Mandiri Sekuritas ANTM

Summary from recent company visit:

Antam sees FY10F ferronickel production to grow by 21%yoy as a result of better demand prospects as well as resumption of normal operations of the Feni3 plant to at least 17k tons while gold production to increase by 28% to some 3,400kg in 2010. The rise in gold production would be attributed to the start of commercial operation of the Cibaliung gold mine which has a planned production of 800kg next year. Ultimately, Cibaliung is expected to produce some 2,000kg pa during its remaining 6 year mine life. The production estimates are in-line with ours, what’s up for review are the selling price assumptions. 9M09 ferronickel production was at 10,500 tons or 87% of our targeted production and 75% of Antam’s revised projection of 14k tons by year end. 3Q should post better results from previous quarters due to higher qoq ferronickel production of 58% coupled with improved selling prices of both nickel and gold. Currently, Antam trades at PER09-10F of 48x and 24.3x, respectively.