Hundreds Company Update Delta Dunia Makmur Bloomberg: DOID.IJ Reuters: DOID.JK Samuel Research 18 April 2017 Target Price Rp 1,600 Last Price Rp 1,145 Potential Upside 40% JCI Index 5,427 Share isued (bn) 8.33 Market Cap. (Rp tn) 9.53 52-Weeks High/Low 1200/106 Avg Daily Vol (mn) 60.98 Free Float 60.6% Nominal Value Rp 50 Book value/share 17 Relative to JCI Chart 5 4 3 2 Company Background Shareholder Structure BUY (Maintain) JCI Northstar Tambang Persada Ltd DOID 1 Aug-16 Nov-16 Feb-17 Rp343 PT Delta Dunia Makmur (DOID) merupakan peruhaan induk dengan fokus investasi di jasa pertambangan. Melalui anak usahnya PT Bukit Makmur Mandiri (BUMA) 39.3% Others 0.1% Public 60.6% Timing to collect! Kami tetap optimis DOID mampu membukukan kinerja positif di 1Q17. Dilatarbelakangi solidnya kinerja operasional, meningkatnya Overburden Removal (OB), dan EBITDA yang diperkirakan tumbuh solid, kami merevisi keatas estimasi di 2017F. Mempertahankan BUY dengan TP menjadi Rp 1,600. Penambahan kontrak hingga 2025. Pertumbuhan yang signifikan didukung oleh kontrak baru yaitu, Berau ( hingga 2025), Tadjahan Antang Mineral (hingga 2024), dan Sungai Danau Jaya (hingga 2023), DOID berpeluang meningkatkan produksi. Kami estimasikan 2017F volume Overburden Removal (OB) meningkat 25% yoy mencapai 359 juta bcm. Disisi lain, ekstraksi batubara DOID, kami estimasikan meningkat 18% yoy menjadi 40 juta ton. Tariff yang diuntungkan dengan harga batubara. DOID diuntungkan dengan biaya pertambangan batubara yang memiliki tiga tingkatan dan ditentukan berdasarkan rata-rata selama tiga bulan terkahir. 1.) Tier 1: harga batubara < USD 65 blended average tariff akan terdiskon 6%. 2) Tier 2: harga batubara antara USD65-75 3).Tier 3: Harga batubara berada di atas USD75 blended average tariff akan meningkat 6%. Kami melihat harga batubara akan stabil di level US$ 70 untuk tahun 2017, membuat DOID berpotensi tetap menikmati tariff di Tier 2 atau Tier 3. Peningkatan EBITDA 2017F seiring penguatan harga batubara dan solidnya management. Dilatarbelakangi meningkatnya OB (+25% yoy), harga batubara yang lebih stabil (USD 70/ton), pengurangan diskon tarif yang disertai efisiensi biaya (cash cost 2017F USD 1.03/ton), DOID berpeluang memiliki marjin EBITDA yang lebih tinggi di 2017F. Kami asumsikan EBITDA marjin mencapai 35.7% di FY 17F (FY16: 35.4%, FY15: 33%). Serta laba bersih 2017 kami estimasikan naik mencapai USD 89 juta (16A: USD 37 juta, 15A: rugi bersih USD 8 juta). Menaikkan TP menjadi Rp 1,600. Kami menggunakan pendekatan DCF dan merekomendasikan Buy untuk DOID, dengan meningkatkan TP menjadi Rp 1,600 (+ 40%) merefleksikan 11.2x PE 17 (30% diskon terhadap UNTR). Adupun resiko investasi terletak pada 1) berkurangnya kontrak akibat melemahnya harga batubara ke bawah USD 60/ton, 2) biaya produksi yang lebih tinggi dari estimasi. Sharlita Malik +62 21 2854 8339 sharlita.malik@samuel.co.id Forecast and Valuation (at closing price Rp1,145 per share) Y/E Dec (USD mn) 15A 16A 17E 18E Sales 566 611 762 795 EBITDA 187 216 272 273 Net Profit (8) 37 89 93 EPS (US$/sh) (0.001) 0.004 0.011 0.011 BV per share (US$/Sh) 0.010 0.015 0.025 0.037 EV/EBITDA (x) 3.2 5.0 4.1 3.7 P/E Ratio (x) (4.0) 13.0 8.3 7.9 P/BV Ratio (x) 0.4 3.9 3.5 2.4 www.samuel.co.id Page 1 of 5
Figure 1. Client Breakdown by sales SDJ 6% TAM 6% Other 4% Kideco 14% Adaro 14% Berau 56% Figure 2. OB and coal removal mn tons and average rate USD/ton 440 $2.00 400 $1.95 $1.90 360 $1.85 320 $1.80 280 $1.75 $1.70 240 $1.65 200 $1.60 2014 2015 2016E 2017E 2018E 2019E OB and coal removal mn tons (LHS) Average rate USD/ton (RHS) Figure 3. Revenue USD mn and EBITDA margin Revenue USD mn EBITDA USD mn EBITDA margin (RHS) $900 $800 $700 $600 $500 $400 $300 $200 $100 $0 2014 2015 2016E 2017E 2018E 2019E 40.0% 36.0% 32.0% 28.0% 24.0% 20.0% www.samuel.co.id Page 2 of 5
Figure 4. Debt/EBITDA, Interest Coverage, and Net Gearing ratios Net gearing (RHS) Debt/EBITDA (x) Interest coverage (x) 5.0 1000% 4.0 800% 3.0 600% 2.0 400% 1.0 200% 0.0 2014 2015 2016E 2017E 2018E 0% www.samuel.co.id Page 3 of 5
Profit and Loss Statement Cash Flow Yr-end Dec (USD mn) 15A 16A 17E 18E Yr-end Dec (USD mn) 15A 16A 17E 18E Revenue 566 611 762 795 Net Income (8) 37 89 93 COGS 440 447 540 553 Depreciation & amort. 71 52 92 96 Gross profit 126 164 222 242 Others (26) 9 1 12 Gross margin (%) 22.2 26.8 29.2 30.5 Working capital 9 26 (7) (0) Operating profit 87 122 178 175 Operating Cash Flow 45 124 175 201 Operating margin (%) 15.5 20.0 23.4 22.0 Net - Capital expenditure (23) (34) (110) (110) EBITDA 187 216 272 273 Investing Cash Flow 11 2 (97) (95) EBITDA margin (%) 33.0 35.4 35.7 34.4 Net Change In Debt (66) (91) (68) (75) Other Income (Expenses) (93) (9) (49) (37) Others financing 5 4 3 3 Pre-tax profit (6) 61 129 137 Financing Cash Flow (61) (87) (65) (72) Income tax - net (3) (24) (40) (44) Net Cash Flow (4) 39 12 33 Net profit (8) 37 89 93 Cash Beginning 75 71 110 122 Net profit margin (%) (1.5) 6.0 11.6 11.8 Cash Ending 71 110 122 155 Balance Sheet Key Ratios Yr-end Dec (USD mn) 15A 16A 17E 18E Yr-end Dec (USD mn) 15A 16A 17E 18E Cash & ST Investment 71 110 122 155 ROE -9.8% 30.3% 42.3% 30.8% Receivables 139 133 150 152 ROA -1.0% 4.6% 10.7% 10.8% Inventories 20 21 20 20 Revenue Growth (%) (6.9) 0.6 34.0 4.3 Others 37 35 35 35 EBITDA Growth (%) 0.4 1.5 43.5 0.5 Total Current Assets 308 327 357 392 EPS Growth (%) (150.5) n.a 141.5 5.2 Net fixed assets 379 361 380 394 Interest coverage (x) 1.9 2.1 3.6 4.7 Other assets 145 109 96 81 Debt to EBITDA (x) 3.6 3.0 1.9 1.6 Total Assets 832 797 832 867 Net Gearing (%) 698.8 382.2 182.3 90.4 Payables 52 67 79 93 ST. debt and curr. maturity 50 71 69 47 Major Assumptions Other current liabilities 26 21 23 34 Yr-end Dec 15A 16A 17E 18E LT. debt 614 501 436 382 Rupiah avg. (USD/IDR) 13,400 13,600 13,200 12,800 Other long term liabilities 30 35 38 41 Newcastle price US$/ton 59 60 70 70 Total Liabilities 747 675 622 564 Overburden (MnTons) 273 287 359 362 Total Equity 85 121 210 303 Coal getting (MnTons) 33 34 40 42 www.samuel.co.id Page 4 of 5
Research Team Andy Ferdinand, CFA Head Of Equity Research, Strategy, Banking, Consumer andy.ferdinand@samuel.co.id +6221 2854 8148 Rangga Cipta Economist rangga.cipta@samuel.co.id +6221 2854 8396 Muhamad Makky Dandytra, CFTe Technical Analyst makky.dandytra@samuel.co.id +6221 2854 8382 Akhmad Nurcahyadi, CSA Auto, Aviation, Cigarette, Construction Healthcare, Heavy Equipment, Property akhmad.nurcahyadi@samuel.co.id +6221 2854 8144 Arandi Ariantara Cement, Telecommunication, Utility arandi.ariantara@samuel.co.id +6221 2854 8392 Marlene Tanumihardja Poultry, Retail, Small Caps marlene@samuel.co.id +6221 2854 8387 Sharlita Lutfiah Malik Mining, Plantation sharlita.malik@samuel.co.id +6221 2854 8339 Nadya Swastika Research Associate nadya.swastika@samuel.co.id +6221 2854 8338 Private Wealth Management Evelyn Satyono Head of PWM / Institutional Sales evelyn.satyono@samuel.co.id +6221 2854 8380 Muhamad Alfatih CSA, CTA, CFTe Senior Technical Portfolio Advisor m.alfatih@samuel.co.id +6221 2854 8129 Ronny Ardianto Institutional Equity Sales ronny.ardianto@samuel.co.id +6221 2854 8399 Clarice Wijana Institutional Equity Sales clarice.wijana@samuel.co.id +6221 2854 8395 Fachruly Fiater Institutional Equity Sales fachruly.fiater@samuel.co.id +6221 2854 8325 Equity Sales Team Kelvin Long Head of Equities kelvin.long@samuel.co.id +6221 2854 8150 Yulianah Institutional Equity Sales yulianah@samuel.co.id +6221 2854 8146 Lucia Irawati Retail Equity Sales lucia.irawati@samuel.co.id +6221 2854 8173 Online Trading Sales Team Nugroho Nuswantoro Head of Marketing Online Trading nugroho.nuswantoro@samuel.co.id +6221 2854 8372 Wahyu Widodo Marketing wahyu.widodo@samuel.co.id +6221 2854 8371 Aben Epapras Marketing aben.epapras@samuel.co.id +6221 2854 8389 DISCLAIMERS : Analyst Certification : The views expressed in this research accurately reflect the personal views of the analyst(s) about the subject securities or issuers and no part of the compensation of the analyst(s) was, is, or will be directly or indirectly related to the inclusion of specific recommendations or views in this research. The analyst(s) principally responsible for the preparation of this research has taken reasonable care to achieve and maintain independence and objectivity in making any recommendations. This document is for information only and for the use of the recipient. It is not to be reproduced or copied or made available to others. Under no circumstances is it to be considered as an offer to sell or solicitation to buy any security. Any recommendation contained in this report may not be suitable for all investors. Moreover, although the information contained herein has been obtained from sources believed to be reliable, its accuracy, completeness and reliability cannot be guaranteed. All rights reserved by PT Samuel Sekuritas Indonesia www.samuel.co.id Page 5 of 5