[obrolan-bandar] TINS (TP Rp770) - CIMB: Riposte of illegal mining

[simon bolenang]

16 Feb 2009  Indonesia     Timah Company update - Riposte of illegal mining - by Rania Rahmundita (TINS IJ / TINS.JK, UNDERPERFORM - Downgraded, Rp1,100 - Tgt. Rp770, Basic Resources)   Timah's FY08 net profit could be well below market and our expectations largely on high costs of inventory. We see double risks to its profitability in FY09-10 from: 1) softer demand (cutting sales volume expectations by 5-12.5% for FY09-10) and tin prices (cut by 9% for FY09-10 as illegal mining in Bangka-Belitung returns and China's net import position further narrows); and 2) high inventory costs (raising cost assumptions by 5% for FY09-10). We cut our FY08-10 EPS estimates by 11-66% and our DCF target price by 40% to Rp770 (WACC 17%, LTG 0%). More downside for the share price remains, in our view. Downgrade to Underperform from Neutral.   Full-report including important disclosures:   [ PDF ]   PS: if you wish to Opt-Out or Change your Mailing Details, please send an email message to sg.resenquir...@cimb.com . Otherwise call your respective Salesperson. For any other queries, please contact our Call Centre at 1800 538 9889, +65 6538 9889 (overseas) or email  clientservices...@cimb.com . Disclaimer: No part of this report may be reproduced or distributed in any manner without the written permission of CIMB and its affiliates. CIMB and its affiliates specifically prohibits the redistribution of this report, electronically or otherwise, and accepts no liability whatsoever for the actions of third parties in this respect. This email may contain privileged and/or confidential information. If you are not the named recipient or addressee, you are hereby notified that any use, review, disclosure or copying of the contents herein is strictly prohibited. If you have received this email by mistake, please notify the sender immediately by reply email and discard/destroy all its contents. This email is for informational purposes and should not be construed as a solicitation or offer to buy or sell securities or related financial instruments.   Disclaimer: This email may contain privileged and/or confidential information intended only for the use of the addressee. If you are not the addressee, or the person responsible for delivering it to the addressee, you may not use, copy or deliver this to anyone else. If you receive this email by mistake, please immediately notify us. Opinions contained herein may be the personal opinion of the sender and do not necessarily represent the views of the Company. If you are in any doubt as to whether the opinions are officially endorsed by the Company, please contact our Compliance Dept at (+65) 6225 1228 for clarification.