Strong growth momentum for Komatsu continues
United Tractors (UT) reported another strong monthly operational data in June. Heavy equipment sale (Komatsu) was lower compare to record high in May but the number was still above five months average sales. Mining contracting business (Pama) coal production and overburden fell slightly compared to last month due to above-average rainfall but was better than our expectations. We expect seasonally higher coal production and overburden in 2H due to better weather condition. Meanwhile, monthly
coal production at its DEJ mines was also improving. Overall, we think that UT's underlying business could grow faster than our expectations.
Tampilkan postingan dengan label United Tractors: Buy; Rp19. Tampilkan semua postingan
Tampilkan postingan dengan label United Tractors: Buy; Rp19. Tampilkan semua postingan
Senin, 26 Juli 2010
Kamis, 22 Juli 2010
DBS United Tractors: Buy; Rp19,700; TP Rp20,750; UNTR IJ
Be prepared for acquisition-led growth
United Tractors (UT) set aside US$100m to expand its coal production by acquiring more coal asset. The company will use US$50m from the rights issue proceeds to finance the acquisition while the remaining US$50m from either internal cash or bank loan. Recently, UT completed the acquisition of 60% stake in Agung Bara Prima for US$15.9m. Agung Bara has 10m tons of coal reserve located in Central Kalimantan. We believe that given its healthy balance sheet position and strong cash flow going forward, UT will continue to increase its coal reserve by acquiring more coal assets near its coal concession area. Maintain our Buy call for UT with TP of Rp20,750/share. We expect strong heavy equipment sales and further acquisition announcement to be the next catalyst of the stock.
United Tractors (UT) set aside US$100m to expand its coal production by acquiring more coal asset. The company will use US$50m from the rights issue proceeds to finance the acquisition while the remaining US$50m from either internal cash or bank loan. Recently, UT completed the acquisition of 60% stake in Agung Bara Prima for US$15.9m. Agung Bara has 10m tons of coal reserve located in Central Kalimantan. We believe that given its healthy balance sheet position and strong cash flow going forward, UT will continue to increase its coal reserve by acquiring more coal assets near its coal concession area. Maintain our Buy call for UT with TP of Rp20,750/share. We expect strong heavy equipment sales and further acquisition announcement to be the next catalyst of the stock.
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