INVESTOR DIGEST HIGHLIGHT ECONOMY. Equity Research 8 November 2016

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1 INVESTOR DIGEST Economic Data Latest 2016F 7-DRRR, eop Inflation (YoY %) US$ 1 = Rp, period avg 13,088 13,164 Stock Market Data (7 Nov 2016) HIGHLIGHT GDP Growth Eased on Moderating Demand Bank CIMB Niaga: Meeting Takeaways (BNGA; Rp920; Buy; TP:Rp1,130) Bank Permata: Meeting Takeaways(BNLI; Rp565; Buy; TP:Rp700) Aneka Gas Industri: 9M16 Results (AGII; Rp 1,100; Not Rated) Market Recap Nov 7 th 2016; JCI: 5, (+0.44%); USD/IDR: 13,088; Total Value: Rp6.95tn JCI Index 5, % Trading T/O ( Rp bn ) 5,650.0 Market Cap ( Rp tn ) 5, ,027.8 Market Data Summary* EBITDA growth EPS growth EV/EBITDA (x) P/E (x) P/BV (x) Div. Yield Earnings Yield Net Gearing ROE * Aggregate of 77 companies in MS research universe, representing 69.1% of JCI s market capitalization ECONOMY GDP Growth Eased on Moderating Demand GDP growth softened. Third quarter real GDP growth rate softened, recorded at a consensus-in line 5.02% YoY that is also above our expectation. In addition to passing festivity and still weak demand, the result is in line with downbeat core inflation & money supply and other frequent indicators. Production-wise, most sectors decelerated. As many as 15 out of 17 sectors saw slower growth, including agriculture on post-harvest. The only major upside was taxes minus subsidies, likely related to tax amnesty revenue. Moreover, we suspect that part of taxes minues subsidies in the production side might be converted into statistic discrepancy in the expenditure approach. On track to FY16F of 5.0%. Our FY16F real GDP expansion of 5.0% YoY is still on track provided 9M16 s realization of 5.04% YoY and expectation for stabilization in 4Q16. In particular, we see that government spending will remain suppressed due to the high base effect of last year s spending and fiscal savings. Mulling FY17F economic growth downgrade. We will cut our FY17F economic growth from the current 5.4% in the near term. We view that fiscal headwind will continue in 2017, though the risk is not as high as in 2015 and Additionally, we are anticipating limited private consumption expansion next year assuming that lower minimum wage raise would lessen real income growth. Upside lies on commodity price whereas the full impact of deregulations and monetary loosening to private investment is also yet to be seen. Bank Indonesia might respond with monetary loosening. Policy-wise, we reiterate our view that while the current 4.75% policy rate is already ideal, Bank Indonesia could likely execute another 25bps cut in Nov16 as its main concern now has shifted to economic growth. We believe that the central bank wants to create a conducive environment by lowering the cost of capital. Page 1 of 11

2 GDP SUMMARY %, YoY Q16 3Q16 9M16 Mandiri Sekuritas Consensus Actual GDP GDP (%, QoQ) Household consumption Non-profit institutions consumption (0.63) Government expenditures (2.97) 1.97 Gross fixed capital formation Exports of goods and services (1.97) (2.42) (2.00) - (6.00) (3.98) Imports of goods and services (5.84) (2.93) (1.30) - (3.87) (3.94) Sources: CEIC, Mandiri Sekuritas estimate Leo Rinaldy( ) Wisnu Trihatmojo ( ) leo.rinaldy@mandirisek.co.id wisnu.trihatmojo@mandirisek.co.id CORPORATE Bank CIMB Niaga: Meeting Takeaways (BNGA; Rp920; Buy; TP:Rp1,130) We met with CIMB Niaga s (BNGA) CFO and Investor Relations team last week. We discussed about the bank s ditigal banking developments and business focus for Below are the key takeaways from the meeting: Focusing on the digital world. Now that the worst NPL level is behind, the bank is ready to concentrate on its initial strategy, to be an innovative leader in the digital space and to provide better customer experience for its clients. CIMB Niaga takes pride in its ability to successfully deliver digital services as the bank was the first to introduce the ATM in 1987, the first to provide online banking services in 1991, and the first to launch a mobile banking application in In order to remain competitive, BNGA plans to launch a new and improved mobile banking application in Furthermore, to fill in the missing gap between the wholesale and consumer segment, BNGA is working on an internet banking platform for SME customers. The new platform, planned to be launched in 2017/18, will be a hybrid between the current consumer and wholesale banking platforms. We believe the successful implementation of digital developments will help accelerate CASA growth, increase transaction volumes, and reduce cost to income ratio over the medium to long term. Can t always have the best of both worlds. Management has made it clear that they are willing to sacrifice NIMs in return for premium quality customers; this will help keep asset quality in check over the long run. The bank has been working on tightening underwriting standards for the auto segment and has stopped taking referrals from auto dealers, resulting in negative auto loan growth of -17% yoy and increase in NPL to 3.1% in Sept-16 (from 2.8% in Jun-16). Over time, the bank has discovered that pressure to maintain inventory levels and healthy cash flows has caused auto dealers to accept marginal customers, negatively impacting BNGA s asset quality. Going forward, client acquisition strategies will be focused inwards rather than outwards as management has decided to only extend auto financing services to BNGA s existing clients, however at a lower rate of 2.39% (flat rate) for one year. The bank also plans to apply a similar strategy to its mortgage segment. We believe the tradeoff will help prevent significant asset quality deterioration during tough economic times. Commercial and corporate still sore areas. The soft economic environment has caused low hotel occupancy rates and decline in property sales, leading to elevated NPL levels in the commercial (7.4% as per Sept-16) and corporate (4.0% in Sept-16) segment. The bank strongly believes that the majority of its problematic assets will improve once the economy begins to recover. Despite the recent coal price rally, the bank notes that they have not experienced any trickledown effects on its mining related loans. Page 2 of 11

3 Optimistic outlook for BNGA guides loan growth to be below the targeted industry level of 12% in 2017 as the bank has no direct exposure to infra related projects. Even though management guides for a more optimistic year ahead, they still remain cautious as the soft economic environment may prolong elevated NPL levels and slow loan growth. Maintain BUY with TP of Rp1,130, the stock is trading at 0.6x 2017F P/BV. FINANCIAL SUMMARY YE Dec (Rp Bn) 2014A 2015A 2016F 2017F 2018F Pre-Provision Profit 6,407 6,046 6,870 7,540 8,055 Net Profit 2, ,670 3,290 3,986 EPS EPS Growth (45.3) (81.7) P/E Ratio (x) BVPS 1,132 1,141 1,345 1,476 1,634 P/BV Ratio (x) Dividend Yield ROAE CAR Source: Company ( ), Mandiri Sekuritas ( ) Priscilla Thany ( ) Tjandra Lienandjaja ( ) priscilla.thany@mandirisek.co.id tjandra.lienandjaja@mandirisek.co.id Bank Permata: Meeting Takeaways(BNLI; Rp565; Buy; TP:Rp700) We met with Bank Permata s (BNLI) Investor Relations team last week. We discussed about the bank s asset quality and outlook for Below are the key takeaways from our meeting: NPL still a key issue. BNLI guides for NPL to peak in 4Q16 at 5% max and expects NPL to trend down in 2Q17. In general, the soft economic condition tends to adversely impact the commercial and mid-sme segment more than the corporate and consumer segment. The bank discovered that most debtors with problematic loans faced at least one of the following issues: cash flow problems, lack of experience in running the business (this is particularly true for businesses that have been passed down to the second and third generation), and/or over-expansion issues. In addition, the bank partly attributes high NPL ratios to loose loan underwriting standards. As of Sept-16, BNLI s top four NPL contributors come from the retail, wholesale, and mining economic sectors. No upgrades to mining and coal related loans in the meantime. Despite the recent increase in coal prices which reached USD 109/ton (from USD 49/ton in Jan-16), management is still hesitant to upgrade coal and mining related loans from NPL (cat 3-5) to a higher category, i.e.: special mention (cat 2) or performing (cat 1). The bank indicates that they would like to see coal prices sustain over a six month period before upgrading loans to the performing category, despite its ability to service the loans. Approaches to lower NPL. In an attempt to reduce NPL, BNLI has created a Special Asset Management team, which includes an advisor from Standard Chartered Bank, fully dedicated to improve collection activities and reduce problematic loans. Furthermore, the bank has been refining its risk appetite, risk management criteria, and internal policies to ensure tighter underwriting standards are applied to future loan disbursements. Over the next three to six months, management plans to focus on increasing the proportion of consumer loans, particularly from the auto, mortgage, and joint financing segment, which have relatively lower NPL and higher yields. Meanwhile, over the medium term, management plans to concentrate on expanding the SME segment, hence increasing contribution of the retail banking segment (consumer and SME loans) to >50%. Page 3 of 11

4 The calm after the storm. In line with our expectations, management guides for a more optimistic year ahead with loan growth of approximately 10% in 2017 and 10-15% thereafter, along with reduction in NPL beginning 2Q17. Furthermore, the bank expects NIMs of 4% over the next three years and expects CASA to gradually increase to 45%, mainly supported by the increasing number of payroll accounts from Astra Group s companies. The bank indicates that it does not plan on distributing micro loans even though this segment tends to offer higher yields. Maintain BUY with TP of Rp700. The stock is trading at 0.5x 2017 P/BV. FINANCIAL SUMMARY YE Dec (Rp Bn) 2014A 2015A 2016F 2017F 2018F Pre-Provision Profit 2,896 3,719 3,755 4,048 4,399 Net Profit 1, (1,132) 797 1,417 EPS (57) EPS Growth (17.2) (84.4) (399.5) P/E Ratio (x) BVPS 1,305 1,437 1,039 1,075 1,135 P/BV Ratio (x) Dividend Yield ROAE (5.4) CAR Source: Company ( ), Mandiri Sekuritas ( ) Priscilla Thany ( ) Tjandra Lienandjaja ( ) priscilla.thany@mandirisek.co.id tjandra.lienandjaja@mandirisek.co.id Aneka Gas Industri: 9M16 Results (AGII; Rp 1,100; Not Rated) AGII recorded 9M16 net profit at Rp43bn (+13%yoy). Meanwhile, 9M16 EBITDA stood at Rp273bn (+31%yoy), mainly supported by increase in profitability as 9M16 EBITDA margin reached 34% vs 32% in 9M15. However, 3Q16 is down to Rp8bn (-50%qoq, -31%yoy) due to significant increase in interest expense (+18%qoq, +24%yoy). 3Q16 revenue stood at Rp381bn (-10%qoq; +10%yoy). This qoq decrease was mainly contributed by shorter working days on Lebaran holidays (1-2 weeks). Our discussion with the company indicates that in general, demand from medical and consumer sector remain strong while infrastructure s is slower than expected due to delay in government infrastructure projects. The company expects lower interest rate in 4Q16. AGII plans to repay >Rp200bn in 4Q16. Rp Bn 3Q16 2Q16 %qoq 9M16 9M15 %yoy 3Q15 %yoy Revenue % 1, % % Gross profit % % % Operating profit % % 69 30% EBITDA % % % Pretax profit % % 18-41% Net profit % % 12-31% Gross margin 48% 43% 47% 46% 47% Operating margin 24% 20% 23% 19% 20% EBITDA margin 37% 31% 34% 32% 32% Pretax margin 3% 6% 6% 6% 5% Net margin 2% 4% 4% 4% 3% Gerry Harlan ( ) gerry.harlan@mandirisek.co.id Page 4 of 11

5 TAX AMNESTY MARKET Market Recap Nov 7 th 2016; JCI: 5, (+0.44%); USD/IDR: 13,088; Total Value: Rp6.95tn Indo market opened in the red but slowly recovered up to the green zone and remain there in the afternoon session. Finally, just like its Asian peers, JCI closed up 0.44% to 5386 level. Some big cap stocks, namely ASII (+1.2%), BBRI (+0.4%) and BMRI (+2.5%), helped support JCI in positive territory. Additionally, coal mining stocks like PTBA (+4.6%), HRUM (+8.2%), ITMG (+7.8%) and ADRO (+0.9%) were among today s darlings. On the other hand, BBCA (-0.65%), BBNI (-0.45%), LPPF (-0.6%) and INDF (-0.3%) suffered losses. Regular market transaction was recorded at Rp5.6tn (US$427.87mn) and foreign posted a net sell of Rp1.08tn (US$82.5mn). TOP TURNOVER: BUMI BBCA TLKM ASII BBRI BMRI LPKR INDY ANTM BBNI LPPF INCO TINS SMRA UNTR PTBA HRUM ADVANCING SECTOR: mining +2.75%; misc industry +1.1%; constructions +0.7%; finance +0.4%; manufacture +0.4%; consumers +0.3%; agri +0.2%; trade +0.1%; infra +0.07% DECLINING SECTOR: basic industry -0.2% The yield of 10-year government was flat at 7.333% and Rupiah depreciated to Rp13,088 (-0.15%) Sales Team Page 5 of 11

6 FROM THE PRESS BI prepares policy to cap interest on credit cards BI is still reviewing plans to lower interest rate cap of credit cards. Head of Payment System Policy and Supervisor of Bank Indonesia Eni V. Panggabean states that they are still coming up with the concept of the new policy and have not made any final decisions. BI plans to focus on lowering interest rate cap to 2.25% per month or 26.95% per year from 2.95% per month or 35.4% per year. BI hopes that the lower interest rate cap will increase non-cash transactions. (Kontan) BI to release E-wallet policy this month BI plans to release the E-wallet policy on November 14, 2016, which will be part of BI s Payment Transaction Processing (PTP) policy. The E-wallet will be based on the E-cash policy, the maximum amount allowed to be placed in the E-wallet is Rp10mn. (Kontan) October foreign exchange reserve drops It decreased by US$700mn to US$115bn, equivalent to 8.4 months of import and payment for government external debt services. This amount is also above the international standard of approximately 3 months of import. (Investor Daily) President Jokowi: First section of Becakayu toll road to operate in March 2017 Following his visit to Bekasi-Cawang-Kampung Melayu (Becakayu) toll road project, President Jokowi requests Waskita Toll Road to accelerate operation of the first 8km section of the toll road to reduce congestion in surrounding area. The Becakayu project itself comprise of two phases with total length of 21km. (Bisnis Indonesia) Sept-16 NPL declines to 3.1% OJK s Chairman of Board of Commissioner Muliaman D Hadad states that the industry s NPL declined to 3.1% in Sept-16 from 3.2% in Aug-16. He hopes that NPL continues to decline in 2017 so that loan growth can begin to pick up. The decline in NPL was driven by increase in loan distribution to a number of sectors, particularly the retail sector. (Bisnis Indonesia) Tax revenue up 13.3% YoY in Oct16 The amount was Rp871tn (64.3% of target). Oct16 collection was Rp78.5tn with Rp948.3bn coming from tax amnesty redemption fee. Of other tax components, VAT was still contracting (-0.7% YoY). Yon Arsal, a director general within the Ministry of Finance, comments that tax realization is still on track with target and shortfall expectation remains at Rp215tn (Kontan) Note: Tax revenue growth was 15.2% YoY in Sep16 Four listed SOEs to soon complete rights issuance process Rini Soemarno, the Minister of State Owned Enterprises, stated that all the Government Regulation (PP) has been approved which should pave way for rights issue of Wijaya Karya (WIKA), Jasa Marga (JSMR), Krakatau Steel (KRAS) and Pembangunan Perumahan (PTPP). For WIKA, the rights trading date would occur on November 2016 while JSMR s rights trading date would happen on 1-7 December On separate occasion, the SOE Ministry is also considering IPO of Brantas Abipraya, a state-owned construction company. (Bisnis Indonesia) Bank Mandiri (BMRI) targets 3mn E-Cash users BMRI targets an additional 3mn E-Cash users by partnering up with Line Indonesia. Line Pay E-Cash can be accessed by connecting the phone number registered with Line Pay. Director of Digital Banking and Technology Rico U. Frans states that currently there are 1.7mn E-Cash users, +297%yoy. Furthermore, he states that Line has been downloaded by 90mn people and has 30mn active users, of the 30mn active users BMRI would like to target 3mn users next year. (Bisnis Indonesia) Page 6 of 11

7 Bumi Serpong Damai (BSDE) adds ha of land bank Up to 9M16, BSDE has increased their land bank with an additional of ha of land. The company has allocated Rp1.26tn from internal cash for land banking purposes up to 9M16. As of Sep 16, the company has raked in Rp4.1tn of marketing sales or 60% of FY16 marketing sales target and about 63% (Rp2.6tn) of the pocketed marketing sales coming from residential segment. (Bisnis Indonesia) Erajaya Swasembada (ERAA) to find business partner to fulfill the minimum local content rule The company is eyeing to find business partner in manufacturing division in order to fulfill the ruling in mobile phone manufacturing. The 30% minimum local content in 4G phone will start to implement in January However, the company will still focus on its core distribution business under its retail stores (Erafone, Samsung shop and Urban Republik), while manufacturing division will give a value added to the company. Kontan Foxconn to start selling Luna phone in Indonesia Foxconn Technology Group, Taiwanese-based electronics manufacturing company, will soon selling its new smart-phone in Indonesia under Luna brand in early Nov 16 and targeting the middle class people (41.1% of total phone market). Until end of 2016 the company is optimist to sell 30k units, while the long term target is to grab 5% market share in Indonesia premium smart-phone segment. The phone is produced locally in Semarang. Kontan Mayora Group to operate newest factories for bottled water in Dec 16 The Rp1-1.4 tn investment is spent to boost market share by 5x up to 30-40%. Capacity would increase to 5 mn carton/month (5x current capacity). According to the bottled water producer association (Aspadin), demand for bottled water is up by 9-10% YoY in 2016 from 24 bn liter, where 90% is supplied by SMEs. From the F&B business, Mayora Indah (MYOR) hopes to revert back to 50:50 revenue contribution from domestic and export sales after slower export growth this year. MYOR stated that domestic sales has increased by 30% YoY and export by 15% YoY. Mayora s bottle water, Le Minerale, is not under the listed company. (Bisnis Indonesia, Investor Daily) Page 7 of 11

8 Indices Currencies and ADRs Major Commodities Last YTD Currency Last YTD Last YTD JCI 5, Rp/US$ 13, Oil spot (US$/bl) Dow Jones 18, US$/EUR Nickel spot (US$/mt) 11, Nikkei 17, YEN/US$ Gold spot (US$/oz) 1, SET 1, SGD/US$ Tin 3-month (US$/mt) 21, Hang Seng 22, CPO futures (Ringgit/ton) 2, STI 2, ADR Stocks Soybean oil (US$/100gallons) S&P 500 2, TLK in Rp 10, Rubber forward (US /kg) Coal (US$/ton) Ishares indo Baltic Dry Index Property Valuation JCI Code Rec. Market Cap (Rp bn) Share price Target Price Discount to NAV RNAV per share (Rp) Premium (discount) to replacement cost Replacement cost per share (Rp) PE (x) ROE 16F 17F 16F 17F BSDE Buy 39,841 2,070 2,570-56% 4,673 34% 1, % 12.3% PWON Buy 34, % 1,207 71% % 24.7% SMRA Neutral 20,916 1,450 1,575-63% 3, % % 7.9% CTRA Buy 23,735 1,565 1,600-49% 3, % % 14.0% JRPT Buy 11, ,300-74% 3,242 19% % 20.4% ASRI Neutral 7, % 1,161 85% % 6.3% LPCK Buy 4,089 5,875 10,000-76% 24,683 25% 4, % 14.6% MDLN Buy 4, % 1,165 30% % 6.6% CTRS Buy 5,996 3,030 4,000-77% 13,390-25% 4, % 13.9% Simple Average -63% % 13.4% Industrial Estate Valuation JCI Code Rec. Market Cap (Rp bn) Share price Target Price Discount to NAV RNAV per share (Rp) Premium (discount) to replacement cost Replacement cost per share (Rp) PE (x) ROE 16F 17F 16F 17F DMAS Buy 11, % % % 12.5% BEST Buy 2, % % % 9.0% SSIA Neutral 2, % 1,701-35% % 8.1% LPCK Buy 4,089 5,875 10,000-76% 24,683 25% 4, % 14.6% MDLN Buy 4, % 1,165 30% % 6.6% Simple Average -68% % 10.2% Page 8 of 11

9 Equity Valuation Price Price % of Mkt Cap Net Profit EPS Growth PER (x) EV/EBITDA (x) P/BV (x) Div.Yield Code Rating (Rp) Target PT (Rp Bn) Mandiri Universe 5,386 5,550 4,135, , , % 16.4% % 1.8% Banking 942,691 68,847 83, % 21.4% N.A. N.A % 1.8% BBCA Neutral 15,400 15,150 (1.6) 379,687 19,326 21, % 12.4% N.A. N.A % 1.3% BBNI Buy 5,575 6, ,966 10,783 12, % 20.5% N.A. N.A % 3.1% BBRI Buy 12,450 14, ,131 25,817 30, % 19.1% N.A. N.A % 2.1% BBTN Buy 1,875 2, ,856 2,439 2, % 21.0% N.A. N.A % 2.5% BDMN Sell 3,760 3,500 (6.9) 36,038 3,375 3, % 9.5% N.A. N.A % 2.0% BJBR Neutral 1,515 1, ,690 1,522 1, % 16.9% N.A. N.A % 4.1% BJTM Neutral ,683 1,032 1, % 7.2% N.A. N.A % 9.0% BNGA Buy 920 1, ,121 1,670 3, % 97.0% N.A. N.A % 0.0% BNLI Buy ,622-1, N/M N/M N.A. N.A % 0.0% BTPN Neutral 2,880 2,635 (8.5) 16,820 1,756 1, % -1.5% N.A. N.A % 0.0% PNBN Buy 875 1, ,077 2,260 2, % 13.5% N.A. N.A % 0.0% Building Materials 125,138 9,374 10, % 7.0% % 4.0% INTP Neutral 15,925 20, ,624 4,368 4, % 5.3% % 6.0% SMCB Sell (4.3) 7, N/M 10.1% % 1.7% SMGR Neutral 9,300 11, ,163 4,501 4, % 5.4% % 2.4% ARNA Buy , % 147.5% % 1.7% Constructions 100,247 4,670 5, % 22.7% % 0.7% ADHI Buy 2,170 3, , % 32.0% % 1.4% PTPP Buy 3,970 5, , , % 19.2% % 1.0% WIKA Buy 2,650 3, , % 23.9% % -1.4% WSKT Buy 2,500 3, ,453 1,634 1, % 12.7% % 1.1% WTON Buy , % 33.8% % 1.0% WSBP Buy , % 41.1% % 1.1% Toll road 30,532 1,612 1, % -6.2% % 1.1% JSMR Neutral 4,490 5, ,532 1,612 1, % -6.2% % 1.1% Rice Mill 6, % 16.9% % 0.5% AISA U/R 2,010 U/R U/R 6, % 16.9% % 0.5% Consumer 1,154,698 34,249 37, % 11.1% % 1.0% ICBP Neutral 9,275 9, ,164 3,662 3, % 6.6% % 1.5% INDF Buy 8,150 11, ,565 3,999 4, % 5.5% % 2.9% MYOR Neutral 1,505 1, ,650 1,346 1, % 7.2% % 1.6% ULTJ U/R 4,750 U/R U/R 13, % 19.6% % 0.0% UNVR Neutral 44,000 41,900 (4.8) 335,720 6,414 7, % 13.4% % -1.9% GGRM Buy 66,475 75, ,904 6,018 7, % 20.8% % 1.5% HMSP Neutral 3,980 3,850 (3.3) 462,946 12,021 12, % 8.1% % 2.5% WIIM U/R 490 U/R U/R 1, n/a % 0.0% n/a n/a n/a n/a n/a n/a 0.0% 0.0% Healthcare 97,189 3,281 3, % 11.7% % 1.4% KLBF Neutral 1,690 1,500 (11.2) 79,219 2,156 2, % 11.2% % 1.1% SIDO Neutral , % 12.9% % 3.0% TSPC Neutral 2,160 2,100 (2.8) 9, % 12.1% % 2.6% Hospital 53, % 12.2% % 0.6% MIKA Buy 2,840 3, , % 11.1% % 0.7% SILO Neutral 10,100 10, , % 17.7% % 0.0% Retail 95,580 3,980 4, % 21.0% % 2.9% ACES Neutral , % 10.4% % 1.9% ERAA Neutral (1.6) 1, % 49.7% % 4.4% LPPF Buy 15,825 21, ,176 2,082 2, % 13.1% % 4.1% MAPI Buy 5,700 5, , % 194.2% % 0.0% MPPA Neutral 1,675 1, , % 49.9% % 0.6% RALS Neutral 1,325 1,180 (10.9) 9, % 6.5% % 2.7% TELE Buy 690 1, , % 18.6% % 4.2% Automotive 337,125 16,763 18, % 10.0% % 2.2% ASII Neutral 8,225 8,200 (0.3) 332,977 16,492 18, % 9.5% % 2.2% Page 9 of 11

10 Price Price % of Mkt Cap Net Profit EPS Growth PER (x) EV/EBITDA (x) P/BV (x) Div.Yield Code Rating (Rp) Target PT (Rp Bn) IMAS U/R 1,500 U/R U/R 4, N/M 53.7% % 1.2% Heavy Equipment 85,945 4,683 5, % 24.1% % 2.0% HEXA* U/R 3,400 U/R U/R 2, % 50.0% n/a n/a 0.0% 0.0% UNTR Neutral 22,275 21,000 (5.7) 83,089 4,554 5, % 23.5% % 2.0% Plantation 39,692 2,271 3, % 38.2% % 1.9% AALI Buy 15,000 16, ,159 1,519 2, % 19.8% % 1.8% LSIP Buy 1,455 1, , % 62.5% % 2.0% SGRO U/R 1,910 U/R U/R 3, % 28.6% % 1.7% Property 158,376 10,231 11, % 11.1% % 0.6% APLN U/R 272 U/R U/R 5, , % 24.7% % 3.0% ASRI Neutral (17.5) 7,574 1, % -59.0% % 1.7% BSDE Buy 2,070 2, ,841 1,721 2, % 53.8% % 0.9% CTRA Buy 1,565 1, ,735 1,474 1, % -3.1% % -1.2% CTRS Buy 3,030 4, , % 1.8% % 1.9% JRPT Buy 830 1, , , % 11.6% % 1.0% LPCK Buy 5,875 10, , % -15.9% % 0.0% MDLN Buy , % -2.2% % 0.0% PWON Buy ,675 1,934 2, % 25.9% % 1.3% SMRA Neutral 1,450 1, , % 78.2% % 0.0% Industrial Estate 17,371 1,394 1, % 11.5% % 1.9% DMAS Buy , % 8.4% % 2.3% BEST Buy , % 18.8% % 0.4% SSIA Neutral , % 15.5% % 1.7% Poultry 81,767 3,547 4, % 22.2% % 1.2% CPIN U/R 3,530 U/R U/R 57,885 2,671 3, % 20.2% % 1.4% JPFA U/R 1,900 U/R U/R 20, % 25.8% % 0.8% MAIN U/R 1,620 U/R U/R 3, N/M 36.3% % 1.1% Coal 109,504 5,176 5, % 13.2% % 2.7% ADRO* Neutral 1,685 1,100 (34.7) 53, % 14.2% % 2.1% HRUM* Neutral 2,510 1,100 (56.2) 6, N/M 43.3% % 1.3% ITMG* Neutral 16,600 7,600 (54.2) 18, % 8.0% % 4.5% PTBA Neutral 13,050 9,200 (29.5) 30,074 1,542 1, % 12.7% % 2.9% Oil & Gas 60,119 6,887 7, % 10.5% % 5.9% PGAS* Sell 2,480 3, , % 10.5% % 5.9% Shipping 2, % 11.0% % 4.8% SOCI* Buy , % 11.0% % 4.8% Metal 36, N/M N/M % 0.4% ANTM Neutral (45.1) 8, % N/M % 0.1% INCO* U/R 2,850 U/R U/R 28, % 33.3% % 0.5% Telco 464,830 20,562 23, % 15.8% % 3.2% EXCL Neutral 2,270 2, , N/M 81.6% % 0.4% ISAT U/R 6,375 U/R U/R 34,641 1,013 1,908 N/M 76.0% % 2.1% TLKM Buy 4,150 4, ,582 19,278 21, % 11.2% % 3.4% Tower 66,831 3,540 4, % 26.3% % 0.0% TBIG Neutral 5,850 6, ,060 1,120 1, % 39.1% % 0.0% TOWR Buy 3,800 5, ,771 2,420 2, % 20.4% % 0.0% Media 63,240 3,175 3, % 16.0% % 2.8% SCMA Buy 2,470 3, ,115 1,599 1, % 16.9% % 3.1% MNCN Buy 1,900 2, ,125 1,576 1, % 15.0% % 2.3% Textile 5, % 22.0% % 0.0% SRIL* Buy , % 22.0% % 0.0% Note: - *) net profit in USD mn - U/R means Under Review - n/a means Not Available - N/M means Not Meaningful - N.A means Not Applicable Page 10 of 11

11 Mandiri Sekuritas A subsidiary of PT Bank Mandiri (Persero) Tbk Plaza Mandiri 28 th Floor, Jl. Jend. Gatot Subroto Kav , Jakarta 12190, Indonesia General: , Fax : (Equity Sales) RESEARCH Tjandra Lienandjaja Deputy Head of Equity Research, Banking tjandra.lienandjaja@mandirisek.co.id Liliana S Bambang Property, Building Material liliana.bambang@mandirisek.co.id Adrian Joezer Consumer, Strategy adrian.joezer@mandirisek.co.id Ariyanto Kurniawan Telecom, Coal, Metal, Automotive ariyanto.kurniawan@mandirisek.co.id Bob Setiadi Construction, Toll Road bob.setiadi@mandirisek.co.id Francis Lim Quant, Health Care, Hospital francis.lim@mandirisek.co.id Yudha Gautama Mining, Plantation yudha.gautama@mandirisek.co.id Laura Taslim Retail laura.taslim@mandirisek.co.id Priscilla Thany Banking priscilla.thany@mandirisek.co.id Ferdy Wan Building Material, Industrial Est., Media ferdy.wan@mandirisek.co.id Lakshmi Rowter Research Assistant lakshmi.rowter@mandirisek.co.id Gerry Harlan Research Assistant gerry.harlan@mandirisek.co.id Leo Putera Rinaldy Chief Economist leo.rinaldy@mandirisek.co.id Wisnu Trihatmojo Economist wisnu.trihatmojo@mandirisek.co.id Aziza Nabila Amani Research Assistant aziza.amani@mandirisek.co.id INSTITUTIONAL SALES Lokman Lie Co-Head Institutional Equities lokman.lie@mandirisek.co.id Silva Halim Co-Head Institutional Equities silva.halim@mandirisek.co.id Aditya Sastrawinata Institutional Sales aditya.sastrawinata@mandirisek.co.id Andrew Handaya Institutional Sales andrew.handaya@mandirisek.co.id Cindy Amelia P. Kalangie Institutional Sales cindy.amelia@mandirisek.co.id Feliciana Ramonda Institutional Sales feliciana.ramonda@mandirisek.co.id Kevin Halim Institutional Sales kevin.halim@mandirisek.co.id Mirna Santikara Salim Institutional Sales santikara.salim@mandirisek.co.id Oos Rosadi Institutional Sales oos.rosadi@mandirisek.co.id Zahra Aldila Niode Institutional Sales zahra.niode@mandirisek.co.id Kusnadi Widjaja Equity Dealing kusnadi.widjaja@mandirisek.co.id Edwin Pradana Setiadi Equity Dealing edwin.setiadi@mandirisek.co.id Jane Theodoven Sukardi Equity Dealing jane.sukardi@mandirisek.co.id Michael Taarea Equity Dealing michael.taarea@mandirisek.co.id RETAIL SALES Andreas M. Gunawidjaja Head Retail Equities andreas@mandirisek.co.id Boy Triyono Plaza Mandiri boy.triyono@mandirisek.co.id A. A. Damargumilang Pondok Indah Office Tower damar.gumilang@mandirisek.co.id Herianto Pondok Indah Prioritas herianto@mandirisek.co.id Hendra Riady Mangga Dua hendra.riady@mandirisek.co.id Indra Mas'ari Bandung indra.mas ari@mandirisek.co.id Yogiswara P. Yogyakarta yogiswara.perdana@mandirisek.co.id Widodo Solo widodo@mandirisek.co.id Linawati Surabaya Linawati@mandirisek.co.id Bambang Suwanto Malang bambang.suwanto@mandirisek.co.id Ruwie Medan ruwie@mandirisek.co.id Aidil Idham Palembang aidil.idham@mandirisek.co.id Yuri Ariadi Pontianak yuri.ariadi@mandirisek.co.id INVESTMENT RATINGS: Indicators of expected total return (price appreciation plus dividend yield) within the 12-month period from the date of the last published report, are: Buy (10% or higher), Neutral (-10% to10%) and Sell (-10% or lower). DISCLAIMER: This report is issued by PT. Mandiri Sekuritas, a member of the Indonesia Stock Exchanges (IDX) and Mandiri Sekuritas is registered and supervised by the Financial Services Authority (OJK). Although the contents of this document may represent the opinion of PT. Mandiri Sekuritas, deriving its judgement from materials and sources believed to be reliable, PT. Mandiri Sekuritas or any other company in the Mandiri Group cannot guarantee its accuracy and completeness. PT. Mandiri Sekuritas or any other company in the Mandiri Group may be involved in transactions contrary to any opinion herein to make markets, or have positions in the securities recommended herein. PT. Mandiri Sekuritas or any other company in the Mandiri Group may seek or will seek investment banking or other business relationships with the companies in this report. For further information please contact our number or fax ANALYSTS CERTIFICATION: Each contributor to this report hereby certifies that all the views expressed accurately reflect his or her views about the companies, securities and all pertinent variables. It is also certified that the views and recommendations contained in this report are not and will not be influenced by any part or all of his or her compensation.