JPM Adaro Energy (ADRO) – 1H10 net income significantly below expectations

Adaro reported 1H10 net income of Rp1,153 bn, down 48.7%Y/Y. As, historically, 1H contributes 50.8% to the full year forecast, the reported 1H10 net income came in significantly below both JPM's (31.6%) and consensus' (29.6%) forecast of Rp3,648 bn and Rp3,893 bn, respectively. Will revisit model; maintain OW and PT of Rp2,600: Meanwhile, we view that the share price could decline on the back of the weak 2Q10 results. We see risk to our and consensus forecasts; and note that our estimates are currently under review.