KLBF Hold

Kalbe Farma 1Q12 Results: Meet our expectations Revenues inline with expectations Revenues grew 27.7% to over Rp3tr in 1Q12, up from Rp2.4tr in the same quarter last year - reaching 23.5% of our full year forecast of Rp12.8tr, i.e. inline. All business segments recorded strong growth in the period. The only segment to disappoint was the consumer health segment whose 1Q12 revenues were only about 20% of our full year target. Operating profits also reached our expectations The operating profits grew by 23.6% yoy to Rp515bn in 1Q12, or up from Rp417bn in the same period last year. The figure was slightly above expectations, reaching 25.7% of our full year forecast of over Rp2tr. Bottom line: slightly above forecast At the bottom line, Kalbe recorded a 27.7% yoy increase in net profits to Rp403bn, or up from Rp316bn in the same period the year before. The figure is 26% of our full year forecast of Rp1.5tr. Lower profit margins, as expected Profit margins weakened in 1Q12, as expected. The gross margin fell to 49% from 51.8% in 1Q11. This was expected, however, given the stronger contribution from the distribution unit. The operating margin also declined, falling to 17.2% in 1Q12 from 17.7% in 1Q11. The net margin was stable at around 13.9. Still HOLD with a TP of Rp3,725 We are satisfied with the company's performance in 1Q12 as our full year forecasts were reached in almost all accounts. As such, we maintain our HOLD recommendation with a TP of Rp3,725, implying a 2012F P/E multiple of 22.6x. At the current share price level, the counter is trading at a 2012F P/E multiple of 21.4x.

AISA Buy

Tiga Pilar Sejahtera Food Upward revision to reflect strong 4Q11 Adjustments made to reflect the 2011 results The 2011 revenues came in slightly higher than our forecast with higher-than-expected revenues from the food manufacturing and rice units. In 2011, revenues from food manufacturing reached Rp982bn (vis-à-vis our forecast of Rp835bn) while revenues from the rice unit reached Rp726bn (vis-à-vis our forecast of Rp686bn). Elsewhere, however, the plantations unit failed to reach our target of Rp164bn with revenues reaching only Rp81bn in 2011. We have made some adjustments accordingly, raising our full year revenues forecast to Rp2.77tr from Rp2.68tr previously, an upward revision of about 3%, but reducing our full year net profit forecast by 13% to Rp181bn from Rp207.5bn previously. Forecasting stronger food manufacturing revenues coming from Taro snack We have raised our forecasts for the food units with a stronger contribution coming from the snack foods unit as revenues from Taro were first booked in January this year. We have upped our full year revenues forecast for the Food unit by nearly 15% to Rp1.37tr from Rp1.2tr previously, raising our forecast for the snack foods unit from Rp244bn previously to Rp322bn. Forecast revenues for rice unit revised up by 5% We have also raised our revenues forecast for the rice unit to reflect the strong 2011 performance. We upped our forecast to Rp1.26tr from Rp1.2tr previously. The company is in negotiations to add another two mills this year as part of its long term plans, resulting in total capacity of 200K tons of rice this year, involving a total investment of between Rp170bn to Rp200bn. The new mills shall be located in East Java and Central Java. Forecast revenues for plantations unit reduced We have reduced our revenues forecast for the plantations unit as we anticipate CPO production to start in the second half of the year. In addition, the anticipated 5,000ha new planting plan is now shifted from 2011 to 2012, thus raising this year's new planting program to 11,800ha from 6,000ha previously. As a result, our 2012 revenues forecast is slashed to Rp148bn from Rp295.5bn previously. Maintain BUY with a higher TP of Rp950 Following the adjustments, we slightly raise our TP to Rp950 from Rp925 previously. The new TP implies 2012F P/E of 15.4x. Currently, the counter trades at 2012F P/E of 10.5x.

BSDE Rekomendasi Buy

Bumi Serpong Damai Where the future lies Strong marketing sales Marketing sales reached Rp828 bn in 1Q12, up 17% yoy. The 1Q12 marketing sales are also 20% of our full year target of Rp4.1 trillion (which is 19% higher than the marketing sales achieved in 2011). The major contributor to the marketing sales is BSD city, followed by Kota Wisata and Grand Wisata. Note that as a result of seasonality, BSDE usually books 40% of its marketing sales in the first half of the year and 60% in the second half (since more clusters are launched in the second quarter). BSD City is about to launch four new clusters: FOGLIO, PLACIDO, GIARDINA HEIGHT, and ALBER EXTENTION by the end of April. The total number of units to be launched is 198, with prices ranging from Rp900 million to Rp2.1 billion. The Serpong area has great appeal Continued improvements in the infrastructure supported by the availability of access roads, suggest a bright future for the Serpong area. Given the development trend in this area, BSDE is optimistic that Serpong will become a new CBD area within the next 5 years, a significant change since 70% of the BSD City workers are still commuting to Jakarta, even up to now. Demand in BSD City remains high and the area accounts for 65%-70% of the company's total marketing sales. By selling around 100 ha per year, or about 1,000-2,000 houses, BSDE's current huge land bank of 3,055 ha in the BSD City area should be sufficient for around 30 years of development. Strong appetite for BSD City property translates into continuous land price appreciation. For the residential and commercial areas, average land selling prices reached Rp4.5 mn and Rp7mn, respectively, in 2011. This year, we forecast 15% selling price increases. Strong internal funding Despite its huge landbank, the company is eager to acquire more land, especially since the current land acquisition price is only Rp300-400k per sqm. For 2012, BSDE has earmarked Rp2 trillion for capex, of which Rp600-700 bn will be used for land acquisition and the rest for building the infrastructure and financing the construction of the office buildings. With cash of Rp3,479 bn at the end of 2011, and only a small amount of debt financing, we anticipate that the company will remain in a net cash position of 35% at the end of 2012. TP raised to Rp1,580 We remain optimistic on the company's outlook - especially the BSD City project which has plenty of room to be developed going forward. Additional growth will come from BSDE's other projects which have shown consistently good performance. Surging land prices have boosted the value of the company's assets, resulting in total NAV of Rp61,508 billion. By applying a 55% discount to the NAV of the total company, we arrive at a new Target Price of Rp1,580. BUY.

AALI Rekomendasi Hold

Astra Agro Lestari 1Q12 result Earnings fall on lower ASP.... Sales reached Rp 2.5tn in 1Q12 (-6.6% YoY), above our forecast but in line with the consensus. The lower CPO and PK ASP in 1Q12 (-6.9-38.7% yoy) dragged down the 1Q12 revenues despite higher CPO and PK sales volume (+5.6-63% yoy). As a result, the bottom line fell 42.2% YoY to Rp 378bn, 17% of our full year forecast and 14% of the consensus. .... coupled with higher costs and a higher opex to sales ratio Margins were weaker, as expected. The gross margin was down by 1,030bps to 28.6% due to increases in harvesting and maintenance costs (+10% YoY, 32% of costs) as the number of workers increased along with the addition of 17k ha of newly mature areas. The lower margin was exacerbated by the higher opex to sales ratio, up from 5.7% to 8.1% in 1Q12. In particular, the company recorded higher selling expenses (+34% YoY, 37% opex) and higher wage costs (+23% YoY, 25% opex). The operating margin slumped 1,220bps to 20.6%. Strong external production growth FFB harvested reached 1.09mn tons (+4.6% yoy, -19.6% qoq) thanks to the higher external production of 493k tons (+14.6% yoy, -24.2% qoq) while the nucleus production reached 796k tons (+0.7% yoy, -4.7% qoq). The company's intensification program ensured a relatively stable yield of 4.6 tons/ha, slightly down as the newly mature area increased. CPO production reached 289k tons (+5.2% yoy, -14.2% qoq), in line with our forecast while PK production reached 63k tons (+11.2% yoy, -13.5% qoq). New plantings reached 150ha, with replanting of 160ha. Currently AALI is in the process of obtaining land rights in South Kalimantan. Maintain HOLD, TP unchanged For the meantime we maintain our HOLD recommendation, awaiting the 1H12 results. Our concerns are on the limited production growth and weaker margins although its net cash of Rp 558bn and decent dividends (4.5% dividend yield with Rp 995 DPS) do offer some support. Our TP of Rp 23,100 implies FY12-13 P/E of 16.2-14.4x. The shares currently trade at 15.5 x P/E, an 18% premium to its peers.

BWPT Rekomendasi Beli

BW Plantation 1Q12 Result Top line growth from higher CPO volumes Revenues grew 55% YoY in 1Q12 to Rp 268bn thanks to higher CPO sales volume of 31k tons (+75.8% YoY) despite slightly lower CPO ASP of Rp 7,835/kg (-0.5% YoY). Net profits grew 52% to Rp 82bn in 1Q12, or 21% of our full year forecast. Margins, however, were weaker. Lower margins margin were due to higher fertilizer costs and employee benefits, +17-28% YoY, respectively. The gross margin fell by 1,110bps to 61%, while the operating margin declined by 850bps to 44.8%. Higher growth from plasma despite its small portion Production wise, plasma FFB production grew 46.3% YoY to 5,032 tons while nucleus FFB production grew a slower 3.6% YoY to 111,215 tons. As a result, CPO and PK production was up by 8.2-11.1% to 27,426 tons and 4,688 tons, respectively. The CPO and PK production in 1Q12 reached 21% of our full year forecast. Indeed, according to the management, 1H12 will account for around 40% of this year's production. CPO sales volume increased to 31,001 tons (+75.8% YoY), which includes last year's inventory of 2,733 tons, while PK sales volume was little changed at 5,100 tons. 150k ha of land bank by 2015 The company's target is to increase its land bank to 150k ha by 2015 from the current 114k ha. This year, the company plans to increase its oil palm plantations area of 10,000 ha to 20,000 ha in Kalimantan. BWPT has allocated Rp 270bn for acquisition purposes. In March 2012, BWPT signed a CSPA with PT Prima Cipta Selaras, which has a location permit covering 11,203 ha, some 2,059 ha of which have already been planted in nucleus areas, in a deal worth Rp 175bn. The estates are located in Kutai, East Kalimantan, near the SSS estates. Net gearing at its highest level Net gearing has increased to 135% from 75% in 1Q11. This year capex will reach Rp 1tn with funding coming from additional bank loans with a lower cost of funds. Note that another 60 tons/hour mill will be built at the SSS estates this year with expected completed by 2014 to process FFB from 24,433 ha of new maturing areas. The cost of the new mill is Rp 120bn. Capex will also be spent on new plantings and to acquire more land bank. Maintain BUY, higher TP of Rp 1,910 We have adjusted our model to reflect the new acquisition and reduced our WACC assumption to 12.8% to reflect the lower risk free interest rate of 8.5%. We maintain our BUY recommendation and raise our TP to Rp 1,910, implying FY 12-13F P/E of 20.5-14.6 x, which is justified, we believe by the company's strong production growth profile, high productivity and excellent margins. The stock currently trades at 17.7 x P/E, offering 15.8% potential upside.

MAPI Rekomendasi Beli

Mitra Adiperkasa A middle class growth story Strong revenues growth to be maintained At the top line, net revenues grew a brisk 25% to Rp5,890 bn in 2011. Furthermore, profitability remains good with the gross margin edging up to 51.66% in 2011, or slightly above our previous forecast of 50.2%. Going forward, MAPI is confident it can maintain its high margins. This year, with the continued high demand from the country's burgeoning middle class coupled with the company's aggressive expansion strategy, we expect revenues to grow another 25% to Rp7,314 bn. Strong performance in the first quarter MAPI has indicated sales growth of 29% yoy in the first quarter of 2012 to Rp1,637 bn, up from Rp1,269.10 bn in 1Q11. This represents 22% of our total revenues forecast for the full year, consistent with MAPI's seasonal average in the first quarter in previous years. To help spur revenues growth, MAPI is adding more brands to its portfolio (in the first quarter of the year, MAPI added 3 new brands: Spanx, Diva, and HossIntropia). Although the company's focus is on store expansion, MAPI will still acquire new brands in an effort to maintain its position as the leading retail marketing company in Indonesia. Continuing to expand its retail network MAPI added 32 new stores across the country in the first quarter of 2012, mostly in the food and beverages segment, lifting the total number of stores it manages to 1,076. This translated into the addition of 5,214 sqm of store space during the period, resulting in total store space of 470,352 sqm. For 2012, MAPI plans to add around 60,000 sqm of additional floor space, most of it in Jakarta thanks to the opening of two new department stores (Sogo in Kota Kasablanka and Debenhams in Kemang Village), which together shall add 30,000 sqm of store space. With Rp600 billion of capex needed for this year's expansion, financed from internally generated cash and external financing, we expect net gearing to reach 52% in 2012. TP raised to Rp7,200 We are encouraged by 2011's excellent performance and remain confident that the company can repeat this success again in 2012. Our confidence is grounded in the country's solid economic growth which is creating a burgeoning middle class and therefore higher demand for MAPI's products. We raise our Target Price to Rp7,200, implying a FY12/13 PE of 25.5-20.5x. BUY maintained.

JSMR Direkomendasi Beli

Jasa Marga 1Q12 traffic volume Growing on a monthly basis Jasa Marga's traffic reached 97.8mn vehicles in March 2012, or up 7.5% mom. And even though there are more operating days in March than in February, daily average traffic still grew by 0.5% mom to 3.16mn vehicles per day, depicting resilient growth despite concerns that inflation would pick up if the government hikes subsidized fuel prices. In regard to new toll road sections, the Semarang-Solo and Surabaya-Mojokerto sections have shown promising signs of growth. New toll roads a boost to traffic Cumulatively up to March 2012, Jasa Marga's total traffic reached 284.6mn vehicles, or up 12.1% yoy, with the new sections providing a source of growth. Other cities besides Jakarta - such as Semarang, Surabaya, and Medan - have seen solid traffic growth reflecting brisk economic activities in those cities. Traffic congestion is severe in greater Jakarta and other cities might offer better infrastructure for investment and business. This shift in economic activities to areas out of Jakarta is likely to continue in our opinion. Share divestment plans Jasa Marga has announced plans to divest its minority holding in Citra Marga Nusaphala (CMNP) and its own shares acquired through share buy backs. Jasa Marga holds a 3.8% stake in CMNP worth Rp195.8bn (81.6mn shares), while the company's holding of its own stock is worth Rp122.5bn (24.5mn shares). Hence, through the planned divestments, Jasa Marga would raise around Rp318.3bn. These funds would be used to finance capex for new toll roads. Looking pricey Jasa Marga's operational performance is inline with our expectations. Looking ahead, the company has major investment plans with seven new toll roads in the pipeline and new sections being added. This provides the impetus for growth, although land acquisition remains a lengthy process. It remains to be seen whether new legislation will have the desired effect and speed up the land acquisition process. Currently we are revisiting our numbers - especially in regard to the company's investment plans. At the current share price, the stock trades at PER FY12-13 of 32.9-37.4x and EV/EBITDA of 16.4-15.3x, a touch pricey, in our view. Maintain BUY at the moment.