Banpu is expected to post a first-quarter net profit of Bt743 million, close to the same period last year but a 37-per-cent drop quarter on quarter.

"Banpu's market price is still higher than the fair value of Bt208. Moreover, it presents

an upside gain from future investment projects, as well as

the listing of its ITM (Indo Tambangraya Megah) subsidiary in Indonesia on the Jakarta Stock Exchange," the securities company said.

Banpu closed last Thursday at Bt216. The Thai stock exchange was closed last Friday and yesterday for the Songkran holiday.

The coalmining company plans to list its ITM subsidiary. AYS said if ITM's initial public offering (IPO) price was set 12-14 times above its prospective earning capacity, then there was a chance that Banpu's share price could rise further, to Bt217 to Bt237. The IPO is expected in the second half of the year.

Also in the second half, Banpu expects to finalise plans to acquire a new coalmine in Indonesia.

AYS estimates that Banpu sold 4.4 million tonnes of coal in the first quarter, down from 5.1 million tonnes in the same period last year and from 6.6 million tonnes in the previous quarter. The drop was attributable to a mishap in its Indonesian mine that disrupted coal shipments for 10 days. Output was thus cut 400,000 tonnes from the original estimate of 2.5 million tonnes.

The coal price in the first quarter is expected to average $35.30 a tonne, close to the level of $37.10 a tonne in last year's first quarter. Banpu's gross margin is estimated at 37.1 per cent, up from 36.6 per cent in last year's first quarter. It will tend to rise further, due mainly to growing demand from China and India. At present, China has become a net importer of coal, importing 8.6 million tonnes during the first two months of this year against exports of 7.7 million tonnes in the same period last year. Coal prices should range between $45 and $52 per tonne this year and year, although prices could ease in the second half of this year,

due to increased supply from Indonesia.

In the first quarter, AYS expects Banpu to realise a net profit of Bt823 million from its investment in BLCP Power, a coal-fired power-plant operator. Banpu is also expected to reap profits of Bt70 million from its mining business in China and another Bt140 million from its power-generating business in the country. However, it will incur extra expenses of Bt150 million from the production stoppage in Indonesia, which will be realised this year.