Mandiri Sekuritas Adhi Karya: A slow start, below than expected (ADHI, Rp660, Buy, TP Rp800)

ADHI’s 1H10 revenue dropped by 38.3% yoy, quite a slow start due to lower government projects realization in 1H10. We also note that pretax income fell by 19.8%, as ADHI booked gain on asset sales of Rp44.4bn, whilst there was no additional income in 1H10. Such result is lower than our and consensus estimates. However, we believe project realization to start in 2H10, thus they could meet our and consensus target. The company is currently trading at a relatively low PER10 of 6.8x.