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-----Original Message-----
From: Kurniadi Oen <kurniadi...@gmail.com>
Date: Wed, 3 Jun 2009 11:31:06
Subject: [bei-investorclub-jkt] JP Morgan - Perusahaan Gas Negara; Raise PT to
Rp 4400/sh [1 Attachment]
-bussyeeet deh pgas target price satu tahun dinaikkan jadi rp 4400 ,mana
udah dijualin murah2
*Subject:* FW: FW: JP Morgan - Perusahaan Gas Negara; Raise PT to Rp 4400/sh
• *Model revisited: *We revisit our model and incorporate the following new
assumptions into it: (1) Raise FY09E volume from 705MMScfd to
750MMscfd and change LT volume forecast. (2) Adjust the long-term gas
selling price upwards. (3) Adjust the long-term cost of gas to incorporate
the
gas from LNG facilities. (4) Extend the PT time horizon from Dec-09 to
Jun-10. (5) Adjust beta for the valuation from 1.118 to 1.102.
• *Gas supply is likely to be adequate*: One concern among investors is that
PGAS gas supply could potentially run out by FY12E. However, we view
that there is potential that PGAS could secure new gas contracts in the form
of Lematang (50MMScfd), Jambi Merang (85-100MMScfd), and Suban
phase 3 of Conoco Phillips (300MMScfd). In the worst scenario that PGAS
failed to secure the large supply such as Suban phase 3, its LNG receiving
terminal projects could provide 300MMScfd of gas which could replace
supply from Suban.
• *Ability to cover rising gas cost: *One could argue that the cost of gas
could
rise as the new contracts are signed and the LNG gas will be priced at
international level. Historically (since FY00) selling price has risen by
9.2%
CAGR while cost of gas has risen by 3.7%CAGR. With this, we believe
PGAS should be able to pass on higher cost of gas to its customers. Our
channel check has indicated that there is a high likelihood that PGAS will
be
able to pass on the high purchase price of LNG to PLN. Note: Only LNG &
diesel can be used to supply peak hour grid, and LNG is cheaper than diesel
despite commanding higher price than that of pipe gas.
• *Raise PT to Rp4,400 and maintain OW: *We continue to be bullish on
PGAS on the back of 31.9% CAGR in profit growth from FY08-FY13E; we
have extended and raised of June-10 DCF based PT from Rp3,000 to
Rp4,400. (Risk free rate =11.5%, risk premium = 5.5% and terminal growth
rate = 7.0%) *Risks to our view and PT: *(1) Lower than expected
distribution volume, distribution margin and transmission fee. (2) Higher
than expected cost of gas.
