Date BrokerSectorStock News

18-Jan Morgan Coal PTBA Earnings : Raised earnings for 2011F by 15% and for 2012F by 14%
Stanley ASP : ASP 2011 - US$84 / 23% increase from 2010 ASP
Constraint : Slow railway expansion; PTBA's rail capacity is effectively
value
Reserves : Huge reservers of high quality coal (2bn tonnes @ 6000kc
Thesis : PTBA has the largest resources and reserves of the 4 I
which implies potentially higher production growth if the
resolved.
18-Jan CLSA Telco TLKM Earning : Earning risks outweigh the defensive characteristic
Operational trends at TLKM are bleak with costs having g
of the past 11 quarters; a trend we expect to continue
Constraint : Hyper competition, eroding margins, mobile maturing ind
Expansion : Diworseification, entering Cambodian market. Lack of foc
Smaller foreign market (population of 15m vs ID at 220m
Positive : Strongest balance sheet across industry, little chance of d
18-Jan CLSA Telco ISAT Background: ISAT is 2nd biggest cellular provider with 23% market sh
segment in ISAT, growing by 21% CAGR over the past 5 y
Strategy : value-based approach, where it is last to enter the price
strategy will be focusing on quality & better margins rath
cellular penetration has reached saturation point.
18-Jan CLSA Telco EXCL Background: Fastest growint cellular provider in ID, commanding 23
have grown by 38% CAGR vs Industry average of 29%.
Debt : EXCL's net gearing is down from 407% in '08 to 89% in
rights issue in '09 & several sales of tower assets.
Div Policy : No minimum obligation thus more cash could be allocate
expansion
18-Jan UBS Coal PTBA constraint : Low average selling price that's 15% below domestic pe
much-debated infrastructure expansion.
PLN's further delay to construct Bangko Tengah powe
management expectations of 2014. The plant is suppose
coal, equivalent to approximately 20% of future sales volu
18-Jan UBS Coal ADROPrice : 2011 ASP estimate is limited as ADRO has priced 50% o
2010 benchmark price, while remaining volumes has yet
Output : Production pressure in 1 year negatively affects the su
infrastructure capacity constraints.
Incremental prod growth is likely to be from Wara min
have reached max prod cap of 42 - 44mt.
Cost :
Revised infrastructure development entailing convey
overburden volumes to the landfills rather than coal to
based on growing land constraints to offload over 200m
will increase hauling distances and in turn overburden cos
18-Jan UBS Coal ITMG Price : 75% of '11 volume is still unpriced.
Reserves : ITMG was unable to grow reserves beyond its 12-year res
Cost :
Sector costs remain under pressure from higher fuel pri
with 2H10 deteriorating weather. ITMG's production cost
fuel price volatility versus the sector, given the impleme
power plant
18-Jan UBS Coal Risk : Fluctuations of coal rice as the main revenue driver
Fluctuations in oil price, which accounts for a major part o
 Operational disruptions as a result of adverse weather c
mining equipment.
21-Jan UOB Metal NickelPrice : Nickel prices to moderate in '11. It reached about U
concern following the cyclone at New Caledonia, the worl
Inventory : Inventory level has increased since 3Q10 to 137,800
consumption.
Strong nickel performance in '10 thanks to increase
Stainless steel, which is usually used for application in
storage, & chemical industries accounts for 65% of nickel
Sturdy tin prices on global tin deficit. Strong demand
Metal Tin industries, there will likely be a global tin deficit of about
expected to continue into '12 & '13 despite new tin supp
Russia & Australia.
Indonesia is the largest tin exporter in the world
Metal NickelDemand :
Lower demand for nickel in '11 as demand for stainless
assuming the Chinese government policies continue to co
uncertain eco growth in developed countries. China
accounting for 35.7% of global consumption in '09.
NickelSupply : No disruption to nickel mine supply from the floods in Que
all the nickel mine production in Australia is from Western
Metal Tin Supply :
Unfavourable weather conditions pushed up LME tin pr
had been adversely affected by unfavourable weahter
mining production from small-scale-miners. A ban on tin m
tin producer in Sep '10 also attributes to it.
Metal NickelRisks :
The efforts by Chinese government to curb econom
economic growth in developed countries, and weake
construction & manufacturing sectors may lower the
downward pressure on nickel prices.
Metal Tin A slowdown in the electronics and chemical industries wi
industry
18-Jan Morgan Stanley
Coal ITMG ASP :
Based on increasing regional thermal coal prices, expe
from 2010 to US$91. & becaus3e of ITMG's high quality
first to move higher (3Q ASP of US$78/ton is 14% high
2011
Using ASP to be thermal
updated around US$80-82.
coal price will give ITMG 4-6 year
Reserve : than enough time to utilize its US$350 mn of cash balan
strategy.
ITMG currently has 54% of 2011's volume signed, with 2
Contract : price, & the majority of remaining 48% to be signed thro
priced contracts were signed at US$82/ton off a benchm
time.
LC : What's the dividend policy, what's the historical pe?
Production : Despite unusual weather, ITMG has achieved roughly 70%
2011 FC : Even stronger ASP improvements compared with po
additional reserve realization.
18-Jan CLSA Property Outlook : Property is beneficiary to asset reflation, interest rates
detrimental impact on the mortgage market if rate
mortgage rate is at historical low.
Inflation will translate into higher asse4t prices (e.g.
market, developers maintained their selling prices. Ma
with ample supply of land bank, focus on landed resi
middle segment, with strong balance sheet.
 News
15% and for 2012F by 14% based on higher coal prices
ase from 2010 ASP
s rail capacity is effectively a ceiling over PTBA's realizable

coal (2bn tonnes @ 6000kcal/kg)

es and reserves of the 4 ID coal miners in MS coverage,
er production growth if the bottleneck of railway capacity is

ensive characteristic
e bleak with costs having grown faster than revenues in 9
d we expect to continue
argins, mobile maturing industry (70% penetration)
bodian market. Lack of focus in home market
ation of 15m vs ID at 220m)
s industry, little chance of divesting their tower assets
ovider with 23% market share. Data is the fastest growing
1% CAGR over the past 5 years.
it is last to enter the price war and the first to exit. ISAT's
uality & better margins rather than quantity, believing that
ed saturation point.
der in ID, commanding 23% mkt share. # of subscribers
ndustry average of 29%.
om 407% in '08 to 89% in 9M 10, following a successful
les of tower assets.
more cash could be allocated for debt repayments & future

's 15% below domestic peers & continuous delays in the

xpansion.
uct Bangko Tengah power plant is dissapointing, given
2014. The plant is supposed to off-take 10-12mt of PTBA's
ely 20% of future sales volume.
as ADRO has priced 50% of 2011 saleds volume based on
emaining volumes has yet to be priced.
r negatively affects the subsequent years due to overall
ints.
kely to be from Wara mine as Tutupan mine appears to
42 - 44mt.
opment entailing conveyor belt transporting growing
ndfills rather than coal to the Barito river. The decision is
aints to offload over 200mt of annual overburden, which
and in turn overburden costs

ves beyond its 12-year reserve life

essure from higher fuel prices as well as costs associated
her. ITMG's production costs are relatively less exposed to
sector, given the implementation of a mine-site coal-fired

main revenue driver

accounts for a major part of costs
esult of adverse weather conditions or tight availability of

'11. It reached about US$26,000/tonne due to supply

at New Caledonia, the world's largest nickel deposit.
d since 3Q10 to 137,800 equiv. To 5.1 weeks of nickel

n '10 thanks to increased demand for stainless stell.

lly used for application in the construction, consumer &
accounts for 65% of nickel consumption.
n deficit. Strong demand from electronics and chemical
a global tin deficit of about 21,000 tonnes in '11. Deficit is
& '13 despite new tin supply coming onstream in Morroco,

orter in the world

1 as demand for stainless steel is expected to moderate
ment policies continue to control economic growth in '11 &
eloped countries. China is largest consumer of nickel,
consumption in '09.
upply from the floods in Queensland, Australia, as currently
n Australia is from Western Australia.
ons pushed up LME tin prices. Indonesian tin production
by unfavourable weahter conditions and lower onshore
scale-miners. A ban on tin mining in Congo, Africa's largest
ributes to it.
ernment to curb economic growth, uncertainty in the
ed countries, and weaker-than-expected demand from
g sectors may lower the demand for nickel, and put
prices.
and chemical industries will hurt demand in the tin mining

thermal coal prices, expectation of ITMG's ASP rise 21%

s3e of ITMG's high quality coal, its ASP was amongst the
of US$78/ton is 14% higher YoY). Management expects
82.
ice will give ITMG 4-6 years of mine life expectancy, more
US$350 mn of cash balance to execute a long term M&A
11's volume signed, with 25% index-linked and 29% fixed
ning 48% to be signed throughout the year. The 29% fixed
at US$82/ton off a benchmark price of US$100/ton at the

at's the historical pe?

G has achieved roughly 70% of its 2010FY target.
ments compared with poorer-quality coal names and

et reflation, interest rates will rise but should nt have a

mortgage market if rate to increase by 1-2%. Current
ow.
gher asse4t prices (e.g. Land prices). Even in a weak
d their selling prices. Main beneficiaries are developers
ank, focus on landed residential development, focus on
alance sheet.