PTRO is gearing up to become a major player in Indonesia’s coal mining industry. Recently, the company announced a USD 400 mn capex plan to purchase various mining equipment.
Why such a massive investment? It’s to support the new contracts they’ve secured with several leading coal companies.
But this investment isn’t just for typical mining contracting.
PTRO is now collaborating with several companies owned by CUAN, such as Tamtama Perkasa (TP), Multi Tambangjaya Utama (MUTU), and Daya Bumindo Karunia (DBK).
Additionally, other companies such as Pasir Bara Prima (PBP) and Global Bara Mandiri (GBM) have also entrusted PTRO with the operations of their mines.
Imagine the potential—this could be a massive opportunity for PTRO to further expand its reach and business portfolio!
The mining equipment will be sourced from major suppliers like UNTR, Trakindo Utama, Indomobil Group, and Eka Dharma Jaya Sakti.
These names are no strangers—they’ve been key players in Indonesia’s heavy equipment industry for years.
This ensures that the equipment PTRO is purchasing will be of top quality and ready to handle any operational challenges in the field.
Interestingly, mining activities for these new contracts have already kicked off since 3Q24.
This means we’ll soon start to see tangible contributions from these contracts to PTRO’s coal mining volume.
The company projects that overburden volume could reach 87 mn bcm by 2027, with an impressive annual growth rate of 137% over the next three years.
These projections indicate exponential growth, serving as a strong signal for investors to start paying closer attention to PTRO’s potential.
Furthermore, the mining volume from affiliated companies is expected to contribute up to 33% of PTRO’s total volume by 2027.
Just imagine, this is a significant leap from only 5% in 2024.
These projections further reinforce our confidence that PTRO is set to experience a substantial increase in revenue.
PTRO’s estimated revenue in 2027 could reach USD 80 mn, growing at an impressive CAGR of 174% over the next three years.
These figures are not just projections—they reflect PTRO’s solid expansion strategy and strong execution.
So, how does PTRO plan to fund this large capex? The company has a healthy balance sheet with a current debt-to-equity ratio of 1.0x.
Even if the entire USD 400 mn were financed with debt, the ratio would only increase to around 2.5x.
However, there’s no need to worry—PTRO won’t be taking on the full capex all at once.
They plan to spread this investment gradually over the next 8 to 12 years.
Moreover, PTRO still has USD 221 mn in undrawn credit facilities from BNI and BCA, giving them additional flexibility.
Considering all of this, PTRO’s outlook looks very promising.
The potential profit growth from new contracts, along with increased coal sales volume, puts PTRO on track for stronger financial performance in the future.
We believe this substantial potential makes PTRO even more attractive to investors, especially as they have opportunities to develop new mining assets owned by their affiliates.
For investors seeking a mining stock with strong growth potential, PTRO is definitely worth considering.
We recommend a “BUY” for PTRO shares with a target price of IDR 27,100, reflecting a solid valuation and expectations of consistent performance improvements moving forward.
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