APLN, META, and INCO - JP Morgan

* Agung Podomoro Land (APLN): Reported FY10 net profit of Rp242bn, at the low-end of the range by the four IPO underwriters (Rp242bn, Rp255bn, Rp341bn, and Rp320bn). The key take-away is the HoH profit slowdown – Rp160bn in 1H10 and Rp80bn in 2H10. The key share price driver from here on will be 2011 profit delivery: the latest marketing sales guidance is between Rp3.0-3.5trn, versus Liliana Bambang’s forecast of Rp2trn. But how will that translate to year 2011 profit? (That’s the big questionmark faced by the market today). The NPAT 2011 forecast range by the four IPO underwriters is fairly wide (Rp481bn, Rp542bn, Rp552bn, and Rp673bn), implying 2011 P/E of 9.7-13.6x – in theory, these forecasts are looking conservative given the latest marketing sales target by the company, but again after the 2010 profit realization, no one can be sure. My take – let’s tune-in to the management call tomorrow at 10:30am JKT, +6221 2556-7777, passcode 1282#

* Research call – Nusantara Infrastructure (META IJ): BIG dreams. Liliana Bambang (analyst) visited META recently. The Rajawali group recently acquired a 23.6% stake in the company. They are determined to expand its assets from US$400mn to US$4bn in the next five years, via asset acquisition and greenfield expansion. The company currently owns four toll roads, with total length of around 34.7km, which includes Pelabuhan Makassar toll road (Makassar harbor toll road), Seksi Empat Makassar toll road (airport toll road), and Kebun Jeruk-Penjaringan toll road (connecting West Jakarta to airport). My take – could be worthwhile to be put on your stock screen, although more of a long term speculative investment at this stage.

* Research call – PT Inco. US$500MM net cash = potential high dividend payment. Raise price target to Rp5,400. We estimate INCO’s net cash level is likely to be ~ US$500MM by 1Q11E and see a potential payout of US$300MM, or Rp272 per share, as total dividend in May 2011. Historical analysis indicates that INCO’s dividend payout as a percentage of net cash has been relatively stable in the 65%-75% range. With a US$300MM payout, INCO could potentially offer investors a 5.8% absolute dividend yield, receivable in two months. The AGM is scheduled on April 13, 2011, in Jakarta and we would expect any such dividend to be paid within 30 days post-AGM.