ADRO Wins vs PTBA

Breaking news : adro wins vs ptba. (Clsa ).

 The Indonesian Supreme Court has ruled in favour of the South Sumatra Lahat regency's right to issue coal concessions for 24,752hA of land in its regency. The verdict means that the court has ruled in favour of Adaro's claim on the ~2,000hA Musika Indah Permai concession in South Sumatra, which was previously challenged by Bukit Asam. Please see comments by Jayden Vantarakis:
 
 
 
- Adaro paid US$225m for 75% of this concession during 3Q11, but has been unable to release details to the market concerning reserves and development plans. Drilling work done by Bukit Asam indicates there reserves of ~200mt thermal coal in the concession.
 
-  Whilst there is no impact to 11CL or 12CL earnings for Adaro, this news means some of the overhang on the stock from the dispute is removed.
 
- The stock currently trades on 8.5x 12CL PE and 3.8x 12CL EV/Ebitda vs an average 15.1x and 5.4x respectively since listing forward since listing. We recently upgraded Adaro to an Outperform (based on target 10x PE and 5x EV/Ebitda) as part of our recent sector note and the stock now offers 28% upside to our target price.

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