Mansek Semen Gresik:1H10 net profit grew 7.5%yoy,inline with consensus estimates (SMGR,Rp9,250,Neutral,TP:Rp9,400)

SMGR ’s 1H10 net profit grew 7.5%yoy,despite of lower revenue compared with 1H09 (-1.6%yoy)to only Rp6.7tn.In 1H10,domestic sales figure only grew by 4.0%yoy,whilst export dropped significantly,which brings total production growth of only 0.5%yoy.Given the fact,it suggests that there was no increase in the domestic average selling price.

Better gross margin due to several cost efficiencies amplify its bottom line level. Overall,SMGR ’s 1H10 result was still in-line with our and consensus estimates.SMGR is currently trading at PER10F of 14.7x (vs average peers of 14.8x)and EV/ton of US$295 (vs average peers of US$296).