Three things that was indicated by PTBA’s higher-than-expected 1Q09 results. PTBA has a strong bargaining power in domestic market that provide a substitute in times of weak export market (first), stable production costs (second), and a clear indication that electricity consumption is resillient during times of crisis (third).
For 1Q09, PTBA reported a 221% jumped in net profit to Rp920.57bn , on the back of an 89% increased in revenue at Rp2.33trn. Higher selling price and sales volume as well as stable costs have permitted this achievement. At Rp9.750, PTBA stock is trading at 8.2 times our revised FY09 estimates, still below the market that is trading at 11 times FY09 earnings.
From our DCF calculation, lower WACC and higher earnings resulted in higher target price of Rp11,725 per share for PTBA. We continue to like PTBA and rate the share a BUY.
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