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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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Friday, 03 December 10
INDONESIAN LOW RANK COAL IS ATTRACTING COAL BUYERS FROM INDIA AND CHINA
COALspot.com - Bhakti Energi Persada has sold out its whole coal production until the end of 2011, Jeffry Mulyono said during McCloskey Asia P ...
Thursday, 02 December 10
INDIA'S COAL SHORTAGE TO DEEPEN NEXT YEAR - MONEY CONTROL
Money Control reported that, India's coal deficit will deepen sharply next year, its coal minister said on Tuesday, forcing Asia's third largest e ...
Thursday, 02 December 10
CIL INCHES CLOSER TO PEABODY STAKE DEAL - THE TELEGRAPH INDIA
The Telegraph India reported that, state-run Coal India Ltd (CIL) hopes to complete negotiations to buy over 10 per cent in Australian miner Peabody ...
Thursday, 02 December 10
DRY BULK MARKET WEIGHED DOWN BY CAPESIZE BLUES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The negative sentiment currently undergoing in the capesize market has kept the dry bulk market’s benchmark, the Baltic Dry Index (BDI) on the ...
Monday, 29 November 10
NUCLEAR SUPERTANKERS TO SHAKE UP SHIPPING - THIS IS MONEY
This is money reported that, plans are under way that could see nuclear-powered supertankers sailing the world’s shipping lanes, refuelling on ...
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- Carbofer General Trading SA - India
- Central Java Power - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Chamber of Mines of South Africa
- Sical Logistics Limited - India
- Mintek Dendrill Indonesia
- Ambuja Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Kumho Petrochemical, South Korea
- Bhushan Steel Limited - India
- Sakthi Sugars Limited - India
- SN Aboitiz Power Inc, Philippines
- Ministry of Mines - Canada
- Agrawal Coal Company - India
- Maharashtra Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Bayan Resources Tbk. - Indonesia
- Coal and Oil Company - UAE
- The Treasury - Australian Government
- Africa Commodities Group - South Africa
- Minerals Council of Australia
- ICICI Bank Limited - India
- Medco Energi Mining Internasional
- Ind-Barath Power Infra Limited - India
- Metalloyd Limited - United Kingdom
- Videocon Industries ltd - India
- Ceylon Electricity Board - Sri Lanka
- Alfred C Toepfer International GmbH - Germany
- Xindia Steels Limited - India
- Latin American Coal - Colombia
- Dalmia Cement Bharat India
- Manunggal Multi Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Globalindo Alam Lestari - Indonesia
- Electricity Generating Authority of Thailand
- VISA Power Limited - India
- Rio Tinto Coal - Australia
- Siam City Cement PLC, Thailand
- Semirara Mining Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Intertek Mineral Services - Indonesia
- London Commodity Brokers - England
- Grasim Industreis Ltd - India
- PTC India Limited - India
- Ministry of Finance - Indonesia
- Heidelberg Cement - Germany
- Australian Commodity Traders Exchange
- Edison Trading Spa - Italy
- Chettinad Cement Corporation Ltd - India
- Kobexindo Tractors - Indoneisa
- Baramulti Group, Indonesia
- SMC Global Power, Philippines
- Essar Steel Hazira Ltd - India
- Merrill Lynch Commodities Europe
- Central Electricity Authority - India
- MS Steel International - UAE
- Singapore Mercantile Exchange
- Energy Link Ltd, New Zealand
- Krishnapatnam Port Company Ltd. - India
- Vijayanagar Sugar Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- IEA Clean Coal Centre - UK
- Interocean Group of Companies - India
- Banpu Public Company Limited - Thailand
- Simpson Spence & Young - Indonesia
- CNBM International Corporation - China
- PetroVietnam Power Coal Import and Supply Company
- Tamil Nadu electricity Board
- Rashtriya Ispat Nigam Limited - India
- Parry Sugars Refinery, India
- Indo Tambangraya Megah - Indonesia
- TeaM Sual Corporation - Philippines
- Independent Power Producers Association of India
- San Jose City I Power Corp, Philippines
- Energy Development Corp, Philippines
- Global Business Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Barasentosa Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Gujarat Sidhee Cement - India
- Petron Corporation, Philippines
- Uttam Galva Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Bangladesh Power Developement Board
- Bhatia International Limited - India
- Leighton Contractors Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Cement Manufacturers Association - India
- South Luzon Thermal Energy Corporation
- Standard Chartered Bank - UAE
- Power Finance Corporation Ltd., India
- Indika Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Vedanta Resources Plc - India
- New Zealand Coal & Carbon
- Economic Council, Georgia
- The University of Queensland
- Vizag Seaport Private Limited - India
- Sree Jayajothi Cements Limited - India
- Sarangani Energy Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Marubeni Corporation - India
- Neyveli Lignite Corporation Ltd, - India
- Georgia Ports Authority, United States
- Indonesian Coal Mining Association
- Wood Mackenzie - Singapore
- Larsen & Toubro Limited - India
- Meenaskhi Energy Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Miang Besar Coal Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- Holcim Trading Pte Ltd - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMG Consultants - Indonesia
- International Coal Ventures Pvt Ltd - India
- Lanco Infratech Ltd - India
- Deloitte Consulting - India
- Posco Energy - South Korea
- Directorate Of Revenue Intelligence - India
- Mercator Lines Limited - India
- Australian Coal Association
- Bharathi Cement Corporation - India
- Eastern Coal Council - USA
- McConnell Dowell - Australia
- Mercuria Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- AsiaOL BioFuels Corp., Philippines
- The State Trading Corporation of India Ltd
- Gujarat Mineral Development Corp Ltd - India
- Savvy Resources Ltd - HongKong
- Toyota Tsusho Corporation, Japan
- PowerSource Philippines DevCo
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Oldendorff Carriers - Singapore
- Mjunction Services Limited - India
- Global Coal Blending Company Limited - Australia
- Malabar Cements Ltd - India
- Parliament of New Zealand
- Global Green Power PLC Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Altura Mining Limited, Indonesia
- Jaiprakash Power Ventures ltd
- Samtan Co., Ltd - South Korea
- Gujarat Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Thai Mozambique Logistica
- Anglo American - United Kingdom
- Indian Oil Corporation Limited
- Indogreen Group - Indonesia
- Price Waterhouse Coopers - Russia
- Formosa Plastics Group - Taiwan
- Borneo Indobara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Meralco Power Generation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Orica Mining Services - Indonesia
- Orica Australia Pty. Ltd.
- Planning Commission, India
- Riau Bara Harum - Indonesia
- Straits Asia Resources Limited - Singapore
- Coalindo Energy - Indonesia
- ASAPP Information Group - India
- Madhucon Powers Ltd - India
- PNOC Exploration Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Aditya Birla Group - India
- Eastern Energy - Thailand
- Tata Chemicals Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Kartika Selabumi Mining - Indonesia
- GMR Energy Limited - India
- Wilmar Investment Holdings
- Port Waratah Coal Services - Australia
- Sojitz Corporation - Japan
- Star Paper Mills Limited - India
- Iligan Light & Power Inc, Philippines
- Goldman Sachs - Singapore
- GVK Power & Infra Limited - India
- Cigading International Bulk Terminal - Indonesia
- Indian Energy Exchange, India
- Directorate General of MIneral and Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jindal Steel & Power Ltd - India
- GAC Shipping (India) Pvt Ltd
- Commonwealth Bank - Australia
- Renaissance Capital - South Africa
- Billiton Holdings Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thiess Contractors Indonesia
- Attock Cement Pakistan Limited
- Binh Thuan Hamico - Vietnam
- Therma Luzon, Inc, Philippines
- Romanian Commodities Exchange
- Siam City Cement - Thailand
- European Bulk Services B.V. - Netherlands
- OPG Power Generation Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- India Bulls Power Limited - India
- Ministry of Transport, Egypt
- Trasteel International SA, Italy
- Maheswari Brothers Coal Limited - India
- Kepco SPC Power Corporation, Philippines
- Electricity Authority, New Zealand
- Sindya Power Generating Company Private Ltd
- White Energy Company Limited
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