BANPU
Transcription
BANPU
Thursday, April 30, 2015 1Q15 Earnings Preview BANPU BANPU Rec. : HOLD 1Q15 net profit to remain dull from extraordinary items We are likely to revise down BANPU’s 2015 net profit forecast to reflect significant Fx loss in 1Q15, while normalized profit is still projected to decrease following lower coal price. Yet, full year profit would be sustained by Hongsa power plant. Fx loss to suppress 1Q15 profit at B82m We estimate 1Q15 net profit at B82m, rising only 24.4%qoq, which is very low, because there is B1bn loss from Fx and currency translation differences. However, normalized profit would grow as much as 46.1%qoq, mainly because BLCP has resumed its full operation. Profit from the coal business would remain low as a result of decreasing average coal price. Overall, 1Q15 is estimated to make up only 2.4% of our full-year forecast. 2015 net profit forecast cut likely We are likely to revise down BANPU’s 2015 net profit forecast after 1Q15 earnings report to reflect significant Fx loss in 1Q15. However, net profit tends to improve in 2Q15 because there will not be massive extraordinary expense like in 1Q15. Normalized profit is still projected to weaken qoq in 2Q15 as a result of decreasing sales from ITMG and Centennial coal mines, but it would revive and the show strongest growth qoq in 3Q15 after sales get back to a high season. In addition, shared profit from Hongsa power plant, which is planned to start a commercial run of phase 1 in July 2015 and phase 2 in November 2015, will help prevent the profit in 4Q15 from weakening like in the same period every year. Current Price (B): 29.00 Target Price (B): 30.00 Upside : 3.4% Dividend Yield : 4.8% Total Return : 8.2% Market Cap. (Bm) : 74,874.48 CG Score : Technical Chart HOLD recommended 2015 fair value (DCF) is B30. has already bottomed out and coal selling prices have been around three to six month lag be reflected in a better coal investors can speculate BANPU Key Data FY: Dec 31 Sales (Bm) Net Profit (Bm) EPS (B) Norm EPS (B) Norm PER (x) DPS (B) Dividend Yield (%) BVS (B) PBV (x) ROE (%) We recommend HOLD. The coal price likely has a limited downside now. However, most entered into a forward contract, which has time, so if the price rebound in 2H15, it will business in 2016. Yet, in the short term, following rising coal price. FY12A 117,314 8,441 3.11 2.20 13.2 1.80 6.2 30.14 1.0 10.0 FY13A 102,944 2,325 0.90 0.90 32.3 1.20 4.1 27.72 1.0 3.0 FY14A 102,122 2,680 1.04 1.36 21.3 1.20 4.1 26.25 1.1 3.8 FY15F 103,298 3,450 1.34 1.34 21.7 1.40 4.8 30.63 0.9 4.7 FY16F 113,449 5,676 2.20 2.20 13.2 1.60 5.5 33.95 0.9 6.8 ASP vs IAA concensus EPS (B) ASP Cons %diff 2015F 1.34 1.51 -12% 2016F 2.20 2.37 -7% Source: IAA concensus and ASP Nalinrat Kittikumpolrat License No.: 018350 [email protected] Source : ASP Research This report is a rough translation of one of our Thai-language research products. It is produced primarily with time efficiency in mind, so that English-reading clients can see what the main recommendations are from our Thai-language research team. Given that this is a rough-and-ready translation, Asia Plus Securities pcl cannot be held responsible for translation inaccuracies.) The reports and information contained herein are compiled from public data sources and our analysts' interviews with executives of listed companies. They are presented for informational purposes only and not to be deemed as solicitations to buy or sell any securities. Best attempts have been made to verify information from these vast sources, but we cannot guarantee their accuracy, adequacy, completeness and timeliness. The analyses and comments presented herein are opinions of our analysts and do not necessarily reflect the views of Asia Plus Securities. Fx loss to suppress 1Q15 profit at B82m We estimate 1Q15 net profit at B82m, rising only 24.4%qoq, which is very low, because there is loss from Fx and currency translation differences. BANPU’s major currency is US Dollar (USD), while net asset of Centennial project is 2.6bn in Australian Dollar (AUD); as AUD has weakened around AUD0.10/USD, BANPU will face Fx loss. At the same time, the stronger USD has also resulted in Fx loss from USD debts. Overall, 1Q15 loss from Fx and currency is estimated as much as B1bn. Excluding the aforementioned extraordinary items, normalized profit would grow as much as 46.1%qoq, mainly because BLCP has resumed its full operation after a one-month maintenance shutdown in 4Q14. Profit from the coal business would remain low as a result of decreasing average coal prices, a decrease of US$2/ton to US$58/ton for ITMG mine in Indonesia and a decrease of US$4.6/ton to US$62/ton for Centennial mine in Australia because export coal prices have fallen below the cost. Meanwhile, overall cost has dropped around US$2/ton, mainly from ITMG mine. Coal sales volume at ITMG mine would decrease 0.4 million tons to 7 million tons on seasonal effect (rainy season), while sales volume from Centennial mine would increase 0.5 million tons from 4Q14 when there was a production halt for a longwall move at Mandalong mine. Overall, 1Q15 is estimated to make up only 2.4% of our full-year forecast. 2015 net profit forecast cut likely We are likely to revise down BANPU’s 2015 net profit forecast after 1Q15 earnings report to reflect significant Fx loss in 1Q15. However, net profit tends to improve in 2Q15 because there will not be massive extraordinary expense like in 1Q15. Normalized profit is still projected to weaken qoq in 2Q15 as a result of decreasing sales from ITMG mine (because of a rainy season in Indonesia) and Centennial mine (because of a three-week operation halt for a longwall move at Mandalong mine); the coal price is projected to stabilize from 1Q15. However, normalized profit would revive and the show strongest growth qoq in 3Q15 after sales revive from a high season of ITMG mine and full operation of Centennial mine. In addition, shared profit from 1,800 MW Hongsa power plant (BANPU holding 40% stake), which is planned to start a commercial run of phase 1 in July 2015 and phase 2 in November 2015, will help prevent the profit in 4Q15 from weakening like in the same period every year for BLCP usually undertakes a one-month annual shutdown in the fourth quarter. Overall, FY2015 normalized profit is projected to drop 2.6%yoy due to the coal business as average coal selling price would decline around 10.4%yoy in 2015. However, there is compensation from Hongsa power plant, which is an important project to help boost profit since 2H15 onward. 1Q14F Earnings Preview Key Data (Bm) 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q58F %QoQ Sales 24,905 25,475 25,477 27,087 27,140 23,307 27,345 24,329 22,143 -9.0% Cost of sales 18,051 17,409 16,876 18,393 17,716 16,024 18,871 16,832 14,571 Gross Profit 6,854 8,066 8,601 8,695 9,424 7,283 8,475 7,498 998 738 864 38 848 1,270 735 Norm Profit 1,462 1,952 2,677 1,317 3,109 2,123 2,062 895 Income tax 514 512 918 842 1,186 813 1,320 Net Profit 752 418 693 461 1,801 682 Norm Profit 329 881 1,185 794 EPS (B) 0.29 0.16 0.27 0.18 27.5% 31.7% 33.8% 5.9% 7.7% 10.5% Interests in joint ventures Gross Margin Operating Margin %YoY 2015F 2014 %YoY -18.4% 103,298 102,122 1.2% -13.4% -17.8% 72,345 69,443 4.2% 7,572 1.0% -19.6% 30,954 32,679 -5.3% 807 -1779.5% -4.9% 4,178 2,805 48.9% 2,429 171.5% -21.9% 8,958 8,189 9.4% (281) 930 -431.2% -21.5% 2,508 3,038 -17.4% 131 66 82 24.4% -95.5% 3,450 2,680 28.7% 685 1,248 782 1,143 46.1% 43.9% 3,450 3,509 -1.7% 0.70 0.26 0.05 0.03 0.03 24.4% -95.5% 1.34 1.04 28.7% 32.1% 34.7% 31.2% 31.0% 30.8% 34.2% 30.0% 32.0% 4.9% 11.5% 9.1% 7.5% 3.7% 11.0% 8.7% 8.0% (75) (48) Source : Financial Statement / ASP Research Coal Price referred to Barlow Jonker Index (BJI) Demand of Coal in Long-term US$/ton 110 100 23 Apr 15 = 62.47 US$/ton 90 80 70 60 Apr 15 Feb 15 Dec 14 Oct 14 Aug 14 Jun 14 Apr 14 Feb 14 Dec 13 Oct 13 Aug 13 Jun 13 Apr 13 50 Source : BANPU Source : BANPU Key Risks Regional Key Recommendations Company Hong Kong CHINA SHENHUA-H CHINA COAL ENE-H YANZHOU COAL-H CHINA SHANXI LU'AN -A CHINA SHENHUA-A YANZHOU COAL-A CHINA COAL ENE-A INDONESIA ADARO ENERGY TBK TAMBANG BATUBARA INDO TAMBANGRAYA INDIKA ENERGY HARUM ENERGY INDIA COAL INDIA LTD THAILAND BANPU PUB CO LTD LANNA RESOURCES AVERAGE PBV 2015F 2016F PER 2015F 2016F REC./BB Rating Current Price Target Price Upside (%) 3.64 1.88 1.87 20.2 5.1 8.0 22.2 3.8 5.9 10.4% -25.1% -26.6% 1.0 0.6 0.8 1.0 0.6 0.7 10.3 4,093.8 50.8 9.6 95.2 31.2 4.13 4.00 2.62 2.47 14.1 23.6 16.8 9.6 14.2 20.4 10.4 5.4 0.8% -13.3% -38.0% -43.7% 1.8 1.5 2.0 1.5 1.8 1.4 2.0 1.5 41.7 15.4 65.3 356.3 32.3 15.3 52.5 229.0 3.69 3.68 3.38 3.00 2.13 895.0 9,725.0 13,425.0 302.0 1,225.0 1,088.8 12,003.5 19,370.5 1,192.5 21.7% 23.4% 44.3% -2.7% 0.8 2.3 1.3 0.2 0.8 0.7 2.1 1.3 0.2 0.8 11.5 12.3 8.0 23.3 18.9 8.6 11.0 7.4 2.3 10.5 3.80 371.0 407.6 9.9% 5.1 4.6 15.8 13.4 HOLD SELL 29.00 12.60 30.00 12.50 3.5% -0.8% 0.9 1.1 1.5 0.9 1.1 1.4 21.7 16.1 15.3 13.2 13.1 10.4 1. Coal selling price may miss our forecast. 2. There could be an unplanned shutdown of coal mines and power plants. 3. There could be risk from overseas investment in Indonesia, China, and Australia (country risk). Remark: - Calculation excluded companies with unusual PER or PBV BB Rating is the average from Recommendation Consensus of analysts in the last 12 months etc. 5 = BUY, 4 + WEAK BUY, 3 = HOLD, 2 = WEAK SELL, 1 = SELL Source :Bloomberg Source : ASP