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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, 05 January 11
HIGHER COAL PRICES LIFT UP COAL STOCKS
Thermal coal price this month has gone up 5.63% to US$127.70 per ton today from mid last month at US$120.89 per ton.
Thermal coal price for next ...
Wednesday, 05 January 11
BUKIT ASAM TARGETS 20% BUY TO GROW COAL TRANSPORT CAPACITY - THE JAKARTA GLOBE
The Jakarta Globe reported that, Indonesian coal producer Tambang Batubara Bukit Asam is considering buying an additional 20 percent stake in Bukit ...
Wednesday, 05 January 11
FLOODING IN AUSTRALIA WILL CAUSE COAL PRICES TO SPIKE AT LEAST 20 PERCENT
Rising coal prices are set to spike at least 20 per cent higher because of supply shortages due to severe flooding in Australia, adding cost pressur ...
Wednesday, 05 January 11
DRY BULK MARKET BEGINS NEW YEAR ON SOUR NOTE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Seasonal factors like the worst flooding in Australia’s Queensland in half a century, coupled with thin trade activity has put the dry bulk ma ...
Tuesday, 04 January 11
THE WCI-CHINA ROUTE WAS TRADED IN THE MID US$ 10,000S - BRS DRY BULK
As reported by BRS Dry Bulk, after a stronger than expected performance in 2010, rates finished on a sombre note in December with the BDI at1,773 po ...
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- Jindal Steel & Power Ltd - India
- TeaM Sual Corporation - Philippines
- India Bulls Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asmin Koalindo Tuhup - Indonesia
- Chamber of Mines of South Africa
- Banpu Public Company Limited - Thailand
- Mercuria Energy - Indonesia
- Videocon Industries ltd - India
- Bayan Resources Tbk. - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Jaiprakash Power Ventures ltd
- Leighton Contractors Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vizag Seaport Private Limited - India
- Indo Tambangraya Megah - Indonesia
- Eastern Coal Council - USA
- Star Paper Mills Limited - India
- Sree Jayajothi Cements Limited - India
- Kobexindo Tractors - Indoneisa
- Singapore Mercantile Exchange
- Power Finance Corporation Ltd., India
- Attock Cement Pakistan Limited
- Coalindo Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Riau Bara Harum - Indonesia
- Global Business Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Larsen & Toubro Limited - India
- GAC Shipping (India) Pvt Ltd
- Siam City Cement - Thailand
- Edison Trading Spa - Italy
- Sojitz Corporation - Japan
- Price Waterhouse Coopers - Russia
- International Coal Ventures Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Tata Chemicals Ltd - India
- Meenaskhi Energy Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Timah Investasi Mineral - Indoneisa
- Dalmia Cement Bharat India
- Gujarat Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Ministry of Finance - Indonesia
- Toyota Tsusho Corporation, Japan
- Renaissance Capital - South Africa
- IEA Clean Coal Centre - UK
- Karaikal Port Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Commonwealth Bank - Australia
- Central Electricity Authority - India
- PetroVietnam Power Coal Import and Supply Company
- Barasentosa Lestari - Indonesia
- Agrawal Coal Company - India
- SMC Global Power, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Minerals Council of Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Deloitte Consulting - India
- Globalindo Alam Lestari - Indonesia
- Romanian Commodities Exchange
- Thai Mozambique Logistica
- Bulk Trading Sa - Switzerland
- Kepco SPC Power Corporation, Philippines
- Georgia Ports Authority, United States
- Sindya Power Generating Company Private Ltd
- Eastern Energy - Thailand
- Electricity Authority, New Zealand
- LBH Netherlands Bv - Netherlands
- San Jose City I Power Corp, Philippines
- Interocean Group of Companies - India
- Sakthi Sugars Limited - India
- Australian Coal Association
- The University of Queensland
- Port Waratah Coal Services - Australia
- Maheswari Brothers Coal Limited - India
- Manunggal Multi Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- The State Trading Corporation of India Ltd
- Australian Commodity Traders Exchange
- Anglo American - United Kingdom
- Gujarat Mineral Development Corp Ltd - India
- Orica Mining Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Ministry of Mines - Canada
- Billiton Holdings Pty Ltd - Australia
- Cement Manufacturers Association - India
- Karbindo Abesyapradhi - Indoneisa
- CNBM International Corporation - China
- London Commodity Brokers - England
- Ambuja Cements Ltd - India
- Borneo Indobara - Indonesia
- Bharathi Cement Corporation - India
- Trasteel International SA, Italy
- Cigading International Bulk Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Oil Corporation Limited
- Orica Australia Pty. Ltd.
- Carbofer General Trading SA - India
- Latin American Coal - Colombia
- Kartika Selabumi Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Indogreen Group - Indonesia
- Central Java Power - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Binh Thuan Hamico - Vietnam
- Bangladesh Power Developement Board
- Kapuas Tunggal Persada - Indonesia
- McConnell Dowell - Australia
- Petrochimia International Co. Ltd.- Taiwan
- GVK Power & Infra Limited - India
- Petron Corporation, Philippines
- Bhushan Steel Limited - India
- Marubeni Corporation - India
- Africa Commodities Group - South Africa
- Heidelberg Cement - Germany
- GMR Energy Limited - India
- Oldendorff Carriers - Singapore
- Directorate General of MIneral and Coal - Indonesia
- MS Steel International - UAE
- IHS Mccloskey Coal Group - USA
- SMG Consultants - Indonesia
- Xindia Steels Limited - India
- White Energy Company Limited
- Therma Luzon, Inc, Philippines
- Bhatia International Limited - India
- Bukit Baiduri Energy - Indonesia
- Simpson Spence & Young - Indonesia
- PTC India Limited - India
- Uttam Galva Steels Limited - India
- Savvy Resources Ltd - HongKong
- Indika Energy - Indonesia
- Madhucon Powers Ltd - India
- Coastal Gujarat Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Mjunction Services Limited - India
- Essar Steel Hazira Ltd - India
- Intertek Mineral Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Ministry of Transport, Egypt
- Bhoruka Overseas - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aboitiz Power Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Medco Energi Mining Internasional
- CIMB Investment Bank - Malaysia
- Straits Asia Resources Limited - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Parry Sugars Refinery, India
- Merrill Lynch Commodities Europe
- Ceylon Electricity Board - Sri Lanka
- Indian Energy Exchange, India
- Lanco Infratech Ltd - India
- Vedanta Resources Plc - India
- Kumho Petrochemical, South Korea
- ASAPP Information Group - India
- Antam Resourcindo - Indonesia
- Coal and Oil Company - UAE
- Mintek Dendrill Indonesia
- Sical Logistics Limited - India
- Parliament of New Zealand
- Tamil Nadu electricity Board
- European Bulk Services B.V. - Netherlands
- Kideco Jaya Agung - Indonesia
- Kaltim Prima Coal - Indonesia
- Economic Council, Georgia
- Mercator Lines Limited - India
- Wilmar Investment Holdings
- Samtan Co., Ltd - South Korea
- Electricity Generating Authority of Thailand
- Siam City Cement PLC, Thailand
- VISA Power Limited - India
- Planning Commission, India
- OPG Power Generation Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Thiess Contractors Indonesia
- Meralco Power Generation, Philippines
- Posco Energy - South Korea
- PNOC Exploration Corporation - Philippines
- Aditya Birla Group - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Goldman Sachs - Singapore
- Sarangani Energy Corporation, Philippines
- Standard Chartered Bank - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Energy Link Ltd, New Zealand
- Directorate Of Revenue Intelligence - India
- Energy Development Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Indonesian Coal Mining Association
- Malabar Cements Ltd - India
- Gujarat Sidhee Cement - India
- Baramulti Group, Indonesia
- Metalloyd Limited - United Kingdom
- South Luzon Thermal Energy Corporation
- Wood Mackenzie - Singapore
- Ind-Barath Power Infra Limited - India
- The Treasury - Australian Government
- Alfred C Toepfer International GmbH - Germany
- New Zealand Coal & Carbon
- PowerSource Philippines DevCo
- Bukit Makmur.PT - Indonesia
- Independent Power Producers Association of India
- ICICI Bank Limited - India
- Rio Tinto Coal - Australia
- Semirara Mining Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Makarim & Taira - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Grasim Industreis Ltd - India
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