Untuk penggemar BUMI.
~~~~~~~~~~~~~~~~~~~~~
Indonesian Commodities 27 September 2007
UBS Investment Research
Global Equity Research
Indonesia
Mining
PT Bumi Resources
Sector high earnings growth driving value
Continued volume growth
We highlight Bumi Resources sector-high production growth level, which could
surpass our estimates. Management has indicated 2007-09 production volume of
63-75 tonnes, in line with our assumptions. However, the recent coal price
strength
is likely to put upward pressure on Bumis reserve size and, in turn, volume
sales.
Expanding mining operations
Management has indicated that in addition to coal mine expansion, future
investment might include 1) gold and copper developments; 2) coal-bed-methane
development; 3) iron-ore exploration in Mauritania; and 4) stakes in Newmonts
Indonesian gold and copper operations. None of these projects are included in
our
valuation.
Risks
The primary risks to our valuation include coal price volatility, disruptions
in
production and distribution, as well as energy price fluctuations. The current
mining law draft revision adds a level of political risk, while there is
execution risk
entailed with Bumis current expansion plans.
Valuation: higher price target Rp4,250
We base our valuation on a 16-year DCF methodology, in line with Bumis current
concessions and reserve life (adjusted for production growth). We assume a risk-
free rate of 9.3% and long-term growth of 0%, which renders an 11.8% WACC.
We raise our price target from Rp3,150 to Rp4,250 on our anticipated increase
in
reserves.
Highlights (Rpbn) 12/05 12/06 12/07E 12/08E 12/09E
Revenues 15,921.46 16,969.46 19,303.54 27,049.45 31,838.97
EBIT (UBS) 2,649.88 2,960.43 4,661.09 11,024.63 15,489.12
Net Income (UBS) 1,551.48 2,209.40 2,598.67 5,578.91 7,946.00
EPS (UBS, Rp) 80 114 134 288 410
Net DPS (UBS, Rp) 8 8 66 8 28
12-month rating Buy
Unchanged
12m price target Rp4,250/US$0.46
Prior:Rp3,150/US$0.34
Price Rp3,400/US$0.37
RIC: BUMI.JK BBG: BUMI IJ
25 September 2007
Trading data (local/US$)
52-wk range Rp3,450-710/US$0.38-0.08
Market cap. Rp65,974bn/US$7.20bn
Shares o/s 19,404m (ORD)
Free float 88%
Avg. daily volume ('000) 128,710
Avg. daily value (Rpm) 342,379.8
Balance sheet data 12/07E
Shareholders' equity Rp11,764bn
P/BV (UBS) 5.6x
Net Cash (debt) Rp2,442bn
Forecast returns
Forecast price appreciation +25.0%
Forecast dividend yield 0.3%
Forecast stock return +25.3%
Market return assumption 11.5%
Forecast excess return +13.8%
EPS (UBS, Rp)
>From
12/07E
To Cons.
12/06
Actual
Q1Q2EQ3EQ4E
-
---
(7)
33
54
54
-
---
1
42
30
41
12/07E -134 8,196
12/08E -288 10,265
Performance (Rp)
Stock Price (Rp) Rel. Jakarta Comp
Profitability & Valuation 5-yr hist av. 12/06 12/07E 12/08E 12/09E
EBIT margin % 19.0 17.4 24.1 40.8 48.6
ROIC (EBIT) % 27.0 28.0 38.7 93.0 119.7
EV/EBITDA (core) x 4.5 5.8 12.5 5.2 3.5
PE (UBS) x 9.0 7.2 25.4 11.8 8.3
Net dividend yield % 0.7 1.0 1.9 0.2 0.8
0
500
1000
1500
2000
2500
3000
3500
0
50
100
150
200
07/0410/0401/0504/0507/0510/0501/0604/0607/0610/0601/0704/0707/07
Source: Company accounts, Thomson Financial, UBS estimates. (UBS) valuations
are stated before goodwill, exceptionals and other special items.
Price Target (Rp) (LHS) Stock Price (Rp) (LHS)
Valuations: based on an average share price that year, (E): based on a share
price of Rp3,400 on 26 Sep 2007 23:39 HKT
Rel. Jakarta Comp (RHS)
Source: UBS
Andreas Bokkenheuser www.ubs.com/investmentresearch
Analyst
[EMAIL PROTECTED]
+62-21-2554 7033
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