Indo Premier ANTM (HOLD - TP Rp 1.030)

Potential loss from Derivative still covered by high earning; Cut Previous Earning Estimate of 2008F and 2009F by 11% and 16% respectively - Downgraded TP to Rp 1,030 from Rp 1,090,-

Consensus is getting gloomier at ANTM’s prospect
EPS Consensus for 2009 has declined by 27% to Rp 88 from previous Rp 121, indicating that the market shares gloomier outlook for ANTM. However, our estimate calculations are above consensus on average as seen in table 2. This showed us that are more confident that consensus.

Key assumptions revision valuation for FY09 dan FY10
We revise and adjust some of our assumptions into our valuation modelling. The key assumptions changes are summarized in table 3 below. We revise exchange rate as well up to Rp 11,000 and Rp 10,000 for 2009F and 2010F respectively from previous estimate Rp 9,500. While for nickel price at LME we are using new price assumption at US$ 13,000 and US$ 15,000 for 2009 and 2010 respectively.

Valuation and Recommendation
With new assumption and WACC of 18.1% (Rf 12%, Risk premium 6.5% and beta 1.3x) we have downgraded our TP to Rp 1,030 (decrease 5,5% from our previous TP Rp 1,090). We also have represented buy back program of 15.4 million shares into our valuation. Based on the last trading price at Rp 1,070, ANTM P/E 2009 traded at 11x and P/E 2010F at 9.3x.

We are still maintaining our HOLD recommendation considering limited downside to nickel price and market outlook. ANTM price seems have reflected its fundamental prospect in 2009 with minim catalyst.