PT Sumber Global Energy Tbk, together with its subsidiaries, engages in coal trading and shipment services in Indonesia. The company engages in the wholesale of solid, liquid, gas, and renewable energy; and mining of rare earth metals and minerals. It also engages in the hotel, agency, and contracting businesses, as well as provision of other supporting mining activities. In addition, it offers transportation and warehousing services. It serves companies operating in the energy sector. The company was founded in 2008 and is headquartered in South Jakarta, Indonesia. PT Sumber Global Energy Tbk is a subsidiary of PT Sumbermas Inti Energi.

Indonesia

PT Sumber Global Energy Tbk

Basic Materials

The company tries to pay dividends regularly but only sometimes does so. It has paid dividends in roughly half 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 outstanding and can be rated excellent compared to its peers. On average, the company pays dividends annually. 

SGER.JK reported revenue of IDR 14 762 475mn in the last 12 months, up 20% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 11% from FY23 to IDR 42.27.

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). Within the past six months, its performance has trailed this peer group's by 8ppts and its growth accelerated by 2ppts in the past month. There is a distinction between the stock's performance and that of its peers from the same country and industry. Over six months its performance trailed that of this peer group by 20ppts and its growth decelerated by 5ppts in the previous month. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The company has reported weak EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 6.3% in the last 12 months, a decline from 7.2% in FY23. 

Historically, SGER.JK has reported modest net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 4.5%, down from 5.6% in FY23. 

PT Sumber Global Energy Tbk reported a return on equity (RoE) of 36.8% in the last 12 months, down from 56.5% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to 14.3% in the last 12 months, a decrease from 17.3% in FY23. 

In the last 12 months, the return on capital employed (RoCE) declined to 33.2%, above the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 9.2 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.

SGER.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, low margin volatility, strong debt servicing capacity, adequate interest coverage, and an favourable capital structure, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry, bleak profitability, and poor working capital management.

In highly turbulent market conditions, SGER.JK is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, SGER.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 critical to immense. 

Based on key historical and expected multiples, the stock is fairly valued relative to its peers. In particular, the stock is underpriced on P/E, of fair value on EV/EBITD. 

PT Sumber Global Energy Tbk

IDR 306

3

PT Sumber Global Energy Tbk

IDR 306

3

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

IDR 306

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