Mandiri Sekuritas BTEL to establish a new subsidiary (BTEL, Rp142, Under-review)

BTEL plans to establish a new subsidiary which is engaged in data on 3Q10. Bakrie Connectivity will provide data services and will manage optical networking, including supervise the media business (TV One, ANTV and Vivanews) owned by Bakrie Group. BTEL will deposit the initial capital amounting of Rp500bn, with funds obtained from US$250mn global bond issuance. BTEL will issue a global bond maturing in May 2015, with interest up to 11.5% and it has rating of B from Fitch Ratings agency.

Mandiri Sekuritas Bayan Resources: 1Q10 net profit up 26.8%yoy (BYAN, Rp6050, Under-review)

Bayan reported net profit grew by 26.8%yoy to Rp144bn, as operating margin improve for almost double compare with 1Q09. Company booked revenue up by 7.7%yoy which seems came from higher coal prices, meanwhile operating profit up by 100.5%yoy as significant negative growth came from operating expenses. Barging cost down by 40%yoy and salaries expense down by 34%yoy compare with 1Q09. We have Sell recommendation on stock and currently we are reviewing our valuation due to 1Q10 results.

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.