PT PAM Mineral Tbk, together with its subsidiaries, engages in the exploration, mining, processing, and sale of nickel ore. The company was incorporated in 2008 and is headquartered in Jakarta Pusat, Indonesia.

Indonesia

PT PAM Mineral Tbk

Basic Materials

The company pays dividends irregularly. There have only been a few years with dividend payments in the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are somewhat mixed. In the past 12 months, the dividend yield has been moderate and on par with its peers. On average, the company pays dividends annually. 

NICL.JK reported revenue of IDR 1 442 490mn in the last 12 months, up 26% from FY23. The dynamics of cash flow, as measure by free cash flow (FCF), were rather similar. EPS grew 871% from FY23 to IDR 29.90.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). The stock has outperformed this peer group by 242ppts over past six months and grown 188ppts faster in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is 'fair'.

The company has reported average EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 29.3% in the last 12 months, up from 7.6% in FY23. 

Historically, NICL.JK has reported strong net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 22.0%, a growth from 2.4% in FY23. 

In the last 12 months, the return on capital employed (RoCE) grew to 38.3%, above the peers. 

PT PAM Mineral Tbk reported a return on equity (RoE) of 39.3% in the last 12 months, up from 3.6% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to 33.4% in the last 12 months, an increase from 3.1% in FY23. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 6.5 in the past several years. This ratio implies a excellent shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are close to minimal. In combination with rigorous business standards, shareholder rights are well protected.

NICL.JK has very poor trading liquidity. It will take at least a day or two for the average private investor to sell a common position under normal market conditions. Liquidity is unstable and becomes extremely unfavourable on the days with the lowest activity. However, under highly turbulent market conditions, the trading volume tends to improve significantly. The stock has a small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note resilient historical revenue growth, solid return on capital, strong debt servicing capacity, adequate interest coverage, solid cash flow generation, and an favourable capital structure, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry.

In highly turbulent market conditions, NICL.JK is moderately volatile. In other words, the stock will fall more than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be moderate. 

In normal market circumstances, NICL.JK is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from moderate to substantial. 

Based on key historical and expected multiples, the stock is greatly overvalued relative to its peers. Specifically, the stock is 'expensive' on P/E, overvalued on EV/EBITDA, overpriced on P/FCF. 

PT PAM Mineral Tbk

IDR 890

3

PT PAM Mineral Tbk

IDR 890

3

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

IDR 890

About

About

About

About