CIMB Bank Danamon Quick takes - Adira acquisition: contributing, not burdening

(BDMN IJ / BDMN.JK, OUTPERFORM - Maintained, Rp2,625 - Tgt. Rp3,675, Financial Services)

Danamon is acquiring another 20% of Adira, which we view positively for two reasons: 1) Adira will add to Danamon's growth, given that its profit growth has consistently outpaced Danamon's. Adira also provided Danamon with earnings stability when the bank was hit by one-off derivative losses in FY08; and 2) the acquisition is EPS-accretive, with the implied acquisition P/E being lower than Danamon's current P/E. We remain upbeat on Danamon, especially after the clarity of the transaction. Adira's valuation of Rp1.6tr is in line with our expectations. We maintain Outperform on Danamon and our DDM-based target price of Rp3,675.