CIMB AKR Corporindo Quick takes - Small step forward, giant leap beyond?

(AKRA IJ / AKRA.JK, OUTPERFORM - Maintained, Rp1,180 - Tgt. Rp1,800, Chemicals)

We maintain our Outperform rating on Akra with a higher DCF-based target price of Rp1,800 (from Rp1,140) after rolling it over to 2010 and factoring in a boost from its newly-won contract from the government to distribute subsidised fuel. We believe AKR is in a good position to profit from subsidised fuel de-regulation in Indonesia, given its already leading position as a private-petrol distributor, which could be further boosted by new capacity at end-2009 from a JV with Royal Vopak. Our earnings estimates have been adjusted by 1-2% for FY09-11 to reflect the additional distribution volume.