Mandiri Sekuritas Perusahaan Gas : To expedite its Floating Storage Regasification Terminals (PGAS, Rp3,850, Buy. TP:Rp5,250)

PGAS which has plans to build two FSRT (one in Belawan, North Sumatera, and one in West Java) is eager to complete the two facilities by end 2011. PGAS is in a JV with Pertamina to build West Java terminal and 100% ownership in North Sumatera terminal. Each of the facilities requires an investment of US$250mn. However, PGAS CFO, Riza P admitted that no definite financing arrangements has been done yet. We have not included the projects in our forecasts, as financial feasibility study has not been
completed yet. At Rp3,850, PGAS is trading at FY10F and FY11F PER of 13.5x, and 13.5x, respectively with EV/EBITDA FY10F and FY11F of 8.3x and 7.3x, respectively.

NISP United Tractors eyes US$1.2bn power plant projects (UNTR, Rp20,850, Hold)

· UT is currently eyeing 2 power plant projects worth US$1.2bn, which consist of 2x300MW thermal power plant in Palembang and another 2x300MW in Riau. For the project in Palembang, UT holds a consortium with Wijaya Karya (WIKA, Rp630) and municipal government, while for Riau, UT cooperate with municipal government on the project.
· UT is currently preparing fresh cash to finance the project as it has to be started imminently after the winner is announced. The company is currently waiting for the announcement from PLN.
· UT balance sheet position is healthy with net cash position as of 1H10 and this would enable the company to finance this project and also maintain its capex without any difficulty.
· However our concern is on the company’s margin due to mounting cost from its mining contracting business. Currently UNTR is trading at 2011F PER of 14.3x and EV/EBITDA of 7.5x, Hold.

Mandiri Sekuritas Indocement TP: 1H10 net profit grew 39.9% yoy, slightly higher than expected (INTP, Rp16,850, Neutral, TP: Rp16,600)

Domestic sales volume grew 17.3% yoy, which was higher than total revenue of only 11.8% yoy. This shows that average selling price was lower. However, margins improved, thus net profit increased by 39.9% yoy. Overall, FY09 result is inline with our and consensus estimates. Currently INTP is trading at EV/ton and PER10 of US$335 and 18.5x, respectively.

Mandiri Sekuritas Telkom: 1Q10 net income in line with ours and consensus (TLKM, Rp7,850, Buy, TP: Rp12,000)

Telkom reported 1Q10 net earnings of Rp2.8tn (+13%yoy) which came in-line with ours and consensus estimates. 1Q10 revenues totaled Rp16.6tn (+6%yoy). Revenue breakdown as follows: 40% cellular, 30% data, internet, IT, 20% fixed lines, 6% interconnection and the remainder for other services. Main revenue driver came from data, internet and IT services which grew by 25%yoy. However what’s noticeable was the slowdown in net cellular ads of only 400k (from 4Q09) to 82mn subscriber as of 1Q10, the lowest among major GSM players. EBITDA margin was about 54.5%, which also slightly declined from 56.7% in 4Q09. Our concern stems on Telkom’s ability to raise subscriber base (though still a runaway market leader with about 50% of the GSM market) despite the healthy growth comings from its content services segment. We currently have a buy on the stock, which trades at about PER10F 14.5x.

NISP Unilever Indonesia net income jumps 26% (UNVR, Rp13,850, Hold)

• For the first quarter of 2010, Unilever Indonesia booked net income of Rp971.8bn
which was a 26% YoY jump from Rp769.1bn in 1Q09. Revenue for the company increased to Rp4.97tn, increased by 11% YoY from Rp4.48tn a year before. Net income was slightly below our expectation as it only accounted for 24% of our full year figure for 2010F of Rp20.98tn, however net income beat our expectation as it was 28% from our full year figure for 2010F of Rp3.45tn.

• The company successfully continued their upward streak which started from the third quarter last year, as revenue on quarterly basis was also up by 5% from Rp4.7tn in 4Q09.

• As 70%-80% of the company’s raw materials are closely related to the movements of the US Dollar and oil price, the stronger IDR and the soft commodities prices led to improvement to gross margin which is now 52%, up from 47% last year. However, a more important feature was their ability to suppress operating costs as operating costs was actually down 9% QoQ from Rp1.42tn in 4Q09 to Rp1.29tn in 1Q10. As a result, operating and net margin now stands at 26.24% and 19.54%.

• We will examine our assumptions regarding margins for the company and effect to net income. Currently UNVR is trading at 2010F PER of 30.6x and EV/EBITDA of 21.8x, Hold.

Mandiri Sekuritas Unilever Indonesia: 1Q10 net income of Rp972bn, inline with ours and consensus estimates (UNVR, Rp13,850, Buy, TP: Rp13,000)

􀂄 UNVR posted 1Q10 net income of Rp972bn (+26.4%yoy, +26.9%qoq).

􀂄 Profit growth was mainly due to sales growth of 10.9%yoy and 5.1%qoq. Adjusting for seasonality effect on selling expense, the 1Q10 results is inline with ours and consensus estimate.

􀂄 We still have Buy recommendation on UNVR which currently is trading at PER10-11F of 31.3-26.6x.

Mandiri Sekuritas Bank Tabungan Pensiunan Nasional: BTPN 1Q2010 Result Increased Significantly (BTPN, Rp7,850, Not Rated)

􀂄 BTPN posted a significant increase in Net Profit of its 1Q2010 result to reach Rp154.6 bn (+165.2% yoy), which within our expectation based on the projection of our Bonds report and the consensus estimates.

􀂄 BTPN’s net interest income for 1Q2010 is reported at Rp782.2 bn, a 127.6% increase as the result from higher portion of its micro loan that gives higher margin for the bank, which this is reflected on the NIM figure that arrived at 14.9% (vs. 12.2% FY09 and 9.8% 1Q09.

􀂄 The bank booked gross loan of Rp17.7 tn (+12.7% qoq), which expected as the bank plans to gain more contribution from the micro loan this year. NPL is figured at 1.5% (vs. 0.5% Fy09), while ROE is 30.3%, LDR 87.5%, CAR 17.6% (vs. 23.0%, 84.9% and 18.5% for FY09, respectively. The bank plans to issue Rp750 bn conventional bonds on the 2Q this year, which aimed to support its long term funding. Third party funds of the bank is currently Rp20,2 tn (+9.1% qoq).

􀂄 Based on Bloomberg consensus, the bank is currently trading at P/BV10 3.0x and PER10 15.9x. We don’t have recommendation on the counter.