Danareksa Opportunities exist

Buying opportunities still exist
The market showed impressive performance in April. Yet not all of the listed stocks participated in the rally. A few have been left behind. This is where we still see some good buying opportunities. Lagging stocks that we like include UNVR, INTP, SOBI, and MYOR. They have all posted good 1Q09 financial results. INTP is our favored stock in the cement sector. We like it for its efficient operations. As for consumer giant UNVR, its 1Q09 revenues grew an impressive 18% YoY in 1Q09, beating our expectations. With an excellent track record we believe that UNVR can continue to deliver excellent results going forward supported by its strong brand names. SOBI - Indonesia’s largest sorbitol producer - also posted good 1Q09 results. Its high gross margin of 29% was attributable to higher than expected average selling prices. Our other pick, Mayora, has good earnings prospects (its 08-11F core earnings are expected to grow 21% CAGR).



FY09 EPS estimate raised by 4% year-to-date
In April we raised the target prices for four stocks and lowered them for four others. The target price of UNTR was raised the most (by 46%). UNTR’s 1Q09 net profits reached 34% of our full year forecast on the back of higher-than expected ASP for heavy equipment, higher-than-expected parts and services revenues growth, higher contracting fees, and a weaker currency. In contrast, our target price for SMRA was slashed by 49%. Yet despite this, the stock still has plenty of upside potential. This explains our BUY recommendation on the stock. Year-to-date, our forecast FY09 market EPS has been raised by around 4% on the back of changes in earnings forecasts for individual companies.



April was a great month
By the end of the month the JCI reached 1,722.77, or its highest level in six months. The JCI rose 20% in April. In US dollar terms the performance was even better – the return reached a stellar 33% as the rupiah recovered to 10,590/US dollar.