Sekali lagi untuk penggemar BUMI.
Denger2 ada yg bikin 4800, bener gak sih?
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A bargain vs regional peers
(BUMI IJ, Rp3,675, OP, ,TP: Rp4,200)
Event
�� We reinitiate coverage on Bumi Resources with an Outperform
rating and Rp4,200 price target,
representing 17% potential upside from the current price. We apply a 20.5x
2008E EPS multiple
(to our conservative bull case) to arrive at our price target. This multiple
reflects a 25% discount to
the Chinese and Australian coal sector.
Impact
�� Well positioned for robust domestic and global seaborne
demand (particularly China and
India) given its geographic location, large reserve base and plans to nearly
double production.
Further, we see upside risk to our coal price forecasts and earnings.
�� US$1.50 per tonne of cost cuts and potential to increase
payout ratio. We believe that Bumi
can achieve US$1.50 of its US$3 cost-cutting target (assuming no change in
strip ratio). Further,
we highlight that Bumi has the opportunity to increase shareholder
remuneration given its net cash
position, by at least increasing the payout ratio from 30% to 50%. We even
see the potential for a
special dividend.
�� 30% discount to regional peers. Bumi trades at roughly 18.9x
2008E PER, EV/reserves of $6
per tonne and EV/ EBITDA of 8.5x, a 30%+ discount to the Chinese and
Australian coal sector.
We think Bumi should be benchmarked against regional plays such as Shenhua
(1088HK,
HK$46.7, UP, TP: HK$22.2), China Coal (1898HK, HK$23.1, OP, TP: HK$16.6) and
Yanzhou
(1171HK, HK$16, OP, TP: HK$17.08).
�� Key concerns include minorities being aligned with its
founding shareholder, the ability to hit
managementÂ’s high expectations (eg, sales volume target of 58mtpa for 2007
appears roughly 2–
3m tonnes too high) and acquisition risk.
Earnings revision
�� Re-initiation of coverage. We see upside risk to our global
coal price forecasts and earnings.
Price catalyst
�� 12-month price target: Rp4,200.00 based on a PER methodology.
�� Catalyst: Increasing volumes, prices and shareholder
remuneration.
Action and recommendation
�� We reinitiate coverage on Bumi Resources with an Outperform
recommendation and Rp4,200
price target, representing 17% upside from the current price. We believe that
Bumi is a strong rerating
story and does not deserve to trade at a 30% discount to its regional peers.
�� Bumi also ranks well on a quant basis, coming fourth out of
45 stocks in Indonesia.
Adam Worthington (62) 21 515 7338 [EMAIL PROTECTED]
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