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1 Premier Insight 31 October 2017 Equity Indonesia Research Daily JCI Index 6,050 6,000 5,950 5,900 5,850 5,800 Net buy (sell) in Rp bn 1,500 1, (500) (1,000) (1,500) JCI Index 2-Oct 3-Oct 4-Oct 5-Oct 6-Oct 9-Oct 10-Oct 11-Oct 12-Oct 13-Oct 16-Oct 17-Oct 18-Oct 19-Oct 20-Oct 23-Oct 24-Oct 25-Oct 26-Oct 27-Oct 30-Oct Foreign net buy (sell) Key Indexes 16-Oct 17-Oct 18-Oct 19-Oct 20-Oct 23-Oct 24-Oct 25-Oct 26-Oct 27-Oct 30-Oct 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000-15% 10% 5% 0% -5% -10% -15% -20% Index Closing 1 day 1 year YTD JCI 5, % 10.2% 12.8% LQ % 6.3% 11.4% DJI 23, % 28.7% 18.1% SET 1, % 14.9% 11.4% HSI 28, % 23.6% 28.8% NKY 22, % 26.3% 14.5% FTSE 7, % 7.7% 4.8% FSSTI 3, % 20.3% 17.2% EIDO % 0.8% 9.7% Commodity price Commodities Last price Ret 1 day Ret 1 year (in USD) Oil/barrel (WTI) % 11.2% CPO/tonne % 1.8% Soy/bushel % -4.4% Rubber/kg % -10.9% Nickel/tonne 11, % 11.9% Tins/tonne 19, % -6.2% Copper/tonne 6, % 41.6% Gold/try.oz (Spot) 1, % -0.1% Coal/tonne % 5.8% Corn/bushel % -5.7% Wheat/bushel (usd) % 2.2% Source : Bloomberg % net buy/market turnover Rp bn News & Analysis Corporates ACES: PT Ace Hardware (ACES IJ; Rp1,400; Buy) reported net profit of Rp526bn in 9M17 (+11% yoy), in-line with our/consensus expectation, given the strong 3Q17 profit at Rp198bn (+14% qoq, -17% yoy). The adjusted net profit in 3Q17 grew by +25% yoy after we took out other income (ie. gain from asset disposal) in 3Q16. Top-line reached Rp4.2tn in 9M17 (+19% yoy), in-line with our/consensus expectations (forming 76%/75% of FY17F respectively). All margins expanded, driven by strong sales growth. Opex-to-sales was kept stable. (Company). Comment: We maintain our positive view for ACES as 3Q17 results came in-line with our expectation. Lifestyle merchandise has contributed 41% to total sales in 9M17, still posting positive sales growth in 3Q (-1.2% qoq, +28% yoy) in this category. At this stage, we maintain Buy. ACST: Acset Indonusa (ACST IJ; Rp3,000; Not Rated) reported earnings of Rp111bn (+178% yoy) in 9M17, in line with consensus, forming 77% of FY17 estimate. The bottom line growth was mainly supported by top line growth (+50.7% yoy) with margin improvement all across the board. On quarterly basis, net income was also growing strong Rp46.4bn (+394% yoy, +38.5% qoq). (Company). ADHI: Adhi Karya (ADHI IJ; Rp2,180; Buy) reported earnings of Rp205bn (+78% yoy) in 9M17 with net margin expanded 40bps to 2.4%. The improvement was supported by operating profit growth of 168% caused by lower opex to revenue of 4.2% from 5.2% in 9M16. Nevertheless, company saw revenue growth of 53% yoy, driven by construction of 66% yoy and property of 84% yoy, whereas EPC reported lower revenue of 48% yoy. This caused gross margin to increase to 11.6% from 9.8% in 9M16. (Company). Comment: 9M17 earnings were inline with ours and consensus estimates. We believe higher gross margin was partly attributed to revenue from Light Rail Transit (LRT) project which fetch higher margin (~15%) compared to usual construction job. Further surprise for ADHI may come in 4Q17 given its pending LRT payment from KAI around Rp4.5tn that is expected to be received in December Reiterate Buy at TP of Rp2,700. AKRA: AKR Corporindo (AKRA; Rp7,250; Not rated) posted soft performance in 9M17, net profit (core) was down by 1.4% yoy which mainly caused by margins compression during period. The earnings figure came below consensus estimates with 69.3% achievement. The company reported revenue amounted to Rp13.4tn, up 22.6% yoy. Unfortunately, this good performance on the top line was mainly contributed by trading segment (contribute 90.7% of AKRA S total revenue) that surged 24.1% yoy to around Rp12.1tn, whereas its cost grew faster by 29.4% yoy. This brought trading segment gross margin drop to 8.6% in 9M17 (vs.12.4% yoy) and drove the company s blended margins squeezed across the board. Worth to note, the company also posted extraordinary gain from discontinued operation of some Rp297bn in 9M17. (company). BDMN: Bank Danamon (BDMN IJ; Rp5,050; Hold) 3Q results (in-line) Net profit of Rp995bn in 3Q (+0.6% qoq); Rp3.0tn in 9M (+21% yoy) formed 25% / 75% of our FY17F forecast and consensus, respectively (inline). Strong yoy profit growth was driven by lower loan provisions (-25%) while core profit (PPOP) was flat in 9M17 on the back of flat revenues and operating costs. Total loan portfolio grew by only 2% yoy, due to its shrinking micro-credit portfolio (-33%), while NIM rose to 9.3% (+50bps yoy) with stable NIM in 3Q vs. 2Q.

2 Management expects the bank s micro loans of Rp7.7tn (6.1% of total loans) to continue declining into Adira Finance s (35-40% profit contribution) 2-W and 4-W new financing grew 7% / 8% yoy, respectively, although total loan portfolio grew only 1% yoy. Credit cost declined sharply to 2.7% in 9M (vs. 3.6% last year); with 2.6% in 3Q (2Q: 2.8%), largely due to unwinding of the micro portfolio. (Company). BNGA: Bank Niaga (BNGA IJ; Rp1,230; Non-Rated): 3Q17 results Net profit of Rp817bn in 3Q (+10% qoq); Rp2.2tn in 9M (+69% yoy) formed 31% / 83% of FY17F consensus estimate of Rp2.6n (well ahead of expectation). Strong earnings recovery in 2017, which sustained its uptrend since 2016, was due to lower loan provisions (-16% yoy) coupled with loan growth (2.7%) and wider NIM (+20bps yoy). NPL ratio of 3.95% was slightly lower than a year ago (4.21%) with provisions/npl coverage of around 114%. Despite the bank s profit recovery in past two years, earnings were still well below its prior levels of around Rp4.3tn in (Company). DMAS: Puradelta Lestari (DMAS IJ; Rp189; Buy) booked disappointing earnings of Rp254bn (-48% yoy) in 9M17, way below expectation, reaching only 31% and 34% of our and consensus FY17 earnings forecast. The disappointing result was mainly due to top line fall (-51% yoy) while opex increased (+15% yoy) which resulted in lower operating margin of 47% in 9M17 (vs. 9M16: 54%). In quarter basis, bottom line was improved to Rp133bn in 3Q17 (vs. 3Q16: Rp8bn), after net loss of Rp2bn in 2Q17. (Company). Comment: Given inline 9M17 marketing sales of 37.5ha, we believe the disappointing earnings in 9M17 were only caused by slow revenue recognition (6 months-1 year). Thus, DMAS earnings achievement will mainly catch up in 4Q17 as most of 2017 marketing sales will be translate into accounting sales in 4Q17. We will review our forecast given this lower than expected 9M17 results, however at this stage, maintain BUY at TP of Rp280. DMAS is now trading at 72% discount to estimate RNAV/share. HRUM: Harum Energy (HRUM IJ; Rp2,350; Not Rated) recorded higher than expected results in 9M17 with details as follow; Net profit reached $32.6mn (+204% yoy) in 9M17, represent 112% of consensus FY17F earnings estimate of $29.1mn. Revenues reached $239mn (+84% yoy) in 9M17, accounting for 77% of consensus FY17F estimate (inline). Operating profit jumped 202% yoy in 9M17, accounting for 99.6% of consensus forecast for FY17F. Operating margin expanded to 23.3% in 3Q17 (from 17.9% in 2Q17), likely caused by higher ASP. (Company). (US$ Mn) 9M17 9M16 % Y-Y 3Q1 7 % Q-Q % Y-Y cons 9M17 / FY17F Revenues (15.7) COGS (21.9) 50.8 Gross profit (1.4) G&A expenses (7.1) 2.8 Selling expenses (27.5) 29.4 Operating profit Net interest inc. (exp) (19.7) (21.2) Other (0.9) (0.6) 53.5 (0.8) Pretax profit Tax Minority Interest Net profit M17 9M16 3Q17 FY17F GPM (%) OPM (%) Pretax mgn (%) NPM (%)

3 ICBP: PT Indofood CBP (ICBP IJ; Rp8,825; Hold) reported net profit of Rp3tn in 9M17 (+7% yoy), in-line with our/consensus expectation. Net profit in 3Q17 was booked at Rp950bn (-5% qoq, +11% yoy). Top-line reached Rp27tn in 9M17 (+4% yoy), in-line with our/consensus expectation (forming 72%/73% of FY17F respectively). Up to 9M17, net margin was relatively stable (11%), supported by lower opex growth in 3Q. (Company). Comment: We view the result to be neutral and maintain our Hold recommendation, given the in-line results with our expectation. INDF: PT Indofood SM (INDF IJ; Rp8,150; Buy) reported net profit of Rp3.3tn in 9M17 (+1% yoy), in-line with our expectation (formed 76% of FY17F), yet slightly below consensus (73%). Net profit in 3Q17 was booked at Rp1tn (-5.6% qoq, - 0.2% yoy). Top-line has reached Rp53tn in 9M17 (+7% yoy), while sales in 3Q was relatively flat (-2% qoq). Net margin stood at 5.8% in 3Q17 (-63bps yoy) due to higher tax expense (+39% qoq, +15% yoy). (Company). Comment: We view the result to be neutral as it was in-line with our expectation. At this stage, we maintain Buy given the upside from Agribusiness division. KINO: Kino Indonesia (KINO; Rp1,950; Hold) posted poor performance in 9M17, net profit was down 61.9% yoy to Rp70.4bn as a result of lower revenue amounted to Rp2.3tn, down 13.1% yoy. The earnings number came below ours and consensus estimates with 30.8% and 54.6%, achievement. On quarterly basis, we saw a strong recovery in 3Q17, with revenue and net profit jumped 22.4% qoq & 131% qoq, respectively. (Company). Comment: We believe the strong recovery in 3Q17 was resulted by robust growth from KINO s beverages segment. Currently, KINO trades at PE 2017F 12.1x. PGAS: Persuahaan Gas Negara (PGAS IJ; Rp1,865; Hold) has released its finanicial result which was below our expectation due to higher than expected interest and income tax. Net income was down -58.6% yoy to US$102mn but turned profit of US$49mn in 3Q17, due lower distribution margin, increasing financial cost and taxes. Despite improved distribution volume in 3Q17, company s financial performance remained weak. Distribution volume stood at 767mmscfd in 9M17 (-3.3% yoy) with transmission volume at 736mmscfd (+2.1% yoy). There was a significant jump in distribution volume to 803mmscfd in 3Q17 (+18.0% qoq). If we assume similar volume for 4Q17, then distribution volume would rise to 770mmscfd in FY17, still lower than 803mmscfd in FY16. Distribution margin dropped significantly to only US$1.92/MMBTU in 3Q17 resulting an average margin of US$2.75/MMBTU in 9M17 (-15.3%yoy). There might be some disturbance due to cut off period causing fluctuation in quarterly margins. Nevertheless, looking at the general trend, distribution margin has declined in past 5 years from above US$4/MMBTU to US$3/MMBTU. Oil assets operation able to book positive EBITDA of US$203mn in 9M17 (+50.0% yoy), but still in gross loss of US$25mn due to increasing depreciation. Quarterly revenue remained flat at US$128mn in 3Q17. Income from associates declined -28.7% yoy to US$34.5mn due to poor performance from TGI, net income contribution fell -28.8% yoy while Unimar loss US$5.0mn (vs profit US$9.3mn in 9M16). Overall we still see weak performance from PGN, with no immediate recovery in profitability and operational matrix. We maintain our Hold recommendation on the counter. 3

4 9M17 9M16 % 3Q17 2Q17 % FY17F % of forecast Turnover 2,165 2, % % 2,829 77% EBITDA % % % Operating Profit % % % Net Int. & Invest. Inc. (95) (79) 20.4% (28) (42) -33.9% (86) 111% Forex gain (losses) (17) (68) -74.5% 5 (6) % (9) 193% Except. & Others % 13 1 na 57 56% Group Pretax % 81 (18) % % Taxation (88) (50) 74.1% (33) (27) na (44) 202% Minorities 0 0 nm 0 0 na - nm Net Profit % 49 (45) % % EBITDA Margin 29.2% 29.8% 27.6% 25.6% 24.1% Source: Company RALS: PT Ramayana (RALS IJ; Rp910; Hold) reported net profit of Rp368bn (+2% yoy) in 9M17, still in-line with our/consensus expectation. The Company booked net loss of Rp1bn in 3Q17 (-100% qoq, -101% yoy), given the weak sales of Rp953bn (-60% qoq, -32% yoy), dragging down 9M17 sales by 3% yoy. Given the weak 3Q, no significant margin improvement up to 9M17 (compared to 9M16). (Company). Comment: We already expect the poor 3Q achievement since 2Q, as the Company solely depends its sales achievement from Lebaran momentum. At this stage, we maintain Hold rating as 3Q results came inline with our expectation as we expect FY17F EPS to fell by -5% yoy. Markets & Sector Telco sector: Indosat (ISAT IJ; Rp6,00; Buy) together with Hutchison Indonesia will be awarded 5Mhz each in the 2100 spectrum, subject to any objection from other participant. Each of them offered bidding price of Rp423.1bn. The official announcement will take place today. (Company). Economics Investment: Investment realisation in 3Q17 was up 13.7% yoy (3.4% qoq) to reach Rp176.6tn by Sep17. Domestic investment grew by 16.8% yoy (6.4% qoq) and foreign investment 12% yoy (1.6% qoq). Sector wise, highest domestic investment materialised was in utilities, construction, and property & industrial estate; whereas highest foreign investment made was in basic metals, mining, and utilities sectors. Singapore, Japan, and China remained the three largest investors. (Indonesia Investment Coordinating Board). Comment: The high investment realisation should be positively affecting the market as realised investment was greater than 2016 s year growth (10.7% yoy or 2.5% qoq). Note, however, that this does not immediately translate into higher investment in GDP as both investments have different definition. The figure also excludes for oil and gas, banking, non-bank institution, insurance, leasing, and household industries. 4

5 Head Office PT INDO PREMIER SEKURITAS Wisma GKBI 7/F Suite 718 Jl. Jend. Sudirman No.28 Jakarta Indonesia p f INVESTMENT RATINGS BUY : Expected total return of 10% or more within a 12-month period HOLD : Expected total return between -10% and 10% within a 12-month period SELL : Expected total return of -10% or worse within a 12-month period ANALYSTS CERTIFICATION. The views expressed in this research report accurately reflect the analyst;s personal views about any and all of the subject securities or issuers; and no part of the research analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in the report. DISCLAIMERS This reserch is based on information obtained from sources believed to be reliable, but we do not make any representation or warraty nor accept any responsibility or liability as to its accruracy, completeness or correctness. Opinions expressed are subject to change without notice. This document is prepared for general circulation. Any recommendations contained in this document does not have regard to the specific investment objectives, finacial situation and the particular needs of any specific addressee. This document is not and should not be construed as an offer or a solicitation of an offer to purchase or subscribe or sell any securities. PT. Indo Premier Sekuritas or its affiliates may seek or will seek investment banking or other business relationships with the companies in this report.