Reuters: Hot Stocks: STOCKS NEWS INDONESIA-Macquarie ups Perusahaan Gas target price

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STOCKS NEWS INDONESIA-Macquarie ups Perusahaan Gas target price Sep 10th 2012, 06:09 Mon Sep 10, 2012 2:09am EDT Macquarie Equity Research raised its target price on shares of PT Perusahaan Gas Negara Tbk to 5,000 rupiah from 4,270 rupiah, highlighting the state-owned utility's improved supply outlook and stronger cash flow. The gas producer is said to have better supply outlook in East Java with the potential for 60-80 million standard cubic feet per day (mmscfd) of new gas supply, Macquarie analyst Adam Worthington said in a note on Monday. Improving flow rates from state-owned utilities peer Pertamina and local unit of oil and gas company ConocoPhillips should lead to 10 percent growth per year in 2013, Worthington added. "The company plans to sell higher margin CNG products of 30 mmscfd in 2013, which are linked to oil prices at $20+ per mmbtu vs 1H12 prices of $6.9 per mmbtu," he said. "This, combined with the recent price increase & higher margin makeup gas, should ensure that PGAS's margins are relatively intact the next couple of years." He kept Perusahaan Gas rating to 'outperform' as investors put a higher premium on defensive assets, with increasing volume and margin visibility. At 12:25 p.m. (0525 GMT) company's shares were steady at 3,850 rupiah, while the broader index was up 0.08 percent. 1230 (0530 GMT) Link this Share this Digg this Email Reprints

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