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P H
Oct 23,2017 07:31:39

Bukit Asam ($PTBA)’s strong 3Q17 net profit is above consensus expectations. We think the strong earnings should continue, as high coal prices are likely to be sustained. Based on our discussion with its CFO, the firm is confident that PLN’s request to use a cost-plus margin formula for determining the coal selling price to domestic power plants is unlikely to be implemented. We maintain our assumptions and reiterate BUY with an unchanged IDR17,400 TP (58% upside). Bukit Asam’s FY17F-18F P/Es of 6.8x and 5.8x respectively are the cheapest among our coal universe.



  • Management is confident that the cost-plus margin formula is unlikely to be implemented. Based on our discussion with Bukit Asam’s chief financial officer Mr Orias Petrus Moedak, he is confident that Perusahaan Listrik Negara’s (PLN) request to use a cost-plus margin in determining the coal selling price to domestic coal power plants is unlikely to happen. 
      

  • Using conservative accounting to record coal selling prices to PLN. Bukit Asam booked revenue from selling coal to PLN in 9M17 using the ASP the latter requested for in negotiations. These negotiations are still ongoing.
     
    If the final agreed selling price with PLN in the yet-to-be-signed agreement uses 4Q16 ASP (as per the former agreement), there should be a positive surprise. This is because Bukit Asam would record a higher selling price and make a retroactive adjustment to its revenue from PLN since the start of 2017. 
      
  • Banko Tengah (Sumsel 8) power plant should commence its commercial operation date (COD) in 2021. On 19 Oct, Bukit Asam subsidiary PT Huadian Bukit Asam Power and PLN signed an amendment to their power purchase agreement (PPA) for the 2x620MW Banko Tengah (Sumsel 8) mine mouth coal-fired power plant. The COD of this plant is scheduled for 2021. 
     
    The Sumsel 8 power plant is slated to consume 5.1m tonnes of coal pa, 100% of which would come from Bukit Asam’s coal mine. This should increase its coal sales by 5.1m tonnes (FY17F: 23.1m tonnes) from 2021 onwards.
      
  • 3Q17 earnings are above consensus expectations (9M17: ~77% and ~82% of our and street’s estimates). Bukit Asam booked strong 3Q17 earnings of IDR902bn (+165% YoY, +5.7% QoQ) on the back of higher revenue and gross margins (3Q17: 40%, 2Q17: 37%, 3Q16: 24%). This was partly contributed by a lower stripping ratio in 3Q17.
     
  • Reiterate BUY with an unchanged IDR17,400 TP. We maintain our assumptions and reiterate our BUY call on this counter with an unchanged DCF-derived IDR17,400 TP. This implies P/Es on our FY17F-18F EPS of 10.8x and 9.2x respectively.
     
    Currently, Bukit Asam is trading at FY17F-18F P/Es of 6.8x and 5.8x, respectively, making it the cheapest coal stock in our universe. Key risks are the Government’s decision to change the domestic coal price formula, a delay in expanding railway capacity, a significant drop in coal prices, weaker-than-expected coal demand, and a strengthening IDR. (Hariyanto Wijaya, CFA, CPA, CMT)
      

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P H
Sep 24,2017 09:14:35

Bukit Asam ($PTBA) – Assesing PLN’s Request On The Coal Price Formula

PLN is requesting for the coal selling price to domestic coal-fired power plants to be at costs plus a 15-25% margin formula amidst the recent strong coal prices. We view such a probability as small, as the Indonesian Government has allocated a higher budget for electricity subsidies in the 2018 proposed state budget. We maintain our assumptions that coal selling prices to domestic power plants would still be linked to international coal prices. Maintain BUY with an unchanged IDR17,400 TP (43% upside).


  • Cost plus margin formula? According to Detik, Perusahaan Listrik Negara’s (PLN) procurement director, Nickye Widyawati, has requested that coal prices for domestic power plants be determined via a cost-plus formula instead of using international prices as a benchmark. We view such a probability as small, considering the Government of Indonesia has allocated a sufficient state budget for electricity subsidies in its 2018 proposed state budget. Also, the decision maker on implementing the coal domestic price formula is the Ministry of Energy and Mineral Resources (MEMR), not PLN.
     
  • Sufficient budget for an electricity subsidy in the 2018 proposed state budget. The Indonesian Government has allocated a 15.2% higher electricity subsidy in its 2018 proposed budget, which would increase to IDR52.2trn (2017: IDR45.3trn). In 6M17, PLN obtained the Government’s electricity subsidy of IDR23.9trn, which turned PLN’s operating losses before subsidy of IDR6.3trn to an operating income after subsidy of IDR17.5trn. We think PLN’s 6M17 operational costs have already been exposed to the current high coal prices. Therefore, we think 2017 and 2018F’s allocated electricity subsidy from the Government should be sufficient to accomodate the current high coal prices.
     
  • Scenario analysis. PLN has requested for the coal selling price to domestic power plants be at a formula of costs plus margins of between 15% and 25%. Bukit Asam’s 1H17 gross margin was 37.3%. Around 57% of Bukit Asam’s total coal sales volume is to PLN. If MEMR decides to implement the coal selling price formula to domestic power plants at costs plus a 25% margin, then Bukit Asam’s FY18F-19F earnings could decrease by 18% and 15% respectively from our current earnings forecasts. If MEMR decides on the costs plus 15% margin formula, then Bukit Asam’s FY18F-19F earnings could decrease by 37% and 36% respectively from our current earnings forecasts (Figure 3). 
     
  • Maintain BUY. We maintain our assumptions that coal selling prices to domestic power plants would continue to be linked to international coal prices. We maintain an unchanged IDR17,400 TP as we view the possibility of PLN’s request to be granted as unlikely. Our TP implies FY17F-18F P/Es of 10.8x and 9.2x, respectively. Key risks are the Government’s decision to change the domestic coal price formula, a delay in expanding railway capacity, a significant drop in coal prices, weaker-than-expected coal demand and a strengthening IDR. (Hariyanto Wijaya, CFA, CPA, CMT)
     

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P H
Feb 27,2017 11:04:05

Bukit Asam ($PTBA) - Peerless As The Only SOE Coal Mining Company

As the only SOE engaging in coal mining, Bukit Asam is the only operator that would benefit from synergy between SOEs as:

1. Its coal sales volume to other SOEs keeps increasing;
2. It has long-term coal domestic commitments to other SOEs.

We think the combination of higher coal sales volume and coal price in FY17F should fuel earnings – which we think consensus has not fully factored in, as our FY17F EPS is 35% higher vs the street. We re-initiate coverage with TP of IDR17,600 (58% upside), implying FY17F P/E of 11.4x.

¨ Beneficiary of higher coal selling prices. We think FY17 coal prices should reach around USD70-75.00/tonne (FY16 average: USD63.00), as China – the world’s biggest coal consumer and producer – has an interest in its coal mining companies generating profit in order to service their sizeable bank loans. As such, we assume an average FY17F coal price of USD73.00/tonne, and USD70.00/tonne from FY18F onwards. Higher coal price in FY17 onwards should increase Tambang Batubara Bukit Asam Persero’s (Bukit Asam) profitability and earnings, as its earnings are sensitive to changes in coal price (every 10% change in coal price should lead to a 16% change in EPS).

¨ The only coal company benefitting from SOE synergy. Bukit Asam is the only state-owned coal mining company in Indonesia. The Ministry of State Owned Enterprises (SOEs) pushes synergy between SOEs, which is crystallised in a decree guiding SOEs in the procuring of goods and services. The decree is one of a few key factors leading to Bukit Asam’s sizeable yearly SOE coal sales volume, together with other SOEs’ long-term coal commitment of around 574m tonnes.

¨ Domestic power plant joint ventures (JVs) to increase coal sales volume over the coming years. In addition to receiving return on investment in power plants, the JVs should increase Bukit Asam’s coal sales volume through the purchasing of the required coal from the latter.

¨ Expanding to overseas power plants to increase coal sales volume. Bukit Asam is planning to expand into overseas power plants via JVs in South-East Asia, especially to Vietnam and Myanmar. The two countries are expanding their electricity capacity, which means an increased need for coal. Bukit Asam’s corporate secretary informs that the company has signed an agreement to supply 1.5m tonnes of coal to Vietnam annually from 2018.

¨ Re-initiating coverage at BUY with IDR17,600 TP. Our DCF-derived TP implies FY17F P/E of 11.4x (-0.25SD from its 6-year mean P/E). Our FY17F EPS is 35% higher vs consensus, as we think consensus has not yet fully factored in an increase in coal sales volume and higher coal prices.

¨ Risks to our call include:
i. Delay in expanding its railway capacity;
ii. A significant drop in coal prices;
iii. Weaker-than-expected coal demand;
iv. A strengthening IDR. (Hariyanto Wijaya, CFA, CPA)

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P H
Jan 04,2017 15:22:42

Bukit Asam ($PTBA) to target completion of Sumsel 8 Power Purchase Agreement (PPA) revision by May-17

According to local press, PTBA is targeting to complete revision of Sumsel 8 Power Purchase Agreement (PPA) by May-17. With this, Sumsel 8 power plant is estimated to commence operation in 2021, delay from initial target of 2019. One of the issues to be discussed is PLN’s request to reconfigure Sumsel 8 specification from 2x620MW to 3X400MW. (Bisnis Indonesia)

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P H
Dec 16,2016 10:13:05

Indonesian Coal Miners in Focus: Tambang Batubara Bukit Asam

The soaring benchmark thermal coal price of the Indonesian government (called harga batubara acuan, abbreviated HBA), which is set (on a monthly basis) by the Energy and Mineral Resources Ministry, should boost earnings of listed Indonesian coal miner Tambang Batubara Bukit Asam in 2017. The HBA price nearly doubled to USD $102 per metric ton in December from the year-start. Besides the rising coal price, the company should also see improving corporate earnings due to its expected rising sales volume.

The price at which Tambang Batubara Bukit Asam ($PTBA) sells its coal on the domestic market is determined by the HBA. More specifically, the domestic sales price in 2017 is determined by the average HBA in the last three months of 2016. This would be USD $85.2 per metric tons. However, CLSA Securities says the coal miner offers coal at a 20 percent discount, which would mean that Bukit Asam sells its coal (domestically) for a price of USD $62 per metric ton in 2017. This would imply a nearly 40 percent (y/y) growth in average sales price next year and a great boost for the coal miner's corporate earnings.

Bukit Asam, a coal miner that is for 65 percent owned by the Indonesian government, sells about 50-60 percent of its total coal sales on the domestic market of Indonesia and therefore the HBA price growth is a very positive matter for the coal miner. CLSA Securities, in fact, states that Bukit Asam will benefit the most - among Indonesian coal miners - from HBA growth as other local coal miners focus on exports (on average, other Indonesian coal miners only sell 25 percent of their coal output on the domestic market).

Meanwhile, Bukit Asam is also expected to raise coal output in 2017 from an estimated 19.6 million tons of coal in 2016 to 21.7 million tons in 2017. Also, the sales volume is expected to grow to 23.5 million tons in 2017 from an estimated 21.4 million tons in 2016. Rising production and sales will contribute to the company's expected improving corporate earnings in 2017.

Therefore, CLSA Securities advises investors to buy shares of Bukit Asam. Recently, the securities firm raised its target price for the miner's shares from IDR 15,500 to IDR 17,000 a piece. On Thursday (15/12) shares of Bukit Asam climbed 0.79 percent to IDR 12,700 a piece. So far this year, the company's shares have soared a whopping 180.66 percent.

Earlier, Arviyan Arifin, President Director of Bukit Asam, informed that the miner allocated USD $500 million for capital expenditure (capex) in 2017. These funds will partly be used for the expansion of its two coal-fired power plants. Arifin said development of the miner's power plants in 2016 has not met expectations, therefore more funds and time are needed to optimize production and efficiency at its power plants.

Up to the third quarter of 2016, Bukit Asam posted IDR 10.04 trillion in revenue, down 4.3 percent from revenue in the same period one year earlier. This decline is attributed to the lower coal price. For example, the miner exported coal at an average price of USD $51.75 per metric ton in January-September 2016, down from an average of USD $60.81 per metric ton in the same period one year earlier.

Besides coal production and the establishment of coal-fired power plants in Indonesia, Bukit Asam is also eager to establish two power plants in Myanmar and Vietnam.

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P H
Dec 14,2016 08:21:33

$PTBA kembali menjajaki ekspansi dua PLTU di Myanmar dan Vietnam tahun depan. Total kapasitas PLTU yang dibidik sekitar 800 MW. PTBA sudah mengantongi izin dari Menteri Listrik Myanmar dan rencananya PTBA akan membangun 2x100 MW. PTBA akan menggandeng badan usaha swasta Myanmar dan akan masuk dengan kepemilikan minoritas. Sementara itu, PTBA akan mengambil alih sebagian ekuitas dalam proyek PLTU di Vietnam. PTBA mencari proyek PLTU dengan kapasitas 600 MW. Jika proyek PLTU dapat dieksekusi, maka PTBA berpeluang menjadi pemasok batubara dalam PLTU. Pendanaan ekspansi di luar negeri akan disiapkan dari kas internal dan sumber eksternal.

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P H
Dec 14,2016 08:12:14

Bank Rakyat Indonesia ($BBRI) distributes loans to Bukit Asam ($PTBA)

BBRI distributed loans totaling to USD135mn and Rp800bn to PTBA. The loans will be used to support the company’s funding and to support the government’s energy supply. The foreign exchange loan scheme consists of USD100mn of working capital loans and USD35mn of forex line, which is a non-cash facility to be used for hedging. Meanwhile, of the total rupiah loans, Rp500bn consists of bank guarantees and stand by letters of credit while the remaining Rp300bn will be used as collateral for imported coal and operational needs both inside and outside the country. (Bisnis Indonesia)

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P H
Dec 14,2016 08:03:36

PTBA: Plans to expand coal-fired power plants in Myanmar and Vietnam

Tambang Bukit Asam ($PTBA) aims to build two power plants in Myanmar and Vietnam in 2017. The company has an offer to build a 600MW coal-fired powerplant in Vietnam, but it is still reviewing whether the equity portion scheme is profitable for the company. For power plants in Myanmar, PTBA has obtained a mining permit in the country, and is currently waiting for a conducive situation in the power plant area. (Investor daily)

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P H
Dec 06,2016 15:19:30

PTBA: In negotiations with PLN regarding coal price

Tambang Bukit Asam ($PTBA) plans to revise its coal-sale contracts with Perusahaan Listrik Negara (PLN) next year in regards to the rising trend in coal prices. The company is currently in negotiations with PLN for a contract revision and expects there will be changes in the contracts starting from 2017. (Petromindo.com)

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P H
Dec 02,2016 13:20:31

PTBA memperoleh fasilitas pinjaman sebesar Rp1,7 triliun dari BMRI untuk menggarap proyek-proyek pengembangan perusahaan. Pinjaman dibagi beberapa jenis, sebesar US$100 juta untuk pembiayaan belanja modal total sebesar US$130 juta dengan skema Fasilitas Pinjaman Transaksi Khusus. Kemudian skema Treasure Line untuk memenuhi kebutuhan likuiditas valuta asing dalam operasional perusahaan dan Rp700 miliar berupa fasilitas Trust Receive.
 
Sumber daya PTBA sebesar 8,27 miliar ton dan cadangan tertambang 3,33 miliar ton. Pada tahun 2020 PTBA mengincar produksi hingga 58 juta ton per tahun. Sementara pada 2024, menargetkan mampu mencapai produksi 98 juta ton per tahun.

Saat ini PTBA memiliki kontrak pasokan batu bara jangka panjang untuk konsumen domestik hingga 30 tahun ke depan sebesar 574 juta ton. Untuk sektor PLTU, pada 2020 diharapkan sudah memiliki sejumlah pembangkit dengan total kapasitas sebesar 1.500 megawatt, dan tahun 2025 sekitar 4.500 megawatt. Demikian dikatakan oleh Sekretaris Perusahaan Bukit Asam, Adib Ubaidillah.

$PTBA $BMRI

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P H
Dec 01,2016 23:21:47

PTBA: Obtains funding facility from BMRI; Plans higher capex in 2017

Tambang Bukit Asam ($PTBA) has just obtained loan facility from Bank Mandiri ($BMRI) for IDR1.7tn or USD230mn, which will be used for expansion in both mining and power sectors. In separate news, PTBA plans to allocate higher capex in 2017 of IDR4.5tn and also acquire another coal mine located in Kalimantan in early 2017 as part of its expansion strategy. Moreover, PTBA has reached agreement with Perusahaan Listrik Negara (PLN) to not revise the original capacity design of the planned 2x620MW coalfired power plant in South Sumatra province. (Iqplus.info, Petromindo.com)

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P H
Dec 01,2016 15:47:00

Bukit Asam ($PTBA) to eye for another mining asset

According to local press, PTBA is planning to acquire another mining asset in FY17, which the company has reserved budget of more than USD100mn. To finance their expansion projects, PTBA has obtained loan from Bank Mandiri ($BMRI) amounting to USD230mn and Rp1.7tn. The USD230mn bank loan consists of USD100mn special borrowing facility (for capex) and USD130mn treasury line (for foreign currency needs). On the other hand, the Rp1.7tn consists of Rp700bn supplier financing and Rp700bn Trust Receipt non LC (for payment to suppliers) as well as Rp300bn invoice financing facility. (Kontan)

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P H
Nov 21,2016 22:16:56

Bukit Asam: Domestic-Oriented Coal Play ($PTBA; Rp11,125; Sell; TP:Rp9,500)

  • Despite our upbeat earnings outlook for PTBA in FY17, we see high risk of coal price reversal on the Chinese
    government's effort to ease the coal price rally. We raise our FY16-18 net profit by 0-30% after imputing FY16/17/18 coal
    price assumption of USD64/70/69, but downgrade PTBA to sell with TP of Rp9,500.
     
  • Better sales volume ahead… We expect PTBA's sales volume to continue improving in FY17 post the completion of the
    Tj. Enim – Prabumulih double-track railway, coupled with full operations of additional wagons and locomotives. We
    assume FY17 production and sales volume at 22mn (+5% YoY) tons and 23mn tons (+5% YoY) respectively. Meanwhile,
    we assume PTBA to maintain stable SR ratio at 5.6x in FY17.
     
  • …Supported by growing domestic demand and large reserve base. We think PTBA has plenty of room to grow thanks
    to its huge coal reserve and significant exposure to growing domestic market. Currently, PTBA has a vast coal reserve of
    3.33bn tons, with mine life of over 100 years. In addition, it has entered into a 20-year coal supply contract (2010-2030)
    with PLN to deliver a total of 262mn tons, which provides domestic sales stability going forward. We think PTBA has the
    flexibility to increase sales volume to PLN with expected rising electricity needs.
     
  • Better earnings outlook in FY17. Given high coal ASP in 4Q16, we expect better earnings for PTBA next year due to its
    significant exposure to the domestic market (~55-60%). According to the management, domestic coal price (1-year
    contract) is set based on the 3-month average of the Indonesian coal benchmark price (HBA), hence making its earnings
    the least sensitive toward volatility in coal price. Our sensitivity analysis indicates that every 1% increase in coal price will
    increase PTBA’s earnings by 2.8%.
     
  • Downgrade PTBA to sell with TP of Rp9,500. On higher coal price and earnings outlook, we raise our FY16-18 net profit
    by 0-30% after imputing FY16/17/18 coal price assumption of USD64/70/69. However, we downgrade PTBA to sell with TP
    of Rp9,500 based on 10x FY17 target P/E (-1SD).
     
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P H
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.

$PTBA $KKGI $ADRO $ITMG $HRUM $BUMI $BORN $BYAN

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P H
Nov 21,2016 09:04:32

The Coal Industry Isn’t Coming Back

By MICHAEL E. WEBBER

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.”

$PTBA $KKGI $ADRO $ITMG $BUMI $BORN $BYAN

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P H
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)

$PTBA $ADRO $KKGI $ITMG $BUMI $BYAN

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P H
Nov 18,2016 09:58:36

Mining: Government to transfer 9.36% stake in Freeport Indonesia

The government plans to transfer a 9.36% of stake in Freeport Indonesia to a newly-formed state-owned mining-holding company, Asaham Aluminium (Inalum) that would control Bukit Asam ($PTBA), Aneka Tambang ($ANTM) and PT Timah ($TINS). (Petromindo)

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P H
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)

$ITMG $HRUM $UNTR $PTBA $KKGI $BUMI $BORN $ADRO

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P H
Nov 14,2016 17:09:33

Indonesia: Currency update: IDR depreciation: Don’t panic
 
Effects of a shallow FX market; Buying opportunities exist
Based on Bank Indonesia’s data, ytd the average daily turnover for the IDR spot market is only USD1.7bn, which is shallow by regional standards, reflecting just 0.5x of GDP (exhibit 1), one of the lowest among its regional peers. Even worse is the 1M NDF market, which only trades at USD0.7bn a day ytd. Unfortunately, the NDF sometimes can influence the spot market, particularly on pressure stemming from the recent Trump election. However, given such illiquidity, we advise investors to remain calm, particularly as we believe the fundamentals in Indonesia remain largely unchanged. We note that, through years of balance sheet repair since the 1998 Financial Crisis, the Indonesian stock market’s net gearing has improved from more than 150% back then to 27.3% in 9M16. Furthermore, we believe Indonesia is currently in a good position given that its 3Q16 CAD of 1.86% is the lowest since 1Q12. In fact, we think the current situation presents buying opportunities for investors as we expect the IDR to become stronger by year-end. It is worth pointing out that there should still be around USD10bn to come in from tax amnesty repatriation between now and the end of 2016.

Sensitivity analysis: 1% weaker IDR = 0.9% market EPS
Given recent IDR gyrations, we present our latest currency sensitivity analysis on the IDR/1USD, in an effort to aid investors in better gauging their investments in Indonesia. Our study, based on 87 non-financial stocks under our coverage (62% of total JCI market capitalization), shows that each 1% IDR depreciation could lower the EPS of our covered stocks by 0.9% overall (exhibit 5). That said, it is not a surprise that a recent 3% negative swing in the NDF market spooked investors, as it could translate into a 3.6% wipeout in 2017 market EPS growth.  

Winners: Coal, Metals, Oil & Gas and Plantations

A stronger dollar should in general spell good news for sectors with dollar revenue such as Coal, Metals and Oil & Gas and Plantations (exhibit 5). By stock, our sensitivity analysis indicates that $SIMP, $WINS, $TBLA, $PTBA and $SGRO should be the major beneficiaries of IDR deprecation within our basket of stocks (exhibit 2).

Losers: Poultry, Property and Consumer Discretionary
Against a backdrop of a weaker IDR, sectors with large USD costs and borrowings should suffer: Poultry, Property and Consumer Discretionary (exhibit 5). Stock-wise, losers of a stronger dollar include heavily leveraged companies under our coverage: $SMCB, $LPKR and $MAPI (exhibit 3).

Safe havens: Mainly Construction and Telcos  

For investors seeking shelter from currency volatility, we point to the Construction and Telco sectors (exhibit 10 & 24). In terms of stocks, $JSMR, $SCMA, $SIDO and $WSKT (exhibit 4) should have their earnings relatively least altered by FX swings.


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P H
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.”

$KKGI $PTBA $BUMI $ITMG $BYAN $ADRO

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P H
Nov 08,2016 18:29:18

MQQ Strategy – Nov 2016 update

- The Mansek Quant Quest (MQQ) strategy marked its debut with 2.9% return (vs JCI’s 1.1%) in October. We reshuffle the MQQ ten-stock portfolio for November by substituting $KREN and $LPPF with $BBNI and $BJTM.

- Top picks for November 2016. We reshuffle our MQQ ten-stock portfolio, adding $BBNI and $BJTM to replace $KREN and $LPPF. Estimated outperformance (equal-weighted) of the rebalanced portfolio is 1.8% relative to our Quant universe, with greatest contributions coming from Value and Profitability again this month. For a forecast of each stock in the universe, please refer to Figure 8 inside.

- Outperformed in October 2016. October is a boost to confidence. The MQQ’s recommendations (includes Mansek non-rated) managed to gain an equalweighted return of 2.9% (vs JCI’s 1.1%) in its debut. The biggest contributors were the coal-related stocks – $PTBA (+23.6%) and $UNTR (+22.2%), while the cement companies dragged on performance – $INTP (-5.2%) and $SMGR (-2.5%). Overall, it is a tougher month as the MQQ strategy tends to perform better in trending markets, while October is rather uneventful for the JCI.

- What investment styles worked? Momentum and Profitability worked spectacularly in October, with each recorded a long-only return of 8.3% mom and 11.4% mom respectively. Monthly style performance, however, can swing widely, and is thus a noisy indicator of future performance. The MQQ weighting to each style in November remains largely similar – 26% Value, 23% Profitability, 25% Growth and 26% Low Risk.

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P H
Oct 29,2016 10:23:07

Coalminer Bukit Asam ($PTBA) Reports 30% Decline in 9-Month Profit

Jakarta. State-controlled coalminer Bukit Asam saw a 30 percent decrease in net income in the first nine months of this year from the corresponding period last year, on the back of lower coal prices.
The miner, trading under the stock ticker PTBA on the Indonesian Stock Exchange (IDX), posted Rp 1.05 trillion ($80 million) in net income in the January-September period, compared to Rp 1.50 trillion last year, according to a filing to the bourse on Friday (28/10).
Revenue was down 4.4 percent to Rp 10.04 trillion.
Bukit Asam posted a rise in coal sales by volume, but a weaker price dragged down its total revenue.
Coal sales, by volume increased 5.5 percent to 15.14 million tons in the first nine-month period, but the average selling price fell to Rp 645.84 per ton from Rp 712,099 per ton.
The cost of goods sold slightly increased to Rp 7.59 trillion from Rp 7.53 trillion.
Bukit Asam seeks to expand its customer base beyond its traditional markets in China, Taiwan, Japan, Malaysia, India and Vietnam, the company's corporate secretary Adib Ubaidillah said in a memo received by the Jakarta Globe on Friday.
It is now also eying other markets such as South Korea, the Philippines, Bangladesh and more, he added.
Adib said the company also keeps making efforts "to optimize production," while also continuously investing in various projects that can help boost its coal sales at home.
The company has been investing in coal-fired power plants in several regions, including Tarahan in Lampung and Tanjung Enim in South Sumatra, among others.
It also has investments in a rail project in Tanjung Enim to transport its coal to buyers.

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P H
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

$PTBA $HRUM $KKGI $ITMG $ADRO $BUMI $BYAN

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P H
Aug 29,2016 22:08:55
Indonesia Equities: Pricing In Near Term Positives

Key Points

- +9% gains in MSCI Indonesia since our country upgrade in July - Since our upgrade of Indonesian equities to overweight two months ago in the MIG publication after clarity on its tax amnesty programme emerged, sentiment has further improved following the appointment of well respected Finance Minister Sri Mulyani Indrawati. The Indonesian equity market has seen strong equity inflows in 3Q16 lifting the index up ~9% (local currency terms, +8.2% in USD), which has outpaced world equities’ gains (+5.2%) for the same period and supported our call.

- Year to date’s gains of +18.6% has also more than recouped 2015’s losses of -12%, which has supported the turnaround highlighted in our January 2016’s South East Asia Equity Strategy report. The equity market rally year to date has been supported by a benign environment of lower interest rates, stable IDR currency vs the USD, under-owned positions in global portfolios and improving confidence in Indonesia’s recovery story. Estimated equity inflows into Indonesia so far for 3Q has exceeded the total inflows for 1H16, driving the market to new highs. Since mid May this year, it is estimated that net equity inflows reached $1.7bln, vs $1.6bln net outflows over the whole of 2015 (source: JPM estimates).


- Near term positives post amnesty and cabinet reshuffle look priced in, valuations are now close to 10 year high – At 16x PER, Indonesian equities is now trading close to +2 standard deviations to its 10 year historical average multiple and at its highest valuation level since 2007, which we believe has priced in much of the near term positives. Although near term liquidity is likely to remain supportive given benign expectations on interest rates, we caution that valuations have caught up and believe it is prudent to start taking some money off the table. On domestic updates, while the recently released 2017 budget is credible, it is unlikely to lead to further corporate earnings upgrades given a moderate government spending target of 6% (planned fiscal deficit for 2017 is 2.4% of GDP, flat/lower than 2016E). Towards the end of September and December which marks the first and second phases of the tax amnesty programme’s staggered tax rates for declared wealth, investor sentiment may also be influenced by expectations over the tax collections.


- Muted start to the 9-month tax amnesty programme, although still early days - As of 23rd August 2016, the asset declaration in the Tax Amnesty Program has reached Rp51.7tn, consisting of 85% onshore/15% offshore assets (12% overseas assets declared, 3% overseas net assets repatriated), while asset repatriation has reached Rp1.6 tn. Momentum of onshore assets declared in first half of August has picked up, with the tax office reporting about Rp11.5tn worth of onshore assets declared (>4x July’s). About three-quarters of the assets declared were from private individuals, and the balance private entities, which we view as supportive of property sector’s recovery given interest rates are expected to remain low while the Ministry of Finance has allowed repatriated funds to be invested in real assets (such as property and gold).


- Looking ahead, earnings upgrades need to pick up momentum for the rally to have more legs - Earnings wise, the recent 2Q results season was mixed with single digit corporate top line growth from a year ago. Concerns on banks remain dragged by asset quality issues while commodity related earnings have been moderate. Following the latest 2Q earnings season (where consensus earnings were trimmed -2% lower for FY16E and FY17E), FY16E and FY17E earnings are now forecast to grow +7% and +14% respectively (higher than Asia ex Japan equities’ 2.2% FY16E and 11% for FY17E respectively) which we believe is priced in current valuations.

Time to lock in some profits – Switch out of names which have rallied and offer no upside to target prices
- Sectors we are cautious on are: Commodity related plays which have rallied and priced in recovery expectations (coal – Bukit Asam, ITMG, palm oil – Astra Agro, London Sumatra), Banks (loans growth will be moderate while we expect asset quality concerns to remain a near term overhang) and Utilities (in particular, Perusahaan Gas – where we think profitability will remain pressured by regulatory efforts to lower gas prices).

Preferred Picks/Switch Ideas

- Preferred Sectors we would accumulate new positions are: Property (Bumi Serpong – Western Jakarta play, large landbank catering to middle income buyers), Telecommunications (Telekomunikasi Indonesia – improving smartphone penetration and data usage supported by a young population), Consumer (Indofood and Media Nusantara, which benefit from an improving domestic economy in 2H16) and Infrastructure (Jasa Marga – No. 1 toll road operator, long term beneficiary of infrastructure development in Indonesia).


- Risks to the current rally include weaker than expected global economy, faster than expected Federal Reserve interest rate hikes which may result in global liquidity volatility and disappointments in the domestic recovery and infrastructure spending pace (continues to be a focus in the 2017 budget, with 9% yoy expected growth).


$PTBA $KKGI $HRUM $ITMG $AALI $LSIP $SGRO $SMAR $PGAS $BBCA $BBRI $BMRI $BBNI $BSDE $ASRI $LPCK $LPKR $CTRA $TLKM $INDF $ICBP $AISA $MNCN $JSMR

Bull
P H
Aug 29,2016 09:14:47
China imported 9.31 million mt of thermal coal in July, rising 30.7% year on year and up 23.5% from June to the highest level since December 2014, according to data released by the General Administration of Customs Wednesday.

$KKGI $PTBA $HRUM $BUMI $BORN $ITMG
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P H
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)

$KKGI $PTBA $ADRO $ITMG $HRUM
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P H
Jul 27,2016 08:50:23
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)

AUGUST 2016
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)

SEPTEMBER

Sep 13, 2016
$SMCB (Holcim Indonesia)

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P H
Jul 26,2016 21:03:40

*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)*


$KKGI $ADRO $BUMI $PTBA $ITMG $BORN $BYAN 



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P H
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)

$ADRO $PTBA $KKGI $BUMI $BRAU $BYAN $UNTR

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P H
Jun 15,2016 10:10:57
PTBA’s 5,000MW powerplant projects “on track” – State run coal mining company Bukit Asam ($PTBA) says it remains on track to meet its target of adding 5,000MW to its power generating capacity as part of its diversification strategy. The firm has broken ground on a 2x620MW mine mouth powerplant in South Sumatra called the Sumsel 8. 3 Other powerplants in Sumatra will also be built soon, namely the 3x600,MW Sumsel 9 and 10, as well as thje 800-1,200MW powerplant in Peranap Riau. Also in the pipeline is a 2x350MW powerplant project in Kuala Tanjung, North Sumatra.


Bull
P H
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.

$PTBA $ADRO
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P H
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.

$PTBA $ADRO $ITMG $KKGI $BORN $BUMI $BYAN $INDY

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P H
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.

$ADRO $PTBA $DOID $ITMG


 

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P H
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.

$PTBA $KKGI $ADRO $ITMG

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P H
Apr 25,2016 17:48:38
Tambang Bukit Asam (PTBA): Electrifying
 
-  Sales volume +10% q-q and +14% y-y ... : PTBA booked 5.23mn mt of coal sales in 1Q16, up 10% q-q and 14% y-y. About 56% of the total, or 2.91mn mt, was sold locally, up 12% q-q and 34% y-y, for a CAGR of 7% over the past 5 years. Exports totalled 2.32mn mt, up 7% y-y but down 3% q-q, reflecting the company’s shift to selling coal domestically. The sales volumes represent 18% of PTBA’s 2016 sales guidance and 23% of our full-year estimate.

-  ... on +5% y-y PLN demand, supporting +8% y-y electricity sales: Coal-fired power plants function as base loaders to generate electricity, enabling PTBA’s coal sales volumes to move in tandem with PLN’s electricity sales (exhibit 5). In 1Q16, operating performance was helped by: electricity sales growth of 8% y-y; sales increases of 5% y-y to state-owned electricity company, Perusahaan Listrik Negara (PLN); and new coal contracts for the 2x200MW Pangkalan Susu coal-fired power plants in Lahat, North Sumatera and the Teluk Sirih 2x112MW coal-fired power plant in Teluk Sirih, West Sumatera. Our research indicates that Pangkalan Susu would require 480k mt of coal per annum, while Teluk Sirih would require 460k mt.

-  Strong 1Q16 net profit of IDR525bn, up 55% y-y, in the cards
      PTBA is scheduled to release its 1Q16 results on 28 April 2016. We forecast 1Q16 revenue to increase 16% y-y to IDR3.8tn, representing 24% of our 2016 expectation IDR15.8tn, and look for net profit to jump 55% y-y to IDR525bn, or 24% of our full-year expectation of IDR2,198bn. The Tarahan port expansion should allow PTBA to increase annual coal-sales volumes by up to 25mn mt.

Outlook: 2,500MW of coal-fired power plants by 2020
The Energy and Mineral Resources Ministry (ESDM) expects 2016 domestic coal demand to rise 7.7% y-y to 86mn mt, following PLN’s target of 6% y-y electricity growth to 226TWh on Indonesia's expected economic improvement. We continue to believe that greater electricity development would benefit PTBA in terms of sales volumes, as PTBA is the main coal supplier for PLN, offsetting weak coal prices that we assume should average only USD50/mt this year. Further, through the 2x620MW Central Bank power plants, 1,200MW Peranap power plant, and 3x600MW Sumsel 9&10, PTBA aims to have at least 2,500MW of coal-fired plants by 2020, up from 200MW currently, with the increased capacity to contribute 30% of total revenues. Management estimates that each 1MW capacity increase would result in an increase of IDR1bn in revenue per annum.

Recommendation: Retain BUY and IDR7,800 TP on resilient growth
At this stage, we reiterate our BUY call and 12M IDR7,800 TP (DCF-based, 19% WACC) on PTBA, as we expect continued 2016 earnings growth on PLN's higher coal sales volumes. Looking ahead, our earnings model will be further supported by PTBA’s power plant projects which would only come on stream in 2019-20. Risk: Slower economic improvement/ electricity project delays.

$PTBA
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P H
Apr 19,2016 23:46:35
PT TAMBANG BATUBARA BUKIT ASAM Cash Dividend IDR 289.73 per share

$PTBA
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P H
Apr 19,2016 12:48:37
PT Bukit Asam Tbk (PTBA) siapkan modal US$400 juta untuk mendanai pembangkit listrik tenaga uap Bangka Tengah. Dana tersebut melengkapi pinjaman dari The Export-Import Bank of China (Cexim) senilai US$1,2 miliar.
Bear
P H
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.

$IHSG $ELSA $GIAA $ANTM $TINS $PTBA $INCO $ERAA $ADRO
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P H
Mar 10,2016 08:45:34
Tambang Batubara Bukit Asam ($PTBA); Key Takeaways from Analyst Meeting

- We attended PTBA analyst meeting following the FY15 results and below are the updates:

- Coal resources and reserves upgrade. PTBA announced an upgrade of its coal resources and reserves, on the back of
exploration activities of one of its acquired mines, Tabalong. According to KCMI 2011 assessment (Indonesian Mineral Reserves Committee), PTBA coal resources is reported at 8.27bn tons (up from 7.29bn tons) while reserves is reported at 3.33bn tons (up from 1.99bn tons), with company coal price assumption at USD52/ton. Based on FY15 production volume of 19.28mn tons/year, PTBA now has a mine life of over 100 years.

- More railway capacity optimization… After success operations of double-track railway in FY15 (Tj. Enim – Prabumulih), PTBA’s railway capacity is effectively increased to up to 23.7mn tons/year. Going forward, the company will work towards building double-track railway from Tj. Enim – Tarahan port (COD: 2018), which is expected to add additional capacity of 20mn tons, putting total railway capacity to 45mn tons by FY18.

- …and cost efficiency ahead. In FY15, PTBA’s total cost (mining cash cost & transportation) is reported to be around USD40/ton and it is aiming to lower its cost by 5-10% in FY16, according to the management. Some cost efficiency strategies include 1) negotiation of better pricing terms with contractors and 2) electrification of some mining equipments. According to the company, pricing of PAMA and other contractors has fallen by about 4-5% currently.

- FY16 guidance. For FY16, PTBA expects blended ASP to fell not more than 4% from FY15 blended ASP of Rp707k. Stripping ratio will be maintained between 4.5x-4.7x. Meanwhile, FY16 sales volume is targeted at 29.1mn tons, a 52% YoY increase (vs. our target of 22mn tons). Sales breakdown will be 53% domestic and 47% export. Key risks to company’s sales target include 1) execution risk by the National Railway Company (PTKA), operator of PTBA’s railway and 2) weaker than expected coal demand for the export market.

- Maintain buy at TP Rp7,500. At this juncture, we still maintain our buy call on PTBA with TP Rp7,500, based on 10x FY16 target PE. The counter is currently trading at 8.7x FY16 PE based on our estimate.
Bull
P H
Mar 09,2016 12:11:35
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.

$IHSG
Bear
P H
Mar 04,2016 09:14:28
Tambang Bukit Asam ($PTBA): Proxy to growing domestic demand

- PTBA’s FY15 net profit of Rp2.0tr is above forecast thanks to weak IDR, higher production, and successful cost cutting. Nevertheless, we cut our FY16/FY17 net profit by 24%/21% after imputing lower coal price assumption. Maintain buy, cut TP to Rp7,500 (from Rp10,000).

- FY15 net profit above forecast. PTBA reported 4Q15 net profit of Rp528bn (-26%qoq, +89%yoy). This brings its FY15 net profit to Rp2.0tr (+9% yoy), representing 105%/109% of our and consensus forecasts. Despite blended ASP lowering to Rp707k/ton (-3%yoy), its gross and operating margin remain stable at 30.1% and 17.6% respectively, due to cost cutting initiatives which have lowered production cost/ton by 10% to Rp357k/ton. Stripping ratio remains low at 4.5x and its railway capacity has increased by 6% to 15.8mn tons after the completion of the double track lines from Tj Enim to Prabumulih. PTBA sold 19.1mn tons of coal (+6%yoy) and expects 29mn tons of sales volume this year (vs. our forecast of 21-22mn tons).

- Stable domestic demand with growth potential for export market. We like PTBA due to its strong exposure to growing demand from domestic market (50%), with majority of the demand coming from PLN (long term agreement). Sales to the export market only accounts for the other 50% of sales volume (vs. up to 90% on peers) or around 10mn/ton p.a (2.5mn tons/quarter), thus the low base number provides PTBA with more room to further expand its sales to the export market. On top of that, PTBA only sells higher quality coal (>75% CV>6300kcal) to the export market, which commands premium pricing.

- Maintain Buy, Rp7,500TP. We cut our FY16/FY17 net profit by 24%/21% after lowering our coal price assumption to USD55/ton (from USD65-70/ton, while maintaining our FY16/FY17 sales volume target at 22mn tons and 23mn tons respectively). Our target price has also been lowered to Rp7,500 (from Rp10,000) after imputing lower earnings forecast, based on 10x FY16 P/E (-1SD mean). We put PTBA as a proxy to the coal sector due to 1) higher exposure to domestic market (50%), 2) upside in production to partially offset weak price, and 3) huge reserves.
Bear
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