Credit Suisse: KALBE FARMA (KLBF): Robust in line 1Q results – maintain Hold as fairly valued

At Rp2,000- KLBF is trading on premium 18.8x 2010F PER (+16.6% EPS Growth), compared to CS Indonesia Universe on 15x 2010F PER (+18.5% EPS Growth). Personally, I will accumulate its peer TSPC (@Rp840- on 9.9x 2010 consensus PER). We maintain Hold KLBF as it is fairly valued already!

· Teddy Oetomo (Daily): Kalbe Farma (KLBF) achieved 20.4% YoY net income growth to Rp256 bn in 1Q10, 24% of our FY10 and 23% of consensus’ forecast, while operating income was up by 25.5% YoY to Rp387bn. We believe KLBF’s strong 1Q10 was supported largely by the stronger IDR. As per our report Kalbe Farma – High Correlation to IDR, 30 March 2010, KLBF’s share price exhibits a 70% correlation to the IDR.

· While we recognise KLBF’s robust 1Q10, we believe the stock is currently trading at a relatively demanding valuation. The counter is at the higher end of its historical trading range and at a higher 2010E P/E than its local peers. We maintain our NEUTRAL rating and target price of Rp1,870/share for KLBF due to its relatively demanding valuation.