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Sunday, May 15, 2011

Appreciating to Intrinsic Value - PT. Indocement Tunggal Perkasa

by Indopremier Securities

Fiscal year 2010 and first quarter of 2011 are both in line with our expectation: revenue driven by higher selling volume and ability to maintain already high ASP. Going forward, INTP has space for growth through higher volume due to lower utilization rate of 67.95% compared to SMGR. We see the stock price is steadily appreciating from Rp 14,350 since our March update, we maintain BUY position with TP of Rp 19,300.

Aligned Performance

Revenue performance for fiscal year 2010 is fully in line with 0.22% difference in our forecast compared to actual figure. We saw minor surprise in term of higher than expected COGS and operating expense, yet all-in-all it was within narrow margin of 5.28% lower actual net income. Similarly, benchmarking from the first quarter of 2011, we foresaw little surprise going forward for FY2011 as the Q1 revenue already reach 22.79% of our full year forecast, although we do anticipate a possibility for upward revision because historically first quarter of the year is a sluggish period for INTP. 

No Increase in ASP, Lower Margin

Average selling price for first quarter 2011 was maintained at already high level Rp 805,000 per ton, no chance from FY2010, so with higher oil and coal, naturally we see lower gross margin of 48,86% compared to 51,90% last year. We expect decent upward adjustment in ASP in the range of 5% driven from passing on higher cost of raw materials, however should it not materialize INTP might has an edge to reach revenue target with higher volume considering the utilization rate is at decent 67.95% compared to 93.87% of SMGR.

Maintain Buy with TP Rp 19,300

We continue to endorse INTP and maintain target price of Rp 19,250. The price has appreciated from Rp 14,350 in early March and currently fluctuates in the range of Rp 17,000s, thus presenting ca. 13.5% upside. 


2009
2010
2011F
2012F
2013F
Year End 31 Dec





Sales
 10,576,456
 11,137,805
 12,589,708
 13,812,722
 5,099,570
EBITDA
 4,273,720
 4,698,197
 5,285,177
 6,120,944
 6,671,633
Net Income
 2,746,654
 3,224,942
 3,673,887
 4,378,337
 4,897,085
EPS
 746.12
 876.05
 998.00
 1,189.37
 1,330.28
PER (x)
 17.85
 15.47
 13.58
 11.39
 10.19
PBV (x)
 4.59
 3.81
 3.15
 2.61
 2.19
EV/EBITDA (X)
 12.00
 11.54
 10.81
 9.93
 9.70
Dividend Yield
1.69%
1.94%
1.84%
2.19%
2.45%
Source: company, IPS calculation

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