Daily Focus 25 Feb 2011 - DBS Vickers

Astra Agro Lestari: Buy; Rp21,700; TP Rp30,650; AALI IJ 4Q10 results in line
• Astra Agro Lestari (AALI) booked 4Q10 net profit of Rp788.6bn – in line with expectations
• Costs were higher than expected, offset by higher other income
• New planting reached c.3.5k ha
• Buy call reiterated for 41% upside to Rp30,650 TP.

London Sumatra P: Buy; Rp10,500; TP Rp13,500 prev Rp14,200; LSIP IJ Rubber production below forecast
• London Sumatra (Lonsum) booked 4Q10 net profit of Rp391.5bn – slightly below
• The variance was from 33% lower-than-expected rubber volumes
• New plantings reached 1.1k ha – below 3k ha target
• FY11F-13F EPS cut by 7-8%, TP lowered to Rp13,500. Buy call maintained for 29% upside.

Astra International: Buy; Rp51,900; TP Rp60,000; ASII IJ Beat expectations due to higher non-operating income
• 4Q10 net profit surged 36.4% yoy to Rp4,004 billion, 33% ahead of market expectations
• Despite FY10 earnings growing 43%, dividend payout ratio was unchanged at 45%
• Maintain BUY; earnings under review with upward bias.

United Tractors: Buy; Rp22,900; TP Rp27,900; UNTR IJ Net profit below estimates due to Pama’s margin pressure
• Strong Komatsu sales cushioned Pama’s weak earnings. Expect margin improvement at Pama this year.
• Beneficiary of positive outlook from coal sector
• Attractively priced at 14.6x FY11F PE for 20% earnings CAGR over FY10-12F. Maintain Buy, TP Rp27,200.