying a yield of 37% for FY22 ). 


<ul>
<li>Float and capping changes will require passive trackers to buy <a href="https://www.smartkarma.com/entities/bank-central-asia-tbk-pt" target="_blank" data-smartkarma-citation="entities:440:1" rel="noopener">Bank Central Asia (BBCA IJ)</a> and sell <a href="https://www.smartkarma.com/entities/bank-rakyat-indonesia-persero" target="_blank" data-smartkarma-citation="entities:484:1" rel="noopener">Bank Rakyat Indonesia Persero (BBRI IJ)</a> at the close on 28 April.</li>
<li>There will be passive changes to other stocks too, though the impact will not be material on most of the stocks.</li>
<li>
<a href="https://www.smartkarma.com/entities/gojek-goto" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">GoTo (GOTO IJ)</a> could be added to the IDX30, LQ45 and IDX80 indices in May. With the oversubscription option nearly all used up, the stock should trade weak near-term.</li>
</ul>


Float and capping changes will require passive trackers to buy Bank Central Asia (BBCA IJ) and sell Bank Rakyat Indonesia Persero (BBRI IJ) at the close on 28 April.
There will be passive changes to other stocks too, though the impact will not be material on most of the stocks.

GoTo (GOTO IJ) could be added to the IDX30, LQ45 and IDX80 indices in May. With the oversubscription option nearly all used up, the stock should trade weak near-term.


IDX30/LQ45/IDX80 Index Rebalance: Float & Capping Changes

External broker reports(aggregated public sources), Mirae Asset Securities

Mirae Asset Securities

External broker reports(aggregated public sources)

Mirae Asset Securities Co.,Ltd. provides comprehensive wealth management services. The Company offers fixed income securities brokerage, securities dealing, equity underwriting, and other services. Mirae Asset Securities also deals with mergers and acquisitions, foreign currency, and financial derivatives

<p>Solid earnings due to sweet coal prices</p><div class="content-highlight"><em>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.</em></div>

Solid earnings due to sweet coal pricesContent 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.

Indo Tambangraya Megah (ITMG IJ) - Solid earnings due to sweet coal prices

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.

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Indo Tambangraya Megah (ITMG IJ)

ITMG - Insights from the Q2 2022 Presentation

Indo Tambangraya Megah (ITMG IJ) is an Indonesian coal producer with a 2.6x PE FY22e, with 28% of its market capitalization in cash and a dividend...

Sameer Taneja

IDX30/LQ45 Index Rebalance: Big Inflows on ARTO, BBRI, BBCA; Outflows on GOTO, TLKM, BMRI

There are 3 changes each for the IDX30 and LQ45 indices that will be implemented on 29 July. The largest passive inflows are on BBRI, ARTO and...

Brian Freitas

A Layman's Thesis for ITMG

Trading at 1.9x PE FY22e with a 37% implied dividend yield on a payout ratio of 70% with 28% of its market cap in cash post outstanding dividend...

Sameer Taneja

IDX30/LQ45/IDX80 Index Rebalance: Float & Capping Changes

Float and capping changes will require passive trackers to buy BBCA and sell BBRI at the close on 28 April. There are changes to other stocks as...

Brian Freitas