NISP United Tractors postpones coal mine acquisition (UNTR, Rp21,200, Hold)

· UT postponed its plan on acquiring one remaining coal mine as the company failed to meet agreement in negotiation process. UT said that the completion of this acquisition will be delayed from the company’s original schedule. Previously, UT targeted to complete the transaction in 4Q10.

· Separately, UT said that the company’s operational data remain stable in September where UT cited that its heavy equipment sales volume was not disrupted by rainfall season. Despite such statement, we view that long holiday season in September was a major concern in heavy equipment sales instead of rainfall.

· Rain may affect the company’s coal mining contracting and coal mine business where this has affected UT’s profitability in 2Q10.

· Currently UNTR is trading at 2011F PER of 14.5x and EV/EBITDA of 7.7x, Hold.

NISP Astra Agro Lestari posts stable sales volume in 8M10 (AALI, Rp21,250)

· During 8M10, AAL sold 689,446 tons of CPO or relatively stable as it was only 0.8% YoY lower compared to 8M09 period of around 695,000 tons. Despite posting a lower YoY basis, the company’s sales volume rose by 20.6% MoM in August to 115.8k tons from 96.0k tons a month earlier.
· This was AAL’s monthly highest sales volume this year and also coupled with stronger selling price of Rp6,967/kg compared to Rp6,428/kg in July 2010. Thus total ASP during 8M10 reached Rp6,631/kg.
· This data is positive as despite lower sales volume, the company’s 8M10 ASP of Rp6,631/kg was 4.9% YoY higher than Rp6,324/kg in 8M09.
· AALI is trading at 2011F PER of 17.0x and EV/EBITDA of 9.2x.

Mandiri Sekuritas AALI: Sales volume in August grow by 20.6% MoM (AALI, Rp21,250, Sell, TP: Rp18,000)

􀂄 AALI recorded sales volume in August grew by 20.6%MoM from 96.0k ton in July to 115.8k ton in August.
􀂄 YTD CPO sales volume still decrease by 0.8% yoy from 694.8k ton in 8M09 to 689.4k ton in 8M10.
􀂄 YTD CPO sales volume of 689.4k ton represented 65.0% (within our expectation) of our FY10F sales volume of 1,060.6k ton.
􀂄 Currently, AALI trades at PER FY10F and FY11F 17.7x and 17.6x, respectively.

Mansek AALI:7M10 CPO production volume reach 53%of our FY10F assumption (AALI,BUY,Rp21,200,TP:Rp24,500)

AALI ’s 7M10 CPO production volume decreased by 6.5%yoy from 607,826 ton in 7M09 to 568,315 ton in 7M10.This 7M10 CPO production volume represents 53%of our FY10F.From 2003 to 2009,7M production represented between 52%up to 59%of FY CPO production.Currently,We maintain our CPO production assumption.

Currently,AALI trades at FY10F and FY11F PE of 15.3x and 13.1x, respectively.

Mansek Astra Agro Lestari:takeaway from a company visit (AALI,Rp21,250,BUY,TP:Rp24,500)

Although its 1H10 CPO production decreased by 5.7%yoy,AALI still maintains its FY10F CPO production similar to that recorded in FY09.

AALI indicated that its COGS in 1H10 increased by 6%yoy,which we believe was due to newly matured plantation (please note that newly matured plantation was recorded at 12,882 ha in 1Q10 (an increase of 9.2%from FY09).

The cost (fertilizer,maintenance,etc)of newly matured plantation is charged to income statement (while for immature plantation it is capitalized).Meanwhile,the productivity of newly mature plantation is still low around 10 ton FFB/ha compared to its average productivity of 22 ton FFB/ha.

We estimate AALI ’s 1H10 net income will decrease by around 6%-10%yoy.
Currently,AALI trades at PE FY10F and FY11F of 15.3x and 13.1x.