Delta Dunia Makmur (DOID) - High Quality Business at Attractive Valuation

DOID – Initial Coverage with Buy Recommendation
Price: Rp1,040 – Target Price: Rp1,450

High Quality Business at Attractive Valuation

  • After new owners entered Northstar Tambang Persada (NTP), we believe the company will be in a better corporate governance.
  • Majority of customers are mining companies with good reputation and BUMA has potential for an extension or renewable contract.
  • Coal production will improve as La Lina phenomenon will end.
  • By using refinancing steps, BUMA has succeeded to reduce cost of debt and interest expenses.
  • Financial leverage will improve and increase equity value.
  • Attractive valuation, TP Rp1,450/share with upside potential 39%, translation PE’17.2x