Southeast Asia’s Best Stock Seen Extending Rally on Cost Cut
- Adaro Energy’s rally is 3 times bigger than runner-up AirAsia
- Cost cuts led to the largest 3Q Ebitda margin versus peers
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PT Adaro Energy, Southeast Asia’s best-performing stock this year, is expected by analysts to extend gains in 2017 as it benefits from rising coal prices and cost-cutting initiatives.
The coal miner’s measures to reduce expenses resulted in an earnings before interest, taxes, depreciation and amortization margin of 36.2 percent in the third quarter, the largest among Indonesia’s five biggest listed coal miners, and the highest quarterly reading in three years, according to data compiled by Bloomberg. Adaro’s shares more than tripled in 2016, also buoyed by rebounding commodity prices, and analysts see the stock advancing another 8.1 percent in the next 12 months to the highest since May 2012.