TB Bukit Asam (PTBA) – Maintain BUY
Price: Rp20,550 – Target Price: Rp27,500
Higher Domestic Price Settlement
- PTBA reported FY10 earnings of Rp2,009 bn, declined 26.4% YoY.
- Coal production reached 12.5 mn ton (+7% YoY), domestic ASP -18% YoY, while export selling price +4.5% YoY to US$67.5/ton.
- Overall, FY10 results were inline our expectation.
- Management expect sales volume to grow by 23% YoY to 16.8 mn ton in FY11
- PTBA has reached FY11 domestic price settlement with PT Indonesia Power (PLTU Suralaya) at Rp815,000/ton (+19% YoY).
- Average domestic ASP will increase by 26.1% YoY to Rp772,413/ton in FY11, or 3.7% higher than our expectation.
- The stock is currently trades at 12.2 PER’11 with lowest EV/reserve of US$2.4/ton.
- Our price target Rp27,500/share, reflects 16.3x PER’11. MAINTAIN BUY