CIMB Adaro Energy Result note - Delivering well

(ADRO IJ / ADRO.JK, OUTPERFORM - Maintained, Rp1,060 - Tgt. Rp1,270, Basic Resources)

We maintain Outperform on Adaro, whose good 1Q09 results could further instil confidence in the company and management, we believe. 1Q09 net profit is largely in line with our forecast and consensus expectations. ASP is higher than expected, more than offsetting higher-than-expected cost per tonne. There is upside to revenue and profit, in our view, assuming costs are maintained and the production target can be met. Adjusting for ASP and costs from this set of results, we raise our FY09 EPS estimate by 8% and DCF-based target price by 6% to Rp1,270 (WACC 15%, LTG 0%).