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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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- Vedanta Resources Plc - India
- Pendopo Energi Batubara - Indonesia
- VISA Power Limited - India
- Formosa Plastics Group - Taiwan
- Directorate General of MIneral and Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Deloitte Consulting - India
- Vijayanagar Sugar Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Borneo Indobara - Indonesia
- Bhatia International Limited - India
- European Bulk Services B.V. - Netherlands
- Interocean Group of Companies - India
- PetroVietnam Power Coal Import and Supply Company
- Tata Chemicals Ltd - India
- New Zealand Coal & Carbon
- Australian Coal Association
- Lanco Infratech Ltd - India
- Bukit Makmur.PT - Indonesia
- CIMB Investment Bank - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aditya Birla Group - India
- MS Steel International - UAE
- Romanian Commodities Exchange
- Sojitz Corporation - Japan
- Wilmar Investment Holdings
- Jindal Steel & Power Ltd - India
- South Luzon Thermal Energy Corporation
- Bulk Trading Sa - Switzerland
- Intertek Mineral Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Generating Authority of Thailand
- Coalindo Energy - Indonesia
- Cement Manufacturers Association - India
- Salva Resources Pvt Ltd - India
- Grasim Industreis Ltd - India
- Thai Mozambique Logistica
- IHS Mccloskey Coal Group - USA
- Samtan Co., Ltd - South Korea
- Chettinad Cement Corporation Ltd - India
- Madhucon Powers Ltd - India
- Sakthi Sugars Limited - India
- Barasentosa Lestari - Indonesia
- Medco Energi Mining Internasional
- Kapuas Tunggal Persada - Indonesia
- Merrill Lynch Commodities Europe
- Altura Mining Limited, Indonesia
- LBH Netherlands Bv - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Parry Sugars Refinery, India
- PTC India Limited - India
- The State Trading Corporation of India Ltd
- Indo Tambangraya Megah - Indonesia
- Semirara Mining Corp, Philippines
- Energy Development Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Heidelberg Cement - Germany
- Bangladesh Power Developement Board
- Australian Commodity Traders Exchange
- TeaM Sual Corporation - Philippines
- Parliament of New Zealand
- White Energy Company Limited
- Karbindo Abesyapradhi - Indoneisa
- Sindya Power Generating Company Private Ltd
- Alfred C Toepfer International GmbH - Germany
- Jorong Barutama Greston.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Sarangani Energy Corporation, Philippines
- Latin American Coal - Colombia
- Kalimantan Lumbung Energi - Indonesia
- Eastern Coal Council - USA
- Central Electricity Authority - India
- San Jose City I Power Corp, Philippines
- India Bulls Power Limited - India
- Dalmia Cement Bharat India
- GVK Power & Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Edison Trading Spa - Italy
- Maharashtra Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- Ministry of Mines - Canada
- Savvy Resources Ltd - HongKong
- Carbofer General Trading SA - India
- OPG Power Generation Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Oldendorff Carriers - Singapore
- Uttam Galva Steels Limited - India
- Thiess Contractors Indonesia
- Gujarat Sidhee Cement - India
- Gujarat Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Rashtriya Ispat Nigam Limited - India
- Kepco SPC Power Corporation, Philippines
- Mercator Lines Limited - India
- Leighton Contractors Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Mjunction Services Limited - India
- CNBM International Corporation - China
- Indika Energy - Indonesia
- Siam City Cement PLC, Thailand
- Sinarmas Energy and Mining - Indonesia
- Marubeni Corporation - India
- Simpson Spence & Young - Indonesia
- Riau Bara Harum - Indonesia
- GMR Energy Limited - India
- Cigading International Bulk Terminal - Indonesia
- Planning Commission, India
- Petrochimia International Co. Ltd.- Taiwan
- Ceylon Electricity Board - Sri Lanka
- Power Finance Corporation Ltd., India
- Sical Logistics Limited - India
- IEA Clean Coal Centre - UK
- Kohat Cement Company Ltd. - Pakistan
- Bhushan Steel Limited - India
- Coal and Oil Company - UAE
- Wood Mackenzie - Singapore
- Posco Energy - South Korea
- Port Waratah Coal Services - Australia
- Meralco Power Generation, Philippines
- Indian Energy Exchange, India
- Gujarat Mineral Development Corp Ltd - India
- Globalindo Alam Lestari - Indonesia
- Star Paper Mills Limited - India
- Straits Asia Resources Limited - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Renaissance Capital - South Africa
- The University of Queensland
- Krishnapatnam Port Company Ltd. - India
- Aboitiz Power Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vizag Seaport Private Limited - India
- Iligan Light & Power Inc, Philippines
- Africa Commodities Group - South Africa
- Singapore Mercantile Exchange
- Ministry of Transport, Egypt
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Anglo American - United Kingdom
- Eastern Energy - Thailand
- Economic Council, Georgia
- London Commodity Brokers - England
- GAC Shipping (India) Pvt Ltd
- Mintek Dendrill Indonesia
- Ministry of Finance - Indonesia
- Jaiprakash Power Ventures ltd
- Kobexindo Tractors - Indoneisa
- Tamil Nadu electricity Board
- Indonesian Coal Mining Association
- Energy Link Ltd, New Zealand
- Therma Luzon, Inc, Philippines
- Makarim & Taira - Indonesia
- Mercuria Energy - Indonesia
- Rio Tinto Coal - Australia
- Orica Australia Pty. Ltd.
- Global Green Power PLC Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Siam City Cement - Thailand
- Attock Cement Pakistan Limited
- Orica Mining Services - Indonesia
- Goldman Sachs - Singapore
- Meenaskhi Energy Private Limited - India
- Commonwealth Bank - Australia
- Ind-Barath Power Infra Limited - India
- Minerals Council of Australia
- Billiton Holdings Pty Ltd - Australia
- International Coal Ventures Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Bukit Baiduri Energy - Indonesia
- Standard Chartered Bank - UAE
- Price Waterhouse Coopers - Russia
- Videocon Industries ltd - India
- Indogreen Group - Indonesia
- PowerSource Philippines DevCo
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMC Global Power, Philippines
- Malabar Cements Ltd - India
- Electricity Authority, New Zealand
- Antam Resourcindo - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Kideco Jaya Agung - Indonesia
- Bharathi Cement Corporation - India
- Georgia Ports Authority, United States
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Oil Corporation Limited
- Sree Jayajothi Cements Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Petron Corporation, Philippines
- Ambuja Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Coastal Gujarat Power Limited - India
- Independent Power Producers Association of India
- The Treasury - Australian Government
- Neyveli Lignite Corporation Ltd, - India
- Larsen & Toubro Limited - India
- Toyota Tsusho Corporation, Japan
- Central Java Power - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- SMG Consultants - Indonesia
- Banpu Public Company Limited - Thailand
- ASAPP Information Group - India
- McConnell Dowell - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maheswari Brothers Coal Limited - India
- Manunggal Multi Energi - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Xindia Steels Limited - India
- Chamber of Mines of South Africa
- Directorate Of Revenue Intelligence - India
- Agrawal Coal Company - India
- Global Business Power Corporation, Philippines
- ICICI Bank Limited - India
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