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Thursday, 25 November 10
ANALYSIS: COAL SECTOR: VALUE EMERGENCE - THE JAKARTA POST
 Coal demand will remain firm due to a build-up of coal-fired power plants in India, China and Indonesia. As a result, we have upgraded our coal price from US$95 per ton to a range of between $100, 105, 108, 110 and 115 per ton, respectively in 2011, 2012, 2013, 2014 and 2015 (inflation rate of 1 percent thereafter).
Additionally, Indonesia is one of the lowest cost coal producers in the world, which means that coal prices have to adjust with the incremental cost of production of higher-cost structured companies.
Thermal Seaborne coal demand is set to rise by 74 percent to 1,187 million tons in 2025 from 680 million tons in 2010, according to Coaltrans Coal Conference in Amsterdam last month. This is driven by a higher demand from China and India, which currently accounts for about 28 percent of the global thermal coal market.
China, which currently relies on coal to produce 80 percent of its power needs, is installing two new coal-fired power plants per week with capacities of 500 megawatts per plant. This pace will persist at least in the next decade, potentially doubling power capacity by 2020 and adding a 500-gigawatts new coal-fired electricity generation capacity according to the International Energy Agency. We highlight that with China consuming 43 percent of the global thermal coal production, imbalances between its indigenous production and consumption will drive global coal prices higher.
As for India, at present it imports about 8 percent of global coal production. But the number is set to grow to 25 percent by 2015. Indian thermal coal demand is expected to rise 810 million tons, or 131 percent, by 2025, driven by a 158 percent hike in coal-fired power capacity, in line with power demand, which will rise from the current 147 gigawatts to 380 gigawatts by 2025.
Meanwhile, Vietnam, which three years ago was the largest exporter of coal to China, is expected to become a net importer by 2015, putting further pressure on global supply in the medium term. Vietnam currently exports about 50 percent of its production or about 24 million tons, but this will fall to only 3 million tons, despite rising coal production from 48 million tons in 2009 to about 105 million tons in 2025.
Stripping out PT Bayan Resources’ (BYAN’s) price movements, the coal sector has underperformed the market by 9.8 percent year-to-date (ytd). We believe value is emerging, particularly for our top picks, and we raise our sector weighting to overweight.
At this stage, PT Bukit Asam (PTBA) has the highest upside potential based on Discounted Cash Flow (DCF), helped by the inclusion of the Banjarsari power project in our forecasts. We like PTBA’s railway expansion projects, which will increase PTBA’s railway capacity from 11 million tons currently to 47.7 million tons by 2015 or 82.7 million tons by 2018.
This will increase fourfold PTBA’s production from 12.7 million tons to 52.5 million tons by 2015 or by seven fold to 87.5 million tons by 2018. We also like PTBA for its government link, translating to more secured supply contracts to PLN. Additionally, we like its huge reserves (fives times Indonesia’s coal production), which will pave the way for it to become the second-largest coal producer after BUMI starting in 2018.
This means 33 percent compound annual growth rate (CAGR) for earning per share (EPS) in the next five years through 2015. It also has cash reserves of Rp 4.9 trillion with no debt and solid corporate governance. Our second pick is PT Indika Energy or INDY (+27 percent upside), due to Kideco’s strong performance (which contributes 76 percent of its pre-tax profit). This is followed by Adaro Energy (+19 percent), the largest market cap and second-highest average daily turnover after BUMI, which plans to nearly double production from about 42 million tons in 2010 to 80 million tons by 2014.
Surabhi Chopra, The writer is an analyst at PT Bahana Securities Source: The Jakarta Post
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Wednesday, 26 January 11
DRY BULK MARKET TAKES YET ANOTHER NOSEDIVE, CAPESIZES LOOK RATHER UNATTRACTIVE AT THE MOMENT - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The downturn of the dry bulk market sees no boundariers, disproving even those who thought that at least for the capesize market, the worst had pass ...
Tuesday, 25 January 11
DRY BULK RATES CONTINUED TO TUMBLE LAST WEEK - BRS
With weather-related problems affecting the short-term outlook, and new building deliveries the longer-term picture, dry bulk rates continued to tum ...
Tuesday, 25 January 11
R-POWER TO INVEST $5BN IN INDONESIA - THE TIMES OF INDIA
The Times of India reported that, In what is being seen as one of the largest foreign investments in Indonesia, Reliance Power will infuse $5 billio ...
Monday, 24 January 11
GOVT PROMISES COAL FOR PLN DESPITE PRICE SPIKES - THE JAKARTA POST
The Jakarta Post reported that, the government says state electricity company PT PLN will receive enough coal to fire its power plants, despite pric ...
Monday, 24 January 11
DRY BULK MARKETS DOWNTURN SEES NO RELIEF - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept falling for yet another week, with the industry’s benchmark, the Baltic Dry Index (BDI) losing an additional 4.79 ...
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- Globalindo Alam Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Riau Bara Harum - Indonesia
- Coalindo Energy - Indonesia
- Eastern Coal Council - USA
- Mjunction Services Limited - India
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement - Thailand
- Formosa Plastics Group - Taiwan
- Antam Resourcindo - Indonesia
- Meenaskhi Energy Private Limited - India
- Edison Trading Spa - Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- Independent Power Producers Association of India
- Parliament of New Zealand
- SMG Consultants - Indonesia
- Wilmar Investment Holdings
- Samtan Co., Ltd - South Korea
- Gujarat Sidhee Cement - India
- International Coal Ventures Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Barasentosa Lestari - Indonesia
- Ministry of Mines - Canada
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sojitz Corporation - Japan
- Malabar Cements Ltd - India
- Price Waterhouse Coopers - Russia
- Neyveli Lignite Corporation Ltd, - India
- Xindia Steels Limited - India
- Aboitiz Power Corporation - Philippines
- London Commodity Brokers - England
- Meralco Power Generation, Philippines
- Trasteel International SA, Italy
- Marubeni Corporation - India
- Minerals Council of Australia
- Thai Mozambique Logistica
- Kapuas Tunggal Persada - Indonesia
- Mercuria Energy - Indonesia
- Merrill Lynch Commodities Europe
- Tamil Nadu electricity Board
- PTC India Limited - India
- European Bulk Services B.V. - Netherlands
- Central Electricity Authority - India
- Energy Development Corp, Philippines
- Petron Corporation, Philippines
- White Energy Company Limited
- Eastern Energy - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Global Business Power Corporation, Philippines
- Mercator Lines Limited - India
- Ministry of Transport, Egypt
- Star Paper Mills Limited - India
- Madhucon Powers Ltd - India
- Ambuja Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- Wood Mackenzie - Singapore
- Chamber of Mines of South Africa
- Bukit Baiduri Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Standard Chartered Bank - UAE
- Rio Tinto Coal - Australia
- CIMB Investment Bank - Malaysia
- Australian Coal Association
- Bukit Makmur.PT - Indonesia
- Jindal Steel & Power Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Romanian Commodities Exchange
- Ind-Barath Power Infra Limited - India
- Medco Energi Mining Internasional
- Carbofer General Trading SA - India
- Karaikal Port Pvt Ltd - India
- GVK Power & Infra Limited - India
- Planning Commission, India
- Kalimantan Lumbung Energi - Indonesia
- Posco Energy - South Korea
- Salva Resources Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Economic Council, Georgia
- Straits Asia Resources Limited - Singapore
- Baramulti Group, Indonesia
- Power Finance Corporation Ltd., India
- South Luzon Thermal Energy Corporation
- Bharathi Cement Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Orica Mining Services - Indonesia
- ASAPP Information Group - India
- Indian Oil Corporation Limited
- Leighton Contractors Pty Ltd - Australia
- ICICI Bank Limited - India
- Aditya Birla Group - India
- GMR Energy Limited - India
- Bhatia International Limited - India
- Cement Manufacturers Association - India
- Maharashtra Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Coastal Gujarat Power Limited - India
- Sarangani Energy Corporation, Philippines
- Commonwealth Bank - Australia
- Uttam Galva Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Australian Commodity Traders Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Orica Australia Pty. Ltd.
- Borneo Indobara - Indonesia
- Bangladesh Power Developement Board
- Singapore Mercantile Exchange
- Asmin Koalindo Tuhup - Indonesia
- Lanco Infratech Ltd - India
- Bhushan Steel Limited - India
- Pendopo Energi Batubara - Indonesia
- Anglo American - United Kingdom
- Indonesian Coal Mining Association
- McConnell Dowell - Australia
- Agrawal Coal Company - India
- New Zealand Coal & Carbon
- Directorate General of MIneral and Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Jaiprakash Power Ventures ltd
- IEA Clean Coal Centre - UK
- Parry Sugars Refinery, India
- Georgia Ports Authority, United States
- Global Coal Blending Company Limited - Australia
- Mintek Dendrill Indonesia
- Essar Steel Hazira Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Sical Logistics Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Electricity Authority, New Zealand
- Renaissance Capital - South Africa
- Semirara Mining and Power Corporation, Philippines
- India Bulls Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Global Green Power PLC Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Banpu Public Company Limited - Thailand
- Larsen & Toubro Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bayan Resources Tbk. - Indonesia
- TeaM Sual Corporation - Philippines
- Bulk Trading Sa - Switzerland
- LBH Netherlands Bv - Netherlands
- SN Aboitiz Power Inc, Philippines
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
- Vedanta Resources Plc - India
- Central Java Power - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Mineral Development Corp Ltd - India
- IHS Mccloskey Coal Group - USA
- Makarim & Taira - Indonesia
- Kumho Petrochemical, South Korea
- The University of Queensland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Finance - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Dalmia Cement Bharat India
- Therma Luzon, Inc, Philippines
- Indian Energy Exchange, India
- VISA Power Limited - India
- Kideco Jaya Agung - Indonesia
- GAC Shipping (India) Pvt Ltd
- Simpson Spence & Young - Indonesia
- Africa Commodities Group - South Africa
- Kepco SPC Power Corporation, Philippines
- Interocean Group of Companies - India
- Kobexindo Tractors - Indoneisa
- Coal and Oil Company - UAE
- Attock Cement Pakistan Limited
- Ceylon Electricity Board - Sri Lanka
- Port Waratah Coal Services - Australia
- Altura Mining Limited, Indonesia
- Savvy Resources Ltd - HongKong
- Energy Link Ltd, New Zealand
- Maheswari Brothers Coal Limited - India
- Grasim Industreis Ltd - India
- Manunggal Multi Energi - Indonesia
- Indogreen Group - Indonesia
- Deloitte Consulting - India
- OPG Power Generation Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Latin American Coal - Colombia
- Holcim Trading Pte Ltd - Singapore
- Indika Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- PowerSource Philippines DevCo
- Kaltim Prima Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- Sakthi Sugars Limited - India
- Vizag Seaport Private Limited - India
- Oldendorff Carriers - Singapore
- GN Power Mariveles Coal Plant, Philippines
- The Treasury - Australian Government
- MS Steel International - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMC Global Power, Philippines
- Videocon Industries ltd - India
- Bhoruka Overseas - Indonesia
- PNOC Exploration Corporation - Philippines
- Siam City Cement PLC, Thailand
- Toyota Tsusho Corporation, Japan
- Timah Investasi Mineral - Indoneisa
- Directorate Of Revenue Intelligence - India
- Sindya Power Generating Company Private Ltd
- The State Trading Corporation of India Ltd
- Thiess Contractors Indonesia
- San Jose City I Power Corp, Philippines
- Heidelberg Cement - Germany
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