DBS Indofood Sukses Makmur; Buy; Rp3,825; TP under review; INDF IJ

Better then expected 1Q2010

The group reported 1Q10 net profit of Rp631.9b (+26.4% q-o-q and +472.1% y-o-y) - inclusive of Rp96.9b FX gains. Operating profit came in at Rp1,411.4b, representing 29.3% of our full year forecast - ahead of our expectations.

Revenues came in at Rp9,308.6b (+4.5% y-o-y). Sequentially, growth also came in at +4.2% - despite seasonally low quarter. Gross and operating margins were reported at 30.0% and 15.2% - up from 26.9% and 14.3% in 4Q09 and 25.4% and 12.7% in 1Q09.

Total borrowing stood at Rp17,233.5b; translating to net gearing ratio (including MI) of 73.6% - down from 88.4% at the end of last quarter.

Buy rating reinstated; TP under review with upside bias.