DAILY INSIGHTS
EQUITY RESEARCH
Thursday, 31 August 2006
MINING /1H06 RESULTS
SELL
Timah
Unchange
Price
Rp1,740
Target Price
Very poor performance
Rp1,200
Downgrade
Reuters Code
Bloomberg Code
No. of shares (mn)
Market cap (Rp bn)
(US$ mn)
Weight in JCI (%)
3mo Avg. daily T/O (US$ mn)
TINS.JK
TIN SIJ
503.3
875.7
96
0.1
0.4
Price
12 mos Hi/Lo
(Rp)
2,525/1,480
PER - 2006F
12 mos Hi/Lo
(x)
47.3/24.5
EV/EBITDA - 2006F
12 mos Hi/Lo
(x)
9.8/6.2
Key Financial
Net Gearing, %
ROAA, %
ROAE, %
06F/07F
10.1/3.8
1.0/0.8
1.8/1.3
(%)
-5.2
-14.0
-32.0
-27.2
USD/IDR - YE
2005
2006F
(Rp)
9,830
9,997
(%)
65
35
·
Performance of the tin business, despite flat sales volume and prices, was slightly worse than
expected, driven by higher unit costs dragging down the unit margin by 35%. As inland
production was down and offshore production was up in an environment of firmer tin prices,
we suspect the main driver for the increase in costs was higher fuel costs. As such, the net profit
was down by 75% to Rp24bn.
·
We will upgrade our forecasts to reflect higher tin prices and the higher contribution from the
coal business, but we maintain our SELL call with a YE06 target price of Rp1,200 due to the
unclear future business prospects.
1H05
1H06
yoy
%
2006F
A/F
%
1Q06
2Q06
qoq
%
Average exchange rate, Rp/US$
Tin ore production, Ton Sn
Inland
Offshore
Total
9,392
9,228
-1.7
9,475
97.4
9,329
9,098
-2.5
19,549
3,749
23,298
15,154
5,382
20,536
-22.5
43.6
-11.9
28,000
12,000
40,000
54.1
44.9
51.3
6,717
2,738
9,455
8,437
2,644
11,081
25.6
-3.4
17.2
Tin metal sales, M tons
Average tin price, US$/Mton
Tin COGS, US$/Mton
Margin, US$/Mton
19,364
8,221
6,814
1,407
19,083
8,120
7,201
919
-1.5
-1.2
5.7
-34.7
40,000
8,000
7,132
868
47.7
101.5
101.0
105.9
9,614
7,629
6,351
1,278
9,469
8,614
7,973
641
-1.5
12.9
25.5
-49.8
Sales, Rp bn
Gross profit, Rp bn
Operating profit, Rp bn
Net profit, Rp bn
1,607
269
147
97
1,729
200
68
24
7.7
-25.6
-53.8
-75.2
3,274
315
39
27
52.8
63.4
175.7
88.9
810
107
47
12
920
94
21
12
13.6
-12.2
-55.7
7.8
9.6
5.2
3.4
5.9
2.0
0.7
10.7
4.7
1.2
11.8
2.6
1.6
Source: Danareksa Sekuritas & Company
1,000
-30
Year end to Dec, Rp bn
2004
2005
2006F
2007F
2008F
Revenue, Rp bn
Net profit, Rp bn
Core profit, Rp bn
EPS, Rp
EPS growth, %
Core EPS, Rp
Core EPS growth, %
PER, x
Core PER, x
PBV, x
EV/EBITDA, x
Yield, %
2,812
178
238
353
387.5
472
93.7
4.9
3.7
0.6
2.1
7.3
3,396
107
145
214
(39.6)
289
(38.8)
8.1
6.0
0.6
3.2
9.3
3,274
27
30
53
(75.0)
60
(79.1)
32.6
28.9
0.6
7.1
4.9
3,442
20
23
40
(24.3)
46
(24.5)
43.1
38.2
0.6
7.0
1.2
3,571
6
13
13
(68.9)
25
(44.7)
138.3
69.1
0.6
8.1
0.9
11/9/2005
10/5/2005
8/31/2005
Isnaputra Iskandar, CFA
(62-21) 350 9888 ext. 3504
isnaputra@danareksa.com
Danareksa research reports are also
available at Reuters Multex, First Call
Direct and Bloomberg.
www.danareksa.com
8/16/2006
-20
6/7/2006
1,500
7/12/2006
-10
5/3/2006
2,000
Margins, %
Gross margin
Operating margin
Net margin
3/29/2006
0
2/22/2006
2,500
1/18/2006
(%)
10
Rp
Relative to JCI (RHS)
TINS posted sales of Rp1,729bn (+8% yoy) in 1H06 driven by the stronger-than-expected
performance of its coal business. The coal business posted Rp287bn in sales which almost
reached out FY06 target of Rp295.1bn.
3,000
12/14/2005
TINS (LHS)
·
Exhibit 1. 1H06 results
Price Relative to JCI
1 mo
3 mos
6 mos
12 mos
Major shareholders
Govt. of Indonesia
Est. free float
News & comments:
10.1
1.2
0.9
31 August 2006
DAILY INSIGHTS
Shareprice and Recommendation
Date
Rec
Price Target, Rp
3-Apr-06
SELL
1,500
30-May-06
SELL
1,500
31-Aug-06
SELL
1,200
3,500
3,000
2,500
S
2,000
S
S
1,500
1,000
500
8/28/2006
5/29/2006
2/27/2006
11/28/2005
8/29/2005
5/30/2005
2/28/2005
11/29/2004
8/30/2004
5/31/2004
3/1/2004
12/1/2003
9/1/2003
-
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their respective employees and/or agents makes any representation or warranty (express or implied) or accepts any responsibility or liability as to, or in relation to, the accuracy or
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employees or agents accepts liability for any errors, omissions or mis-statements, negligent or otherwise, in the report and any liability in respect of the report or any inaccuracy
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The information contained in this report is not be taken as any recommendation made by P.T. Danareksa Sekuritas or any other person to enter into any agreement with regard to
any investment mentioned in this document. This report is prepared for general circulation. It does not have regards to the specific person who may receive this report. In considering
any investments you should make your own independent assessment and seek your own professional financial and legal advice.
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