Mandiri Sekuritas XL Axiata increase frequency capacity to 2x10MHz 3G (EXCL, Buy, Rp5,550, Buy, TP: Rp5,900)

According to news released by EXCL’s investor relations, the company has received an approval from minister of communication and telecommunication for its second 3G carrier. With this approval, XL will obtained consecutive 2x10MHz 3G carrier (1960-1970 MHz /2150-2160 MHz), EXCL only had 2x5 MHz 3G previously. In accordance with Decree No. 322/KEP/M.KOMINFO/09/2010, XL should pay an upfront fee in the amount of Rp327.6bn while the annual fee will be Rp.160 billion. Under the payment scheme configured, the upfront fee will be charged on this year and will be amortize for 10 years, meanwhile annual fee for the first year only charged 20% or around Rp32bn.

Mandiri Sekuritas XL Axiata obtained Rp2.5tn debt (EXCL, Rp5,600, Buy, TP: Rp5,900)

EXCL obtained Rp2.5tn worth of debt from Bank Mandiri that will be used to refinance debt and to finance working capital. The 5 years debt carried interest rate of 1.4% above JIBOR. EXCL will pay its debt from Export Kredit Namden (EKN) worth US$265.2mn. In 1H10 EXCL had repaid its debt worth US$219mn and Rp900bn using its internal cash. EXCL has debt amounting to Rp11.4tn at end Jun10.

Mandiri Sekuritas Perusahaan Gas : 1H10 Above ours, within consensus (PGAS, Rp4,000, Buy, TP: Rp5,260)

􀂄 PGAS 1H10 result announcement showed a net income which already has been reported in newspaper weeks before. Based on full result reported, differences in our forecast lies in our cost assumptions. Therefore we have make cost adjustments. We also do volume upgrade to our forecasts. In his comment to Bloomberg, PGAS CEO, Hendy P. Santoso, hinted 2011 revenue will be flat as no additional supply indicated. This also has been our view that although still attractive, PGAS lacks catalyst, as no new supply is seen until the completion of its Floating Storage Regasification Terminal in 2012.
􀂄 Our new forecast resulted in an upgrade of target price from currently Rp4,650/share to Rp5,260/share. At Rp4,000/share, PGAS is trading at FY10F PER of 14.2x and FY11F PER of 14.0x, with EV/EBITDA 10F and 11F of 8.6x, and 7.6x, respectively.

Mandiri Sekuritas Mayora Indah: 1Q10 net profit of Rp119bn, above ours and consensus estimates (MYOR, Rp5,000, Buy, TP: Rp5,000)

􀂄 MYOR posted 1Q10 net income of Rp119bn (+67%yoy, +14%qoq), slightly above ours and consensus FY10F estimates.

􀂄 Net income growth was mainly due to revenue growth of 27%yoy and 26%qoq. Lower qoq margin was mainly due to rising sugar price (+8.9%qoq) that constitute 25% of the company’s COGS. While higher yoy margin was due to Rupiah sharp appreciation.

􀂄 1Q10 net income even surpassed 3Q09 net income where most consumer goods companies reached its peak quarterly profit due to Moslem festive.

􀂄 We still maintain Buy recommendation on MYOR which currently is trading at PER10-11F of 9.5-8.8x, respectively.

Mandiri Sekuritas Bank Central Asia: 1Q2010 net profit increased 18.3% yoy (BBCA, Rp5,450, Buy, TP: Rp5,400)

􀂄 BBCA reported increase in net profit for its 1Q2010 by 18.3%yoy, to reach Rp1,93 bn, which slightly below our expectation (-5.4%) but in line with consensus estimates (-4.4%).

􀂄 BBCA’s Net Interest Income dropped by 26.8% yoy to Rp2,867bn this quarter. However, the decline occurred, mainly due to SBIs’ income re-classification, which based on the newly PSAK 50-55 implementation, it is posted under Non-Interest Income, led the account jumped by 83.2% yoy to Rp1,903bn, on which SBIs income contributed Rp665 bn. The bank posted net provisioning reversal of Rp303bn, much resulted from repayment on impaired loans, assisted the operating income arrived at Rp2,393bn (+29.8% yoy). YTD NIM stood at 5.5% (vs 5.8% 1Q09), mainly due to lower yield where as in line with market trend.

􀂄 BBCA booked gross loan of Rp120.9bn, a slight decline by 2.5%, where cyclicality took major role, despite marginal growth in the corporate sector as top tier corporate issued bonds over the period. However, consumer sector continued to be the front-liner growth of the bank, thanks to lower interest rates that boosted the bank’s mortgage lending (48.4% of total consumer lending). 1Q2010 LDR posted at 49.6% (vs. 50.3% FY09), while NPL 0.8%, CAR 17.5% and ROE 30.9% (vs. 0.7%, 15.3% and 31.8% FY09, respectively).

􀂄 The bank is currently trading at P/BV10 4.2x and PER10 17.1x. We still call Buy on the counter.

Mandiri Sekuritas ISAT: 1Q10 net income up 139%yoy, but lags behind expectations (ISAT, Rp6,050, Buy, TP: Rp5,400)

1Q10 net income was up by 139%yoy to Rp286bn, despite the jump, this fell below expectation as it represented only 18% and 16% our and consensus FY10F. Net adds in 1Q from 4Q09 was about 5.98mn (vs 4.4mn if 3Q09-4Q09), thus bringing its total cellular subscribers to some 39.1mn. With this, operating revenues grew by 2.5%yoy to Rp4.7tn, while EBITDA also grew by 3.3%yoy to Rp2.24, while maintaining a margin of 47%. The complete results and 1Q financial statements shall be released by May 10, 2010. We currently are reviewing our estimates and assumptions on Indosat, which trades at PER10F of 20.1x.x

Mandiri Sekuritas Bank Central Asia: FY09 results in line with our expectation and consensus (BBCA, Rp5,700, Neutral, TP: Rp5,400)

􀂄 Bank Central Asia recorded a net profit of Rp6.8tn (+17.9% yoy) in FY09, which was inline with our expectation and consensus estimates.

􀂄 The bank actually recorded higher than expected operating expenses, however as it booked lower provisioning expenses, the bottom line is about in line with our expectation.

􀂄 It is worth noting that the bank recorded strong loan growth in 4Q09 of 9.9% qoq, with loans to commercial segment posted the highest growth of 13.1% yoy. Coupled with the decline in absolute amount of NPL in 4Q09 (-36.7% qoq), such strong growth in loans supported the decline in NPL to 0.7% at end Dec09 from 1.3% at end Sep09.

􀂄 At present, Bank Central Asia is trading at 2010F P/BV of 4.2x and PER of 16.7x. As the bank’s share price has already exceeded our target price, we changed our recommendation to neutral.