Mandiri Sekuritas Bakrieland: 1Q10 initial numbers (ELTY, Rp240, Buy, TP: Rp500)

Bakrieland’s Corporate Secretary was quoted by Bisnis Indonesia as saying that the company posted 1Q10 net income of Rp28bn(+6.5%yoy) while revenues and operating income came in at Rp206(+26.6%yoy) and Rp33bn(+27.8%yoy). If this holds true, the numbers are well below consensus (representing 13%, 9% and 15% of FY10F top-line, operating income and net income, respectively). What differentiates us from consensus would be the bottom-line figure as our FY10F fully assumes the full recognition of interest expense (some Rp200bn) from its toll-road (kanci pejagan), thus 1Q10 bottomline represented 77% of our FY10 net income target of Rp36bn. We think we cannot benchmark ELTY’s full year performance based on 1Q10 considering (a) extent of interest expense capitalization (b) revenue realization rate and (c) possible corporate actions. Again, we view ELTY as more of an asset play, with the stock currently trading at a 61% discount to our NAV10F. Maintain buy.