Company Update

06 Januari 2023

Metal Mining Sectoral Update January 6, 2023

Metal Commodities in Turmoil, Prospective over the Long Haul

Key Takeaways:
• Going into 2023, we foresee that metal prices are projected to fall -11% YoY for aluminum, -16% YoY for copper, -29% YoY for tin and -16% YoY for nickel. In the long run, however, we believe their growth would revive and pick up again, backed by the energy transition and green technologies development trend.
• Thus far, gold’s prospect in FY23F will heavily depend on the Fed’s next move, but will probably fully begin its rally nearing FY2023’s end. Gold’s prices are expected to gain by 10% by the end of the year.
• For key metal players in our universe is a normalization of earnings, we project INCO’s net income to contract by 4%, while ANTM would be looking at a bottom line increase of 11%, and MDKA’s performance through FY23F would result in a solid 25% hike in net income due to their newly consolidated PT MBMA.
• We propose a Neutral stance for the metal sector due to a normalization in metal prices through FY23F. There could, however, be a substantial upside by gold’s potential upward momentum amid looming global recession fears. Our top picks are: 1) ANTM (BUY; TP: IDR3,260) and 2) MDKA (BUY; TP: IDR5,600). Risks include escalation of the Russia-Ukraine dispute and reenactment of China lockdowns.

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