BORNEO LUMBUNG (BORN): In-line 1Q11 NP, despite volume below - reit Buy - Credit Suisse

Current Spot Hard Coking coal price is USD325/t for May delivery, above CS
assumption of USD260/t 2011F ASP for BORN. Despite 1Q sales volume of 533k
tonnes with 1Q production 753k tonnes, we are currently forecasting 3.2m tonnes
FY2011F Sales volume. EPS Sensitivities Analysis to US$10/bbl rise in oil coal
price is -1.0%, 5% volume shortfall is -6.4%, and US$10/t rise in coal benchmark
price is +7.6%. At Rp1,710/share, BORN is trading on 13.4x 2011F PER and
implying 17% upside to end-2011F Target Price Rp2,000 (based on 16x 2011F PER),
we reiterate BUY BORN!

· Fonny Surya: BORN posted Rp 426 bn 1Q11 net income, 18.9% of our FY11E
estimates, 19.8% of consensus estimates. 1Q11 revenue reached Rp 1202 bn,
increased 123.8% YoY, 16.1% of our FY11E estimates, 16.2% of consensus
estimates. Sales volume was 532,609 tonnes, 16.6% of our FY11E estimates. (Our
estimate is 3.2 million tonnes) . ASP is US$254 vs our estimate of US$260. Sales
volume was below our expectations given delayed shipments as BORN was waiting
for BHP pricing for 2Q11. However, earnings were inline with our expectations
given margin is better than our expectations as cost is better than expected. We
expect BORN to be able to catchup with the target volume in 2H11 as production
is ramping up and ISP of 1 mnt should be completed by mid-2011.