Mansek PTBA Below consensus –Export,the determinant for 2H (PTBA,Rp16,500, Neutral TP IDR 18.750

With volume achieved only 44.1%of the total company estimate for FY10, and domestic prices contract short of our expectation of Rp685,000/ton (PLN blended contracts :Rp635,100/ton),hopes for PTBA ’ s earnings improvement should be coming from the export.Export needs a boost. Export in 2Q10 was just 0.9Mt (1Q10:1.3Mt).Assuming most of domestic is aimed for PLN,PTBA has to export 5.0Mt in 2H,more than double the
amount in 1H. PTBA aims high in the export,with 20-25%spot transactions and calorific value of 6,700-7,000 kcal,earnings performance is really dependent on the achievement of its sales department.At Rp16,500,is trading at 14.4x and 11.8x,PER10F and PER11F,respectively.

We ’re revising down our forecast to reflect the domestic price.Our preliminary calculations on the new forecasts expect net income at around Rp2.2tn,a 16%downward adjustment.We will review our recommendations and target price.