Riding the Gold Price Momentum - Mandiri Sekuritas
MDKA is set to benefit from record high gold prices, as nearly 100% of its gold production in 2021 remain unhedged. We have upgraded our FY20-22F net profit by 13-31%, mainly on higher gold price assumption. Maintain Buy, and we raised our SOTP-based TP to Rp2,200/share.
Upgrade TP to Rp2,200/share on strong gold price momentum.
With gold prices continuing to soar toward an all-time high, we see the possibility for MDKA’s share price to continue to outperform the market despite strong share price performance this year (+60% YTD vs. -18% YTD IDX). Gold price has increased by 25% YTD to USD 1,900/toz, as massive quantitative easing measures taken by the US Federal Reserves in recent months have encouraged investment into gold. We expect gold prices to remain elevated, considering gold will continue to benefit from a surge to safe haven assets, as the end of the COVID-19 pandemic remains uncertain. We have upgraded our gold price assumption to USD 1,700/toz in FY20F and USD 1,800/toz in FY21F from USD 1,500/toz.
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