Corporate result flash 4 May 2011

Timah HOLD
Sector: Metal Mining (Neutral) (From Buy)

Price: 2,800
Surabhi Chopra TP: IDR3,150 (Unchanged)
E-mail: surabhi@bahana.co.id TP/consensus: 99%
Phone: +6221 250 5081 Ext. 3603 JCI: 3,814

1Q11 performance Exhibit 1. Company information

Market cap (IDRb/USDb) : 14,092/1.7
ƒ TINS booked 1Q11 earnings growth of +150% y-y, -25% q-q to IDR355b,
3M avg.daily t.o.(IDRb/USDm) : 35.8/4.2
in line with our and consensus estimates, accounting for around 25% of
Bloomberg code : TINS IJ
full-year estimate.
Exhibit 2. Shareholders information
ƒ 1Q11 top line grew 22% y-y to IDR2.2t while COGS were only up 9.5% y- Government of Indonesia (%) : 65.0
y, translating to 74% y-y growth in gross profit. The operational numbers Free float (%) : 35.0
Source: Company
are not out yet, but we believe revenue growth was backed primarily by
higher selling prices as tin prices have increased 19% ytd. Exhibit 3. Key forecasts and valuations
2010 2011F 2012F
ƒ Operating expenses were up 40% y-y (higher general and administration Sales (IDRb) 7,475 11,001 11,365
costs), bringing operating profit to IDR473b (+90% y-y), some 5% below Net profit (IDRb) 936 1,409 1,450
EPS (IDR) 186 280 288
ours and 2% below consensus.
EPS growth (%) 198.4 50.5 2.9
Outlook EV/EBITDA (x) 7.4 4.9 4.5
P/E (x) 15.1 10.0 9.7
We apply TIN price of USD24,000/ton (+23% y-y) and production of 48,000
BVPS (IDR) 846 1,033 1,181
tons (inline with management’s guidance) resulting in 2011 net profit of PBV (x) 3.3 2.7 2.4
IDR1.4t, +48% y-y, the highest in the metal sector. The downside risk to our DPS (IDR) 93.0 140.0 144.0
forecast is that TINS exports the majority of its product to Japan for Yield (%) 3.3 5.0 5.1
Source: Company, Bahana estimates
electronic use, and cancellations of orders would adversely impact TINS sales
volumes unless the company can divert its sales to other markets. Exhibit 4. Relative share price performance
(%) (%)
0.0 0.0
(0.7)
ytd (0.6)
1M 3M 6M 9M 12M

Recommendation and valuation (5.0) (5.0)

We will review our production forecasts for 2011 after talking with the (10.0)

(11.8)
(7.1)
(9.5)
(10.0)

management as well as our ASP as the current tin spot prices are much (15.0) (15.0)

(20.0) (20.0)

higher at USD32,011/ton. At this stage, our DCF-based TP is at IDR3,150/sh,, (25.0)

(21.7)
(25.0)

reflecting just 11.5% upside potential. Thus, with less than 15% upside, TINS IJ relative to JCI

Source: Bloomberg
TINS is now a HOLD.

Exhibit 5. Result summary

End of 31 March 2011 q-q y-y 1Q11/ 1Q11/ 1Q10/ 1Q09/
(IDRb) 1Q10 4Q10 1Q11 (%) (%) 2011F Cons. 2010 2009
Sales 1,835 2,724 2,249 (17.4) 22.5 20.4 21.9 22.0 20.6
Gross profit 370 941 644 (31.5) 74.2 21.7 19.2 10.9
Operating expense 122 253 171 (32.4) 40.5 29.0 19.9 22.9
Operating profit 248 687 473 (31.2) 90.8 19.9 23.5 18.9 2.7
Net interest inc. (expenses) (3) 2 5 110.6 (256.5) (7.6) (60.0) 31.6
Forex gain (expenses) (23) 6 (21) (477.3) (7.5) na 99.5 (16.9)
Other income/(expenses) 2 (122) 3 (102.6) 43.6 21.1 (1.3) 27.8
Pretax profit 226 568 472 (16.9) 108.6 20.1 23.7 20.1 6.7
Taxation 85 95 118 23.2 39.1 12.5 47.1 9.4
Minority interest (0) (0) 0 (150.0) (120.0) 14.3 22.7 (61.9)
Net profit 142 473 355 (24.9) 150.1 25.2 25.0 15.0 4.6
Balance sheet & ratio analysis 1Q10 4Q10 1Q11 2010 2011F 2012F
Gross margin (%) 20.1 35 29 23.1 27.0 26.9
Operating margin (%) 13.5 25.2 21.0 15.7 21.7 21.5
Pretax margin (%) 12.3 20.9 21.0 13.5 21.3 21.3
Net margin (%) 7.7 17.3 15.8 11.4 12.8 12.8
Inventory Days 124 94 102 184 177 208
Receivable Days 30 23 27 54 41 31
Payable Days 17 14 17 28 43 68
Total cash (IDRb) 680 844 843 844 1,625 2,210
Total debt (IDRb) 263 432 141 432 561 661
Net gearing (%) nc nc nc nc nc nc
Source: Company, Bloomberg, Bahana estimates

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