ANN/THE STRAITS TIMES – In a turbulent year marred by global monetary tightening, recession fears and a conflict in Ukraine, a mining stock in Indonesia is proving to be the world’s best performer with a whopping 1,595 per cent rally.
Shares of Adaro Minerals Indonesia have moved sideways since sliding from a peak in April, but are still handsomely beating peers in the 2,803-member Bloomberg World Index – delivering more than double the returns of runner-up Turkish Airlines.
Adaro has seen its share price skyrocket since a January 3 debut in Jakarta, catapulting from IDR100 to IDR2,990 in just over three months before a downshift took hold. It closed at IDR1,695 on Wednesday, with a market cap of about USD4.5 billion.
While the stock’s fortune has been closely tied to global coal prices, analysts see more gains, thanks to Adaro’s strategy of using its windfall profit to diversify into aluminium and battery making for electric vehicles.
The company reported a 482-per-cent jump in net profit in the nine months through September, as its average selling price more than doubled and coal sales volume jumped 41 per cent. Forecasts from five analysts compiled by Bloomberg suggest another 42 per cent upside in stock prices over the next 12 months.
Adaro’s price-to-book ratio at about 9.4 is near its lowest since listing, according to Bloomberg-compiled data, though it is about six times higher than domestic peers including Bukit Asam and Indo Tambangraya Megah. China’s Shanxi Coking Coal Energy Group and Australia’s Whitehaven Coal – both of which produce coking coal – have ratios at about two.
