With 5M09 performance going well, we believe that we can achieve our FY09F earnings outlook comfortably. Thus, we remain a buyer for UNTR with target price of Rp13,000/share that implies to PER09F of 13.4x or P/BV09F of 2.5x. We expect EPS growth of 9.8% in FY09F and 34.0% in FY10F.
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Kamis, 18 Juni 2009
Mandiri Sekuritas United Tractors: Good 5M09 operational performance. (UNTR, Rp10,050, Buy, TP: Rp13,000)
Here is a short update on United Tractors 5M09 performance, which was well for construction machinery & mining contracting. However, coal sales were again below than expectation with the company downgrading their FY09F target from 4.0mn tons to 2.5mn tons. Below are the details on each business segment:
Construction Machinery: 5M09 unit sales were within with our expectation, with positive sign of demand recovery in various sectors. 5M09 unit sales were 1,140 units (-42.6% yoy) and in May09 unit sales were 303 units (+45.0% mom or - 27.3%yoy). We believe that May09 unit sales could be an early sign of recovery since its bottom in Dec08 unit sales. Monthly unit sales from each sector reached its year-to-date highest as commodity prices remain at favorable level and leasing rates fell. Sales to Pamapersada were steady at 21% of total sales (ytd Pamapersada contribution was 16% to sales, due to low delivery of 13.8% to Pama in Mar09). We continue to remain comfortable with our FY09F forecast and deem likely for upside to our forecast, should the unit sales continue to accelerate. In addition, spare part sales growth remains similar to 1Q09, which is positive.
Mining Contracting: 5M09 coal production was inline, with stripping ratio at its highest since 2006. 5M09 coal production was on track with our estimates at 24.4mn tons while overburden was higher at 218.2mn bcm, translating to 8.9x stripping ratio. Rainfall in the mining sites has eased down in May09 but problems in the mining site caused delay in coal production. As result, UNTR focused more on extracting overburden so that coal production can be easily upped when needed. UNTR mentioned that there were stockpile problem in Adaro site and new operation in East Block of Indominco site that caused more overburden than production. For FY09F, we still believe that our forecast can be comfortably achieved while stripping ratio could be above our expectation of 7.5x.
Coal Sales: UNTR downgraded its FY09F coal sales target to 2.5mn tons, below our target of 3.0mn tons. 5M09 coal sales showed poor results again as Glencore and Nobel delayed their shipping due to high fixedpurchase- price. As result, ytd coal sales were -40.1% yoy and UNTR downgraded their FY09F target to 2.5mn tons, below ours of 3.0mn tons. Based on current condition, it looks tough to achieve our FY09F target. However, should coal price continue to improve and start to match with average fixed-selling-price of US$82/ton, it is possible for Glencore and Nobel would start sending their shipments on time and improve UNTR’s coal sales. Note that coal sales contributed a small chunk to total EBITDA before elimination in 1Q09, at about 7.7%.
With 5M09 performance going well, we believe that we can achieve our FY09F earnings outlook comfortably. Thus, we remain a buyer for UNTR with target price of Rp13,000/share that implies to PER09F of 13.4x or P/BV09F of 2.5x. We expect EPS growth of 9.8% in FY09F and 34.0% in FY10F.
With 5M09 performance going well, we believe that we can achieve our FY09F earnings outlook comfortably. Thus, we remain a buyer for UNTR with target price of Rp13,000/share that implies to PER09F of 13.4x or P/BV09F of 2.5x. We expect EPS growth of 9.8% in FY09F and 34.0% in FY10F.
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