Resources Prima

Resources Prima (RP): UOBK initiates at Buy with TP $0.33. Says that with a reported calorific value of ~6,000kcal/kg, RP offers high ranked coal at one of the lowest cash cost/tonne amongst its Indonesian-listed peers due to the mines proximity to the jetty. Meanwhile its coal logistics business is also a growing cash cow as unused capacity is leased to neighboring concessions. In a blue sky scenario that RP doubles its coal processing capacity to 12mt /year, coupled with potential M&As, UOBK sees TP rising to $0.43 - $0.50.