Event
We
analyse ICBP’s FY11A result (released on 20/3) in detail, and take
the
opportunity to
update our investment thesis, earnings forecasts/outlook,
and
valuation. We
maintain our Underperform call, but raise our valuation and
PT
to Rp5,100 from
Rp4,900, and raise our FY12E earnings estimates by 7.2%.
While
ICBP is trading only modestly above our fair value estimate, we
believe
the story remains
unexciting on account of the company’s relatively weak
growth prospects,
coupled with its premium operating margins. We view the
stock as a
fully-valued “cash cow” that is likely to continue to tread water,
and
in a growth market,
significantly underperform on a relative basis.
