Credit Suisse - RAMAYANA (RALS): In line 1Q09, but outlook improves- Upgrade to Outperform

· RALS reported 1Q09 net income of Rp43 bn, up 2.9%YoY and down 51% QoQ, accounting for 12% of our estimates and 11% of consensus' for FY09. We believe that RALS' 1Q09 earnings are in line with our esimates. RALS's 1Q09 same-store sales growth remained soft, but March 2009 showed early signs of recovery.

· We increase our 2009-11E earnings by 6.2-7%, reflecting more positive outlook for RALS ahead. RALS is currently trading at the lower end of its historical trading range and at the second-lowest 2009E P/E among all Indonesian consumer counters under our coverage. We upgrade RALS from Neutral to OUTPERFORM on higher earnings expectations and undemanding valuations. We increase our target price from Rp510 to Rp600, based on 11x 2009E P/E, in line with market-implied 2009E P/E for the Indonesian market.