· Timah management shared its pessimism that it can achieve 50,000 tons of production this year due to high rainfall that disrupts production. In addition, the company’s sources are depleting as several mining areas have not obtained permit from the Ministry of Forestry.
· The company aims production to at least equal last year’s production of 45,086 tons. Rp800.0bn of capex will still be spent this year as planned.
· The company’s ambition this year to enter the coal business have also been stalled as the two mines in Kalimantan that it has been targeting have not passed qualification. It has since diverted its attention to other mines in Sumatra, with 1.5mn tons production capacity per year. As much as US$30.0mn is budgeted for this purpose.
· TINS is trading at 2011F PER of 11.5x and EV/EBITDA of 6.2x.
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