I have just read the updated Ord minnett research on the IDL...

I have just read the updated Ord minnett research on the IDL website. It is an impressive story told by ORD's and a very worthwhile read for new investors or those whom have any nagging doubts about the SPP - having read this I hope I dont get too scaled in the SPP.

In summary - ORD's have just visited both the new IDL equipment plant at Thornton that is constructing much of what gets exported to China plus they visited one of the mines Huddy's operates for Rio/Coal and Allied. (Smaller than the Cockatoo coal site)

Key Points -

Ord's have visited the sites and seen for themselves this is not just desk based research as is too often the norm.

IDL have announced a string of deals for China and ORD's predict this will continue - we like that !

IDL is now ahead of the run rate for Huddy's and this is only 6 or so months since the setback from handlebar hill - hence the SPP for more equipment for a contract extension - nice

The kit Huddy's are using is new and is more available hence better yielding. This means more tonnage eqauls $$ revenue and more margin. As Ord's observed ... When comparing the daily availability sheets the newer Huddy’s caterpillar trucks easily exceed the availability performance of all other hauling equipment on site (including some near identical but much older and poorer condition gear supplied by Emeco).

RIO and other players want high performing contractors - this bodes well for IDL contract extensions and margin growth.

But most relevant for the IDL investors - despite the recent share price rally IDL is still only trading on an FY10 PER of 7.0x - OM expects that this near a 50% DISCOUNT to market this will continue to be eroded as confidence is gained in the progress that is being made and in the strength of the underlying earnings.

"At a PE of 7 this makes IDL the best value play in the sector"

Emeco has older kit and and has more debt and is at a PE of 13 - which is about the average for mining services (13-14x). Hence a good case for a re rating for IDL in time

When forcasting forward I sense the ORD figures and financial estimates are light - however much like macquarie they the analysts are all erring on the conservative side.

Probably too long a post but hey - go and have a read on the industrea.com.au website under recent news - there are even pictures for those like seeing it in living colour !!