NISP Barito Pacific income plunges by 93.5% YoY (BRPT, Rp1,300)

· Barito Pacific reported a net income of Rp24.9bn, plunging down by 93.5% YoY from Rp386.2bn the previous year despite that sales were up by 27.7% YoY to Rp 8.78tn.
· Higher growth in COGS made the company’s gross profit to decrease by 27.7% to Rp747.3bn. As such this seeped down to the bottom line.
· On a quarterly basis, the decline in performance was even more evident, as revenue decreased by 36.1% QoQ to Rp3.42tn. The company’s main revenue comes from petrochemicals business, which was hurt by a drop in polypropylene prices that have dropped by 17% in the second quarter to US$0.56/lb. As such bottom line was in the red with a net loss of Rp92.1bn in 2Q10.

NISP Lonsum net income jumps by 48.9% YoY (LSIP, Rp9,300)

In 1H10, London Sumatera managed to book net income of Rp417.8bn, a 45.7% YoY jump from Rp286.7bn in 1H09. Sales was up by 8.3% from Rp1.45tn to Rp1.57tn.

Profitability improved as the company reduced operating expenses making operating margin increase by a significant 8.9% to 36.4% in 1H10. However a reduction in interest expense to only Rp15.1bn was offset by forex losses of Rp13.7bn from an interest expense of Rp25.6bn and forex gain of Rp14.6bn. This made net margin only improve by 6.8% to 26.7%.

On a quarterly basis, revenue growth was strong, increasing by 30.3% to Rp886.2bn, making net income jump by 48.9% to Rp167.9bn.

LSIP is trading at 2011F consensus PER of 12.2x and EV/EBITDA of 7.7x.

Mansek Excelcomindo :1H10 net income up 87%yoy,above ours and consensus (EXCL,Rp4,750,Buy,TP:Rp4,300)

XL Axiata posted in-line top-line of Rp8.33tn,while overachieving on the bottom-line to Rp1.32tn (+87%yoy).There were some cost improvements;the growth in operating costs was only at 8%yoy while top-line grew by 35%yoy.On operating statistics,1H10 subscriber base grew to 35.2mn (+43%yoy, +7%qoq),ARPU at Rp34,000 (6%yoy,-3%qoq).Due to higher than expected performance,we are currently reviewing our forecasts and price objective with an imminent upward bias. Currently,the stock trades at PER10F-11F of 18.2x and 14.1x.

Mansek EXCL has allocated Rp4.5tn for network expansion (EXCL,Rp4,100,Buy,TP: Rp4,300)

EXCL has allocated Rp4.5tn for net work expansion.In 2010,EXCL targets to build 1,500-2,000 tower and BTS,while in 1H10 it has already built 900 units valued at Rp2,3tn.This year,the company allocated total capex of US$450mn.By end of Mar 2010,EXCL had 19,904 BTS which cover 90%of Indonesia and number of subscribers of 32.5mn.EXCL targets total BTS of more than 20,000 units by end 2010 and number of subscribers of 38- 39mn.EXCL trades at PER10F-11F of 15.7x and 12.2x,we have Buy
recommendation.

Credit Suisse: Solid but at a premium BBCA (TP Rp5,300)

● BBCA continues to deliver robust performance, reaffirming its solid fundamentals. FY09 results were in line with our and consensus’ estimates, with earnings up 18% YoY and PPOP up 15% YoY.

● BBCA’s NPL ratio currently stands at 0.7%, well below the regional average of 3.3% and the average NPL of the Indonesian banks under our coverage of 3.5%. BBCA is also very well provisioned, with 481% FY09 provision coverage. We tweak our FY10-12E earnings for BBCA in light of its FY09 performance.

● We remain positive on the fundamental outlook of BBCA and believe the counter is attractive for investors looking for multi-year exposure to the Indonesian banking system.

● We maintain our NEUTRAL rating on BBCA, as it is trading at a premium to its local and regional peers. We maintain our target price of Rp5,300, implying 4.0x 2010E P/B and 15.5x 2010E P/E.

Mandiri Sekuritas BNI: takeaway from a company visit (BBNI, Rp2,025, Buy, TP: Rp2,300)

We met with Yap Tjay Soen, the CFO of BNI, yesterday and found out some
interesting highlights:,

􀂄 NPL will remain a challenge until the next two years (max). Therefore, the bank will continue building up its provisioning coverage to cover the possibility of higher NPL in the future (coverage ratio = 120% at end Dec09). Such NPL will mainly come from medium segment as around 15% of the medium-sized loans are basically restructured loans (=Rp6.7tn, of which Rp2.7tn belong to NPL).

􀂄 However, as loans is expected to grow higher this year (+15% yoy vs 8.0% yoy in 2009), the NPL will likely maintain below 5% by end of this year (vs. 4.7% at end Dec09).

􀂄 BNI’s Cost to Income Ratio will likely maintain at around 50-52% as the bank plans to refurbish its branches in order to keep the loyalty of its customers.

􀂄 At current price, the stock is trading at 2010F P/BV of 1.5x and PER of 9.0x. Despite concerns over rising NPL, we see the management’s serious efforts to improve the current loan underwriting process (please note that majority of additional NPL are coming from the legacy loans). We therefore maintain our buy recommendation on the counter.

Mandiri Sekuritas Bank Negara Indonesia:targets rights issue of Rp5-6tn (BBNI,Rp1,970, Buy,TP:Rp2,300)

According to the Ministry of State Owned Enterprises,BNI targets to raise Rp5.-6 tn of fresh funds from the rights issue in 2H10.At the same time,the bank will also sell its 4.14%green shoe option.

In addition,BNI is also reported to have intention to issue subdebt amounted to Rp1-2 tn.

Based on previous rights issue,it takes quite sometimes (around 6-12 months)for BNI to get approval on its rights issue plan from the House of Representative.So,we think that the rights issue will likely occur in 4Q10 the soonest.

At the current price,the stock is trading at 2010F P/BV of 1.4x and PER of 8.6x.We maintained our buy recommendation on the counter.

Indopremier BBCA (HOLD - TP Rp. 3,300)

Inspite of posting a 41.8% YoY increases in Q1 2009 net profit driven by strong net interest income by 29.07% YoY and fee income by 32.09%, BBCA also posted a significant soar in its NPL from 0.6% to 1.6% mainly affected by its two customers in toll road and steel making industry.

Furthermore, Decreasing interest rate environment followed by increasing cost of funds will lead to decrease its NIM ratio along year 2009. Thus, we lowered our target price for the most expensive banks in Indonesia to Rp. 3.300,- and suggest HOLD recommendation. We think that the bank’s share price will be threatened by profit taking action after BI rate announcement last Tuesday.