Mansek Medco Energi:Discovers additional oil in Libya ’s Area 47 (MEDC,Rp2,975, Buy,TP Rp3,500)

The company reported an additional oil discovery in Area 47,Libya.The discovery is the twelfth oil &gas discovery out of 17 wells drilled.This discovery will enhance the overall and ultimate potential in such block. Aside from that,PT Pertamina ’s President Director said that they will set up a joint venture with MEDC to develop an oil block in Libya.We view that both issues should have a positive impact to MEDC.Currently,the company is trading at EV/2P reserves of US$2.4/boe and US$3.9/boe,with or without Libya block in their portfolio.

HYPER-INFLATION: Position for Rare Market Catalyst, Says Trader Vic

Published: Monday, 19 Jul 2010 | 5:38 PM ET

He traded for George Soros and Leon Copperman during his 40 years in business and his Trader Vic books are the stuff of legend.

Victor Sperandeo has seen almost every kind of market, but he’s now preparing for something rarely seen.

He's preparing for hyper-inflation.

Now don't think Sperandeo takes any pleasure in his austere message, he doesn't. The first thing he tells the desk is that he hopes he's wrong.

But history suggests otherwise.

"If you research history there have been 30 occasions of hyper-inflation," he says. "All the numbers that take place 100% of the time in the other 30 occasions are HERE."

We know it's scary stuff and somewhat extreme but Sperandeo makes the case in an easy to understand way without fear mongering.

JPM Indo: Rp70,000 Astra International?

Astra International – No signs of share price over-shooting; a solid Buy still. Aditya Srinath (analyst) was positively surprised by the 70,384 units car sales in June (16% m/m) with continuing momentum to Lebaran. His FY10 EPS forecast is already 8% higher than consensus, the 1H10 results due on the 29th should trigger another round of upward revisions (this is becoming a quarterly ritual now). On the sales desk we understand why sell side analysts like gradual EPS adjustment, rather than one step adjustment. But this is getting boring now for ASII. There is no strong reason on why ASII could not deliver another 25% EPS growth in FY11 (JPM forecasting a mere 5% growth), and a P/E re-rating back to its historical high (Nov-07) of 17x. If these two happens, we would be looking at a share price target of around Rp70,000 for ASII (another 40% upside). Gaikindo automotive fair is on-going now, so July is looking like another strong month for car sales. *** Also worth looking at the automotive peripheral stocks like Multistrada (MASA) that manufacturers tires, on 7x FY10 P/E with 25% plus growth potential in FY11 and FY12 ***

Mansek WIKA Thriving steadily

Although WIKA’s 1H10 financial results will come in late due to their limited review, initial number shows results likely to be above expectation. Revenue and net profit may reach Rp2.7tn and Rp122.2bn, which reflect 33% and 48% of their FY10F target. This also shows that net margin is improving, in fact, it would be the highest ever. Furthermore, they are still in a net cash position, reflecting Rp85/shar! e (17% of their current share price). As such, we maintain our Buy call with higher price target to Rp570/share. It reflects PER10-11F of 12.3-9.5x, or 19% discount to JCI (average discount since listing date).

1H10 net profit grew 30% yoy. Wijaya Karya’s President Director reported that the company was able to book 1H10 net profits of Rp122.2bn (+30% yoy), despite slightly lower revenues of Rp2.7tn (-9.0% yoy). Initial 1H10 top line and bottom line figures reflecting 33% and 48% of their FY10 target of Rp8.1tn and Rp253bn, respectively. This is above expectation, as 4-yrs average net profit is at 44.1%. Note that WIKA’s 1H10 financial results will ! come in l ate due to their limited review process, as requested by their board of commissioner.

Improving margin. Such figure reflects 1H10 net profit margin of 4.5%, which is better from its record high of 4.1% in 1H08. Nonetheless, pattern from the past 2 years suggest that it will slightly decrease in 2H, thus FY net margin will be lower of around 1%. Yet, should it decrease by such number, FY10 may reach 3.5%, which is still the highest ever. It is also better than our forecast of 3.3% in 2010.

In a net cash position, reflecting Rp85/share. Company hinted that cash position as per 1H10 would reach Rp800bn, whilst total debt of some Rp300tn. Cash level will gradually increase in 2H10. They expect cash to reach close to Rp1tn in FY10. Current indicative net cash position reflects cash/share of around Rp85/share, or 16.6% of current share price.

Maintain Buy with a TP of Rp570/share. On average, WIKA is trading at 19.4% discount to JCI since it is listing date. Based on our forecast, the company is currently trading at PER10F of 11.0x or around 28.7% discount to JCI (of some 15.5x), very much lower compared with the average discount. As such, we maintain our Buy recommendation with higher target price of Rp570/share, reflecting PER10-11F of 12.3-9.5x.

A Cup of Tea 9 June'10

US Stocks mostly rose in volatile trading on Tuesday, led by materials and financial shares. Once again, the market was treated to late-day volatility, this time with stocks closing at or near session highs after a wobbly session. Overnight, Federal Reserve Chairman Ben Bernanke said the U.S. economy seemed to have enough momentum to avoid a "double-dip" recession, giving support to domestic-oriented companies. The Dow Jones industrial average gained 123.49 points, or 1.26 percent, to 9,939.98.
A top Federal Reserve official said on Tuesday high unemployment and low inflation justify holding benchmark interest rates ultra-low for "quite some time".

Indonesian shares climbed 1 percent on Tuesday while most Southeast Asian stocks ended mixed as energy and resource shares recouped recent losses. Singapore and Thailand ended off their day's highs, edging down 0.2 percent and 0.3 percent respectively. Malaysia .KLSE was up 0.15 percent, the Philippines was 0.3 percent higher and Vietnam inched up 0.06 percent.

Indonesia, Asia's second best performer, trades at a 12-month forward price to earnings of 13.1 times, the highest in the region, ahead of Malaysia's 13.0, Singapore's 12.4, the Philippines' 11.9, Vietnam's 10.8 and Thailand's 10.3, ( Thomson Reuters Starmine).

“Yes, I’m worries that Indonesia would be affected by the European debt crisis, which might entail a reduction in the financing activities of European and U.S. banks. The deterioration in investment sentiment as a result of troubles in Europe could trigger a repatriation of foreign capital back to investors' home countries, which would adversely impact Asian assets held by foreign investors.”


But on the other hand, I think China is "not as bad as people think". Its middle class, along with India's, is growing rapidly. Even Federal Reserve Chairman Ben Bernanke blessed the US economy this week when he said a double-dip recession is not in the cards.

Yes, there is risk of losing money short term, so the strategy is to be prudent, stay diversified and look for accidental high-yielders.

I do not think we will come anywhere near low last month where we were in the dark old days. I think the negativity and pessimism about the markets is overblown. There's just too much good, too many opportunities and too many things going right to see those levels again.

“Highly Recommend to accumulate Metal (INCO, TINS), Coal/Energy (PTBA, BUMI, ADRO, PGAS) and CPO (SGRO, BWPT, LSIP)for Mid Investment, that I believe will have good result for 2Q10.”






Bang Juntri
DISCLAIMER: This report is issued by Bang Juntri. Although the contents of this document may represent the personal opinion of Bang Juntri. We cannot guarantee its accuracy and completeness.