PTBA - Sector Headwinds Limit Re-rating Potential

KBVS Update
Wednesday, 21 May 2025

PTBA - Sector Headwinds Limit Re-rating Potential
(Reinitiate with a SELL; TP: IDR 1,700)

■ 1Q25 Missed Amid Rising Costs and Price Pressure. Revenue backed by 10.3MT sales (-11% qoq, +6% yoy), but ASP fell to IDR0.95mn/ton (-7% qoq, -1% yoy). Production hit 8.45MT (-18% qoq,+16% yoy), beating target despite heavy rain, but transport was disrupted (~300k tons undelivered). Fuel cost rose post-B40 cut and IDR weakened. Thus, net profit missed (KBVS: 10.7%, Cons: 8.3%), coming in below the usual 15-20% 1Q run-rate.

■ Weaker Outlook, Recovery Hinges on Pricing and Capex Execution. Sector headwinds persist: oversupply, weak demand, rising China output, and rigid HBA pricing hit near-term profit. We cut 2025F net profit by 26.3% (ASP: USD61/ton), expect recovery by 2027F (ASP: USD70/ton; Net profit: IDR10.6tn). Volume may reach 58.6MT by 2029F (+37% vs 2024), but only ~68% of prod. target, ~85%  of transport volume. Costs rise (USD59.7-72.6/ton), but EBITDA margins may improve to 25% in 2029F. Capex for 2025F set at IDR7.5tn (mainly rail & equipment)

■ Reinitiate with SELL, TP IDR 1,700: Re-rating Unwarranted Amid Sector Risks. We use PE Band valuation due to coal’s cyclical outlook. PTBA trades at 12.1x 2025F EPS (5Y avg: 6.35x), above +2SD. Applying 7.18x PE on EPS of IDR237 implies 39.7% downside.

Regards, 
Laurencia Hiemas - KBVS Research