Credit Suisse Bank Mandiri (BMRI.JK, Rp6100, O, TP Rp7200) – Potential catalyst: higher-than-expected asset recovery

• We see potential for a positive earnings surprise for BMRI should the bank be able to complete the asset recovery process from Grup Domba Mas (not listed) and Grup Benua Indah (not listed).

• Asset recoveries from Grup Domba Mas and Grup Benua Indah are equivalent to 18% of our FY10 earning estimates for BMRI. However, we are yet to factor the two potential asset recoveries into our FY10 estimates, as we are still waiting for further indications on the probability of completion of the two transactions.

• Under the condition that BMRI is able to complete all three asset recoveries (Garuda Indonesia (not listed), Grup Domba Mas and Grup Benua Indah) in 2010, we see potential for a positive earnings surprise.

• BMRI’s FY11E P/B remains undemanding relative to its local peers, while its FY11E P/E is still lower than regional peers. Thus, we believe the valuation of BMRI remains relatively reasonable. We maintain our OUTPERFORM rating and target price of Rp7,200

Mandiri Sekuritas Bayan Resources:: Net profit below our expectations and consensus (BYAN, Rp6100, Under-review)

􀂄 BYAN booked revenue FY09 of Rp7.8tn (+59%yoy) below our expectation but above consensus estimates. Production of coal in 2009 is estimated to reach 9.5Mt (+61%yoy).

􀂄 Based on the guidance of 2010 release by the company earlier, average coal selling price in 2009 at US$60-61/Mt lower than in 2008 of US$74.9/Mt.

􀂄 The company target coal production in 2010 become 10Mt lower than initial estimate of 13.8-15.1Mt.

􀂄 Net income of FY2009 was at Rp136bn (+558% yoy) this figure is below our and consensus estimate.

􀂄 We are reviewing our estimation due to the results.