Dec 14, 2010

INTP & Holcim offer 19% & 33% upside

Indonesia's cement sales in November 2010 dropped 8.5% to 3.5 million tonnes due to bad weather hampering demand.
In a news research published by CLSA on December 14 2010,  domestic cement sales reached 36.9 million tonnes in November 2010 after a record high of 3.8 million tonnes in October, an increase of 6.8% YoY, with more production is directed to domestic market.
PT Holcim Tbk (SMCB) and PT Indocement Tunggal Prakarsa Tbk (INTP) enjoyed a higher increase in cement sales vs industry, at the expense of PT Semen Gresik Tbk (SMGR). 
"Both Indocement and Holcim offers 19% and 33% upside to our target price respectively," a report said. "As we move into FY11, we will be watching Semen Gresik closely as they rolling out their capacity expansion, ready for 2012. Semen Gresik is now trading at 12.8x FE11. We also expect robust property sales this year will translate into 6-8% growth in domestic cement sales next year."

Disclosure: No position at the stock mentioned above. 

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