Mandiri Sekuritas Indofood Sukses Makmur: FY09 earnings above our and consensus estimates (INDF, Rp4,100, Neutral, TP: Rp3,700)

􀂄 Indofood registered Rp37.1tn sales (-4.3% yoy, -10.5%qoq) and Rp2.1tn earnings (+100.7%yoy, -35.6%qoq) in FY09. We view that sales figure was backed by stronger sales volume growth of its CBP products. CBP division contributed some 43% of sales in FY09, up from 31% in FY08. Noted that this earnings figure is 17-20% above our and consensus estimates largely due to minority interest factor.

􀂄 As we already mention in our 9M09 report (“Passed its peak”), we think that company’s margin is already peaked in 3Q09. In 4Q09, INDF reported lower gross margin of 26.9%, from 28.6% in the previous quarter, largely due to higher wheat and CPO prices. Wheat and CPO prices have climbed by around 12% and 16% in 4Q09, respectively. For FY09, company booked some forex gain of Rp731bn.

􀂄 Currently, Indofood is trading at PER10F of 19.8x. Maintain Neutral.