Sector Update : COAL MINING April 2009

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Your Trusted Professional

PT Mega Capital Indonesia

Sector Update :

COAL MINING

April 2009

TYPES OF COAL

1. Antrasit : adalah kelas batu bara tertinggi, dengan warna

hitam berkilauan (

luster

) metalik, mengandung antara 86% ‐

98% unsur karbon (C) dengan kadar air kurang dari 8%.

2. Bituminus : mengandung 68 ‐ 86% unsur karbon (C) dan

berkadar air 8‐10% dari beratnya. Kelas batu bara yang

paling banyak ditambang di Australia.

3. Sub‐bituminus : mengandung sedikit karbon dan banyak air,

dan oleh karenanya menjadi sumber panas yang kurang

efisien dibandingkan dengan bituminus.

4. Lignit : atau batu bara coklat adalah batu bara yang sangat

lunak yang mengandung air 35‐75% dari beratnya.

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Your Trusted Professional 3

TYPES OF COAL

1. Batubara Termal : atau batubara

steaming, digunakan dalam proses

pembakaran untuk menghasilkan uap

untuk listrik dan panas.

2. Batubara cooking : atau batubara

metalurgis, digunakan dalam produksi

besi dan baja.

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Thermal Coal – Supply vs Demand

0 100 200 300 400 500 600 700 800 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2020 M illi o n T o n

Supply Dem and

Source: Barlow Jonker

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Global Market Outlook

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Global Market Outlook

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Domestic Market Outlook

Coal Demand For Power Generator (million ton)

34.48

42.8

83.45

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Domestic Coal Resources (Billion Ton)

60,513 61,365 65,400

93,402

104,756

2004 2005 2006 2007 2008

Domestic Coal Reserves (Billion Ton)

7,006 _6,760

9,480

18,712

20,960

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Type Of Coal in Indonesia

Lignit 58.7% Bitum inous 13.9% Antrasit 0.5% Sub-bitum inous 26.9%

Indonesia Coal Reserves

Kalim antan 83% Sum atera 13% Others 4%

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Indonesia Market Share

• Menurut World Coal Institute, sejak tahun 2004

Indonesia menjadi eksportir batubara terbesar

kedua setelah Australia.

• Kontribusi ekspor batubara Indonesia sebesar 26%

terhadap total ekspor pada 2007.

• Indonesia merupakan eksportir batubara termal

terbesar di dunia pada tahun 2007.

Top 10 Coal Producers

0 5 10 15 20 25 30 35 40 PT Bahari Cakraw ala Sebuku

PT Trubaindo Coal Mining PT Bayan Resources PT Tam bang Batubara Bukit Asam PT Indom inco Mandiri PT Berau Coal PT Arutm in Indonesia PT Kideco Jaya Agung PT Adaro Indonesia PT Kaltim Prim a Coal

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Market Share as of 2007

BUMI 30.3% ADRO 20.2% Kideco 10.6% Berau Coal 6.6% Indom inco 5.8% PTBA 4.8% BYAN 2.4% Lainnya 19.3%

PT TAMBANG BATUBARA

BUKIT ASAM TBK

(PTBA)

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Mines & Ports

Shareholders

Pemerintah RI 65.02% Publik 34.98%

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PTBA’s Resources

Bitum inous 2% Sub Bitum inous 42% Low Rank 56%

Production & Sales Volume

(million tons)

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Sales Breakdown

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Financial Performance

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Tambang Batubara Bukit Asam

PTBA

FY 2008 Result (IDR Billions)

FY 2008 FY 2007 Change (YoY)

Sales 7,216.23 4,123.86 74.99% COGS (3,686.14) (2,501.03) 47.38% Gross Profit 3,530.09 1,622.83 117.53% Operating Expenses (1,036.15) (725.84) 42.75% Operating Income 2,493.94 896.98 178.04% Other Income 56.69 114.51 ‐50.50% Profit Before Tax 2,551.67 1,009.56 152.75% Income Tax Expense (837.06) (282.75) 196.04% Minority Interest (6.85) (0.60) 1039.10% Net Income 1,707.77 726.21 135.16% EPS 741.00 315.00 135.24% Cash & Equivalents 3,041.72 2,222.82 36.84% Assets 6,106.83 3,979.18 53.47% Liabilities 2,029.17 1,291.53 57.11% Equity 3,998.13 2,675.50 49.43% Book Value 1,735.20 1,161.18 49.43%

Tambang Batubara Bukit Asam

Key Ratio FY 2007A FY 2008A FY 2009 E FY 2010 F EPS (IDR) 329.93 741.18 1,074.46 1,135.67 BV (IDR) 1,214.83 1,596.08 2,221.22 2,855.21 PER (X) 29.70 13.22 9.12 8.63 PBV (X) 8.07 6.14 4.41 3.43 Gross Margin 39.99% 48.92% 51.27% 50.04% Operating Margin 22.93% 34.56% 36.83% 34.59% Net Margin 18.43% 23.67% 27.60% 26.01% ROA (%) 19.77% 28.48% 32.41% 26.60% ROE (%) 27.16% 46.44% 48.37% 39.78% DER (x) 0.40 0.55 0.49 0.50 DAR (x) 0.29 0.34 0.33 0.33

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Tambang Batubara Bukit Asam

Investment Opportunity:

• Profit Margin relatif lebih tinggi

dibanding perusahaan sejenis

• Dividen payout ratio relatif tinggi (50%

sejak tahun 2001

Investment Risk:

• Turunnya permintaan batubara

• Turunnya harga batubara

Tambang Batubara Bukit Asam

Rencana / Prospek Ke Depan :

• Akuisisi tambang baru di Kalimantan

• Relokasi pabrik briket

• Target penjualan tahun 2009 : 15,5 juta ton

(+21% YoY)

• Capex 2009 : IDR 1 triliun

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Tambang Batubara Bukit Asam

Rekomendasi:

BUY, TP 12 bulan : Rp 9.800

EPS 09E : Rp 1.074

PER 09E : 9,12 X

PBV 09E : 4,41 X

PT INDO TAMBANGRAYA

MEGAH TBK

(ITMG)

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Map of Operations

Shareholders

Publik 26.28% Banpu Mineral Pte Ltd 73.72%

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Reserves & Resources

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Sales Volume

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ASP Movement

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Gross Margin

Indo Tambangraya Megah

ITMG

FY 2008 Result (USD Millions)

FY 2008 FY 2007 Change (YoY) Sales 1,316.98 771.82 70.63% COGS (839.17) (565.75) 48.33% Gross Profit 477.81 206.07 131.87% Operating Expenses (137.80) (85.29) 61.56% Operating Income 340.01 120.77 181.53% Other Income 5.67 (32.77) 117.30% Profit Before Tax 345.68 88.00 292.80% Income Tax Expense (110.76) (32.22) 243.77% Minority Interest ‐ (0.60) ‐100.00% Net Income 234.93 55.79 321.13% EPS 0.21 0.05 320.00% Cash & Equivalents 221.74 257.57 ‐13.91% Assets 979.07 775.63 26.23% Liabilities 368.70 319.31 15.47% Equity 610.37 456.32 33.76% Book Value 0.54 0.40 33.76%

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Indo Tambangraya Megah

Key Ratio FY 2007A FY 2008A FY 2009 E FY 2010 F EPS (USD) 0.05 0.21 0.22 0.18 BV (USD) 0.40 0.54 0.61 0.63 PER (x) 23.94 5.68 5.43 6.44 PBV (x) 2.93 2.19 1.95 1.88 Gross Margin 26.70% 36.28% 37.00% 36.00% Operating Margin 15.65% 25.82% 27.00% 25.00% Net Margin 7.23% 17.84% 18.57% 17.22% ROA (%) 7.19% 23.99% 22.62% 18.00% ROE (%) 12.23% 38.49% 35.93% 29.23% DER (x) 0.70 0.60 0.59 0.62 DAR (x) 0.41 0.38 0.37 0.38

Indo Tambangraya Megah

Investment Opportunity:

• Harga kontrak penjualan relatif tinggi

• Valuasi Menarik

• Besarnya dividen payout ratio (60%

sejak tahun 2007)

Investment Risk:

• Turunnya permintaan batubara global

• Turunnya harga batubara

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Indo Tambangraya Megah

Rencana / Prospek Ke Depan:

• Bagi dividen final tahun 2008 sebesar IDR 706 per

saham pada 28 Mei 2009

• Eksplorasi untuk tingkatkan sumber daya dan

cadangan batubara

• Rencana akuisisi tambang di Sumatera dan

Kalimantan

• Capex tahun 2009 : USD 126 juta

• Target penjualan batubara tahun 2009 : 20,5 juta

ton (+15% YoY)

Indo Tambangraya Megah

Rekomendasi:

• HOLD, TP 12 bulan : Rp 13.000

• EPS 09E : USD 0.22

• PER 09E : 5,43 X

• PBV 09E : 1,95 X

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Comparison

Financial Highlights FY 2008 IDR Billion, unless otherwise stated

ADRO BUMI* BYAN INDY ITMG* PTBA

Revenue 18,092.50 3,378.39 4,876.94 2,314.45 1,316.98 7,216.23 Operating Income 4,211.86 1,107.72 201.15 123.22 340.01 2,493.94 Net Income 887.20 645.37 20.71 1,084.74 234.93 1,707.77 EPS 35.00 0.03 7.00 224.00 0.21 741.00 Book Value 437.98 0.08 597.75 1,001.24 0.54 1,735.20 Cash 2,415.85 171.95 1,531.70 2,989.27 221.74 3,041.72 Assets 33,720.17 5,319.91 6,747.20 8,710.19 979.07 6,106.83 Liabilities 19,692.55 3,177.63 4,734.35 3,496.52 368.70 2,029.17 Equity 14,009.25 1,576.90 1,992.49 5,213.61 610.37 3,998.13 OPM 23.28% 32.79% 4.12% 5.32% 25.82% 34.56% NPM 4.90% 19.10% 0.42% 46.87% 17.84% 23.67% PER (x) 27.14 3.19 421.43 9.82 6.39 12.15 PBV (x) 2.17 1.32 4.94 2.20 2.48 5.19 DER (x) 1.41 2.02 2.38 0.67 0.60 0.51 * in USD million

Comparison

Coal Miners Comparison

Resources Reserves

Production

(mln ton) (mln ton) (mln ton)

FY 09F

FY 10F

FY 09F

FY 10F

ADRO

2,803.0

928.0 38 Rp111.90

Rp95.2

8.49

9.98 BUMI

7,367.0

2,119.0

52 $0.028

$0.02

3.83

5.36 PTBA

7,500.0

1,800.0

11 Rp1,074.0 Rp1,135.0

8.38

7.93 ITMG

1,675.0

312.0

18 $0.22

$0.18

6.10

7.45 BYAN

1,008.0

476.9

6 Rp26.0

Rp144.0

113.46

20.49 INDY

1,284.0

416.0

22 Rp256.0 Rp1,130.0

8.59

1.95 Simple Average

24.81

8.86

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Your Trusted Professional

DISCLAIMER

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 Mega Capital Indonesia.