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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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Monday, 13 September 10
FREIGHT MARKETS MAY BE A BIT SOFT THIS WEEK - VISTAAR SINGAPORE
COALspot.com: The freight market continued its upward trend with the BDI almost touching 3000 points. However the uncertainty seems to continue with ...
Friday, 10 September 10
INDONESIAN RAILWAY CONTRACT STILL UP FOR BIDDING - LOGISTICS WEEK
The tender process for a $2.2bn project to build a coal-transporting railway line in Central Kalimantan province, Indonesia, is still underway and n ...
Friday, 10 September 10
WCI INTO CHINA WITH IRON ORE ARE AIMING AROUND $ 20K - FEARNBULK
Handy
The rates are firm in every corner of the world. However it still looks Atlantic/Baltic/Black Sea offer better employment opportunities for ...
Thursday, 09 September 10
INDIANS BALCO TO BUY 50 K OF 3,000 TO 4,500 GAR CALORIFIC VALUE COAL
COALspot.com: Bharat Aluminium Company Limited (BALCO) is a subsidiary of Sterlite Industries (India) Limited and part of Vedanta Resources PLC, a L ...
Thursday, 09 September 10
INDONESIA SWAPS COAL FOR INFRASTRUCTURE - FT
As Asia’s major economies bound forward and their hunger for energy surges over the next decade, Indonesia is strategically positioned to take ...
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- Siam City Cement PLC, Thailand
- Uttam Galva Steels Limited - India
- Global Business Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Aboitiz Power Corporation - Philippines
- Indian Energy Exchange, India
- Africa Commodities Group - South Africa
- IHS Mccloskey Coal Group - USA
- Vijayanagar Sugar Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Ministry of Mines - Canada
- Cigading International Bulk Terminal - Indonesia
- White Energy Company Limited
- PTC India Limited - India
- AsiaOL BioFuels Corp., Philippines
- Banpu Public Company Limited - Thailand
- TeaM Sual Corporation - Philippines
- Eastern Energy - Thailand
- IEA Clean Coal Centre - UK
- Tamil Nadu electricity Board
- Sojitz Corporation - Japan
- Savvy Resources Ltd - HongKong
- Kohat Cement Company Ltd. - Pakistan
- Planning Commission, India
- Commonwealth Bank - Australia
- Karaikal Port Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Toyota Tsusho Corporation, Japan
- CNBM International Corporation - China
- Central Java Power - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- Samtan Co., Ltd - South Korea
- Bhatia International Limited - India
- SMC Global Power, Philippines
- The Treasury - Australian Government
- Romanian Commodities Exchange
- Borneo Indobara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Gujarat Mineral Development Corp Ltd - India
- Larsen & Toubro Limited - India
- Barasentosa Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Standard Chartered Bank - UAE
- Merrill Lynch Commodities Europe
- Attock Cement Pakistan Limited
- Coastal Gujarat Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Australian Coal Association
- Billiton Holdings Pty Ltd - Australia
- Eastern Coal Council - USA
- Sindya Power Generating Company Private Ltd
- International Coal Ventures Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Vizag Seaport Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- ASAPP Information Group - India
- Central Electricity Authority - India
- Essar Steel Hazira Ltd - India
- Electricity Generating Authority of Thailand
- Independent Power Producers Association of India
- Intertek Mineral Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Kobexindo Tractors - Indoneisa
- Dalmia Cement Bharat India
- Pendopo Energi Batubara - Indonesia
- Singapore Mercantile Exchange
- Miang Besar Coal Terminal - Indonesia
- Interocean Group of Companies - India
- Bahari Cakrawala Sebuku - Indonesia
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Bhushan Steel Limited - India
- Bukit Baiduri Energy - Indonesia
- Heidelberg Cement - Germany
- Indian Oil Corporation Limited
- Electricity Authority, New Zealand
- Wood Mackenzie - Singapore
- Coalindo Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tata Chemicals Ltd - India
- Coal and Oil Company - UAE
- Price Waterhouse Coopers - Russia
- VISA Power Limited - India
- SMG Consultants - Indonesia
- Kumho Petrochemical, South Korea
- Indo Tambangraya Megah - Indonesia
- Cement Manufacturers Association - India
- Jindal Steel & Power Ltd - India
- Goldman Sachs - Singapore
- Meralco Power Generation, Philippines
- Mercator Lines Limited - India
- Carbofer General Trading SA - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ind-Barath Power Infra Limited - India
- Ambuja Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Gujarat Sidhee Cement - India
- Neyveli Lignite Corporation Ltd, - India
- Straits Asia Resources Limited - Singapore
- Grasim Industreis Ltd - India
- Edison Trading Spa - Italy
- European Bulk Services B.V. - Netherlands
- Ministry of Finance - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Thiess Contractors Indonesia
- Binh Thuan Hamico - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Salva Resources Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- ICICI Bank Limited - India
- Iligan Light & Power Inc, Philippines
- Parry Sugars Refinery, India
- Bhoruka Overseas - Indonesia
- Chamber of Mines of South Africa
- The University of Queensland
- CIMB Investment Bank - Malaysia
- Kideco Jaya Agung - Indonesia
- Madhucon Powers Ltd - India
- Maheswari Brothers Coal Limited - India
- Jaiprakash Power Ventures ltd
- Georgia Ports Authority, United States
- MS Steel International - UAE
- Australian Commodity Traders Exchange
- Posco Energy - South Korea
- Latin American Coal - Colombia
- GAC Shipping (India) Pvt Ltd
- Sarangani Energy Corporation, Philippines
- Videocon Industries ltd - India
- Meenaskhi Energy Private Limited - India
- Rio Tinto Coal - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Coal Blending Company Limited - Australia
- Energy Development Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- San Jose City I Power Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mjunction Services Limited - India
- Indogreen Group - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petron Corporation, Philippines
- Makarim & Taira - Indonesia
- Sical Logistics Limited - India
- PowerSource Philippines DevCo
- Simpson Spence & Young - Indonesia
- Xindia Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Lanco Infratech Ltd - India
- Port Waratah Coal Services - Australia
- Aditya Birla Group - India
- Directorate Of Revenue Intelligence - India
- Therma Luzon, Inc, Philippines
- Thai Mozambique Logistica
- Marubeni Corporation - India
- Renaissance Capital - South Africa
- GMR Energy Limited - India
- The State Trading Corporation of India Ltd
- Formosa Plastics Group - Taiwan
- Malabar Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Bharathi Cement Corporation - India
- Indika Energy - Indonesia
- Riau Bara Harum - Indonesia
- Energy Link Ltd, New Zealand
- Sree Jayajothi Cements Limited - India
- Power Finance Corporation Ltd., India
- Baramulti Group, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Deloitte Consulting - India
- Minerals Council of Australia
- SN Aboitiz Power Inc, Philippines
- Medco Energi Mining Internasional
- Star Paper Mills Limited - India
- Mintek Dendrill Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Wilmar Investment Holdings
- Sakthi Sugars Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Orica Australia Pty. Ltd.
- Altura Mining Limited, Indonesia
- Kepco SPC Power Corporation, Philippines
- McConnell Dowell - Australia
- Rashtriya Ispat Nigam Limited - India
- Anglo American - United Kingdom
- Agrawal Coal Company - India
- Bayan Resources Tbk. - Indonesia
- LBH Netherlands Bv - Netherlands
- Ministry of Transport, Egypt
- Orica Mining Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Trasteel International SA, Italy
- Vedanta Resources Plc - India
- Indonesian Coal Mining Association
- GVK Power & Infra Limited - India
- Mercuria Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- New Zealand Coal & Carbon
- Siam City Cement - Thailand
- Parliament of New Zealand
- Economic Council, Georgia
- Bangladesh Power Developement Board
- Metalloyd Limited - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Oldendorff Carriers - Singapore
- London Commodity Brokers - England
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