CIMB Adaro Energy – Singapore Court of Appeal ruling

Quick Takes – Adaro Energy – Singapore Court of Appeal ruling
We maintain Outperform on Adaro and our DCF-based target price of Rp1,200 (WACC 15%, LTG 0%). We do not believe there will be any material impact on Adaro or current shareholders following the ruling by the Singapore Court of Appeal over Adaro's 2001 ownership change yesterday, although short-term sentiment on the stock may be affected. As far as Adaro and current shareholders are concerned, nothing is going to change. In fact, the court has found the 2001 purchase of Adaro lawful, confirming Dianlia as the rightful owner of Adaro. What pans out next between Beckett and Deutsche Bank should not affect Adaro and existing shareholders.