Analisa Saham UNTR | 29 Oktober 2018

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United Tractors (UNTR IJ): Sep-2018 Volume: Strong Komatsu Rebound, Pama Remains Solid
(RHB Sekuritas)

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Reiterate BUY and IDR47,600 TP, 50% upside. UNTR is one of our country Top Picks. September’s monthly operations volume was recently released with overall good numbers, driven by Komatsu’s rebound after a soft August. Sales reached 460 units in Sep 2018, up strongly 33% MoM and 38% YoY, bringing 9M18 volume to 3,681 units (+34% YoY). Komatsu sales to the mining sector reached 216 units (+39% MoM, +55% YoY), bringing 9M18’s total to 1,944 units (+43% YoY). Pama’s OB removal volume reached 92.4m bcm (+2% MoM, +22% YoY), bringing 9M18 volume to 717m bcm (+22% YoY). Its coal production reached 11.3m tonnes in Sep 2018 (+5% MoM, +13% YoY), bringing 9M18 volume to 90m tonnes (+9% YoY).

Reiterate BUY and IDR47,600 TP; expecting strong 3Q18 results
We continue to like UNTR and believe the share price will outperform the index over the next 6-12 months. The group is a beneficiary of the strong USD (the IDR has weakened 11% YTD against the US currency), especially for Pama, given 90%-plus of revenue is in USD vs 30-40% costs in IDR. Pama’s margin should continue to expand. Furthermore, overall 3Q18 volume continues to show an acceleration trend, especially for Komatsu and Pama. The upcoming 3Q18 results announcement – slated for 26 Oct 2018 – should be a near-term catalyst for the stock, in our view: we expect strong figures, which could lead to an upgrade to Street’s numbers. The stock is currently trading at undemanding 11x and 9x FY18F-19F P/E, with 44% and 30% EPS growth and 22-25% ROEs.