Our Comment We met Bukit Asam yesterday and believe that outlook for the company in 2009 remains attractive. The company indicated net profit in FY08 to come in at Rp1.8t, in line with our expectation, on the back of Rp7.2t revenue. For 2009, it expects sales volume growth of 17% to 15m tons and production to grow by 16% to 12.5m tons, thanks to recent acquisition on coal company inKalimantan and improved railway transportation.
Bukit Asam aims to book revenue at Rp10-11t in 2009, or 39-53% higher than that in 2008. It remains optimistic with its new contract price of Rp884k/ton with Suralaya power plant, its biggest customer. We recommend BUY on the counter with target price Rp8500.
Media reported the Bakrie group has difficulties to meet payments of its repo obligation. Bakrie Capital Indonesia, an investment vehicle owned by Bakrie family, has failed to pay Rp700b debt on time, while Bakrie & Brothers has failed to pay Rp83b last month.
Bank of Indonesia will meet today to discuss BI rate. The consensus expects 50bps cut to 8.25%.
Ricardo Silaen
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