Equity Research

BUYInvestment ConsiderationGold sales surgeIn 3Q20, gold sales rose significantly by 147% QoQ to 6967 kg,compared to 2Q20 growth of -45% QoQ. This was driven by an increasein demand because of the pandemic. In order to maintain servicesduring Covid-19. ANTM continues to introduce new Logam Mulia Goldproduct marketing services like online sales transactions and goldbuybacks through the Butik Emas Logam Mulia network spread across11 cities in Indonesia. With the increase in gold price in 2020 andincreasing public interest in safe haven investments, the companycontinues to conduct gold exploration activities in the IUP area, toprovide positive returns for the company's future financial performance.

Continuing strategyAs mentioned in previous reports, in 2020, ANTM is focusing on thedevelopment of domestic market sales, especially Gold, inline withpositive demand, as well as ferronikel and bauxite for export markets.Ferronikel sales are targeted at 27000 Tni, and 9M20 sales reached19507 Tni, which is stable compared to 9M19’s 19703 Tni. TargetBauxite sales are 1.2 million wmt with 9M20 increasing by 18% YoY with9M19 production volume of 1.1 million wmt. For nickel ore, the companyno longer conducts export sales with a domestic market focus withtarget sales of over 1 million wmt. During 9M20, nickel ore sales were1,04 million wmt up significantly compared to 2Q20’s nickle ore salesvolume of 167000 wmt. Domestic nickel ore sales have been supportedby the issuance of MESDM regulation No. 11/2020 as described in ourprevious report. In addition, other ANTM strategies are to keepproduction costs low, and preserve cash through negotiations withcreditors, banks and suppliers. ANTM is also improving internalefficiencies in both business units and the head office.

Valuation: 63% upsideBased on EV/EBITDA, we have a one year target price ofIDR.2020/share or trading at 21x EV/EBITDA. With 63% upside, werecommended BUY.

24 November 2020

Diversified mining and minerals processing, Equity

Price IDR. 1240 Target Price IDR. 2020JKSE Index 5677.31

Stock CodeBloomberg code ANTM IJMarket cap (IDR.bn) 29,437.752-Week High (IDR) 1,28052-Week Low (IDR) 3386-m Avg Daily. Val (IDR) 782Free Float (%) 35

Major Shareholders (%)INALUM 65%Public 35%

USD/IDR-YE2019A 138662020F (Avg) 14600

Key Indicators 2021FDER (x) 0.35Debt ratio (x) 0.40

Analyst: Revita Dhiah Anggrainyrevita.anggrainy@binaartha.com

PT Aneka Tambang Tbk

Profit and Loss (IDR. in bn)

2018 A 2019 A 2020 F 2021 F 2022 F

Sales 25.241 32.719 26.639 27.090 33.596

COGS (21.765) (28.271) (22.492) (22.854) (28.432)

Gross Profit 3.476 4.447 4.146 4.236 5.164

Operating Expenses (1.624) (3.492) (2.375) (2.825) (3.519)

Operating Income 1.853 956 1.772 1.411 1.646

Other Income (587) (269) (451) (368) (469)

Tax Expense (391) (493) (386) (326) (404)

Minority Interest (0,002) (0,001) 0,010 (0,001) (0,001)

Net Income 874 194 934 717 772

EPS 36 8 39 30 32

EBITDA 2.645 2.010 2.723 2.458 2.797

ANTM

Company ProfilePT Aneka Tambang, a leading Indonesian diversified mining and minerals processing company was established

in July 5, 1968. The company was previously owned by government 65% and public 35%, and is now owned by

Inalum 65% and the public 35%. ANTM was formed by several Indonesian Government projects & mining

companies. ANTM offers various products such as ferronickel, low and high grade nickel ore, gold, silver,

bauxite, alumina, coal, and precious metals processing services. ANTM undertakes all stages of mining and

processing, including exploration, mining, smelting, refining, and marketing in relation to nickle ore, ferronickle,

gold, silver, alumina, other precious metal, and coal.

Asset in operation

Source: company

ANTM

Source: company and Wood Mackenzie,

and Roskill Information Services Ltd

Ferronickle processing

Nickle outlook 2020

Among base metals, nickel prices experienced the sharpest fall in the first quarter, dropping 21 percent from

US$/ton14077 to US$11055 , a stark contrast to the high prices in the second half of 2019. Demand for stainless steel

products—which accounts for three-quarters of the world’s nickel usage—has been hit hard in China (the world’s top

consumer) and Italy (Europe’s largest consumer) due to lockdowns. The slump in nickel demand has more than offset

supply disruptions. Indonesia’s nickel ore export ban came into effect in January 2020, which had buoyed prices last year

following stockpiling efforts ahead of the ban. The Philippines, which supplies 70 percent of China’s nickel ore imports,

has suspended its mining operation due to pandemic. During the first half of 2020, Prices made a comeback in Q2, and

even though they did not reach their highest level of the year, they ended the quarter up by 15 percent from their lowest

mark, reaching US$12,790 on June 30. According to Roskill Information Services Ltd, When looking at nickel’s

fundamentals, the coronavirus has had a major impact on demand globally, and while China is now returning strongly,

the rest of the world will take a few years to get back to 2019 levels. Stainless and superalloy being particularly affected,

but also the electric vehicle (EV) sector. We believe, Nickel demand is likely to remain high as stainless steel production

stays strong and electric vehicles (EVs) continue to rise in importance. By 2030, forecast nickel demand from the

batteries sector to account for a little over 25 percent of the total nickel market. Based on Wood Mckenzie, expecting

nickel prices to decline in the second half of 2020 from current levels, leaving the average for the year at around the

US$12,300 to US$12,500 range.

ANTM

Source: Binaartha and company

Chart: Nickle production vs sales volume (Wmt ‘000)

yoy

Chart: Ferronickle production vs sales volume (Tni)

yoy

Chart: Nickle production vs sales volume (Wmt ‘000)

QoQ

Chart: Ferronickle production vs sales volume (Tni)

QoQ

Chart: Gold sales volume (Kg) YoY Chart: Gold sales volume (Kg) QoQ

ANTM

Source: Binaartha and company

Chart: Bauxite production vs sales volume (Wmt

‘000) yoy

Chart: Bauxite production vs sales volume (Wmt 000)

QoQ

Chart: Ferronickle Average Selling Price (US$/lb) YoY Chart: Gold Average selling price (US$/Toz)

Chart: Debt to Equity ratio (x) YoY

ANTM

Profit and Loss (IDR. in bn) yoy

Balance Sheet (IDR. in bn) yoy

Source: Binaartha and company

Profit and Loss (IDR. in bn) 2018 A 2019 A 2020 F 2021 F 2022 F

Sales 25.241 32.719 26.639 27.090 33.596

COGS (21.765) (28.271) (22.492) (22.854) (28.432)

Gross Profit 3.476 4.447 4.146 4.236 5.164

Operating Expenses (1.624) (3.492) (2.375) (2.825) (3.519)

Operating Income 1.853 956 1.772 1.411 1.646

Other Income (587) (269) (451) (368) (469)

Tax Expense (391) (493) (386) (326) (404)

Minority Interest (0,002) (0,001) 0,010 (0,001) (0,001)

Net Income 874 194 934 717 772

EPS 36 8 39 30 32

EBITDA 2.645 2.010 2.723 2.458 2.797

Balance Sheet (IDR. in bn) 2017A 2018A 2019 A 2020 F 2021 F 2022 FCash and cash equivalent 5.551 4.299 3.636 3.369 4.008 3.311Trade Account Receivable 971 944 1.002 1.241 1.336 1.289inventory 1.258 1.846 1.796 3.576 3.117 3.406Other current asset 1.222 254 1.230 1.998 2.032 2.520assset classified as held for sale 0 0 0 0 0 0Current Asset 9.002 7.342 7.665 10.184 10.493 10.525Fixed Asset 14.093 19.490 18.866 18.843 19.576 21.913other long term asset 6.919 5.364 3.664 3.197 3.251 4.032

Total non current Asset 21.012 24.853 22.530 22.040 22.826 25.945Total Asset 30.014 32.195 30.195 32.224 33.320 36.470Trade Account Payable 806 868 740 1.095 965 1.105Short Term bank loans 2.716 1.452 1.408 1.327 1.247 1.210Other short term liablities 2.030 3.242 3.145 3.996 4.064 5.039

Total current liabilities 5.552 5.562 5.293 6.417 6.276 7.354bond 2.097 2.098 2.099 2.099 2.099 2.099investment loans 3.200 5.250 3.466 3.198 3.698 4.698other long term liabilities 674 837 1.204 1.225 1.246 1.545Total long term/ non current liabilities 5.971 8.185 6.768 6.522 7.043 8.343Total Liabilities 11.524 13.747 12.061 12.940 13.319 15.697non controlling interest 0,02 0,02 0,02 0,02 0,02 0,02Total Equities 18.490 18.448 18.133 19.284 20.001 20.773Total Liabilities & Equity 30.014 32.195 30.195 32.224 33.320 36.470

ANTM

Cash Flow (IDR. In bn) yoy

Source: Binaartha and company

Ratio Highlights

Cash Flow (IDR. in bn) 2017A 2018A 2019A 2020F 2021F 2022F+ Net Income 5552 5562 5293 6417 6276 7354

+Depreciation 773 793 1054 952 1047 1152 - Change in WC 756 418 (1255) (1662) 188 349

Cash From Operating Activities 1666 2085 (7) 224 1952 2273 capex (1907) (6189) (430) (929) (1780) (3489)other long term asset (527) 1556 1700 467 (54) (781)cash from investing activities (2434) (4634) 1270 (462) (1834) (4270)bond (899) 1 1 0 0 0 Investment loans (453) 2049 (1784) (267) 500 1000

other long term liabilities 103 164 367 21 21 299 Equity (55) (916) (509) 216 0 0 cash from financing activities (1304) 1297 (1926) (30) 521 1299 Net Changes in Cash (2073) (1252) (663) (267) 639 (697)Beginning Balance 7623 5551 4299 3636 3369 4008 Ending balance 5551 4299 3636 3369 4008 3311

Ratio Highlights 2017 A 2018 A 2019 A 2020 F 2021 F 2022 F

Growth (%)

Sales 38,96% 99,48% 29,62% -18,58% 1,69% 24,02%

OP 7263,93% 208,48% -48,42% 85,40% -20,37% 16,65%

EBITDA 122,18% 92,55% -24,03% 35,51% -9,76% 13,82%

Net profit 110,63% 540,57% -77,83% 381,98% -23,27% 7,72%

EPS 110,63% 540,57% -77,83% 381,98% -23,27% 7,72%

Profitability (%)

Operating Margin 4,75% 7,34% 2,92% 6,65% 5,21% 4,90%

EBITDA margin 10,86% 10,48% 6,14% 10,22% 9,07% 8,33%

NET Profit margin 1,08% 3,46% 0,59% 3,51% 2,65% 2,30%

ROA 0,45% 2,72% 0,64% 3,24% 2,45% 2,33%

ROE 0,74% 4,74% 1,07% 4,85% 3,58% 3,72%

Liquidity

Current Ratio (X) 1,62 1,32 1,45 1,59 1,67 1,43

Cash Ratio 1,00 0,77 0,69 0,53 0,64 0,45

Solvability

Debt/Equity (x) 0,43 0,48 0,38 0,34 0,35 0,39

Int. Coverage (x) 0,75 1,12 2,94 5,96 4,42 4,39

Debt Ratio 0,38 0,43 0,40 0,40 0,40 0,43

Per Share data (Rp)

EPS 5,68 36,39 8,07 38,88 29,83 32,13

BVPS 769,45 767,70 754,59 802,46 832,30 864,43

ANTM

RESEARCH TEAM(62-21) 520-6678 ext.612

Disclaimer; PT Binaartha Sekuritas has compiled this report in good faith, using information believed to be reliable. PTBinaartha and its analyst take no responsibility for the accuracy of the information contained in this report. This reporthas been produced for distribution to clients of PT Binaartha Sekuritas only. This report is not an invitation to buy or sellany security. PT Binaartha Sekuritas may have used the information in this report prior to publication. The company orits clients may have positions in or may from time to time buy or sell the securities mentioned in this report or otherrelated securities.

Stock Ratings:

Buy: a recommendation to purchase the security with upside potential of 20% or greater

Hold: a recommendation to neither buy nor sell a security with upside potential of 0-20%.

Sell: a recommendation to close out a long position in a security with upside potential below 0% or negative.