Coal price back hitting its highest record. On Friday (20/6), coal price in Newcastle Harbor, Australia, hitting US$162.66 per ton. This is surely good news for coal mining company like PT Indo Tambangraya Megah Tbk (ITMG).

Financial Director of Indo Tambangraya Edward Manurung admits, the hike of coal price supporting ITMG’s income. “This year we targeted average coal price of US$67 per ton,” he said. For comparison, Indo Tambangraya last year’s coal price were only US$42 per ton. Besides, ITMG also plans to increase selling volume. “We targeted selling volume of 19.5 million per ton this year,” explain Edward. Which means, there’s 10.17% positive margin compared to last year. Edward added, now ITMG releasing 95% of its coal to export market.

Good performance

According to analyst from Kresna Graha Sekurindo - Jordan Zulkanaen, 70% of ITMG’s coal been bond in contract, but the rest haven’t. He counts; contracted coal is sold for US$54 per ton. “in average, ITMG coal price for this year will be around US$100 per ton,” he said.

While Norico Gaman, Head of Research of BNI Securities predicts, this year’s ITMG coal price can reach US$75-US$80 per ton. Norico also counts, ITMG has proven coal stockpile up to 108.4 million tons. While expected stockpile of ITMG hitting 126.7 million tons. “Their total stockpile is reaching 235 million tons. It can be used for more than 10 years. This is ITMG’s benefit compared to other company,” he said.

Goldman Sachs also giving recommendation to buy up to targeted price of 49,500. According to Sylvia Darmaji, Analyst from Ciptadana Securities, the hike of coal price will be increasing ITMG shares next year. “This year is it affected, but not as big as next year,” he said.

But, both analysts predicts that income from nett profit of ITMG will be increasing from last year. Jordan predicts, ITMG’s income will grow to be US$1.3 billion, with nett profit of US$150 million. As comparison, ITMG only note US$771.82 million income and US$56.77 million nett profit in 2007.

But, Jordan thinks, ITMG coal price today still reflecting that prospect. “I recommend to keep with targeted price of Rp34,500 per share,” he said.

No different from both analyst, Sylivia also recommend to keep ITMG shares with targeted price of Rp32,000. She thinks, price ration to profit per share or price to earning ratio (PER) ITMG is hitting 25 times. “Compared to PER PT Bumi Resources Tbk and PT Tambang Batubara Bukit Asam Tbk that only 20 and 27 times,” she said.

While Norico projected, ITMG income this year is reaching US$928.4 million, with nett profit of US$160.2 million. Besides, he counts, PER ITMG only 19.3 times in 2008 and 14.7 times in 2009. While PER coal industry shares are reaching 28.30 times. “I recommend buying action with targeted price of Rp45,500 per share,” he added.

As note, like quoted in Bloomberg last week, Toke Fong Chee of Goldman Sachs also recommends buying action for ITMG shares. Even, he targeted of Rp49,500 per share.