Indopremier PGAS (BUY TP Rp 4000)

Strong In-line 9M09 Results
PGAS delivered strong 9M09 results in-line with our estimates, with revenues increasing 50% YoY and realizing 78% of our FY09F estimate. On the back of SSWJ completion and higher demand from industrial customers, distribution volume rose 37% YoY to 776 mmscfd, slightly exceeding our FY09F figure of 755 mmscfd. Lower than expected G&A expenses (operating expenses at 68% of FY09F) led to 81% realization of our FY09F operating income. The strengthening of IDR against USD and JPY resulted in a forex gain of Rp911bn, lifting net profit by 145% YoY to Rp4,401bn. For 4Q09, we expect distribution volume to remain flat as many industries will close during December holidays and the delivery of 40 mmscfd of gas to PLTU Cilegon will only start flowing in November. We also expect slightly more forex gains as the JPY is expected to depreciate further from the IDR107.8/JPY reported for 9M09.

Valuation
We reiterate our BUY rating with TP of Rp4,000, which we derived by applying WACC of 11% and LTG of 3%. Our TP still represents 8.1% upside from the current price of Rp3,700 and implies 17.3x FY09F PER and 7.82x FY09F PBV.