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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, 17 November 10
DRY BULK MARKET LOOKING FOR SUPPORT IN COAL TRADES AND INDIAN IRON ORE EXPORTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Nikos Roussanoglou, Hellenic Shipping reported that, the dry bulk market is lacking support to end its 13-day slide, as evidenced by Monday’s ...
Tuesday, 16 November 10
'VALLAR PLC' TO BECOME 'BUMI PLC' POST DEAL - THE JAKARTA POST
The Jakarta Post reported that, The United Kingdom’s Vallar Plc will change its name to Bumi Plc following a cash and stock transaction with t ...
Tuesday, 16 November 10
ROTHSCHILD BUYS INDONESIAN COAL STAKES FOR $3 BILLION - BLOOMBERG
Bloomberg reported that, Nathaniel Rothschild, the only son of U.K. financier Jacob Rothschild, agreed to invest $3 billion in two Indonesian coal c ...
Sunday, 14 November 10
THE FREIGHT MARKET CONTINUED ITS DOWN FALL - VISTAAR SINGAPORE
COALspot.com: The freight market continued its down fall with BDI down by 7.29 pct and closed at 2,313 points.
All other segments were also under ...
Saturday, 13 November 10
INDONESIA SHIPPED 8.73 % MORE COAL IN OCTOBER THAN A MONTH EARLIER
COALspot.com: Indonesia, the world largest coal exporter, shipped 23.55 mln mt of coal in October 2010, which is 8.73 percent more compared to Septe ...
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- ICICI Bank Limited - India
- Formosa Plastics Group - Taiwan
- Mintek Dendrill Indonesia
- Gujarat Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Timah Investasi Mineral - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Power Finance Corporation Ltd., India
- Ministry of Mines - Canada
- Thai Mozambique Logistica
- Meralco Power Generation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- GN Power Mariveles Coal Plant, Philippines
- Energy Link Ltd, New Zealand
- Parliament of New Zealand
- Mercator Lines Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Madhucon Powers Ltd - India
- Coastal Gujarat Power Limited - India
- Ambuja Cements Ltd - India
- Marubeni Corporation - India
- Therma Luzon, Inc, Philippines
- Vizag Seaport Private Limited - India
- Attock Cement Pakistan Limited
- PNOC Exploration Corporation - Philippines
- Cement Manufacturers Association - India
- Medco Energi Mining Internasional
- Simpson Spence & Young - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Renaissance Capital - South Africa
- GVK Power & Infra Limited - India
- Interocean Group of Companies - India
- Bhushan Steel Limited - India
- Bayan Resources Tbk. - Indonesia
- Straits Asia Resources Limited - Singapore
- Rashtriya Ispat Nigam Limited - India
- Ministry of Finance - Indonesia
- Binh Thuan Hamico - Vietnam
- SMG Consultants - Indonesia
- Anglo American - United Kingdom
- Electricity Authority, New Zealand
- Sindya Power Generating Company Private Ltd
- Globalindo Alam Lestari - Indonesia
- The University of Queensland
- South Luzon Thermal Energy Corporation
- Indogreen Group - Indonesia
- Lanco Infratech Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coal and Oil Company - UAE
- Miang Besar Coal Terminal - Indonesia
- Vedanta Resources Plc - India
- AsiaOL BioFuels Corp., Philippines
- Orica Australia Pty. Ltd.
- Bulk Trading Sa - Switzerland
- London Commodity Brokers - England
- ASAPP Information Group - India
- Central Java Power - Indonesia
- Bharathi Cement Corporation - India
- Kartika Selabumi Mining - Indonesia
- Indika Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Standard Chartered Bank - UAE
- Mjunction Services Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Banpu Public Company Limited - Thailand
- Aditya Birla Group - India
- Independent Power Producers Association of India
- MS Steel International - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Antam Resourcindo - Indonesia
- The State Trading Corporation of India Ltd
- Romanian Commodities Exchange
- Wood Mackenzie - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Toyota Tsusho Corporation, Japan
- Kaltim Prima Coal - Indonesia
- Sakthi Sugars Limited - India
- Manunggal Multi Energi - Indonesia
- Economic Council, Georgia
- Baramulti Group, Indonesia
- TeaM Sual Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Rio Tinto Coal - Australia
- Metalloyd Limited - United Kingdom
- Xindia Steels Limited - India
- Barasentosa Lestari - Indonesia
- Borneo Indobara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Generating Authority of Thailand
- Essar Steel Hazira Ltd - India
- Samtan Co., Ltd - South Korea
- Kepco SPC Power Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Indonesian Coal Mining Association
- PowerSource Philippines DevCo
- Karaikal Port Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Jaiprakash Power Ventures ltd
- Vijayanagar Sugar Pvt Ltd - India
- CNBM International Corporation - China
- Global Coal Blending Company Limited - Australia
- Kapuas Tunggal Persada - Indonesia
- Pendopo Energi Batubara - Indonesia
- GAC Shipping (India) Pvt Ltd
- Chamber of Mines of South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wilmar Investment Holdings
- Kobexindo Tractors - Indoneisa
- Planning Commission, India
- Oldendorff Carriers - Singapore
- San Jose City I Power Corp, Philippines
- Salva Resources Pvt Ltd - India
- Parry Sugars Refinery, India
- Global Business Power Corporation, Philippines
- Sojitz Corporation - Japan
- IEA Clean Coal Centre - UK
- CIMB Investment Bank - Malaysia
- Heidelberg Cement - Germany
- Sarangani Energy Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Posco Energy - South Korea
- Indian Oil Corporation Limited
- Thiess Contractors Indonesia
- Eastern Energy - Thailand
- Central Electricity Authority - India
- PTC India Limited - India
- Chettinad Cement Corporation Ltd - India
- GMR Energy Limited - India
- Merrill Lynch Commodities Europe
- Meenaskhi Energy Private Limited - India
- Goldman Sachs - Singapore
- Coalindo Energy - Indonesia
- Agrawal Coal Company - India
- Ind-Barath Power Infra Limited - India
- Edison Trading Spa - Italy
- Intertek Mineral Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- White Energy Company Limited
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement - Thailand
- Australian Commodity Traders Exchange
- Georgia Ports Authority, United States
- Latin American Coal - Colombia
- Grasim Industreis Ltd - India
- Altura Mining Limited, Indonesia
- Indian Energy Exchange, India
- Makarim & Taira - Indonesia
- Africa Commodities Group - South Africa
- Ceylon Electricity Board - Sri Lanka
- Orica Mining Services - Indonesia
- Bhatia International Limited - India
- Kumho Petrochemical, South Korea
- Kideco Jaya Agung - Indonesia
- Tamil Nadu electricity Board
- Energy Development Corp, Philippines
- Tata Chemicals Ltd - India
- Uttam Galva Steels Limited - India
- Australian Coal Association
- Global Green Power PLC Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Bangladesh Power Developement Board
- OPG Power Generation Pvt Ltd - India
- New Zealand Coal & Carbon
- Leighton Contractors Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- Sree Jayajothi Cements Limited - India
- Star Paper Mills Limited - India
- Bukit Baiduri Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Minerals Council of Australia
- Carbofer General Trading SA - India
- Sical Logistics Limited - India
- The Treasury - Australian Government
- Billiton Holdings Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- PetroVietnam Power Coal Import and Supply Company
- Deloitte Consulting - India
- European Bulk Services B.V. - Netherlands
- Gujarat Sidhee Cement - India
- McConnell Dowell - Australia
- Singapore Mercantile Exchange
- Petron Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Maheswari Brothers Coal Limited - India
- LBH Netherlands Bv - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Malabar Cements Ltd - India
- SMC Global Power, Philippines
- Larsen & Toubro Limited - India
- Indo Tambangraya Megah - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Videocon Industries ltd - India
- Dalmia Cement Bharat India
- Bukit Asam (Persero) Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Iligan Light & Power Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Trasteel International SA, Italy
- IHS Mccloskey Coal Group - USA
- Siam City Cement PLC, Thailand
- Mercuria Energy - Indonesia
- Riau Bara Harum - Indonesia
- Port Waratah Coal Services - Australia
- Ministry of Transport, Egypt
- VISA Power Limited - India
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