Net earnings of Rp2.7tn which was 19% ahead of our forecast of Rp2.3tn. Significant earnings surprise in 4Q09 earnings.
4Q09 earnings of Rp878bn, were up 26% qoq and 71% yoy - this compares with earnings growth of 4% qoq for 3Q09
Margins improved. Operating margins rose to 36% in 4Q09 from 35% in 3Q09 while net margin rose to 27.9% for 4Q09 from 26.5% in 3Q09
The company's full-year operating margin rose to 35%, the highest since 1996; we forecast operating margins will peak at 38%
The cash build continues to grow. The company had US$280m cash on its balance sheet as of December-2009 and is forecast to generate US$465m in operating cashflow this year with only US$60m in capex - hence the firm has free cash of more than US$650m to allocate this year - 11.5% of its current market cap.
Conclusion
Our current 2010 forecast of Rp3.05tn will need to be revised up as will consensus of Rp3.1tn
A strong start to the year means our volume assumption of 10% growth for 2010 may be light
The company remains a cash machine - there has been no indication as to dividends
Our target price of Rp17,000 still implies 21% upside from current levels; likely to be revised up
Still a conviction holding for any investor wanting domestic Indonesian exposure - BUY
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