the real inside, page-21

FYI ONLY:

Comsec Insights Report just out - recommends a valuation of $1.23....

"The critical issue for investors is how successful AIO can be in selling assets or selling stakes in assets to reduce its debt. Our sum of parts valuation reflects this ¨Drealisation¡¬ approach as the new basis for valuing AIO, as opposed to the DCF approach used previously. CommSec believes the most likely scenario is that 100% of the coal business will be sold and a partial stake (up to 49%) in the container ports business. On this basis our valuation and price target is $1.23 per share. Whether AIO sells ports or coal (or both), the outcome is expected to be known by the end of FY09. However as the earnings outlook softens so does the potential sale price. CommSec perceives further downside risk for this stock in terms of potential earnings downgrades and at the current price AIO offers little upside regardless of the outcome of monetisation. Subsequently we have downgraded our recommendation to SELL / UNDER PERFORM (previously Accumulate/ Market Perform)."

Source: Comsec Insights