Prospek Saham ADRO, PTBA dan ITMG | 28 Agustus 2018
Official’s Indecision: The Mystery Deepens
We view that demand for coal still be elevated coming in to 4Q18 with several key factor and not only demand would stay elevated but it would be to benefit of our coal miners.
• Longer-than-expected coal mine suspension in China
• Coal import to China will remain as suspension linger
• 85% of china’s total output is subject to inspections
• Demand from India expected to rise in 4Q18 post monsoon season.
• India’s inventory is low and need to import
As the story goes in China the government is planning to implement ‘smart-mining technology’ in an effort to cut the number of mining accidents, this technology in the future will ramp up the efficiency production, however we view that the effect from technology be seen in 2020 onwards.
In 2H18 government is planning to impose sanctions on coal miners who fail to comply DMO requirement of 25% in the form of production cap capacity for 2019 and export quota reduction, however at the same time transfer fee is expected to be implemented of USD10/ton.
As demand will remain high on the back of China & India story, we increase his coal price assumption of 2018F/2019F to USD100/USD95 from a previous USD90/USD85
We retain BUY call on ADRO (TP:IDR2,800), PTBA(TP:IDR5,250) and ITMG(TP:IDR30,500) with ADRO & PTBA as our top pick and update TP on the back of a higher coal price and rollover using 2019 valuation.
For our full report on coal sector please click on the link below
https://goo.gl/gtg6Uu
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