JAKARTA, Dec 4 (Reuters) - Following is a list of stock price
targets, where brokers have either changed their targets or
initiated coverage.
Company RIC Bank Rating Target price Change Adaro Citi Buy 2,500 rupiah Nil
(Medium risk)
* Initiating with a buy as Adaro is well positioned to ramp up production.
* Adaro is one of the most leveraged companies to rising price adjustment and robust coal demand in the long term.
* Adaro's doubling of production to 80 million tonnes as early as 2013E would underpin robust earnings growth; on top of this, efficiency gains from the ongoing projects would enhance the growth.
* TP of 2,500 rupiah is based on 2011E EV/EBITDA of 7.0x.
Company RIC Bank Rating Target price Change Bumi Citi Buy 3,500 rupiah Cuts TP
(High risk)
* Against the backdrop of negative newsflows (CIC loan's exorbitant rate, talk of bond issuance and margin calls), Bumi's share price took a plunge. The collapse in the share price from the recent peak of 3,400 rupiah looks overdone to us.
* Post the correction, Bumi trades on 2010-11 EV/EBITDA of 4.5x and 2.5x, respectively. We have reduced our TP to 3,500 rupiah from 3,800 rupiah, using 2011E EV/EBITDA of 3.5x.
* We maintain our buy call as we continue to be bullish on thermal coal price outlook for 2010 onward, of which Bumi would be the main beneficiary.
* Bumi's participation in a consortium that acquired a 24 percent stake in PT Newmont Nusa Tenggara (NNT) appears value accretive. The acquisition values NNT at 10.5x P/E 2009E (14.0x after accounting for the 25 percent stake free allocation to the regional governments). In comparison, Freeport-McMoRan is trading on 17.7x P/E 2009E.
Company RIC Bank Rating Target price Change Indo Tambangraya Megah Citi Buy 40,750 rupiah Nil
(Medium risk)
* Initiating Indo Tambangraya with buy for its most compelling valuations and attractive yield.
* Robust earnings growth, high dividend payout due to modest capex plan, and attractive valuations are the main rationale for our buy call.
* Trading at a substantial discount to Adaro and Bukit Asam on a 2011E EV/EBITDA basis, we believe the discount will narrow as the company delivers strong earnings growth and increases shareholders' remuneration. Our TP of 40,750 rupiah is based on EV/EBITDA 2011E of 7.0x.
Company RIC Bank Rating Target price Change Bukit Asam Citi Hold, was buy 17,500 rupiah Ups TP
(Medium risk)
* Having substantially outperformed its peers YTD, Bukit Asam's valuations are no longer cheap. Even using 2011E valuations, at EV/EBITDA of 6.3x, the market appears too optimistic in expecting the smooth execution of Bukit Asam's major project expansions.
* We raise our TP to 17,500 rupiah (from 13,820 rupiah) to factor in more aggressive assumptions on the projects' progress. However, we downgrade our call to hold as we await more concrete progress on the projects.
* Bukit Asam intends to acquire two medium-sized coal companies in Kalimantan to boost its production. If Bukit Asam can realise the acquisitions (at reasonable prices), this would likely be a positive catalyst for the share price.
(Reporting by Tyagita Silka; Editing by Sara Webb)
((tyagita.silka@thomsonreuters.com; Reuters Messaging: tyagita.silka.thomsonreuters.com@reuters.net; +62 21 384 6364 ext 905)) Keywords: MARKETS INDONESIA/STOCKRECOMMENDATIONS (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Company RIC Bank Rating Target price Change Adaro Citi Buy 2,500 rupiah Nil
(Medium risk)
* Initiating with a buy as Adaro is well positioned to ramp up production.
* Adaro is one of the most leveraged companies to rising price adjustment and robust coal demand in the long term.
* Adaro's doubling of production to 80 million tonnes as early as 2013E would underpin robust earnings growth; on top of this, efficiency gains from the ongoing projects would enhance the growth.
* TP of 2,500 rupiah is based on 2011E EV/EBITDA of 7.0x.
Company RIC Bank Rating Target price Change Bumi Citi Buy 3,500 rupiah Cuts TP
(High risk)
* Against the backdrop of negative newsflows (CIC loan's exorbitant rate, talk of bond issuance and margin calls), Bumi's share price took a plunge. The collapse in the share price from the recent peak of 3,400 rupiah looks overdone to us.
* Post the correction, Bumi trades on 2010-11 EV/EBITDA of 4.5x and 2.5x, respectively. We have reduced our TP to 3,500 rupiah from 3,800 rupiah, using 2011E EV/EBITDA of 3.5x.
* We maintain our buy call as we continue to be bullish on thermal coal price outlook for 2010 onward, of which Bumi would be the main beneficiary.
* Bumi's participation in a consortium that acquired a 24 percent stake in PT Newmont Nusa Tenggara (NNT) appears value accretive. The acquisition values NNT at 10.5x P/E 2009E (14.0x after accounting for the 25 percent stake free allocation to the regional governments). In comparison, Freeport-McMoRan is trading on 17.7x P/E 2009E.
Company RIC Bank Rating Target price Change Indo Tambangraya Megah Citi Buy 40,750 rupiah Nil
(Medium risk)
* Initiating Indo Tambangraya with buy for its most compelling valuations and attractive yield.
* Robust earnings growth, high dividend payout due to modest capex plan, and attractive valuations are the main rationale for our buy call.
* Trading at a substantial discount to Adaro and Bukit Asam on a 2011E EV/EBITDA basis, we believe the discount will narrow as the company delivers strong earnings growth and increases shareholders' remuneration. Our TP of 40,750 rupiah is based on EV/EBITDA 2011E of 7.0x.
Company RIC Bank Rating Target price Change Bukit Asam Citi Hold, was buy 17,500 rupiah Ups TP
(Medium risk)
* Having substantially outperformed its peers YTD, Bukit Asam's valuations are no longer cheap. Even using 2011E valuations, at EV/EBITDA of 6.3x, the market appears too optimistic in expecting the smooth execution of Bukit Asam's major project expansions.
* We raise our TP to 17,500 rupiah (from 13,820 rupiah) to factor in more aggressive assumptions on the projects' progress. However, we downgrade our call to hold as we await more concrete progress on the projects.
* Bukit Asam intends to acquire two medium-sized coal companies in Kalimantan to boost its production. If Bukit Asam can realise the acquisitions (at reasonable prices), this would likely be a positive catalyst for the share price.
(Reporting by Tyagita Silka; Editing by Sara Webb)
((tyagita.silka@thomsonreuters.com; Reuters Messaging: tyagita.silka.thomsonreuters.com@reuters.net; +62 21 384 6364 ext 905)) Keywords: MARKETS INDONESIA/STOCKRECOMMENDATIONS (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.