Daily Focus 16 Feb 2011 - DBS Indo

Banking
Sterling FY10 results
The Indonesian banking industry covering both commercial and rural banks, reported a 21.1% y-o-y growth in total distribution of funds to Rp2,808tr. Total banking assets increased 19% to Rp3,053tr from FY09’s Rp2,571.5tr. Commercial banks (excluding sharia banks) booked 15% higher total credits of Rp2,831.8tr with FY10 NPL ratio declining to 2.57% from 3.3% in FY09. Commercial banks’ total operating income expanded 16.3% to Rp119.15tr with net profit rising 22% to Rp22.76tr. As at end FY10, CAR including operational risk of commercial banks stood at 17.18% with LDR at 75.2% (below the BI’s target of 78%). SOE banks recorded NIM of 6.11%, which is higher than commercial banks’ NIM of 5.73%.

Bukit Asam: Buy; Rp19,700; TP Rp26,650; PTBA IJ
To expand port capacity to 50m tons by end of 2015
Bukit Asam plans to spend Rp2.7tn (US$300m) to boost its port capacity to 50m tons (194%) by end of 2015. Out of Rp1.8tn capex this year, PTBA has set aside Rp550bn for port capacity expansion. The company also plans to increase railway transportation capacity by adding new locomotives and wagons to expand capacity from 11.5m tons to 14m tons by end of this year. We believe that PTBA is on track to build up its logistics network in order to catch up with massive railway capacity expansion that is expected to rise from 11.5m tons in 2010 to 47m tons by end of 2015. The stock is trading at an attractive 11.3x FY11F PE which is below its five years’ average PE of 15.0x. Maintain Buy with TP of Rp26,650 implying 17x FY11F PE and 35% upside potential.