INTA, INDY, BLTA and GIAA - JP Morgan

SALES CALL

* Intraco Penta (INTA) – signed distribution agreement for heavy equipment brand Sinotruk, produced by China National Heavy Truck company, that reportedly claims a 20% market share in China. During the signing event, CEO Petrus Halim told the press that INTA’s heavy equipment sales has grown by 70% yoy to Rp1.9trn in FY10, driving the 121% yoy growth in net profit to Rp83bn in FY10. My take – INTA has not released FY10 audited results, so the CEO guidance on FY10 profit (perhaps unaudited) is new news to the market, that implies an impressive 4Q10 net profit of Rp35.5bn (1Q10=Rp13.5bn, 2Q10=17.5bn, 3Q10=16.5bn). Based on such result, the management’s ambition to hit FY11 net profit target of Rp210bn may increasingly look more credible, that would imply FY11 P/E of under 6x. During the signing ceremony, Mr.Halim also mentioned the plan to raise US$150mn financing through bonds and rights issue, and the ambition to acquire a coal mine.

* Indika Energy (INDY) – there is a one full page colour advert on PT Mitra Bahtera Segarasejati (MBSS), the company that INDY is looking to acquire through an IPO. MBSS is an integrated transport and logistic coal service company. MBSS looks like a good company with strong entry barriers, that is set to grow by 30 plus percent. The market has been somewhat concerned with the possibility of INDY over-paying the deal, but we do not think it is a likely case. Should be a good deal for INDY. BUY.

* Berlian Laju Tanker (BLTA) – IDX official Mr. Eddy Sugito told the press that BLTA’s subsidiary, PT Buana Listya Tama, is planning an IPO to raise US$120mn by selling a 39% stake (implied market cap of US$307mn). BLTA’s current market cap is US$440mn.

* Garuda Indonesia (GIAA) – Bisnis Indonesia’s press article highlights the fact that Bahana Securities’ MKBD (net adjusted working capital) has fallen by 59% to Rp82bn when GIAA shares hit Rp570, or 24% lower from IPO price. Danareksa’s MKBD has fallen by 53% to Rp222bn as of 23 Feb. My take – Bahana, Danareksa, and Mandiri Securities have fully underwritten the IPO. Interpolating from these figures, it appears that a Rp10 down move in GIAA share price has resulted in Rp6.5bn reduction in Bahana’s MKBD. If the sensitivity is correct, Bahana’s MKBD could turn negative when GIAA’s share price hits Rp440/share.