Company Update  / 

ANTM

IJ  /   Click here for full PDF version 
 Author(s):  Ryan Winipta  ;Reggie Parengkuan 

• WBN 1Q24 results indicates 38%/26% qoq decline in nickel-ore & FeNi sales in 1Q24F, which we think would reduce WBN NP by (-48% qoq).
• We expect
  ANTM
  to report negative EBIT in 1Q24F due to significant decline in ore-sales, but positive bottom-line due to WBN contribution.
• Maintain Buy rating for
  ANTM
  as our nickel top-pick with Rp1,800/share TP. Further weakness in share price is a buying opportunity.

WBN 1Q result; nickel ore and FeNi sales dropped by 38%/26% qoq
Eramet reported lower nickel ore sales for Weda Bay Nickel (WBN,

ANTM

's 10%-owned associates) of 6.1mn wmt (-38% qoq, -17% yoy), mainly driven by "commercialization permit issues" according to Eramet. We think such decline in ore-sales was mainly driven by a delayed RKAB issuance for WBN, similar to other listed nickel-miners in Indonesia. WBN ore sales target is maintained at 40-50mn wmt of nickel ore sales in FY24F, but this was subject to RKAB issuance. WBN's FeNi sales volume also declined to 7.2kt (-26% qoq, -10% yoy), most likely also due to RKAB issues, resulting in lower ore & FeNi grade. As a result, WBN revenue declined by 37% qoq with NP (on 100% basis) estimated at Rp1.2bn (-48% qoq).
1Q24F preview: negative EBIT , but positive NP from WBN contribution
We expect

ANTM

to record negative operating profit/EBIT in 1Q24F, mainly due to no FeNi sales being recorded in 1Q24F, in addition to the decline in ore sales by c.57% qoq (1Q24F: ~1mn wmt) on delayed RKAB issuance. On the positive side, we estimate gold sales volume to grow on qoq basis (+4%) to 220k oz, due to Lebaran seasonality in 1Q24F. Thus, we estimate

ANTM

to record negative EBIT , but shall be positive on the bottom-line of Rp104bn (-55% qoq) due to WBN contribution in addition to forex gain. This would be equivalent to 3% of IPS/consensus FY24F NP forecast (Fig. 4). Nonetheless, we think soft 1Q24F result is already priced-in into the share-price, hence, further weakness is a buying opportunity, in our view.
Maintain Buy rating with an unchanged TP of Rp1,800/share
We maintain our FY24F/25F forecast for now, pending upcoming soft 1Q24F results; we have already taken into account the delayed RKAB issuance into our forecast (14mn ore sales volume in FY24F vs. 18.8mn

ANTM

's target), thus, we expect ore-sales guidance to be revised in upcoming earnings call, given soft achievement in 1Q24F. We re-iterate our Buy rating with an unchanged TP of Rp1,800/share (13x FY24F P/E). Downside risks include execution on nickel-ore mining, MSCI index exclusion in May24, pending issuance on RKAB /RKAB-revision.


Sumber : IPS