United Tractors, A challenging year, Danareksa

FY12 sales volume forecast lowered to 9,000 units
Sales of Komatsu rebounded 3% mom to 773 units in May 2012. By sector, the mining accounted
for 62% of the total sales volume, followed by the agro (18%), the construction (13%) and the
forestry (7%). Komatsu’s market share, however, was lower than in 2011 (45% in 5M12 vs 49% in
FY11). This owed to the fierce competition in the heavy equipment industry, especially the 20-ton
class excavator segment (40% of heavy equipment sales volume and 20% of heavy equipment
sales value). On account of this stiff competition, we trim our FY12-13 sales volume forecasts by
5.3-9.6% to 9,000-9,450 units. We feel more comfortable with these numbers, especially since the
highest monthly sales so far this year is the 821 units recorded in March. Moreover, the sales volume
in the last month of the year, December, is typically low. At the same time, we also foresee lower
margins as UT battles the competition through its promotional and financing schemes, although
a larger contribution from after-sales services should help support its margins.

UNTR Downgrade, Early warning signs, YU

Our recent channel check reveals early signs of pressure in the heavy
equipment business from increasing competition. While we do not yet
see a major earnings downside risk at this stage, the generally riskier
environment warrants a valuation de-rating.

We cut our 2012-13 estimates by
5-6% on lower sales and margins.
Target price is lowered to Rp26,000
(based on lower target P/E of 11.6x,
-1SD from the 3-year mean) to reflect
the stock’s higher overall risk due to
increasing competition and exposure
to the softening coal price.
Downgrade from Neutral to
Underperform.

United Tractors, Feb Volume Wrap: A recovery, but tracking lower than guidance in 1Q, JP Morgan

UNTR's 14% outperformance versus the JCI over the last quarter has been
boosted, in our view, by its limited exposure to policy risk and inflation
pressures relative to other blue chips. While growth prospects and
favourable currency leverage still dispose us positively, tighter valuations
now mean that UNTR probably needs to deliver Komatsu sales matching
guidance (9,000-9,500 units) rather than our more conservative 8,000 unit
estimate to open up fresh absolute upside. Maintain OW, Rp 32,500 PT.

United Tractors, Dominates heavy movers, CLSA

As the dominant domestic player in both the heavy-equipment and mining-contracting sectors, United Tractors (UT) will benefit from rising coal demand. Mining remains its key sales driver, while we expect the new land bill to lead to a surge in demand for construction equipment from 2013. Production is gradually rising at its new coal assets, which also provides upside. The company generates more than 25% ROE and we estimate a 67% total shareholder return over 2012-14.

United Tractors, Good performance, CLSA

UT reported a solid FY11 result where revenue and net profit rose 48%
and 52% YoY, respectively, beating consensus estimate by 7%. UT is a
direct beneficiary of growing demand for coal given its dominance in both
heavy equipment and mining contracting business. The upside comes
from continuing strong demand for mining equipment, potential boom in
demand for construction equipment as more infra gets developed, and an
increase in production of its coal assets. BUY.

United Tractors (UNTR.JK) Alert: Weak January Komatsu Sales But Not Alarming, Citi

United Tractors (UNTR.JK)

Alert: Weak January Komatsu Sales But Not Alarming

 Weak start for heavy equipment sales but management maintains guidance —

Komatsu sales fell 15.6% Y-Y (+0.7% M-M) in January to 617 units. The company

attributed the surprising drop to customers’ requests for postponement of their order

deliveries due to heavier-than-normal rainfall in January. We construe the drop as

delayed deliveries and expect a substantial rebound in the next couple of months.

We remain comfortable with our 13% Y-Y sales growth in 2012E to 9,560 units.

Management also maintains its 10-15% growth guidance for 2012.