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Nov 21,2016 22:15:28

Adaro: Another One-Off Surprises?($ADRO; Rp1,500; Sell; TP:Rp1,200)

  • We expect better earnings in FY17 on higher coal price and sales volume. We raise our FY16-18F net profit by 29-36%
    after imputing FY16/17/18 coal price assumption of USD64/70/69, but downgrade ADRO to sell with TP of Rp1,200.
  • Higher production likely. As of 9M16, ADRO’s coal production volume reached 39.33mn tons (-1% YoY), in-line with our
    FY16 production target of 53mn tons. Given its huge coal reserves of 1.1bn tons, we think ADRO is likely increase
    production in FY17 to take advantage of higher coal price. Hence, we assume FY17 coal production of 54mn tons.
  • Surprises due to impairment? Recently, ADRO entered into Share Sale Agreement with BHP Billiton to purchase 75%
    stake in IndoMet Coal project (ICP) for USD120mn, which we think is priced at distressed valuation, given that ADRO
    acquired 25% stake in ICP for USD352mn in 2010. According to the company, the asset is expected to be booked by 4Q16.
    Moreover, the new mining property is subjected to impairment test to reflect the fair value; hence we believe there could
    be potential earning surprise in 4Q16 from potential gain/loss as a result of the test.
  • More upbeat earnings in FY17. According to the company, they are still undergoing contract negotiation process for
    FY17. Given ADRO’s big exposure to export market (~76% of sales), we estimate sizeable exposure to the spot market.
    Hence, we expect ADRO to post good earnings growth on higher coal price. Our sensitivity analysis indicates that every
    1% increase in coal price will increase ADRO’s earnings by 3.3%. Moreover, we estimate ADRO FY17 SR ratio to increase to
    5.1x (from 4.7x in FY16).
  • Downgrade ADRO to sell with TP of Rp1,200. On better earnings, we raise our FY16-18 net profit by 29-36%, after
    imputing FY16/17/18 coal price assumption of USD64/70/69. However, we downgrade ADRO to sell with TP of Rp1,200
    based on 10.0x FY17 target P/E (-1SD). Our sell recommendation was solely based on risk of coal price reversal after China
    government stepped up its efforts to ease coal price rally
Nov 21,2016 11:47:50

Coal Mining: Take Profit

  • Indonesia's coal stocks are expected to be negatively affected by coal price reversal after China's government stepped up its efforts to cool coal price given the stronger correlation between coal price and stock price recently. Downgrade coal sector to Underweight. Downgrade all coal stocks to Sell.
  • Downgrade coal sector to Underweight, sell all coal stocks. We downgrade our recommendation on coal sector to Underweight (from Neutral) as we see risk of coal price reversal after China's government stepped up its efforts to ease steep increase in coal price. Newcastle coal price index has declined to US$105/ton from the peak of US114/ton with coal contract for January delivery concluded at US$94.5/ton FOB on globalCOAL (vs FY17/18F of US$70/US$69/ton of our forecast). We downgrade our recommendation to Sell on ADRO (Sell, Rp1,200TP), PTBA(Sell, Rp9,500TP), ITMG(Sell, Rp12,250TP), and HRUM (Sell, Rp1,600TP). ADRO, PTBA, ITMG, and HRUM are trading at FY17F PE of 12x/12x/10x/13x.
  • China has intensified efforts to cool down coal price by 1) extending the time period for the supply relaxation policy for selective big coal miners to increase production to an equivalent of 330 days' output from 276 days restriction policy, 2) urging more long-term contracts between major coal miners with major power plants, and 3) raising transaction fee for thermal coal futures for same-day trading to curb short-term speculative trading. In addition to that, one of the largest coal producers recently indicated that it will stop selling coal to buyers without annual long-term contracts to further prevent speculative activity in the coal market.
  • Correlations between coal price and stock price are the highest since 2014. While we expect stronger earnings outlook next year driven by higher coal price, we believe that stock price direction will be determined by the volatility on coal prices due to strong correlations between coal price and stock price recently. We take a look at the 3-month correlations of  coal stocks to coal price since 2014. Based on this, the current correlation levels are the highest, standing at 56% for ADRO, 50% for ITMG, 57% for PTBA, and a whopping 66% for HRUM. This makes Indonesia's coal stocks very vulnerable to coal price reversal given the steep increase in the past few months. Note that Indonesia’s coal stock has increased by an average of +284%YTD vs. the index of +11%YTD.
  • Expect stronger earnings outlook in 2017 for Indonesia coal miners, mainly driven by higher ASP. Our discussion with large coal miners indicates moderate production growth next year to maintain high coal price and avoid oversupply in the market. In terms of coal price, we believe at US$70-75/ton coal price is already a good number for coal miners as it's already >30% higher than the avg. of US$55/ton in 1H16. However, we also expect production cost will increase due to higher stripping ratio and contractors’ fee (lower discount fee). Our sensitivity analysis indicates that every 1% increase in coal price will increase ITMG's and HRUM's earnings by 4.8% and 4.0% respectively vs. ADRO's and PTBA's of 3.3% and 2.8%.
  • Key risk to our call is if coal price can sustain at >US$100/ton due to weather related issue.


Nov 21,2016 09:04:32

The Coal Industry Isn’t Coming Back


Austin, Tex. — Donald J. Trump made many important campaign promises on his way to victory. But saving coal is one promise he won’t be able to keep.

Many in Appalachia and other coal-mining regions believe that President Obama’s supposed war on coal caused a steep decline in the industry’s fortunes. But coal’s struggles to compete are caused by cheap natural gas, cheap renewables, air-quality regulations that got their start in the George W. Bush administration and weaker-than-expected demand for coal in Asia.

Nationwide, coal employment peaked in the 1920s. The more recent decline in Appalachian coal employment started in the 1980s during the administration of Ronald Reagan because of the role that automation and mechanization played in replacing miners with machines, especially in mountaintop removal mining. Job losses in Appalachia were compounded by deregulation of the railroads. Freight prices for trains dropped as a result, which meant that Western coal — which is much cleaner and cheaper than Eastern coal — could be sold to markets far away, cutting into the market share of Appalachian mines. These market forces recently drove six publicly traded coal producers into bankruptcy in the span of a year.

Mr. Trump cannot reverse these trends.

For Mr. Trump to improve coal’s fate would require enormous market intervention like direct mandates to consume coal or significant tax breaks to coal’s benefit. These are the exact types of interventions that conflict with decades of Republican orthodoxy supporting competitive markets. Another approach, which appears to be gaining popularity, is to open up more federal lands and waters to oil, gas and coal production.

Doing so would only exacerbate coal’s challenges, as it would add to the oversupply of energy, lowering the price of coal, which makes it even harder for coal companies to stay profitable. Those same policy actions would also lead to more gas production, depressing natural gas prices further, which would outcompete coal. Instead of being a virtuous cycle for coal, it looks more like a death spiral. And this is all without environmental regulations related to reducing carbon dioxide emissions, which aren’t even scheduled to kick in for several years.

Even if the president-elect tried to make these moves, surprising opponents might step in his way. Natural gas companies are the primary beneficiaries of, and now defenders of, clean air and low carbon regulations. They include Exxon Mobil, the world’s largest publicly traded international oil and gas company, which operates in a lot of countries that care about reducing carbon emissions. The company issued a public statement in support of the Paris climate agreement on Nov. 4, the day it took effect. Shutting down coal in favor of natural gas, which is cleaner and emits much less carbon, is a big business opportunity for companies like Exxon Mobil.

In the battle between coal companies and major oil and gas producers, I expect the latter will be victorious.

The rapid uptake of cheap renewables is also a contributor to coal’s demise. Mr. Trump made campaign comments suggesting the end of support for renewable energy technologies. But his recent statements call for supporting all energy forms, including renewables, suggesting he won’t target them after all.

Even if he did, what are his options? Their tax subsidies are already scheduled to expire or shrink. Plus, wind and solar farms are usually installed in rural Republican districts, which explains why they get so much Republican support in the first place. All those rural districts in America’s wind corridor might not be thrilled if their preferred candidate seeks to undermine one of their most important sources of economic growth.

The saving grace for coal production in the United States may be exports to Europe or China. But Europe’s demand for coal is waning. And Mr. Trump seems to be marching us toward a trade war with China. Doing so means the Chinese could retaliate by not buying our coal. And even if a trade war is avoided, cheap coal is readily available from nearby Australia.

What does this mean for the average American? More of the same when it comes to energy, which is a good thing. Energy prices will stay low and our air quality will keep improving. And both will help the economy grow.

Any way you slice it, coal’s struggles are real and hard to mitigate. No matter how much Mr. Trump tries to protect coal from market competition, doing so will be hard to execute and will get him crosswise with important Republican stakeholders and long-held Republican policy priorities.

Michael E. Webber is the deputy director of the Energy Institute at the University of Texas, Austin, and author of “Thirst for Power: Energy, Water and Human Survival.”


Nov 18,2016 09:59:50

Coal: Asian thermal coal industry will likely remain under pressure in 2017

Fitch Ratings stated in an outlook report that the Asian thermal coal industry will remain under pressure in 2017 due to more-than-adequate capacity and price adjustments that are likely to be downward. The strong pricing rebound since early 2016 is unlikely to be sustained as the Chinese government relaxes its workingday curtailment policies to manage prices. Also, India has been ramping up domestic supply aggressively to enhance energy security and reduce current account deficits, while domestic demand growth has been lackluster. At this stage, Fitch expects Indonesian coal producers that focus on the export market are likely to suffer the most as India, their largest buyer, experiences weak thermal power generation, curbs coal imports and increases utilization of higher-rank Australian and South African coal. (Fitch)


Nov 16,2016 09:22:30

Coal Mining - Sector Has Mixed Expectations For 2017

We visited four coal miners recently, and got updates on their outlook for 2017. On production, only Indo Tambang is aiming for flat growth while Harum Energy has the highest target (+33% YoY). Up until now, none of the miners’ customers have locked in their FY17 coal purchase prices. Meanwhile, all players expect their stripping ratios to rise next year. We reiterate our BUY on United Tractors, as we expect earnings to recover (mostly on a rise in mining contracting volume). It would also benefit from a weakening IDR and is the safest play on the recovery in coal prices.

¨ No customer has locked in FY17 purchase prices. The increase in coal prices was faster than what the coal miners’ customers had expected. As a result, no customer has locked in their FY17 coal purchase prices yet. Some have only locked in their 2017 coal purchase volume, as they think coal prices may retreat from the currently high levels.

¨ Higher stripping ratios, but with unchanged mining contracting fees. Based on our talks with the coal miners, all of them expect their stripping ratios to rise next year. However, they still hope to see mining contracting fees remaining unchanged. Up until now, most of the firms were still negotiating mining contracting volumes and fees with their contractors. The miners’ expectations for an unchanged mining contract fee in FY17 are different from United Tractors. It expects less discounts in FY17 due to the recovery in coal prices.

¨ Harum Energy expects to see the biggest production increase. Harum Energy expects its coal production to hit 4m tonnes (vs its FY16 target of 3m tonnes) next year. In 2012, its production peaked at 12m tonnes. In 2011-2016, it cut down on coal production to preserve the long-term value of its assets, as coal prices fell. Meanwhile, Indo Tambangraya Megah (Indo Tambang) expects production growth to stay flat (Figure 1).

¨ Harum Energy is the most exposed counter to the spot coal price. Among the four coal miners, Harum Energy is the most exposed to spot coal price. This is as it sells its coal using spot prices. Therefore, it should start benefiting from the increase in prices from 4Q16 onwards. By contrast, its peers should fully benefit from the current increase in prices from 2017 onwards, as most of their coal selling prices for FY16 have been locked in.

¨ Indo Tambang has the biggest exposure to the China market. China is the main driver behind the increase in imported coal demand. Indo Tambang is the most exposed coal miner to this market (25% of sales are made to Chinese customers), followed by Adaro Energy (14% of sales) (Figure 1). As at 9M16, Harum Energy and Bukit Asam have not sold coal to China. However, they said they would record sales to China from 4Q16 onwards.

¨ All coal miners are the beneficiaries of the weakening IDR. We expect the IDR to continue softening to reach an average of IDR13,700/USD in FY17 (YTD average: IDR13,286/USD). The coal miners’ revenues are mostly dominated in USD terms. Meanwhile, the contribution of USD to their costs is less than to their revenue (Figure 1), which should improve profit margins. Harum Energy and Indo Tambang are likely to benefit the most from a weakening IDR, considering that the difference between USD contributions to their revenue and total costs are the highest.

¨ Reiterate BUY on United Tractors with a IDR24,700 TP. We reiterate our BUY call on United Tractors, as its earnings are set to recover in FY17 from higher heavy equipment sales, and mining contracting and coal sales volumes. We think this has not been factored in by consensus yet. The company should also benefit from the weakening IDR in its mining contracting and coal sales businesses. Also, with consensus lifting its earnings estimate, this should also boost United Tractor’s share price performance. We consider this stock as the safest play on the recovery in coal prices. (Hariyanto Wijaya CFA, CPA)


Nov 16,2016 09:19:12

JCI index closed lower on Tuesday final trading session, decreased by 0.73% to 5,079 with $HMSP, $ADRO, and $UNTR consecutively became lagging movers. The value of transaction was Rp7.3 tn which involved Rp552 bn foreign net sell. Meanwhile, Rupiah closed at 13,369 per USD or strengthened by 8 points. Regional administrations may face challenges in implementing an upcoming rule to boost infrastructure spending in their regions, owing to low capacity and weak spending quality. From our technical desk, we predict JCI could close at positive teritorry with technical range of 5,040,-5,170.

Nov 14,2016 12:25:55

Coal Resurgent, Renewables in Retreat After Trump Win

  • Trump has promised to rescind the Paris climate change deal
  • Oil and natural gas most likely winners with Trump election

If you want a snapshot of what the global energy map will look like under President Donald Trump, look no farther than the stock market.
Glencore Plc, the world’s top coal trader, surged more than 7 percent on Wednesday. Vestas Wind Systems A/S, the world’s biggest wind-turbine maker, plunged as much as 13 percent. The swing foretells a story of the most carbon-intensive fossil fuel making a comeback, while the fight against climate change -- and investment in wind and solar power -- languishes.

"De-carbonization, which has been the organizing principle of Obama’s energy policy, came to a screeching halt last night," said Bob McNally, president of consultant Rapidan Group in Washington and a former senior energy official at the White House under Republican President George W. Bush.

In his only major energy policy speech before the elections, Trump said that he would rescind “job-destroying” environmental regulations within 100 days of taking office and cancel the climate deal reached last year in Paris.

“A Trump administration will focus on real environmental challenges, not the phony ones we’ve been looking at,” Trump told supporters in May in North Dakota, the birth-place of the U.S. shale revolution.

If the president-elect delivers on his campaign promises, he could effectively roll back eight years of U.S. energy policy, with consequences to industry giants like Exxon Mobil Corp. and oil-rich nations including Saudi Arabia and Venezuela.

“Trump has promised a dramatic shift in U.S. energy policy, from getting out of the Paris climate deal, to easing regulation on domestic oil and gas drilling, to scrapping the Clean Power Plan that affects the role of coal," said Jason Bordoff, director of the Center on Global Energy Policy at Columbia University and a former White House official under President Obama.

Few Clues

To be sure, Trump has offered few clues on how he plans to implement his plans. Energy and climate policy has taken a back-seat to immigration, the economy and debate about the candidate’s fitness for office. And some of his proposals are contradictory, like his pledge to boost both natural gas and coal, two fuels that compete against each other in the power generation market.

Yet few doubt who’s likely to win and lose, particularly as Trump can rely on supportive lawmakers in Congress to push his agenda.

"The result is undoubtedly a blow for the renewable energy industry," said Matt Loffman, an analyst at energy consultant Douglas-Westwood in Houston. "The historic election result is perhaps welcome news for a hydrocarbon industry that has been on the ropes for over two years."

Coal prices already are enjoying a renaissance after China, the world’s largest consumer, cut domestic production, forcing power plants to buy overseas. The cost of thermal coal in the Australian port of Newcastle, a benchmark for Asia, has more than doubled since January to a four-year high of $114.75 a ton.

Shares of big coal miners such as Anglo American Plc, BHP Billiton Plc and Rio Tinto Plc rose between 2 percent and 4 percent on Wednesday. Peabody Energy Corp., one of the largest U.S. coal companies, surged as much as 67 percent. Meantime, wind turbine makers Gamesa Corp.

Tecnologica SA and Nordex SE fell. Solar panel makers plunged in New York, led by SunPower Corp., First Solar Inc. and Canadian Solar Inc.
As coal enjoys a comeback, the biggest loser could be the fight against climate change. Under President Barack Obama, the U.S. rescued a two-decade old process the United Nations promoted to rein in pollution, forging a climate change deal last December. Along with China and more than 190 other countries, the so-called Paris agreement set out a framework for all nations to cut emissions.

It would be difficult, but not impossible for Trump to pull out of the Paris accord. While the Senate never voted on the Paris deal, it’s part of the 1992 UN Framework Convention on Climate Change, which the U.S. ratified under Republican President George H.W. Bush. Trump would have to renounce the 1992 treaty and risk bringing down the entire UN process to scrap Paris. The U.S. would have to give three year’s notice to withdraw from Paris.

But Trump doesn’t need to cancel Paris to derail the process, effectively hampering the growth of renewable energy, analysts and campaigners said.

Yukari Takamura, a professor at Nagoya University in Japan who has followed climate change talks for more than a decade, said the Obama administration took a lead that contributed "enormously" to the Paris deal. "Lack of such leadership might slow down the progress" by unsettling the investors who need to fund renewable developments, she said.

As Trump shapes his energy agenda, the first clue about his priorities could come with his selection for secretary of energy. Obama surrounded himself with policy experts and academics such as Steven Chu and Ernest Moniz. Trump has relied so far on the advice of Harold Hamm, the founder and chief executive officer of Continental Resources Inc., one’s of America’s largest shale oil producers.

Whoever his choice as energy secretary, the global fossil fuels industry, which over the last four years has been on the defensive with Obama, is likely to find a friend in the White House.

"The oil and gas industry is a clear winner with the new president," said Alexandre Andlauer, head of oil at research firm Alphavalue in Paris. “U.S. oil companies have a better future today than yesterday.”


Oct 04,2016 08:01:16

Morning all, Harga coal ditutup menguat +12.34% menjadi US$81.10/mt dikarenakan data produksi India yang tercatat turun -5.4% yoy di bulan Sept dan operasi tambang China yang dipotong menjadi 276 hari/tahun.

Saham coal bisa pesta hari ini


Aug 02,2016 10:58:07
Harga Batu Bara Memanas Signifikan : Harga batu bara meroket ke level tertinggi dalam 17 bulan terakhir seiring dengan langkah China sebagai produsen terbesar di dunia mengubah strategi menjadi importir. Meskipun demikian, harga masih rentan koreksi akibat proyeksi kenaikan suku bunga Federal Reserve pada kuartal IV/2016. (BISNIS INDONESIA)

Aug 02,2016 08:45:01
Adaro Energy Laporan Operasional Kuartalan
Kuartal Kedua 2016 Untuk tiga bulan yang berakhir pada tanggal 30 Juni 2016

Ringkasan kuartal ini :

•Dalam kuartal ini, Adaro mencapai kinerja operasional yang baik, sejalan dengan target yang ditetapkan pada awal tahun.

•Adaro menandatangani perjanjian untuk membeli 75% kepemilikan atas Indomet Coal Project dari BHP Billiton.

•Dinamika pasar batubara menunjukkan peningkatan, terutama dengan dukungan pengurangan suplai di Cina. Indonesia melanjutkan disiplin suplainya sementara negara pengekspor batubara lainnya mempertahankan skala ekspor yang sama
atau sedikit meningkat.

•Permintaan terhadap batubara di Indonesia menampilkan prospek yang positif dimana dalam enam bulan pertama 2016,
konsumsi domestik melaju 8% y-o-y.

•Penyelesaian keuangan (financial close) yang telah didapatkan untuk proyek pembangkit listrik 2x1,000 MW di Jawa Tengah semakin memperkuat ekspansi Adaro ke sektor


Jul 27,2016 08:50:24
EARNINGS CALENDAR (Half Year 2016 - Estimated)

JULY 2016

Jul 25, 2016 :
$BBTN (Bank Tabungan Negara (Persero) Tbk PT)

Jul 26, 2016
$BDMN (Bank Danamon Indonesia Tbk PT)
$BMRI (Persero) Tbk PT Earnings Release - 4:00PM GMT+7

Jul 27, 2016
$AALI (Astra Agro Lestari Tbk PT)
$HMSP (Hanjaya Mandala Sampoerna Tbk PT)
$LPPF (Matahari Department Store Tbk PT)
$MPPA (Matahari Putra Prima Tbk PT)
$PTBA (Bukit Asam (Persero) Tbk PT)

Jul 28, 2016
$ASII (Astra International Tbk PT)
$BEST (Bekasi Fajar Industrial Estate Tbk PT)
$BJBR (PT Bank Pembangunan Daerah Jawa Barat dan Banten Tbk)
$DOID (Bloomberg)
$NCO (Vale Indonesia Tbk PT)
$JPFA (Bloomberg)
$PSAB (Bloomberg)
$SSMS (Bloomberg)
$SMGR (Semen Indonesia (Persero) Tbk PT)
$UNTR (United Tractors Tbk PT)
$UNVR (Unilever Indonesia Tbk PT)

Jul 29, 2016
$ASRI (Alam Sutera Realty Tbk PT)
$ADHI (Bloomberg)
$BSDE (Bumi Serpong Damai Tbk PT)
$BNGA (Bloomberg)
$BNLI (Bloomberg)
$BNII (Bloomberg)
$BKSL (Bloomberg)
$BHIT (Bloomberg)
$BISI (Bloomberg)
$CPIN (Bloomberg)
$CTRA (Ciputra Development Tbk PT)
$CTRP (Bloomberg)
$ELSA (Bloomberg)
$GIAA (Bloomberg)
$GJTL (Bloomberg)
$GGRM (Gudang Garam Tbk PT)
$NKP (Bloomberg)
$INTP (Indocement Tunggal Prakarsa Tbk PT)
$INDF (Indofood Sukses Makmur Tbk PT)
$ICBP (Indofood CBP Sukses Makmur Tbk PT)
$INDY (Bloomberg)
$KARW (Bloomberg)
$KAEF (Bloomberg)
$KIJA (Bloomberg)
$KLBF (Kalbe Farma Tbk PT)
$KRAS (Bloomberg)
$LPKR (Lippo Karawaci Tbk PT)
$LSIP (Perusahaan Perkebunan London Sumatra Indonesia Tbk PT)
$MAPI (Bloomberg)
$PWON (Bloomberg)
$PNBN, $PNLF, $PNIN (Bloomberg)
$PTPP (Bloomberg)
$RALS (Bloomberg)
$SMRA (Bloomberg)
$TBLA (Bloomberg)
$TLKM (Telekomunikasi Indonesia (Persero) Tbk PT)
$TOTL (Bloomberg)
$WSKT (Bloomberg)

Aug 1, 2016
$HRUM (Harum Energy Tbk PT)
$SSIA (Surya Semesta Internusa Tbk PT)

Aug 10, 2016
$ITMG (Indo Tambangraya Megah Tbk PT)

Aug 12, 2016
$EXCL (XL Axiata Tbk PT)

Aug 29, 2016
$ADRO (Adaro Energy Tbk PT)
$ANTM (Aneka Tambang (Persero) Tbk PT)
$BBRI (Bank Rakyat Indonesia (Persero) Tbk PT)
$ISAT (Indosat Tbk PT)
$PGAS (Perusahaan Gas Negara (Persero) Tbk PT)


Sep 13, 2016
$SMCB (Holcim Indonesia)

Jul 26,2016 21:03:39

*Harga Batu Bara Naik Terdongkrak Aturan Pemerintah Cina*

•Saat ini perusahaan tambang batu bara di dunia diuntungkan oleh aturan yang diberlakukan Pemerintah Cina, yakni dalam sepekan buruh hanya bekerja lima hari. Aturan ini, diberlakukan sejak Maret lalu, dimaksudkan untuk mengurangi produksi batu bara yang berlebih. Sejak itu harga batu bara terdorong naik karena pedagang batu bara di Cina dipaksa untuk mencari kekurangan pasokannya dari luar negeri.

•Kebutuhan batu bara termal untuk keperluan pembangkit listrik membuat Cina tahun ini menambah impor batu baranya menjadi dua kali lipat, dari 140 juta ton tahun lalu. Akibatnya, harga pun naik.

•Indeks Newcastle, yang dijadikan patokan harga batu bara Asia saat ini US$61 per ton. Kenaikan cukup besar dibanding Januari lalu.

•Para analis memperkirakan produksi domestik Cina Mei lalu turun 10-15% ketimbang Mei setahun sebelumnya.

•Sebelum Cina mengumumkan pengurangan jam kerja, saya memperkirakan impor batu bara akan turun 110 juta ton, tahun ini. Di luar dugaan, ternyata malah bertambah 140 juta ton, dan bahkan mungkin lebih tinggi.

•Berkurangnya produksi itu bertepatan dengan naiknya permintaan di Cina, akibat meningkatnya produksi listrik di musim panas ini. Kebutuhan batu bara untuk pembangkit listrik diperkirakan naik 5% pada Juni, dan akan bertambah lagi pada Juli dan Agustus.

*(OCBC, Source : Tambang)*


Jul 25,2016 21:46:01
Philippines’ coal demand to grow over 1 mln T/yr until 2020 – industry group

MANILA, July 21 (Reuters) – The Philippines’ coal consumption could grow by more than 1 million tonnes annually until 2020 as it expects to switch on more coal-fired power plants to support its economy, the head of a local industry group said on Thursday.

The Southeast Asian country’s consumption of the fossil fuel reached 22 million tonnes last year, and about 80 percent of that, or a record high 17.4 million tonnes, had to be imported almost entirely from Indonesia, the world’s top seller of thermal coal used in electricity generation.

Higher Philippine coal demand could be good news for Indonesia though it might be insufficient to move prices in an over-supplied market.

The Philippines relies heavily on coal imports as domestic supply, mainly from mine operated by Semirara Mining Corp , is not enough and the heat content is too low to be used in most of the country’s power plants. Imports in 2014 totalled 15.2 million tonnes, based on government data.

“We’re looking at an increment of 1 million tonnes per year until 2020,” Arnulfo Robles, executive director of the Philippine Chamber of Coal Mines, told reporters on the sidelines of a power industry forum.

“That’s a very conservative estimate,” he said. Robles welcomed Energy Secretary Alfonso Cusi’s policy statement earlier this month retaining coal as a core part of the country’s electricity generation mix while at the same time pushing aggressively for clean energy.

Robles downplayed the impact of an Indonesian ban on coal shipments to the Philippines, saying only small vessels have so far been stopped from delivering coal. Supply to the country’s power producers is delivered through large ships, he said.

Last month Indonesia said a halt on coal shipments to the Philippines would remain in place because of security concerns, after seven Indonesian sailors were kidnapped in the southern Philippines.

(Source : Adaro Blog, Reporting by Enrico dela Cruz; Editing by Christian Schmollinger)


Jun 15,2016 10:15:12
Adaro: clearer direction

Coal-price stability at ~USD50/bbl in the past six months, the longest since 2Q11, suggests 1) price bottoming out and 2) lower chances of another asset impairment. We upgrade our recommendation to BUY and raise our SOTP price target to IDR1,200 (5.7x 2016 EV/EBITDA in line with 8-year mean), due to higher forecasts and contribution from the Batang project (IDR116/share). Operational improvements and progress in the power project would be the main catalysts, in our view.


Jun 15,2016 08:50:40
Adaro Energy ($ADRO): Upgrade rekomendasi menjadi BUY dengan TP baru di IDR1,200.

* Dalam riset report Adaro Energy (ADRO), Isnaputra Iskandar mengupgrade rekomendasi BUY dengan TP baru di IDR1,200 per saham (mewakili 5.7x 2016 EV/EBITDA).

* Isnaputra melihat harga batu bara mulai terlihat stabil di USD50/ton dalam 6 bulan terakhirnya, terpanjang sejak kwartal 2 2016. Hal tersebut mengindikasikan, bahwa harga batu bara saat ini telah di level bawah, dan juga rendahnya potensi penurunan nilai asset.

* Isnaputra merekomendasikan BUY dan menaikkan TP, seiring menaikkan estimasi labanya, karena memfaktorkan proyek Batang senilai IDR116 per saham, selain itu, Isnaputra menaikkan estimasi labanya di 2016-2018 sebesar 58%/48%/50%, karena menurunkan total biaya sebesar 8%/8%/9%.

* Isnaputra melihat Adaro mampu melakukan efisiensi biaya secara berkesinambungan sebesar 35-40% dalam 3-4tahun terakhir, dipicu oleh turunnya biaya kontraktor, biaya BBM, royalties, dan beberapa iniatif penurunan biaya.
Jun 08,2016 09:12:16
PTBA: Minister approves 2016-2025 RUPTL
Minister approves 2016-2025 RUPTL
Tuesday, June 07, 2016 - 09:01AM GMT+7
By Bernard Loebs
Minister of Energy and Mineral Resources Sudirman Said finally approved on Monday the 2016-2025 electricity procurement business plans (or RUPTL) proposed by state-owned electricity firm PT PLN.
“The RUPTL has been approved and to be published soon,” said Sudirman. The RUPTL document forms as a guideline for private investors to participate in power sector development projects.
The final RUPTL includes key projects such as the South Sumatra 9 and South Sumatra 10 mine mouth power plant projects, and the high voltage direct current transmission (HDVC) project linking Java and Sumatra, which were previously excluded by PLN from the electricity blueprint.
Sudirman said that the HVDC project is important to increase the reliability of electricity supply in Java and Sumatra. “If Java is surplus, electricity can be supplied to Sumatra, and vice versa,” he said.
Meanwhile, the ministry has also accommodated the wish of PLN to develop up to 10,223 MW of power plants under the planned five-year program to develop 35,000 MW power plant projects until 2019. Following asset revaluation and planned government equity injection of up to Rp 23.56 trillion, PLN is seen to have the capital capacity to develop the power plant projects along with required transmission and relay stations. The government previously wanted PLN to develop only about 5,000 MW, with the bulk of the 35,000 MW target to be developed by private investors, as the state utility will be focused on developing transmission lines and relay stations.
Meanwhile, Director General of Electricity Jarman said that under the RUPTL, PLN has also been given a target to help meet the development of renewable energy sources, so that it would account for 25 percent of the energy mix in 2025.
PLN Head of Corporate Communications I Made Suprateka said that the company is committed to help meet the target and to accelerate power plant development projects.
source: Petromindo
Sumsel 9&10 (3x600MW) and HDVC project are PTBA's project and once completed (scheduled to complete in 2019), PTBA will required to supply 8.4mn mt/annum for the plants.

Jun 06,2016 11:56:33
Could Coal Have Survived by Going Green?

While its rivals innovated and iterated, coal stayed stagnant. Now it’s almost too late.

Coal is getting killed in the U.S. That’s largely because its main customer, the electricity industry, is switching to fuels or sources that are either cheaper or cleaner (or both), like natural gas and renewables. In March, for example, coal accounted for only 24 percent of electricity generated down in the U.S.—that’s down from 33 percent in March 2015 and from 41 percent in March 2014. So far this year, U.S. coal production is just two-thirds of what is was last year.

Coal is being massacred by a combination of market forces—natural gas is really cheap and abundant, renewables are getting cheaper, and meanwhile state and federal regulations and mandates are pushing power producers to use fuels or power sources that create fewer emissions. In such an environment, coal has a hard time competing. (Natural gas produces about half the amount of carbon dioxide per British thermal unit created as coal does.)

The reasons these anti-coal forces have gained real strength in the last several years are largely technological developments and the logic of industrial scale. But coal producers’ response has generally not been to innovate but to respond defensively. They fight regulations and help fund lawsuits aimed at stopping policies that discourage coal use. They back politicians—mostly Republicans but some Democrats—who try to reduce subsidies and support for renewables and attempt to shape laws and regulations in ways that are more favorable to coal. But it hasn’t been working: Republican presidential candidates who run hard on coal keep losing and will likely lose again. In many of the biggest states—California, the entire Eastern seaboard—greens have far more lobbying clout than coal miners.

It’s easy to look back and conclude that it was obvious that the eventual rise of cheap natural gas and utility-scale renewals would spell doom for coal. But it didn’t have to turn out this way. The challengers to coal gained market share and social legitimacy because of unpredictable strides in technology, innovation, and investment. Fracking, continually improved upon and applied at immense scale, made cleaner-burning natural gas extraordinarily cheap, and hence attractive to utilities. Renewables were a laughably small segment of the country’s energy sources several years ago. But a decade of investments in small wind and solar farms, and then in bigger wind and solar farms, and then in huge ones, has likewise made those sources more appealing.

What if coal producers had taken a cue from their rivals and invested systematically in technologies and innovations to make their product greener? Could they have figured out a way to make their dirty rocks emerge as a low-carbon (or even a no-carbon) fuel source? Would coal still be in its precarious position?

Now, it’s not as if the coal industry has simply stood idle while other power sources ate its lunch. There are several large-scale efforts underway around the world aimed at allowing coal to burn more cleanly. The idea is generally to capture or reuse the carbon dioxide and other emissions released when coal is burned. The technology exists. But it currently costs a lot of money to do it, in part because carbon capture is still in the experimental stage. Still, it’s happening: A plant in Saskatchewan, Canada, the Boundary Dam Carbon Capture Project captures up to 90 percent of the carbon dioxide emitted in burning coal—which is then injected into nearby oil fields to improve production. There’s the Kemper plant in Mississippi, which is being supported in part by federal funds, that is designed to capture up to 65 percent of emissions and send the carbon dioxide to oil fields. But it is running massively over budget. A similar project is in the works in Texas.

Carbon-free or carbon-reducing technologies, including clean coal technologies, are always really expensive and kludgy at first, especially compared with the established way of doing business. The first modern electric car had to be an expensive luxury vehicle. The first solar panel systems and wind farms built in this country were uneconomic—both the panels and turbines were exorbitantly expensive, as was the design and construction of the systems. Why? Engineers and project managers had to design processes on the fly. The supply chains serving them lacked the scale and volume of production to bring costs down.

In many industries, the 1.0 iteration is generally expensive and not particularly functional. But then you apply the lessons learned to make the 2.0 version more compelling and cheaper. In the meantime, the underlying technology improves. As the market grows, more competitors enter, which spurs price reduction and further breakthroughs. Higher volumes of orders lead to more scale, which turns expensive specialty products and devices into cheaper commodities. Iterate through that process a few times, and you get a functional industry. That’s precisely what has happened with solar panels, wind turbines, and fracking in the last several years.

This process—moreso than any government war on coal—has made life difficult for coal producers. As rivals have made quantum leaps in efficiency and cost, coal has effectively stood still. Solar and wind and fracking had to leap. Coal didn’t have to, so while the market price of coal may be cheaper now than it was a few years ago, it doesn’t burn much cleaner. In contrast, in some parts of the country today the cheapest electricity a utility can buy is produced by solar.

Now, here’s a thought experiment. Between 2009 and 2015, the U.S. coal industry produced more than 7 billion tons of coal. What if the coal-producing industry in 2009 decided to tax itself—say, $2 for every ton mined—and then plowed that money into demonstration projects, carbon capture research, infrastructure, and subsidies for next-generation coal plants? What if it had invested $14 billion in efforts that would allow coal to be burned with no emissions, or with dramatically fewer emissions?

Doing so would not have guaranteed success, or some miraculous breakthroughs. But I’m reasonably sure that we’d be on the third and fourth generation of carbon capture projects, instead of the first; that the costs of building new carbon-capture projects would be far lower than they are today; that researchers would have developed useful new procedures and equipment; that we’d have an industry that knows how to construct such projects on budget instead of incurring massive overruns.

Of course, this would have required the sort of collective action and foresight of which few industries are capable. But had the coal industry done so, it would have had the possibility of positioning itself as part of the solution to lower emissions, rather than as the bulk of the problem.

You could argue that it’s not the miners’ responsibility to ensure that the use of their resource doesn’t produce negative externalities. They’re not the ones who buy and burn the coal, after all. But that’s not why they should’ve done it. As we’ve seen, the industry’s sole customers—electric utilities—now have choices in how they meet demand for electricity. They can convert plants to run on natural gas, or build large-scale renewables, or focus on efficiency and storage instead of production. They could pull plenty of levers if they want to cut emissions.

The coal industry, which had the most to gain from investments in clean-coal technology, has run out of levers to pull.


May 13,2016 09:25:51

Efisiensi Menopang Emiten Batubara

Harian Kontan mengulas kinerja emiten batubara sepanjang kuartal I yang terlihat masih berat. Tapi, beberapa emiten mulai menunjukkan perbaikan kinerja, setelah banyak tergerus karena merosotnya harga batubara tahun lalu.

Sebagian besar emiten batubara menahan ekspansi. Sebagai gantinya, emiten menggenjot efisiensi. Misalnya saja PT Adaro Energy Tbk (ADRO). Emiten ini mencetak kenaikan laba bersih meski pendapatannya menurun. Dalam tiga bulan pertama tahun ini, perseroan membukukan laba bersih senilai US$ 61 juta, atau naik 3%. Di sisi lain, pendapatan usaha ADRO turun 17,51% menjadi US$ 586 juta karena penurunan harga jual rata-rata.

Harga jual rata-rata ADRO 17% lebih rendah daripada periode sama tahun lalu. Namun, volume penjualan masih stabil, yaitu 13,5 juta ton. Tahun ini, ADRO menargetkan produksi batubara sebesar 52-54 juta ton.

PT Tambang Batubara Bukit Asam Tbk (PTBA) mencetak pertumbuhan penjualan 8,16% menjadi Rp 3,54 triliun. Tapi, laba bersih PTBA turun tipis 2,2%. Pada kuartal I 2016, PTBA menjual 5,23 juta ton batubara atau naik 14% jika dibandingkan penjualan di periode yang sama tahun lalu. Jumlah itu terdiri dari penjualan domestik 2,91 juta ton atau 56% dari total penjualan. Sisanya 2,32 juta ton merupakan ekspor.

PT Delta Dunia Makmur Tbk (DOID) juga mencetak kenaikan pendapatan dari US$ 122,17 juta menjadi US$ 126,8 juta. DOID yang merugi US$ 10,43 juta kuartal pertama tahun lalu, mencetak laba bersih US$ 3,06 juta.

PT Indo Tambangraya Megah Tbk (ITMG) masih mencetak penurunan pendapatan 18% menjadi US$ 331,1 juta. Laba bersih ITMG pun turun.

Yudha Gautama, Analis Mandiri Sekuritas, mengatakan, beberapa emiten batubara mencatatkan kinerja di atas ekspektasi. Misalnya saja, margin laba ITMG masih lebih baik dari perkiraan.



May 09,2016 16:49:38
PTBA: The coal upgrade
Coal analyst, Janeman Latul upgrades Bukit Asam earnings on the back of better ASP from higher value coal and improvement in cost management. He also emphasizes on railway debottlenecking which should propel the contract fulfillment with PLN. All the positives aside, Janeman still has his concerns on global coal prices. Thus, following the 50% rally YTD, he cuts his rating to O-PF from BUY but increase our target price 32% to Rp7,500/share from Rp5,700/share
- Following the 1Q16 good result, Janeman increases his assumption on ASP considering higher coal while at the same time factoring in China macro data and the demand environment to be generally constructive through 1H16 before tailing in the second half as policy support adjusts.

- To manage the cost better, Bukit Asam shifts from renting heavy equipment & vehicles (among the biggest COGS items) to buy the equipment. PTBA bought Satria Bahana Support (SBS) to do its coal mining services last year and reducing Pama’s role over time.

- Janeman believes in Bukit Asam’s debottlenecking from railway capacity improvement. He forecasts a modest 11% 3-years Cagr on the railway haulage, which will help boost its sales tonnage to 25.5mn tons in 18CL, a 10% Cagr.

- Minor adjustment on 16CL coal price increase by 1% while for 17-18CL our regional team sees flat seaborne thermal coal prices as RMB devaluation erodes the small upside forecast in Chinese coal prices.


May 02,2016 16:23:46
Adaro Energy (ADRO): Adjusting TP and EPS; Reiterate HOLD

Growth drivers lacking amid soft coal price
The 1Q16 results suggest that ADRO is managing costs well to survive the volatile coal market. Due to upwards revisions to our earnings forecasts, we raise our price target 40% to IDR670, based on 12.5x 2017 PER (20% discount to seven-year mean of 15.6x). The discount is justified in our view given the adverse structural changes in the coal industry. However, we maintain our HOLD rating as: 1) we don’t think coal prices will recover strongly over the next 12-18 months; and 2) it will take 3-4 years for the power projects to have a meaningful impact on earnings.

Better than expected 1Q16 results
ADRO posted flat YoY earnings growth in 1Q16 of USD60m, which was better than our initial full-year forecast of USD63m on the back of lower depreciation expense.

The 1Q16 results suggest…
1Q16 sales were down 18% YoY due to a 34% ASP drop as a result of continued weak global coal markets. Sales volume was flat YoY at 13.5m tonnes. Low oil prices, lower strip ratio of 4.2bcm/tonne, and costefficiency
efforts pushed ex-royalty production costs 25% lower YoY to USD30.7/tonne. We expect costs to increase moderately in the remaining quarters due to higher oil prices and strip ratio. Overall, this was not a bad result given the weak coal prices.

Earnings upgrades
We raise our 2016/17 earnings forecasts 33%/22% to USD84/125m. The revisions are due to lower depreciation expense, which also lowered our ex-royalty production cost assumptions by 2.0% and 2.1%, respectively. Coal-price volatility remains the main risk factor for our forecasts. For every 1% change in our coal price assumptions, we estimate that our 2016-17 earnings forecasts would change by 10.7% and 8.1%.


Apr 20,2016 10:41:30
Adaro akan Bagikan Dividen Final US$ 40,3 Juta

Investor Daily memberitakan PT Adaro Energy Tbk (ADRO) bakal membagikan dividen final sebesar US$ 40,3 juta untuk tahun buku 2015. Sebelumnya, pada awal 2016, perseroan telahmembagikan dividen interimsebesar US$ 35,1 juta. Dengan begitu, total dividen tunai Adaro mencapai US$ 75,4 juta atau 49% dari laba bersih tahun lalu yang sebesar US$ 152,4 juta.

Pemegang saham perseroan telah menyepakati pembagian dividen tersebut dalam rapat umum pemegang saham tahunan (RUPST) Adaro Energy). Pemegang saham perseroan juga menyepakati penggunaan laba bersih sebesar US$ 1,5 juta sebagai dana cadangan. “Sebesar US$ 75,4 juta akan dimasukkan sebagai saldo laba,” kata Presiden Direktur Adaro Energy Garibaldi Thohir
Menurut Garibaldi, tahun lalu merupakan tahun yang sulit. Kondisi kelebihan pasokan dibarengi dengan pertumbuhan permintaan yang lemah menyebabkan harga batubara terus jatuh.

Sementara itu, untuk meningkatkan bisnisnya di sektor pembangkit listrik perseroan berencana membangun pembangkit listrik tenaga uap (PLTU) mulut tambang. Perseroan akan memanfaatkan tambangnya di Sumatera Selatan dan Kalimantan Timur untuk proyek tersebut.
Lebih lanjut dia mengatakan, cadangan perseroan mampu memasok batubara ke pembangkit listrik berkapasitas hingga 4x300 MW. Sementara tambang perseroan di Kalimantan Timur mampu memasok batubara untuk pembangkit listrik berkapasitas hingga 5x1.000 MW.

Garibaldi menegaskan, perseroan ingin mengoptimalkan tambang batubara yang lokasinya lumayan jauh seperti di Sumatera Selatan, Kalimantan Timur, dan sebagian di Kalimantan Selatan. “Kita akanmengoptimalkan konsesi tersebut menjadi pembangkit listrik mulut tambang,”

Perseroan akan memanfaatkan peluang terebut secara perlahan. Saat ini Adaro tengah melakukan feasibility study terkait rencana proyek tersebut. Garibaldi mengatakan, perseroan optimistis dapat menjadi pemain utama di bisnis pembangkit listrik Indonesia. Menurut dia, dari program 35.000 megawatt (MW) pemerintah, perseroan bisa berkontribusi setidaknya sebesar 5.000MW. “Kita memiliki pengalaman membangun pembangkit listrik,” ujarnya.

Apr 14,2016 08:44:04
Tips trading buat hari ini  Kamis, tanggal 14 April 2016  :

1.IHSG kemarin semerbak dengan saham-saham kecil dengan kenaikan yang luar biasa, sedangkan saham baking masih tertekan, kecuali saham ASII.
Tidak usah peduli banget sama market yang susah naik dengan blue chips, kalau banyak saham kecil yang terbang dan memberikan cuan.

2.Jadi mendingan kita bahas satu persatu deh saham-saham yang naik luar biasa.

3.ELSA :Saham ini break out dengan volume yang luar biasa, saham ini jika mampu bertahan diatas level 450, maka targetnya masih jauh yaitu sekitar 630-650.Namun jika tidak mampu bertahan diatas level 450, sebaiknya take profit dulu.

4.GIAA : Saham ini sudah dimainkan 4 hari berturut-turut, so sebaiknya hati-hati, kemarin mencoba menembus level 600, namun tidak kuat sehingga turun kembali dibawah 600, target terdekat adalah 650. Risk lebih besar dari rewards, so main saham ini sebaiknya main cepat saja.

5.ANTM : Saham ini diisukan target menuju 800, kenaikan dalam 2 hari terakhir terlalu cepat, sehingga dapat saja terjadi konsolidasi dahulu, namun jika bertahan diatas level 630, maka saham ini otw menuju 800.

6.TINS : Saham ini sebentar lagi menuju level 1000, so sebaiknya hati-hati jika sudah mencapai level 1000, karena targetnya sudah dekat yaitu 1100.

7.PTBA : Saham ini menguji level 7825, jika mampu tembus level 7825, maka akan menguji level 8000, dengan target 10.000-12.000

8.INCO : Saham ini berpeluang menguji level 2000, dengan target terdekat 2045-2050, target mid term adalah 2700, dengan syarat harus mampu tembus dan bertahan diatas level 2050.

9.ERAA : Saham ini menguji level 800-810, jika tembus maka targetnya akan lumayan jauh, yaitu 1200, dengan syarat harus mampu bertahan diatas level 800.

10.ADRO :Saham ini otw to 800, saham ini ada small resist di level 760. nampak ADRO tidak akan sulit menembus level small resist tsb.

Apr 14,2016 08:42:36
Tips trading buat hari ini  Kamis, tanggal 14 April 2016  :

1.IHSG kemarin semerbak dengan saham-saham kecil dengan kenaikan yang luar biasa, sedangkan saham baking masih tertekan, kecuali saham ASII.
Tidak usah peduli banget sama market yang susah naik dengan blue chips, kalau banyak saham kecil yang terbang dan memberikan cuan.

2.Jadi mendingan kita bahas satu persatu deh saham-saham yang naik luar biasa.

3.ELSA :Saham ini break out dengan volume yang luar biasa, saham ini jika mampu bertahan diatas level 450, maka targetnya masih jauh yaitu sekitar 630-650.Namun jika tidak mampu bertahan diatas level 450, sebaiknya take profit dulu.

4.GIAA : Saham ini sudah dimainkan 4 hari berturut-turut, so sebaiknya hati-hati, kemarin mencoba menembus level 600, namun tidak kuat sehingga turun kembali dibawah 600, target terdekat adalah 650. Risk lebih besar dari rewards, so main saham ini sebaiknya main cepat saja.

5.ANTM : Saham ini diisukan target menuju 800, kenaikan dalam 2 hari terakhir terlalu cepat, sehingga dapat saja terjadi konsolidasi dahulu, namun jika bertahan diatas level 630, maka saham ini otw menuju 800.

6.TINS : Saham ini sebentar lagi menuju level 1000, so sebaiknya hati-hati jika sudah mencapai level 1000, karena targetnya sudah dekat yaitu 1100.
PTBA : Saham ini menguji level 7825, jika mampu tembus level 7825, maka akan menguji level 8000, dengan target 10.000-12.000

7.INCO : Saham ini berpeluang menguji level 2000, dengan target terdekat 2045-2050, target mid term adalah 2700, dengan syarat harus mampu tembus dan bertahan diatas level 2050.

8.ERAA : Saham ini menguji level 800-810, jika tembus maka targetnya akan lumayan jauh, yaitu 1200, dengan syarat harus mampu bertahan diatas level 800.

9.ADRO :Saham ini otw to 800, saham ini ada small resist di level 760. nampak ADRO tidak akan sulit menembus level small resist tsb.

Apr 11,2016 09:42:44
Mining Sector

Trimegah Securities Mining Conference Takeaways

Mining conference: INCO, DOID, ADRO, HEXA, ELSA
We recently hosted a small Mining Conference on 4th April 2016, inviting 4 prominent mining-related companies (eg; INCO—nickel producer, DOID—mining services contractor, ADRO—coal producer, and HEXA—heavy equipment distributor) and ELSA, a strong player in the O&G related industry. Most of the attendees are from asset management and no representative of pension funds were present, which we think indicates the general positioning among locals: pension funds already own the sector while asset managements are underweight and looking for opportunities.

1) Investors are not sure where commodities prices are heading, and so are the corporates
Most of the questions revolve around commodities prices, which seem to be one question that corporates have difficulty on answering. This is not surprising, given recent volatility in commodities prices particularly crude oil. Most corporates seem to be assuming that coal and/or oil prices to hover around current prices in making their investment/operational decisions. The assumptions in our financial models are slightly more conservative. We assume coal price to decline from current level of USD51/ton to USD48.5/ton whereas oil price to USD40/barrel.

2) Corporates are focusing on cost efficiency
Given lack of faith in any commodity price forecast, corporates are focusing on cost efficiency instead. A mining consultant who attended our lunch event mentioned that there is plenty of interest on using technology to improve operational efficiency at mining companies these days. This ranges from replacing regular light bulbs with LED to installing GPS on all excavators. This should benefit the larger mining contractors i.e. UNTR and DOID, which have the economies of scale to invest in the higher-end technologies to improve efficiency.

3) Expect overall heavy equipment sale to remain sluggish
Coal miners and mining contractors are delaying purchase of new equipment. The impact is less on UNTR as it means higher maintenance activity which is normally a higher margin business, but likely to hurt the smaller heavy equipment sellers more.

ADRO remain our top pick in the sector
We have Buys on ADRO and ELSA, with ADRO as our top pick. We like ADRO for its good corporate governance and healthy balance sheet. We also view Batang power plant as a strong catalyst, with projected NAV of IDR104/share (~15% of ADRO’s market cap). Among others, we think INCO has a positive outlook on volume, albeit nickel price remains a risk.

Mar 09,2016 12:11:36
YTD coal stocks have performed very well and outperformed the market. $ADRO is up 32.0+, $PTBA +28.2% and $ITMG +16.2% - all way above JCI’s 5.6%. $ADRO is the best performer YTD as we think the market is so excited with the court’s decision on land acquisition case for the Batang power which is in favour of the project. Speaking about diversification into power projects, it’s not only $ADRO doing it, but also $PTBA and $UNTR. $ITMG does not have a power project on hand now, but is actively looking at some opportunities, we believe. The diversification into power is positive, but we think it will take time for the projects to substantially contribute to earnings as we reckon the projects will be ready only in 3-4 years. This means uncertainty in the projects remains high while at the same time coal price remains weak. Having said that, we maintain our Neutral rating on the sector with $PTBA being our top pick due to its strong balance sheet, low cost and high exposure to domestic market.

May 11,2015 12:57:16
Indeks Harga Saham Gabungan (IHSG) menguat +0,1% (+3 poin) di level 5184,45 poin pada penutupan perdagangan sesi 1, Senin (11/5). Indeks LQ45 naik +0,15% ke posisi 900. Jakarta Islamic Index (JII) naik +0,27% ke posisi 699 poin. Indeks Kompas 100 naik +0,19% ke level 1.134 poin. IDX30 naik +0,15% ke level 466 poin. Pemodal asing membukukan transaksi net sell (jual bersih) -Rp37 miliar. Transaksi yang tercapai Rp2,136 triliun dengan volume trading sebanyak 5,755 miliar saham. Sektor: Agri +2,07% Mining +1,70% Properti -0,69% Infrastruktur +0,16% Finance +0,04% Trade -0,14% Manufaktur -0,17% Consumer -1,17% Basic ind -0,07% Misc-ind -0,25% Kini sektor agro dan mining menjadi penopang utama laju IHSG pada perdagangan sesi siang awal pekan ini. Saham agri ditunjang oleh naiknya AALI +3,07%. BWPT ++3,75%. DSNG +1,41%. GZCO +1,12%. SIMP +2,34%. SSMS +1,01%. Adapun saham-saham mining yang bergerak naik antara lain: ADRO +5,23%. ANTM +0,63%. ARTI +4,44%. HRUM +2,97%. INCO +1,24%. ITMG +5,51%. Kelompok saham properti bergerak negatif seiring terbitnya Revisi PMK No 90 /PMK.03/2015 tentang pengenaan pajak barang super mewah (PPh 22) untuk properti. Saham-saham properti yang melorot adalah: APLN -1,73%. BSDE -0,28%. CTRA -2,92%. JRPT -7,34%. LPCK -0,90% . LPKR -1,19%. Adapun sektor yang turun paling dalam adalah consumer -1,17%. Koreksi consumer dimotori saham: DVLA -1,11%. KAEF -0,84%. GGRM -0,16%. TSPC -1,67%. ULTJ -2,35%. UNVR -0,06%. Bursa Asia Sentimen kebijan Tiongkok yang memangkas suku bunga menjadi sentimen utama bagi market regional. Bank Sentral Tiongkok (People`s Bank of China (PBOC) menurunkan suku bunga kredit dan deposito bertenor 1 tahun sebesar 25 bps. Indeks Nikkei naik +1,27% (+245,32 poin) ke posisi 19.624,51 poin. Indeks Hang Seng naik +0,50% (+132,29 poin) ke level 27.714,63 poin Indeks Shanghai naik +1,18% (+49,62 poin) ke posisi 4.255,54 poin Indeks Straits Times +0,46% (+15,72 poin) ke level 3.467 poin (pukul 12.00 WIB).