· Arief Wana (Daily Attached): Based on the robust rebound in March operating data and higher coal prices (and volumes), we increase our earnings estimates by 5-7%, putting our forecasts 14% above consensus’. Based on the above, we increase our SOTP-based target price by 4% to Rp24,000, implying 25% potential upside. Strong operating data and, therefore, earnings are the key catalyst for the share price, we maintain our OUTPERFORM rating.
· Given our positive view on commodity prices and a better credit market, we have increased our Equipment sales volumes forecasts by 16%, which is similar to the peak 2008 and above street’s and the company’s conservative guidance. We have also incorporated our new, higher coal prices and stronger sales volumes for UT’s coal mining divisions. Meanwhile, we maintain our positive view on the mining contracting division, though the YoY growth is also showing upside risk to our forecast.
On the back of upgrades in equipments volumes, coal mining volume and new coal price upgrade ($95/t for 2010F), once again put our earnings estimates 14% above 2010-2011 consensus. At Rp19,150- UNTR is trading on undemanding 13.4x 2010F PER with +24% EPS Growth & implying 25% upside to SoTP Rp24,000 (implies 16.8x 2010F PER, in line with our Index target multipler 17.5x 2010F PER), we reiterate Top-Buy UNTR within coal sector and Indonesia market, as a leveraged play on domestic coal production volume with upside from coal mine acquisitions and infrastructure sector recovery backed by strong management and balance sheet
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