1. business and industrial
2. energy
3. coal

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