CIMB - Adhi Karya Company update - Running out of time

(ADHI IJ / ADHI.JK, UNDERPERFORM - Maintained, Rp330 - Tgt. Rp285, Construction and Materials)

Various news sources have been indicating that Jakarta's city administration remains keen on the monorail project. We view the reinstatement of the Rp114bn write-off ADHI made for the project unlikely in the short term as project profitability remains in question. Nevertheless, we are upgrading our EPS estimates for ADHI by 14-23% to take into account new projects secured in 1Q09. We attach a new target price of Rp285 (from Rp172), now based on 7x CY10 earnings (5x previously). Maintain UNDERPERFORM as we believe the positive news on government stimulus has been priced in.