● 4Q10 and full-year unaudited results: ANTM’s net profit increased 257% QoQ and 122% YoY, ~10% above consensus but ~11% below our estimates. Its revenue ex. gold trading rose 45% QoQ and 51% YoY, approximately 4% above our 2010 estimate. ANTM’s gross profit was 7% above our expectation, but higher opex and lower dividends from Newcrest put its net profit below our initial forecast.
● ANTM’s significant increase in earnings was primarily driven by strong nickel and gold prices in 2010, as well as additional gold production from Cibaliung. We revise our 2010 earnings estimate to reflect the unaudited results. We also revise our 2011-12 earnings estimates to reflect latest nickel price forecasts and higher fuel prices.
● Strong nickel and gold prices have primarily been driven by growth in global industrial production (indicated by Global IP). Despite positive outlook, we remain cautious given the oversupply concerns about nickel. However, ANTM should benefit from its product mix
from gold, which would provide further earnings hedge.
● We maintain our NEUTRAL rating and target price of Rp2,600.
analysis by: Credit Suisse
analysis by: Credit Suisse