DBS Indo Tambang: Hold; Rp38,600; TP Rp25,475; ITMG IJ

To distribute total dividend of US$234.88m

According to Bisnis Indonesia , Indo Tambang (ITMG) will pay a total dividend of US$234.88m (c.70% payout based on FY09 net profit of US$335.6m), translating into total DPS of Rp1,964 (c.5.0% dividend yield). The company had previously paid interim DPS of Rp678 on 3 November 2009 and remaining DPS of Rp1,286 (c.3.3% dividend yield) will be paid on 19 May 2010.

ITMG also revealed that it targets to increase coal production by 9.5% y-o-y to 23m tons this year, from 21m tons last year. This is slightly higher than our current forecast of 21m tons, as we have not imputed contribution from its new mines. The company has also allocated US$101m for capital expenditure, to be financed internally, most of which will be for infrastructure and a coal washing plant for Trubaindo