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ut of 56 companies under our coverage, 47 counters have thus far reported first quarter in 2011 (1Q11) results. Graph 6 shows the 9 companies that have not reported 1Q11 results. Interestingly, 7 out these 9 companies are dollar earners: 4 coal-related companies, 2 CPO plays and a metal miner.

Based on our 1Q11 result findings thus far, the market as whole (Graph 1) booked 37.0 percent year-on-year (y-o-y) growth in 1Q11 operating profit, a slight deterioration when compared to the fourth quarter in 2010 (4Q10) performance of 38.2 percent y-o-y growth.

This filtered through to the bottom line with the overall market reported slowdown to 46.7 percent y-o-y growth in 1Q11 net profit vis-à-vis 4Q10 growth of 61.4 percent y-o-y. Note that by numbers of companies (Graph 5), we have so far witnessed more disappointment at the operating level than those reporting earnings surprises on the upside.

Only three sectors: Coal, plantations and cement (Graph 2) have made their way onto the good list (i.e. operating and net profit showing growth acceleration in 1Q11 compared to 4Q10 on a y-o-y basis). Both coal and plantation sectors benefited from higher selling prices and volumes while cement experienced 4Q10 price adjustments allowing margin stabilization.

Two sectors: infrastructure-related and oil & gas comprised of the bad list (deceleration of growth at the net profit level) while every other sectors were on the ugly categories (deceleration in both operating and net profit).

We note that the performances of banks and consumer stocks deteriorated in 1Q11 versus 4Q10. Banks suffered from slower loan growth coupled with intensifying competition, which resulted in lower net interest margin (NIM).

On the consumer front, the mass-market consumer companies like Unilever Indonesia and Ramayana Lestari Sentosa continued to book low y-o-y single digit operating profit growth on low purchasing power, intense competition and rising raw materials prices.

With inflation having eased in March-April, share price performances of most banking stocks have done well. Having that said, most banks are closely approaching our target prices, and at this stage of the cycle, we believe it is time for rotational play into coal counters and selective plantation plays.

This is particularly so given that dollar most dollar earners have reported better than expected 1Q11 results, such as Sampoerna Agro, which we have just raised to BUY with target price of Rp 4,200. On coal, we continue to like both PT Bukit Asam and Harum Energy as their earnings will continue to accelerate on improving volumes and buoyant coal prices.

Without market out-performance in coal stocks, it would be difficult in our view for the index to break the 4,000 level given coal’s largest contribution to market EPS growth of 91.6% y-y.

The writer is senior vice president and head of research at PT Bahana Securities