DBS Vickers::; Adaro Energy : HOLD; Rp1,830; Price Target : Rp2,000

DBS Vickers::; Adaro Energy : HOLD; Rp1,830; Price Target : Rp2,000; ADRO IJ Coal production hit 47.7m tons in 2011 Adaro Energy (ADRO) reported coal production of 47.7m tons (+13% y-o-y) in 2011, in line with our estimate of 48m tons. Sales volume rose 16% y-o-y to 50.78m tons supported by coal trading activities of 3.6m tons (+160%y-o-y). The company is targeting for production growth of up to 10% in 2012 to 50-53m tons of coal production. Meanwhile, the company raised its planned stripping ratio to 6.4x in 2012 from 5.9x which should translate into higher production costs. Maintain Hold, Rp2,000TP based on blended valuation of 11x 2012F PE and 2.5x PBV.