UNTR by chuckywow

Nice Friend

Now we're having a nice friend...UNTR. Nice? Yup, as one of few companies giving net income as for 2008, UNTR is exactly a nice-worthy share to collect as for earning-based strategy. Income? you haven't heard much, buddy. UNTR even grows its sales from 27,8 Trilyon in 2008 to 29,2 Trilyon in 2009 and its net income from 2,66 trilyon in 2008 to 3,81 Trilyon in 2009, all in IDR, as stated in its fresh financial reports of 2009, giving us an increasing of basic EPS from 884 to 1147. Dividend has also been increased consistently since 2005, which stated at 110, which has boosted to 320 in 2008 and 450, in our 2009 forecasted.

Expanding all the way

UNTR has three main business lines: mining (as the operator with DEJ), contraction machinery (derived as Komatsu), and mining contracting (derived as Pama). All of three are UNTR's subsidiaries. In 2008, UNTR acquired 30% shares of PT. Tuah Turangga Agung which posses coal concession with an estimated reserves amount of 40 milyon tons of coal. By early 2010 UNTR acquired 30% OF two mining companies, PT Asmin Bara Baronang and PT Asmin Bara Jaan with its subsidiary of Pama. Unfortunately, the detil informations of those two companies have not been revealed by UNTR yet. UNTR has also signed a CSPA to perform an acquisition of rights of mining in Kalimantan, near PT. TTA, which focusses in targetting 3,75-4 milyon tons of mining production in 2010, including TTA.

Valuation

We believe DDM method will be more effective to reflect intrinsic value of UNTR, which is a relatively mature company signed by its constant positive dividend given. We also implied that the investor's required rate of return has been lowered since the average investment risk in our beloved country has been decreased almost significant, due to good macro economic indicators and the sustainability of Indonesia in managing global crisis. Using the historical data of UNTR dividends, we could assume that the average dividend growth of UNTR is about 41%, resulting the 2010's UNTR dividend at 630. This also backed by whooping forecasted 35 trilyon sales in 2010 which derives the forecasted net income of around 4,6 trilyon, both in IDR. All data given will give us the intrinsic value of UNTR at 20.000 IDR, which we believe its target price for this year.

Rumour

One might say that valuating UNTR in a crazy method is simple: its the intrinsic value of UNTR is half of ASII. Well,this may be true, in a reason of the slightly above of half of the UNTR shares, or about 59% portion of total UNTR shares are owned by ASII, which means UNTR is the subsidiary of ASII. When we finish writing this post and peeking bloomberg, both ASII and UNTR, respectively, are priced at 40.100 and 17.300, resulting a crazy idea of: "hey, that means UNTR is indeed understated, it's now priced less half than ASII!" lol