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 Indocement: To build 2mn tons cement mills (INTP, Rp15,350, Neutral, TP: Rp16,600)

􀂄 Aside from the new 1.5mn tons cement mill which will start operating this May, they will build another cement mill with a capacity of 2mn tons. This is sooner than their previous plan, given unexpectedly strong demand. They budgeted around US$100mn for FY10 capex, from previously US$70mn.

􀂄 Other than that, the company will give out cash dividend of around Rp828bn, or equal to Rp225/share. It reflects a dividend yield of 1.5%. The payout ratio of around 30% is inline with our expectation. Cum dividend date will be on 21 June 2010, and it will be distributed 7 July 2010. On valuation basis, the company is currently trading at PER10F of 16.9x.