Mandiri Sekuritas Adhi Karya: A slow start, below than expected (ADHI, Rp660, Buy, TP Rp800)

ADHI’s 1H10 revenue dropped by 38.3% yoy, quite a slow start due to lower government projects realization in 1H10. We also note that pretax income fell by 19.8%, as ADHI booked gain on asset sales of Rp44.4bn, whilst there was no additional income in 1H10. Such result is lower than our and consensus estimates. However, we believe project realization to start in 2H10, thus they could meet our and consensus target. The company is currently trading at a relatively low PER10 of 6.8x.

Mandiri Sekuritas Adhi Karya: A slow start, yet it may reach our FY10 target (ADHI, Rp590, Buy, TP: Rp800)

􀂄 ADHI’s 1Q10 revenue drop 29.5% yoy, quite a slow start yet still inline with our and consensus estimates as historically, 1Q only represents around 10-17% of FY figure. We also note that margins are improving thus the company could book operating profit from operating loss in 1Q09. A lower figure in the bottom line level is because the company booked Rp44bn gain from asset sale in 1Q09, whilst there was no additional income in 1Q10. The company is currently trading at a relatively low PER10 of 6.0x.