ITMG, Solid delivery, CLSA

ITM’s FY11 earnings were 11% ahead of our estimates and 14% of
consensus. ITM continues to provide the highest earnings visibility of the
Indonesian coal producers, completing a hedge program to lock in 2012
earnings. We adjust 12CL earnings by -5% to reflect the hedged coal and
oil volumes. A reserve upgrade combined with benchmark coal price
strength means the stock should trade at mid-cycle multiples and we
raise our target price to Rp,49,000/sh. Stock remains our top sector pick.

CLSA INDO update: ITMG FY11 Result 11% ahead of CLSA on strong ASP, hedging gain

Stock: Indo Tambangraya Megah (ITMG IJ)

Market cap, T/O: US$5.4b, US$2.5m

Rec, TP: BUY, Rp46,000/sh

Event: FY11 result released, 11% ahead of 11CL, 14% ahead of consensus estimates

Our resources analyst Jayden’s comments below.

·         ITM (the 3^rd largest coal miner by market cap listed in Indonesia) released audited accounts after market close today.

·         The earnings result is 14% ahead of consensus and 11% ahead of CL estimates.

·         Production was in line with guidance at 24.7mt for the full year, however a strong 4Q11 ASP led to revenues ahead of our and consensus expectations.