Kim Eng Indonesia Equity Daily, 26 Feb 09

Our Comment


Astra Agro posted net profit of Rp2.631b or up 33% YoY, driven by higher CPO price and gain from sale of its estates. In 4Q08 Astra Agro posted Rp1465b revenue and net profit of Rp502b, which at the surface looks like a strong figure. However, taking a closer look, the company booked Rp403b gain on sale of its estate in Kalimantan and forex gain of Rp78.3b in 4Q08. If we strip-off this one time gain (Rp336b after tax), we come up with net earnings of Rp2295b in FY08. Then, Astra Agro only posted net profit of Rp166b in 4Q08, or only 7.2% of total FY08 normalized profit. This certainly is below our expectation. We maintain SELL on the counter. Budget committee of the parliament approved stimulus package proposed by the government. The amount of stimulus is Rp73.3t, consisting of Rp56.3t fiscal stimulus and Rp17t government spending.


Budget for government spending was increased by Rp2t from Rp15t previously. The increase goes to spending for infrastructure, which becomes Rp12.2t from Rp10.2t. The government expects the spending for infrastructure to be absorbed starting March. The increased government spending is positive. Major beneficiary is Wijaya Karya. The company has healthy order book, diverse portfolio and is in net cash position which puts it in a better position to finance projects. Growth will also be supported from non-construction business line (building material, manufacturing of gas tanks and water heater, etc.) BUY, TP is Rp280 (27% potential upside), which pegs the stock at 10.4x 2009F PER.


Katarina Setiawan


Highlights

· Astra Agro Lestari (SELL): FY08 result below expectation

· Indotambang Raya: Obtains exploration license in protected forest

· Shipping: Banks are yet to lend aggressively

· Astra Graphia: FY08 results From our chartist desk

· IDX: Dow Jones closed at resistance level of trend line, and TD sequential sell countdown. It´s time to accumulate for IDX, still attractive with lower line of Bollinger band 20 day. Technical rebound will continue, with new target 1319. Today´s trading range is between 1230-1247-1270 (support) and 1311-1323-1334 (resistance)

. PTBA: Technical rebound will continue, referring to middle line of Bollinger band 20 day. Maintain target at Rp7900. TRADING BUY