Medco ( MEDC ) ready to soar

Reuters Code: MEDC.JK
Bloomberg Code: MEDC:IJ

Medco Energy shows some hope of recovery. Its 2Q revenue is improving compare to 1Q 09. Even though its revenue has decreased 59.2% yoy, and its net income decreased 84.9% yoy, I believe Medco would be doing much better in 3Q and 4Q

(In million USD)

	4Q-09F	3Q-09F	2Q-09	1Q-09	4Q-08	3Q-08	2Q-08
Revenue	357.65	342.1	311	134.9	340.6	183.4	401
Operating Income	71.53	51.315	31.4	24.1	30.1	82	103
Net Income	42.918	27.368	9.6	7.6	-12.4	229.2	40.7
Operating Margin	20%	15%	10.10%	17.87%	8.84%	44.71%	25.69%
Net Margin	12%	8%	3.09%	5.63%	-3.64%	124.97%	10.15%
Total Shares	3077.46	3077.46	3077.46	3077.46	3096.75	2841.62	3108.85
EPS	0.01395	0.00889	0.00311	0.00247	-0.004	0.080658	0.013092

Based on the trend of IDR appreciating against the USD, I projected that in 3Q and 4Q the USD / IDR rate would be respectively 9800 and 9600.

	4Q-09F	3Q-09F
USD/IDR Rate	9600	9800
	133.88	87.15
Annualized EPS	535.52	348.61

Based on my projection for 3Q and 4Q 2009, I derived the ideal price for Medco stock.

	4Q-09F	3Q-09F
PE 8x	4284	2789
PE 10x	5355	3486
PE 12X	6426	4183