CIMB United Tractors Quick takes - Still going strong

(UNTR IJ / UNTR.JK, OUTPERFORM - Maintained, Rp17,400 - Tgt. Rp23,000, Industrial Goods and Services)

Maintain Outperform on UNTR with an unchanged target price of Rp23,000 (15x CY11 P/E). February's operational data reinforces our conviction of strong volume growth ahead, particularly for Komatsu sales. If the momentum continues, Komatsu sales could in fact beat our current expectations, which are already above company and consensus expectations. Pama continues to post very healthy growth, exceeding that of its closest peer, Buma. This is just about to get better as we are entering seasonally strong quarters. Monthly production at its DEJ mine is also improving. All three divisions, in short, are exhibiting solid growth. No change to our earnings forecasts for now. We expect stock catalysts from consensus earnings upgrades typically going into the month of May, after the release of solid 1Q10 operational data and 1Q10 results, which should not disappoint.