CIMB 2QFY10 Results – Kalbe Farma – No surprises

Maintain Neutral on Kalbe. 1H10 results were in line with our expectation and 6% ahead of consensus, forming 43% of our FY10 forecast, adjusted for seasonality. Net profit was 1% below our expectation, mainly on a higher effective tax rate, but core EPS growth of 38% yoy in 1H10 was in line with our FY10 growth estimate of 36%. We maintain our FY10-12 earnings estimates and target price of Rp2,430, based on 14x CY11 earnings. Maintain Neutral as Kalbe has significantly outperformed the index. Near-term catalysts for an upgrade could include higher growth in 2H10, improving margins and better inventory management in 2H10.