Indorama Venture

Indorama Ventures Plc

IVL’s acquisition of a US ethylene glycol/ethylene oxide (EG/EO) company should lead it into a new growth cycle and allow it to capture strong EG margins in the lucrative North America market. Margins for key products PET and polyester are also poised for a rebound. We raise our 2011-13 core net profit estimates to factor in the acquisition but cut our 2011 net profit number to reflect flood provisions. Our target price is higher, now based on 8x CY13 EV/EBITDA, up from 7x, given stronger growth and a better product portfolio. Outperform maintained.