Indonesia Equity Strategy, FY2011 Earnings Preview, JP Morgan

Our analysis suggests that 4QFY11E Net profits for the JP Morgan
Universe grew at about 10% y/y, and 4% q/q. In aggregate these numbers
are in line with consensus. Compared to previous quarters, we note a
higher proportion of stocks with earnings seen coming in below consensus.
However these are concentrated in the resources space. In contrast we
anticipate property sector earnings coming ahead of the street, along with
autos and industrials.
! Earnings Estimate Overview: We forecast an overall growth of 4% q/q
and 10% y/y for total net profits of Rp32.6tr (excluding BRMS and
BULL). Our numbers are within 2% of consensus in aggregate.

! Property & construction: We anticipate earnings for all construction
and property companies under coverage ahead of consensus estimates,
with the exception of Alam Sutera, where we are in line with the street.
! Industrials & Autos: Given volumes reported for 4Q we expect 4QPAT
for UNTR & ASII to be 15-26% ahead of current consensus forecasts.
! Resources: Resources stand out as a sector where, with the exception of
ADRO, the risks are squarely to a miss. Ironically though, we think the
longer term derating of the space, sets the bar low for performance.
! Banks: Our current estimates suggest Bank Earnings along the lines of
consensus. BDMN will be the first major bank to report earnings, but
with most of the larger banks due in March, and results may be distant as
a catalyst to reverse recent underperformance.
! Telcos: The initial read from EXCL’s results was negative. The impact
of changed regulations on value added services may be a drag on
earnings for TLKM & ISAT.

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