Wednesday, June 29, 2011

PT. Tambang Batubara Bukit Asam Tbk

by CIMB Securities

We are cutting our FY11-13 earnings estimates for PTBA by 0.7-3.6% and DCF price target to Rp26,000 (WACC 12.4%) from Rp27,600. PTBA has underperformed its coal peers with an 11% share-price retreat YTD (vs. the sector's +1%). We believe delays in additional 2011 railway capacity and a lack of meaningful progress on its new railway have been the main culprits. These also explain our earnings and price-target downgrades. But given its share-price underperformance and the increasing reflection of low expectations in consensus estimates (5% downgrades over the past three months), we believe the bulk of the bad news has been priced in. We continue to like PTBA's long-term growth outlook and defensive cost structure (vs. peers) and reiterate Outperform. Any news flow on the progress of its railway project should be potent catalysts for the stock.

No comments:

Post a Comment