Friday, April 29, 2011

PT. Bank Negara Indonesia. Tbk - Low Main Business Income on 3M11

by Samuel Securities


BBNI booked flat growth on main business income on 3M11, reflected by flat net interest income. Meanwhile, bottom line increased by 22.1% to Rp1.25 tr but it was mainly due to recovery loan and efficiency. Result on 1Q11 is better than 4Q10, but it was caused by cyclical business. Bottom line is still in line with our forecast and market consensus.


Loan grew by 16.6% but earning yield declined to 10.4% from 12.1% and slightly· lowered interest income. In our view, the decline in earning yield was due to: 1) the low bond rate (majority of corporation have other option for raising fund from bond) and 2) tight competitive lending rate on consumer loan. Meanwhile, interest expense also fell by 3.9% due to the decreasing cost of fund.

Bank Central Asia (BBCA)

by BNI Securities

The bank posted an impressive earning result in 2010 with 23% improvement on  net earnings compared to a year earlier. The bank was able to disburse 15% higher from its 2009's outstanding loan of IDR 124 trillion to IDR 154 trillion. Despite that BBCA lowered it net interest margin, from 6.4% in 2009 to 5.3% in  2010, the bank managed to lift up its interest income about IDR 2 trillion. BBCA would be a liquidity rich bank in 2011 as its 2010 LDR ratio posted at 55%.

Additional liquidity streams from mature government bond in this year. Combined fixed and variable rates government bond amounts to IDR 9.3 trillion and BBCA may receive IDR 10 trillion next year. We figure that the bank may apply low deposit rate.

Wednesday, April 27, 2011

Agung Podomoro Land Tbk - Buy on Growth

by Indopremier Securities

APLN recorded a better than expected marketing sales of Rp 2,4 trillion for FY2010 accompanied with lower gross profit margin compared to last fiscal year (31.54% current vs 33.64% last year). We see this as a favorable trend in line with the company’s asset light strategy: employ sales discount to boost marketing sales, thus freeing capital for new projects. Going forward for FY2011, the management is targeting Rp 3.5 trillion marketing sales and looks gallant to exceed it with 21% higher actual sales than budgeted for the first quarter of 2011. We are optimistic with the growth potential backed up by established track record of the management and maintain RNAV TP of Rp 480.

Higher than Expected Marketing Sales

The company recorded a strong marketing sales figure in 2010 with Rp 2,4 trillion compared to our forecast of Rp 1.6 trillion, which in turn led to higher revenue recognition to Rp 1.9 trillion vs our estimate of Rp 1.7 trillion. A positive surprise that is in line with the management strategy of high turnover approach.

PT. Semen Gresik Tbk

by Lautandhana Securities

Semen Gresik Group’s (SGG) FY10 revenue reached Rp 14.34 trillion, which is roughly flat compares to Rp 14.39 trillion in FY09, however, its net profit climbed by 9.2% YoY to Rp 3.63 trillion.

On quarterly basis, 4Q10 SGG revenue grew by 11.6% QoQ to reach Rp 4.05 trillion vs Rp 3.63 trillion in 3Q10. Operating and EBITDA profits also increased by 10.9% QoQ and 11.3% QoQ, respectively, while net profit surged by 24.25% QoQ from Rp 895 bilion in 3Q10 to Rp 1.11 trillion in 4Q10.

Tonasa V new cement plant is expected to commence operation in 4Q11, while Tuban IV will follow in early 2012. These additional capacities will increase SGG annual installed capacity from 19.5 million tones p.a. in 2010 to 22.5 million tones p.a. in 2012.

PT. Indocement Tunggal Perkasa

by Lautandhana Securities

Indocement has released its audited FY10 financial report, where the company’s revenue grew by 5.3% YoY reached to Rp 11.14 trillion vs Rp 10.58 trillion in FY09. Meanwhile, net profit climbed by 17.4% YoY from Rp 2.75 trillion to Rp 3.22 trillion.

On quarterly basis, the company’s revenue also grew by 10.3% QoQ attained to Rp 3.03 trillion from Rp 2.75 trillion in 3Q10. Gross profit and EBITDA also increased by 9.4% QoQ and 10.6% QoQ, respectively, while net profit jumped by 13.3% QoQ.

In 2011, Indocement will start to construct a new cement mill (located in Citeureup plant) with capacity of 2 million tones p.a. and is expected to commence operation in 2012/2013. The new cement mill will increase the total cement capacity by 10.8% to a total of 20.6 million tones p.a. from the current capacity of 18.6 million tones p.a.

Sampoerna Agro Tbk (SGRO)

by Lautandhana Securities


SGRO membukukan laba bersih yang meningkat 60% YoY pada FY2010 menjadi Rp 451,72 milyar dari tahun sebelumnya Rp 281,77 milyar. Pendapatan Perseroan juga meningkat 27,3% YoY menjadi Rp 2.311,75 triliun dari tahun sebelumnya Rp 1.815,56 triliun.

Produksi FFB yang kuat pada 4Q2010 di kebun Sumatra dan Kalimantan menjadikan output FFB naik 14,1% YoY menjadi 1,373 juta ton. SGRO mencatatkan kenaikan produksi FFB dan CPO meningkat 3 kuartal berturut-turut sepanjang 2010 ditengah curah hujan yang lebih tinggi 15% di wilayah Sumatra dan 90% di wilayah Kalimantan.

Tuesday, April 26, 2011

PT Jasa Marga Tbk (JSMR)

by Lautandhana Sec

Highlight Events

Jasa Marga’s FY10 net profit surged by 20.2% YoY attaining Rp 1.19 trillion vs Rp 993 billion in FY09, while its revenue also climbed by 18.6% YoY from Rp 3.69 trillion to Rp 4.38 trillion.

On quarterly basis, Jasa Marga posted a 5.5% QoQ revenue’s growth in 4Q10 reaching Rp 1.17 trillion compare to Rp 1.11 trillion in 3Q10. Meanwhile, the company’s bottom line has slipped by 25.6% QoQ (Rp 313 billion in 3Q10 vs Rp 233 billion in 4Q10) due to higher than expected maintenance cost during the period.

Monday, April 25, 2011

PT. Indofood Sukses Makmur Tbk (INDF) - Saved by Efficiency

by E-Trading Securities
• INDF financial performance in 2010 (FY10A) was relatively good compared to previous year. In 2010, net sales increased 2.7%, resulting 19.4% gross profit growth. This is mainly caused by lower raw material cost.
Despite increasing of sales which is below our estimation, but net income exceeded than we expected.

• Inflation rate (6.96% YoY in 2010 and 2.78% YoY in 2009) has not fully affected to INDF’s revenue.
• Efficiency in 2010 supported by strengthening of IDR from USD/IDR 9,400 (in 2009) to closing at USD/IDR 8,991 (in 2010).

• Strengthening of CPO price from US$ 682/MT (in 2009) to US$ 903/MT (in 2010) also contributed to improvement INDF FY10A.

BW Plantation (BWPT) - More Than The Bottom Line

by E-Trading Securities

CPO Outlook

Good upside chance for CPO prices considering limited y-o-y production growth from Malaysia considering the age of their plantations. Increased productions will be absorbed by substitute vegetable oil user whereby
bio-diesel mandate will increase demand for other vegetable oil.
2010 – Rising Prices Coupled with Steady Production

An 18.3% price hike y-o-y to IDR 7,236 helps boost revenue and no 3rd party purchases means keeping the cost down. Production of FFB increased 24% q-o-q and 20% y-o-y while CPO production increased 26% q-o-q and 22% y-o-y. Significant increase of 11.3% in CPO price also occurred in 2H 10 from IDR 6,502 ASP in 1H 10. All these contributed in boosting the bottom line up to a whooping 46% compared to last year.

Sunday, April 24, 2011

International Nickel Indonesia (INCO)

by E-Trading Securities

Nickel price will be determined the most by the consumption, the demand itself comes from various industrial products, such; stainless steel, electroplating, chemicals, and other alloys.

Nickel consumption is dominated by stainless steel sector, which accounts for more than half of the global consumption of nickel. This trend is likely to continue with robust stainless steel demand in near future. Strong demand from stainless steel producers will drive the buoyant global nickel market.

Global nickel consumption is continuously increasing as it is used in more industrialized products, it is anticipated that the global nickel consumption will grow at a CAGR of around 5% during 2011-2014. Developing countries, such as China and India will play a major role in the growth of the global nickel industry in coming years. However, developed countries, such as the US and Germany will also witness strong demand in future as these countries have large and well developed automotive and aerospace industries.

PT. Perusahaan Gas Negara (PGAS) - Nurturing Growth

by E-Trading Securities

PT Perusahaan Gas Negara (Persero), Tbk, better known by the abbreviations PGN or PGAS as naming for the stoke, is a state‐owned enterprise that was established to distribute gas from oil and gas exploitation areas to users in industrial zones, and even to residential areas. PGAS core business is divided into two: the distribution of natural gas to industrial, commercial and residential customers and the commercial transmission of natural gas. From the distribution business, PGAS derives profits from the sale of gas, while from the commercial transmission business PGAS receives toll fees for the transportation of gas.

In 2010, PGAS recorded operating revenues of Rp19.77 trillion and net income of Rp6.24 trillion. PGAS also yielded operating income of Rp9.04 trillion and EBITDA of Rp10.73 trillion in the 12 months of 2010. The financial performance resulted mainly from the increasing gas distribution volume of 824 MMSCFD. The volume was up by 4% from 792 MMSCFD in the same period of 2009. The increase is attributable to rising demand from industries particularly from power sector.

Thursday, April 21, 2011

Govt expected to realize higher investments in Q2

Linda Yulisman, The Jakarta Post, Jakarta |

The government expects to realize another Rp 60 trillion (US$6.91 billion) in investments in the second quarter this year, following solid growth in realized investments during the first quarter, according to the Investment Coordinating Board (BKPM).

BKPM supervision and implementation deputy chairman Azhar Lubis said on Wednesday that the total realized investments in the first quarter this year increased by 27.3 percent to Rp 53.6 trillion from Rp 42.1 trillion compared with the same period in 2010.

“Domestic investment in the first quarter jumped by 110.4 percent to Rp 14.1 trillion from Rp 6.7 trillion in the same period last year. Foreign investment rose by 11.6 percent in the first quarter this year to Rp 39.5 trillion from Rp 35.4 trillion in 2010’s first quarter,” he told reporters at a quarterly investment report press conference.

Cement Sector 1Q11

by Kresna Securities

We maintain our OVERWEIGHT recommendation on the sector. Robust domestic cement sales growth of 11.3% YoY in Mar11 and 8.6% YoY in 1Q11 affirm rosy outlook on the sector. Given strong FY10 property marketing sales as well as 1Q11 new contract jump obtained by state construction companies (WIKA's +55.2% YoY and ADHI's +85.6% YoY), we believe demand still have ample room to expand in the following quarters. SMGR is still our top picks in the sector given its attractive valuation of FY11 P/E of 13.2x (vs INTP's 15.8x and SMCB's 15.5x) yet it offers the largest potential upside of 28.4%.

· Robust domestic appetite in March. Domestic cement sales rose by 11.3% YoY from 3.4m tons in Mar10 to 3.8m tons in Mar11, while compared to Feb11, it grew by 14.9% MoM. On year to date basis, domestic cement sales in 1Q11 recorded growth of 8.6% YoY to 10.6m tons from 9.7m tons in 1Q10.

· Java & Sumatera: the backbone. In 1Q11, Java and Sumatera posted growth of 12.3% YoY and 13.7% YoY, respectively, while sales in other islands were declining. Interestingly, East Java was the only province in Java that suffered a decline by 9.6% YoY, while the strongest growth was recorded in Jakarta (+26.9% YoY) and Banten (+23.9% YoY). In Sumatra, the growth was supported by hefty demand in Lampung (+42.9% YoY), West Sumatera (+41.5% YoY) and Riau (+29.6% YoY). Robust growth in Sumatra and Java are likely to sustain for the next couple of years as the government is developing mega project of East Sumatra-North West Java economic corridor.

PT Indofood CBP Sukses Makmur Tbk

by Kresna Securities

We reiterate our BUY recommendation on the counter with TP at Rp5,575. In line with our expectation, the company posted strong financial performance in 2010.  Revenue jumped by 10% YoY to Rp18.0tr, while the bottom line surged by 58% YoY to Rp1.7tr. Aggressive expansion plans supported by strong balance sheet (net cash of Rp3.0tr in this year) will potentially boost the company's performance going forward. We expect net income to grow by 18.6% YoY in 2013 and 15.5% YoY in 2014 with the completion of dairy production facility.

• FY10 result inline with our estimation. The company's performance in 2010 was relatively inline with our forecast. Compared to our forecast, the company's revenue  deviated by 0.6%, gross margin deviated by 0%, operating profit deviated by 1.2% while net income deviated by 3.2%. Our net income projection is slightly below the actual result due to higher interest expenses of Rp135.4bn vs actual Rp83.5bn.

Wednesday, April 20, 2011

Unilever (UNVR)

by Kresna Securities

A disappointing result has been recorded in 2010, revenue grew by only 7.9%, the lowest since 1990. Although the company performed better at the bottom line with an increased of 11.3% YoY to Rp3.4tr, yet still underperformed our expectation and consensus by 6.2% and 5.5% respectively. Not only that, we also suspect the company will not be able to deliver dividend with similar payout ratio in this year. At the moment, UNVR is trading at demanding valuation FY11 PE of 28.9x, higher than historical average of 25.2x. Therefore, we downgraded our recommendation to SELL with TP at Rp12,850.

 · Disappointing operating and bottom line. FY10 revenue and gross profit wereinline with our expectation, deviated by only around 0.1%-2.9%. At operating level, however, the company's performance was below our expectation missed by 5.9%. We believe the off target performance was attributable to the aggressive advertising & promotion as part of its strategy to maintain its market share. Advertising & promotion expenditure in 2010 reached Rp2.8tr, 10% higher than our forecast of Rp2.6tr. Furthermore, while we expect the company to book Rp17.8bn in other income, the company has posted other expense of Rp4.0bn in 2010 due to 211% YoY increase in  interest expense to Rp30.0bn as well as Rp10.8bn forex loss. Therefore, UNVR's bottom line has missed our target by 6.2%.

PT Jasa Marga Tbk (JSMR)

by Kresna Securities

FY10 result was inline with our forecast deviated only by 0.4%-4.5%. This year, we expect revenue to grow by 10.7% due to tariff adjustment this September as  well as the operation of 2 new toll roads, before accelerating by 13.5% YoY in 2012 due to full impact from both issues. The delay on subsidized fuel limitation and the completion of land clearing act in this year will provide positive catalyst going forward. Maintain BUY with TP of Rp4,200.

• No surprise in FY10 result. The result in 2010 was inline with our expectation,revenue deviated by 0.4%, operating profit by 3.1% while net income by 4.5%. We believe the result has missed our forecast by 4.5% due to higher than expected interest expense of Rp763.0bn vs our estimate of Rp717.8bn.

Monday, April 18, 2011

Cement Sector

by Samuel Securities

The Java Supremacy 3M11 domestic consumption grew 8.6%. Domestic cement consumption showed a very strong figure in 3M11, grew by 8.6% YoY to 10.57mn tons vs 9.73mn tons in 3M10. In the meantime, domestic consumption on March ’11 was recorded at 3.77mn tons or surged by 11.3% YoY due to strong demand growth on Java and Sumatera regions. Export sales remain sluggish with 24% YoY drop in 3M11 as producer are more willing to fulfill the domestic demand growth which offers higher margins compared to export market.

The Java strikes back! In 3M11, cement consumption from Java region has surged by 12.3% YoY, outperforming other regions except Sumatera which also demonstrated a strong growth figure of 13.7% YoY. As such, until 3M10, Java region contribution to total domestic market has slightly risen to 54.3% from 53.8% in FY10. This strong figure is mainly due to substantial demand growth from Jakarta and West Java.

United Tractor Tbk (UNTR)

by Kresna Securities

· Cut EPS by 3.2% in 2011 and 9.6%/% in 2012/13. Aside additional equity by Rp6.1tr and weighted average outstanding shares by 201.5m shares in 2011 as well as 403.3m shares in 2012 onward from the rights issue, several accounts that we also revise are: 1) net capex (+): Rp1.0tr in 2011 and Rp4.0tr/Rp500bn in 2012/13, 2) debt (-): Rp1.9tr in 2011 and Rp679bn/Rp171bn in 2012/13, 3) cash (+): Rp3.3tr in 2011, Rp1.1tr/Rp1.6tr in 2012/13, and 4) net interest income (+): Rp80bn in 2011 and Rp97bn/Rp133m in 2012/13. Due to limited details given by the company, at the moment we have yet incorporated earnings impact resulted from the rights issues’ expansion projects in our profit and loss projection.

· Cut TP by 18% to Rp21,100/share. Our plain vanilla revision in earnings as well as number of shares outstanding suggested DCF TP of Rp19,289/share. Assuming the expansion projects yield excess return of 14.5% (equals to the company’s cost of equity), we then arrived at an approximate NPV of Rp1,841/share. Summing these two figures, we arrived at a rounding new TP of Rp21,100/share.

Sunday, April 17, 2011

Bumi Resources Tbk

by Samuel Securities

Positive outlook, ongoing de-leverage Vallar plans to raise ownership in BUMI. Vallar PLC is offering BUMI’s shareholder a share swap mechanism on its plan to increase its stake to 50% in BUMI by May 10. The ratio for share swap is 57.7 : 1 of which every 57.7 BUMI shares will be offered 1 share of Vallar, implying conversion price of Rp3,240/share.

Debt deleverage on process. Debt deleverage is still on track. BUMI plans to reduce total US$975mn loan by end of 2011, consists of US$600 mn CIC loan and US$375 convertible bond. We estimate interest saving of US$228mn for 2 years, pave off  US$30mn penalty if the debt is repaid in cash.
CIC have interest to be long term partner. BUMI mentioned that CIC might have interest to be a long-term partner. We view there are 3 potential scenarios: 1) cash  settlement, 2) debt to equity swap in BRMS or Vallar and 3) combination of 1 and 2. Good FY10 results. BUMI reported FY10 net earnings of US$311 mn (+63.4% YoY) inline our expectation but around 18.7% higher than consensus. Revenue came in at US$4,369 mn (+19.2% YoY), beat consensus and our forecast.

Higher coal production and ASP in 2011. Management is targeting 10% growth in coal production to 66 mn tons in 2011. Meanwhile, guidance for ASP is US$77/ton for 2011, 8.5% higher compared to 2010. The guidance for coal production is in line with our estimation, however, we expect higher ASP of US$82.5/ton.

Reiterate BUY, price target Rp3,950/shr. BUMI has gained 7.9% YTD and outperformed JCI. Stock catalyst will come from ongoing loan deleveraging. Moreover, Vallar’s plan to increase ownership in BUMI up to 50% will become positive catalyst to the share price movement. We reiterate our BUY call with price target Rp3,950/share, implies 14.9x PER’12F. Maintain BUY

PT. Tambang Batubara Bukit Asam Tbk (PTBA)

by Deutsche Bank

Revising 2011 and 2012 earnings forecasts on higher coal & oil price We have increased our earnings forecasts for 2011 and 2012 by 8% and 6%, respectively. This factors in adjustments to FY10 results, as well as higher DB coal price (up 13% and 4% to USD130/t and USD140/t for JFY11 and JFY12) and higher oil price (up c. 16% to USD117/bbl for both years) assumptions. We have also adjusted our currency to Rp8990 from Rp9200 previously. So far, PTBA has priced around 53% of its 2011 volumes, implying a spot exposure of 47%.

Maintain Buy rating, with TP of Rp32,100 (from Rp33,300) Our revised target price reflects the above-mentioned earnings estimate revisions, slightly offset by currency adjustments. We establish our target price by conducting a sum-of-the-parts DCF analysis; we then apply a 50% premium (unchanged), in line with our approach for the sector as a whole, to reflect the coal upcycle. Our DCF analysis assumes a WACC of 11% and a US$80/t long-term coal price benchmark. For valuation purposes, we have assigned a 50% probability to the new railway project and a 20% probability to the two IPP projects.
We reiterate our Buy rating on PTBA, which should offer among the strongest volume growth rates in the near to medium term, driven by PTKA's rail capacity increases on existing track (up to 23mT by 2015) and the new railway project with Rajawali (incremental 25mT thereafter). This should help unlock the potential of the company's vast coal reserves.

Thursday, April 14, 2011

United Tractor Tbk (UNTR)

by Kim Eng Securities

�� We reiterate our BUY recommendation for United Tractors at target price Rp26,383, reflecting our adjustment based on heavy equipment sales after the earthquake in Japan.

Our View

�� We reduced our estimate for Komatsu sales in FY11 by 2% to 6,090 units (+13% y/y), to reflect possible delays in the deliveries of heavy equipment from Japan. However, we increase our estimate for FY12 by 4% to 6832 (+12%) units, based on our bullish view of the coal sector. We believe the earthquake in Japan has a relatively minor impact on United Tractor’s operations. About half of the units sold, typically small‐medium units, are locally made, while the remaining is imported from other countries like Japan, China and Thailand.

Adaro Energy (ADRO)

by Kresna Securities

We maintain BUY on the counter though reducing our TP to Rp2,725. The 17% spike on cash cost throughout 2010 has deviated our net income forecast by 18.8% while revenue met our forecast. We have decided to adjust our FY11-12 cash cost by 12.3%-7.9% to US$38.4/ton-US$35.7/ton while cutting production assumption by 2.1%-6.8% to 46mt-55mt, reducing our net income forecast by 15.7-12.2%. However, despite being hampered by negative sentiment, the outlook remains attractive. We forecast FY11-12 net income to jump by 102.6%-78.5% respectively. Currently, ADRO is trading at FY11 P/E of 15.9x.

· Stock might be blamed for the disappointment result. FY10 result was much below our estimate as well as the consensus. Although top line figure has met the expectations, the significant cash cost jump during 4Q10 has resulted to the disappointment results causing the bottom line to be deviated by 18.8% to our expectation and 16% to the consensus. We have adjusted our assumption on the issue, implying to a negative sentiment on the stock.

Wednesday, April 13, 2011

Tower Bersama Infrastructure Tbk

On Track

TBIG is on track to reach our 2011 target for tenancies and co-location. For the first quarter of 2011, TBIG has additional 356 new tenants, or reaching 21% of our 2011 target for new tenants (1,680 tenancies). On top of 4,729 tenants as of end 2010, by 31 March 2011 TBIG has managed 5,086 tenancies and 3,370 telecommunication sites in its portfolio. We maintain our target price of Rp 3,100, providing 33% upside. On the counter, TBIG is valued 15.5x FY11 EV/EBITDA and 11.9x FY12 EV/EBITDA. BUY

Ongoing Growth

The additional 356 new tenants for three months were behind our 2011 estimate of 420 tenants/3 months yet we believe that TBIG is on track to reach our year-end assumption. Although Indonesian cellular market faces stagnancy, the telecommunication industry sees another revenue driver. The cellular industry alone is expected to grow 10% YoY in 2011 or translate into additional 20 million subscribers. Assume that one BTS can handle 1,100 subscribers and to handle 20 million new subscribers, it will need around 18,000 BTS or the tower industry may expect 18,000 new tenants in 2011. On top of that mobile broadband internet service is showing an uptrend in recent years and telco operators is focusing on that service. The recent introduction of WIMAX service in Indonesia provides upside to tower industry since it would require BTS and tower infrastructure is involved in this.

Kalbe Farma (KLBF)

by Samuel Securities

Performance meet expectations


 In FY10 KLBF recorded 12.5% YoY revenue growth and 38% YoY earnings growth at Rp10.227 trillion and Rp1.286 trillion respectively.


 KLBF’s FY10 audited result was in-line with market expectation as well as with our projection. Nutritionals and Prescription pharmaceuticals divisions contributed the largest growth in revenue with 18.4% and 16.5% YoY respectively. Distribution division also did well despite the packaging divestiture and managed 13.8% YoY growth compensating the underperforming Consumer Health division.

Harum Energy Tbk (HRUM)

by Kim Eng Securities

� We like Harum Energy and assign it a BUY recommendation with 27% upside, due to its strong volume growth in FY11‐12 and high exposure to the spot market.

� We expect earnings to grow at a CAGR of 75% over the next two years, given the sales volume growth and high sales volume. Moreover, capex will be minimal starting next year, which will allow the company to distribute dividends with a payout ratio of up to 35% in the upcoming years.

Our View

Delta Dunia Makmur (DOID)

by Mandiri Sekuritas

(DOID, Rp1,160, Buy, TP: Rp1,600)

Bukit Makmur Mandiri Utama (Buma), primary operating subsidiary of DOID, has signed settlement agreement with Berau Coal related to the fuel charges dispute from the previous or old shareholders.

The total disputed amount is US$24.4mn and Rp161.4bn. Buma will pay 50% of the respective amounts or equivalent to US$12.2mn and Rp80.7bn in 36 equal monthly installments.

Buma will record a provision those numbers in FY10, which in total equivalent to around US$21.2mn or Rp190bn represent around 35% of our FY10’s earnings. Therefore, we expect DOID’s FY10 result to be significantly below our estimates and consensus due to this one off charged.

Tuesday, April 12, 2011

PT. Indo Tambangraya Megah Tbk (ITMG)

by Kim Eng Securities

􀂃 We recommend BUY at target price of Rp65,025 for Indo Tambangraya. We like the stock due to: 1) rosy earnings outlook with a CAGR of 77% over the next two years; 2) clean balance sheet and strong cash position; and 3) strongest ROE in the sector at 46% and 48% for FY11 and F12, respectively.

Our View

􀂃 We estimate coal output to be 25‐27.3m tons in FY11‐12, or a CAGR of 11%, with additional production coming mostly from Trubaindo, which has higher CV quality than Indominco (hence higher price), but lower stripping ratio (lower production cost). The company has re‐opened the Jorong mine last year and expects to start commercial production at the Bharinto mine in 4Q11.

􀂃 Coupled with an increase of 12‐18% in coal price for FY11‐12, earnings should rise by 124% and 39% to US$457m and US$634m for FY11 and FY12, respectively, after factoring in cash cost increases of 4‐8% to US$53.6‐56.7/ton.

PT. Tambang Batubara Bukit Asam Tbk (PTBA)

by Kim Eng Securities

􀂃 We upgrade our recommendation to BUY as we raise our target price to Rp26,974, following the better‐than‐expected contract price (Rp815k/ton) with Suralaya power plant, its single biggest customer. On the cost side, we expect a y/y increase of 6%, below the industry average.

Our View

􀂃 The new contract price of Rp815k/t for 2011 delivery, a y/y increase of 19%, exceeds our initial estimate of Rp750k/ton by 9%. The contract price for 5,000 kcal/kg GAR coal (CIF), equivalent to US$91.6/ton, is higher than our assumption of US$84/ton for exports. Another contract for 1m tons to Tarahan power plant at Rp575k/ton (~US$64.6/ton) has also surpassed our expectation.

International Nickel Indonesia (INCO)

by Mandiri Securities

Inco: FY10 results inline, 99.2% ours, and 105.4% consensus (INCO, Rp4,750, Buy, TP: Rp6,700)

INCO reported FY10 audited results inline, 99.2% ours, and 105.4% consensus

There’s significant changes compare to the unaudited results. INCO reported FY10 net profit of US$437.4mn (+156.6%yoy, -0.7%qoq) followed by strong revenue growth of 67.7% yoy up to US$1,276.3mn due to stronger sales volume of 77,035tons (+13.7%yoy, -10.0%qoq) and higher average selling price of US$16,568/ton (+47.6%yoy,+13.8%qoq)

Monday, April 11, 2011

Adaro Energy (ADRO)

by Kim Eng Securities

􀂃 We assign a BUY rating to Adaro. Our target price of Rp2,654 offers upside potential of 17%. Our EPS estimates for FY11‐12 are Rp122 and Rp189.

Our View

􀂃 The short‐term increase in cash costs (ex royalty) is our main concern. We estimate that cash costs would rise by 18% and 3% in 2011 and 2012 to US$41.8/ton and US$42.9/ton, respectively. Rising fuel price that constitutes >30% of the total cash cost is the main driver, coupled with an increase in the strip ratio from 5.5x in FY10 to 6.3x in FY11 at the Tutupan mine. Unlike in 2010, the company has not hedged its fuel consumption in 2011. Fuel price has increased by 15% YTD and by some 32%, in comparison to the average cost of US$79.4/bbl in 2010.

Borneo Lumbung Energi & Metal

by Kim Eng Securities

􀂃 We like Borneo Lumbung Energi, the only premium hard coking coal producer listed in Indonesia. At target price of Rp2,021 and upside potential of 22%, it merits a BUY rating. The company is ramping up capacity to 5m tons by YE11 from 3.6m tons at YE10.

􀂃 With coal output expected to grow at a robust CAGR of 54% in FY11‐12, and a low tax rate of 25% (vs. 45% for some of its peers), Borneo looks set to be a major beneficiary of the recent hike in hard coking coal price.

Our View

Clipan Finance Indonesia (CFIN)

by Clsa Securities

Ramping up

Despite having grown EPS at a blistering 36.7% Cagr over the past 3 years, Bret Ginesky believes that its full speed ahead for CFIN as he expects EPS to grow by 37% in 2011. This will be fueled by increasing leverage (CFIN below 2x gearing vs. sector average of 4x). CFIN also expects robust growth in consumer financing volume and plans to increase branches by 6 to 31 in 1H11. Combined with macro catalysts for J-curve growth in the sector, Bret keeps his BUY recommendation, with TP Rp1,100 representing +90% upside.

Key points from report:·

Kalbe Farma (KLBF)

by Mandiri Securities

Kalbe Farma: FY10 results 1.1% above our expectation and 3.3% above consensus estimates (KLBF, Rp3,075, Neutral, Rp3,100)

KLBF reported audited FY10 results with minor discrepancy with the unaudited results quoted previously. Net profit reached Rp1.3tn, 1.1% above our expectation and 3.3% above consensus estimates. This reflected a strong 38.5% yoy growth. Please note that such strong growth was partly enabled by lower corporate income tax (from 28% to 25%) and lower minority interest coming from EPMT.

Sunday, April 10, 2011

Economic Updates

Weekly Economic Update
by IndoPremier Securities


Global Economy

The European Central Bank and the People’s Bank of China increased their key policy rates, aiming at reducing inflationary pressures. The Bank of Japan nonetheless clanged to its ultra-loose monetary policy to assist the economy stricken by last month’s earthquake and tsunami.

Portuguese government said it has decided to make a request for financial aid to the European Commission. The bailout fund was said to amount as much as 75 billion euros.

Fitch Ratings upgraded Brazil’s sovereign rating by a notch to BBB. Outlook for the rating was revised from positive to stable. The rating action reflects an increase in the country’s potential economic growth to 4%–5% which supports its medium-term fiscal outlook and external liquidity position.

Indonesia Economy

Wednesday, April 6, 2011

Bank Jawa Barat (BJBR)

by OSK Securities

Venturing beyond its sphere

Initiating coverage with a Buy.

We initiate coverage on Bank Jabar Banten(BJB) with a Buy rating and a two-stage DDM-derived price target of IDR1,400,implying 24% upside. Recent underperformance has made valuation attractive fora growing bank that has ample liquidity, decent asset quality, sufficient losscoverage, adequate capital and a well-planned strategy.

Progressing beyond its home borders.

BJB‟s growth story involves two strategic avenues of branching out of its vibrant domain markets of West Javaand Banten (WJ&B) to become a national outfit and expanding its capabilitiesfrom relying heavily on a consumer-centric model (lending to Governmentsalaried employees) to micro and commercial lending. We think the plan isimperative to ensure continuation and diversification of growth, given that BJB isalready lending to 90% of Government employees in WJ&B. As it looks beyondWJ&B, its provincial dominance is unlikely to be disoriented.

BW Plantation (BWPT)

by Kresna Securities

We maintain our BUY call on BWPT with TP of Rp2,025. FY10 revenue wasinline but net income beat our target by 8.0%. The company plans to bemore aggressive in increasing its modernization area and good progress inits new planting plan. We maintain our forecast, hence expecting FY11 andFY12 EPS to grow by 7.2% YoY and 34.2% YoY respectively. The counter istrading at FY11 PEG of 2.4x (vs. regional 0.5x). However, on 2012 basis thecounter is trading at 0.3x PEG, a 72.7% discount to regional’s 1.1x.

Tuesday, April 5, 2011

Mandala Multifinance (MFIN)

Chasing a Momentum

by IndoPremier Securities

After booked remarkable new financing and net profit in 2010. Now MFIN are chasing benefit from continuing automotive acceleration in 2011 as the government finally postponed the regulation of removing subsidized fuel. MFIN strong point in distribution network and high quality employee are set to boost new financing in years to come. Supported by 15-20% YoY national motorcycles sales in 2011, we expect MFIN to deliver 30% new financing growth to reach Rp 4.8 tn. BUY recommendation for MFIN with TP Rp 810 per share (62% potential upside from current price).

Stunning Result

MFIN booked remarkable net profit by Rp 132.7 bn (19.4% YoY growth) in 2010, or 8.5% above our forecast. Interest income increased by 32.5% YoY to reach Rp 843.3 bn on the back strong new financing in the same period. We expect MFIN to deliver Rp 152 bn net profit, or increase 15% YoY from 2010.

Global Economy upcoming April 2011

by IndoPremier Securities

The final estimate of the United States gross domestic product in the fourth quarter of 2010 showed the economy grew 3.1% on an annualized quarter-on-quarter basis. That compared to previous estimate of 2.8% and prior quarter’s record of 2.6%.
Thailand’s central bank said it expects further hike in interest rate as the risk balance is tilted toward inflation rather than economic growth.
Standard & Poor’s Ratings Services has cut the ratings of Portugal and Greece to BBB- and BB- on account of lending conditions approved for the European Stability Mechanism (ESM). The terms may be detrimental for commercial creditors if the countries borrow from the ESM.

Indonesia Economy

AKR Corporindo.Tbk

by Samuel Securities

Performance as expected


 AKRA recorded 36% revenue growth and 13% net profit growth YoY in FY10. Net revenue was recorded at Rp12.19 trillion and net income was reported at Rp311 billion.
 The company’s FY10 results are relatively in-line with our projection with bottom line slightly below our projection. Net revenue represents 99.6% and net income represents 92% from our FY10 projection.


Adaro Energy (ADRO)

by Samuel Securities

Escalating cost

• PT Adaro Energy (ADRO) reported net profit of Rp 2,207 bn in FY10, declined by 49.5% YoY and around 16% and 22% below consensus and our estimates. Net revenue declined by 8.3% yoy to Rp24,689 bn, inline with consensus but 6.3% above our expectation.
• Despite bad weather, ADRO managed to book higher coal production of 42.2 mn ton (+4% YoY) and sales volume of 43.8 mn ton (+6% YoY), inline our expectation.


Sunday, April 3, 2011

Bank Rakyat Indonesia (BBRI)

by Samuel Securities

Very Surprising

Highlights: As of 4Q10, BBRI posted strong net interest income and net income as much Rp11.8 tr (+62.2% QoQ) and Rp4.8 tr (+106%), respectively, far above our projection & market’s consensus. On full year basis, net interest income and net income as much as Rp32.9 tr (+43% YoY) and Rp11.5 tr (+57% YoY), or 122% and 123% of our projection.

Bank Central Asia (BBCA)

by Samuel Securities

Not Surprising

 BBCA result for FY10 meets with market and our expectation. On 4Q10, net interest income and net income were booked at Rp3.4 tr (-4% QoQ) and Rp2.4 tr (+11% QoQ). Meanwhile, on full year basis net interest income and net income were booked at Rp12.9 tr (-13.2% YoY) and Rp8.5 tr (+25%), respectively.