Mandiri Sekuritas Perusahaan Gas : Lowering the volume target? (PGAS, Rp4,150, Neutral, TP:Rp4,650)

In a hearing with House of Representatives yesterday, PGAS, CEO Hendi Prio, is mentioning about a target which is the same as last year, 700-800 MMSCFD. The target is below current guidance of 800-900 MMSCFD. PGAS sold 792 MMSCFD in 2009. Our current model is based on 810 MMSCFD of volume distributed. At Rp4,150, PGAS is trading at 19.2x and 18.1x PER10F and PER11F respectively according to our estimates. We are waiting for company confirmation on the new guidance, however we unlikely change
our forecasts as our current forecasts already 17.4% and 24.5% lower than consensus estimates for FY10 and FY11 earnings.