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ANTM - Risk/reward profile skewed to the upside; re-iterate Buy rating
Tuesday, November 12, 2024       10:36 WIB

 Company Update  / Metals  /  IJ  /   Click here for full PDF version 
 Author(s):  Ryan Winipta  ;ReggieParengkuan 
  • We laid out our bear/base/bull case scenario for in FY25F, which will be mainly driven by nickel ore volume/ASP & gold-trading volume.
  • Our scenario assessment indicated that risk/reward profile for is skewed to the upside as P/E can go as low as 7x in FY25F.
  • Our of Rp2,000/share remain unchanged and we re-iterate our Buy rating on . currently trades at 10x FY25F P/E.

Key factors to watch in FY25F: nickel ore, gold-trading, and SGAR
In FY25F, 's performance is likely dictated by external/internal factors such as: 1) further RKAB approval for its nickel-ore business, 2) demand for domestic gold bars, and 3) unlocking bauxite ore sales (up to 3mn at SGAR full capacity) via SGAR plant commencement that is planned to commence operation by 2Q25F. In addition, elevated nickel-ore premium (US$15-20/wmt) above benchmark price shall be positive for its ASP. Gold-trading volume and its trading-margin are also a key factor to watch next year given recently robust trading run-rate (c.400k oz in 3Q24) and c.6% EBIT margin.
FY25F: risk/reward skewed to the upside
We think risk/reward profile for is skewed to the upside, as in our bear-case scenario, is set to deliver Rp2.4tr NPAT in FY25F (15x P/E) by assuming no yearly growth in nickel-ore sales with US$37/wmt ASP vs. US$44wmt in 3Q24, c.25% decline in trading volume, and zero bauxite ore sales. Should be able to deliver higher volume and ASP as laid out in our bull-case scenario (Fig. 1), FY25F P/E can go as low as 7x. Positive tailwind shall also come from addl. margin on its gold-trading business through its sales agreement with Freeport (see details below).
Associate income from WBN shall improve on yoy basis in FY25F
We expect associate income from Weda Bay Nickel (WBN; 10% stake) to recover in FY25F following 32mn wmt ore quota approval for FY25F/26F with potential additional volume should WBN receive additional RKAB quota. Nonetheless, FY24F would become low-base for WBN - 9M24 ore sales volume declined by -42% yoy, vs. 40-42mn sales target initially. Hence, 29mn ore sales volume in FY25F shall imply that associate income is set to improve by +50% yoy, as per our estimates.
Maintain Buy rating with an unchanged TP of Rp2,000/share
We fine-tuned our FY24F-26F NP forecast by -1%/+1%/+3%, respectively, and hence maintain our Buy rating with unchanged multiples target based TP of Rp2,000/share. Key catalyst includes sustained NP delivery in upcoming quarters, which shall translate into higher P/E multiples. Lower LME nickel price is the key downside risks to share price.


Sumber : IPS

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