Sales forecasts lowered
Heavy equipment sales in the year up to March 09 reached only 628 units or 21% of our full year target of 3,000 units. In March alone, the company delivered just 189 units as bad weather resulted in delayed delivery to Pama while third-party sales remained sluggish. Against this backdrop, we reduce our 09-10F heavy equipment sales forecasts by 17-14% to 2,500-3,000 units.
Coal production is still lagging, but should improve
Pama’s coal production rose 11% mom to 5.1mn tons in March 09. Even though total production in the year up to March 09 is only 22% of our FY09F forecast of 65.9mn tons, we remain confident that the target can be reached since 1H production is always lower than 2H production due to adverse weather conditions. Similarly, DEJ’s performance has also been hit by bad weather– its sales in the year up to March 09 are a mere 17% of our full year target of 4mn tons. Nonetheless, sales did pick up in March; in which month DEJ’s sales climbed 8% mom to 254,000 tons on improving weather conditions. All in all, we maintain our assumptions for Pama’s production and DEJ’s sales.
09-10F net earnings cut by 1.2%-4.7%
We reduce our 09-10F net earnings by 1.2%-4.7%. This change reflects: (1) lower equipment sales, (2) 4-7% lower 09-10F DEJ ASP at $75-73/ton after applying our new lower JFY 09-10F benchmark coal price assumption of $75-80/ton based on the Asian coal contract settlements, and (3) higher forecast spare part and service sales which we now expect to grow 15% yoy since the company indicated that sales before elimination (to subsidiaries) per Feb 09 were higher than our previous forecast of 10% yoy.
The valuation is too rich, SELL
Our TP is maintained at Rp6,100, implying 8.4-7.7x 09-10F PE. However, we believe the shares are now rather expensive following the recent rally in the share price (the stock currently trades at 09-10F PE of 11.1-10.1x). On this basis we advise clients to take profits and SELL the stock.
Tidak ada komentar:
Posting Komentar