PT RMK Energy Tbk, together with its subsidiaries, engages in trading, loading and unloading, and crushing coal in Indonesia. The company operates through Coal Sales and Services segments. It is also involved in the stock piling and port management activities. The company was founded in 2009 and is headquartered in Jakarta, Indonesia. PT RMK Energy Tbk is a subsidiary of Pt Rmk Investama.

Indonesia

PT RMK Energy 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. 

RMKE.JK reported revenue of IDR 2 461 044mn in the last 12 months, down 4% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 5% from FY23 to IDR 65.84.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Over the past six months the stock has exceeded the performance of this peer group by 16ppts and its growth decelerated by 7ppts in the past month. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The company has reported average EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 18.9% in the last 12 months, up from 18.7% in FY23. 

Historically, RMKE.JK has reported strong net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 11.7%, down from 11.9% in FY23. 

PT RMK Energy Tbk reported a return on equity (RoE) of 18.1% in the last 12 months, down from 22.8% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to 12.5% in the last 12 months, a decrease from 15.4% in FY23. 

In the last 12 months, the return on capital employed (RoCE) declined to 17.0%, above the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 4.4 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.

RMKE.JK has very poor trading liquidity. It will take considerable time for the average private investor to sell a common position under normal market conditions. Liquidity is relatively stable 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 very 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 and we point to weak positions in its industry, poor working capital management.

In highly turbulent market conditions, RMKE.JK is as volatile as an index. In other words, the stock will move with 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 limited. 

In normal market circumstances, RMKE.JK is volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will move much wider than the index. The stock's losses on its worst days (less than 1-5% of the time) will range from low to mild. We would also like to highlight the mild intraday volatility of the instrument. 

From both historical and forecast perspectives, the stock is slightly overpriced compared to similar stocks. In particular, the stock is underpriced on P/E, of fair value on EV/EBITDA, trading at neutral levels on P/FCF. 

PT RMK Energy Tbk

IDR 510

4

PT RMK Energy Tbk

IDR 510

4

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

IDR 510

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