INVESTOR DIGEST HIGHLIGHT ECONOMY. Equity Research 18 October 2016

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1 INVESTOR DIGEST Economic Data Latest 2016F 7-DRRR (%), eop Inflation (YoY %) US$ 1 = Rp, period avg 13,069 13,348 Stock Market Data (17 Oct 2016) JCI Index 5, % Trading T/O ( Rp bn ) 4,808.0 Market Cap ( Rp tn ) 5, ,016.2 HIGHLIGHT Lower Import Volume, Larger Trade Surplus Automotive: 9M16 4W/2W Wholesales Volumes Cigarette: Inside the Pack Oct 16 Arwana Citra Mulia: 9M16 Results Slightly Below (ARNA; Rp575; Buy; TP:Rp610) Bank Jabar: Upgrade 2016 Earnings (BJBR; Rp1,635; Neutral; TP:Rp1,600) Indocement: Booked a Weak Cement Sales in Sept (INTP; Rp16,950; Neutral; TP:Rp20,200) Market Recap Oct 17 th 2016; JCI: 5, (+0.19%); USD/IDR: 13,069; Total Value: Rp6.56tn 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 68.7% of JCI s market capitalization ECONOMY Lower Import Volume, Larger Trade Surplus Larger than expectation. Sep16 trade surplus of US$1.2bn, the largest since Jul15, is above our (US$900mn) and consensus (US$589mn) estimates. It is boosted by relatively deeper import contraction than export as the former significantly dropped in terms of volume. Separately, the Statistics Indonesia revised up Aug16 export and import growths which yielded upgraded trade surplus. Please refer to exhibit 1. Export softened. Seasonality in China (mooncake festival) and India (Deepavali) stepped up demands from the respective countries; they were the biggest in terms of contribution to the annual growth of export. Still, the whole export volume growth slowed (5.8% YoY vs. 9.8% YoY). Its negative effect was halted by price improvement (-6.1% YoY vs. -8.8% YoY) supported by commodity upside. Meanwhile, by products, annual export decline was mostly contributed by the sharp decline in precious stones; it is on a high base given significant shipment last year. It was partly offset by upside in machinery and mechanical appliances, CPO, and tin. At the bottom line, export growth rate was down to -0.6% YoY from 0.2% YoY. Import volume dropped. Domestic demand for import weakened as evident in dropping volume (2.7% YoY from 13.0% YoY) even though price improved (-4.8% YoY from -11.6% YoY). Raw materials and capital goods segments of import declined while rebounded consumption-wise. It is in line with cement consumption and capital spending slowdowns. All in all, import growth fell to -2.3% YoY from -0.1% YoY and it, especially in terms of capital goods, suggests that investment activity has yet to show solid rebound. Lower 3Q16 CAD. Trade surplus amounted to US$2.2bn in 3Q16, slightly larger than 2Q16 s US$1.9bn. We therefore expect 3Q16 CAD to GDP could be less than -2.0%. We also highlight positive balance of payment prospect in the remaining Page 1 of 13

2 of It is likely to continue being in surplus in 3Q16 given US$5.9bn increase in the foreign exchange reserve while tax amnesty repatriation funds amounting Rp143tn (~US$11bn) so far will particularly benefit the 4Q16. Anticipate flat benchmark rate. Despite larger trade surplus, we are still expecting Bank Indonesia to hold its benchmark rate at 5.0% on Thursday. Bank Indonesia might be waiting for clarity over 2017 electricity tariff adjustment, pending 2017 budget approval at the end of Oct16, and more data, especially 3Q16 GDP that will be released in early Nov16. We also believe that 5.0% policy rate is ideal until YE16 and YE17 considering higher inflation expectation and a more aggressive federal funds rate increase next year. TRADE SUMMARY Aug-16 Sep-16 Prior Revision MS Forecast Market Consensus Actual Exports (% YoY) Imports (% YoY) Trade balance (US$ mn) ,217 Sources: Bank Indonesia, Mandiri Sekuritas estimate Leo Rinaldy( ) Wisnu Trihatmojo ( ) leo.rinaldy@mandirisek.co.id wisnu.trihatmojo@mandirisek.co.id SECTOR Automotive: 9M16 4W/2W Wholesales Volumes 3Q16 4W wholesales volume stood at 251.3k units (-5.1% qoq/ +5.1% yoy), while 9M16's at 783.5k units (+2.5%yoy), accounting for 73% of our FY16E forecast. ASII s 4W market share improved to 53.9% in 9M16 (vs. 50% in 1H15) and for 2W to 73% (from 68% in 9M16). 3Q16 4W wholesales stood at 251.3k units (-5.1% qoq/ +5.1% yoy), while 9M16's at 783.5k units (+2.5%yoy), accounting for 73% of our FY16E forecast at 1.07mn units (+7%yoy) and 75% of Gaikindo s expectation (1.05mn units, +5%yoy). 3Q16 wholesales volume for Toyota stood at 100.9k units (+6.7%qoq/ +29.4%yoy), while Daihatsu's stood at 44.0k units (-6.4%qoq/ +16.4%yoy), bringing ASII s 3Q16 sales volume to 149.0k units (+1.9% qoq/ +24.5%yoy) and 9M16 sales volume to 422.5k units (+10.5% yoy). Meanwhile, Honda s 3Q16 wholesales volume totaled 42.2k units (-17.7%qoq/ +15.8%yoy), bringing Honda s 9M16 sales volume to 151.8k units (+28.9% yoy). ASII s 9M16 market share improves. Toyota s market share improved to 35.2% in 9M16 (vs. 31.5% in 9M15), while Daihatsu s market share remains flat at 17% in 9M16, bringing ASII s 4W market share to 53.9% in 9M16 (vs. 50% in 9M15). Meanwhile, Honda s market share also improved to 19.4% in 9M16 (vs. 15.4% in 9M15). We believe that higher market share for ASII and Honda came at the expense of other smaller players, given relatively flat industry sales. Sept-16 s 4W volume stood at 92.6k units (-3.8% mom/flat yoy). Sept-16 s strong yoy growth was mainly driven by Toyota at 37.0k units (-4.7% mom/+14.1% yoy), Honda at 15.8k units (-7.6% mom/+10% yoy), and Daihatsu at 16.6k units (-1.4% mom/+24.6% yoy). We believe the strong yoy pick up in 4W sales volume indicates recovery of consumer confidence and purchasing power. 7-seater LCGC supports ASII s 4W sales. According to Gaikindo, Toyota Calya's sales in September remains strong at 8.8k units (-4.4%mom), while Daihatsu Sigra's sales reached 5.7k units (flat mom) in September, accounting for 26% of ASII s Sept16 4W wholesales volume. While we think cannibalization impact on from 7-seater Cayla to LCGC Agya is widely anticipated, we also see the impact on Avanza, even though the new 7-seater Cayla is still net positive for ASII. ASII Page 2 of 13

3 targets monthly sales of 8k units for Cayla and 2-3k for Sigra. Based on our channel checks, the waiting time for Calya and Sigra varies around 1 to 2 months. ASII s 3Q16 2W wholesales volume totaled 1.0mn units (-4.9%qoq/-10.5%yoy); 9M16's at 3.2mn units (-2.8% yoy), bringing ASII s market share to 73% in 9M16 vs. 68% 9M15. We suspect Honda s superior market share is mainly driven by brand switching from Yamaha. Maintain Neutral on ASII, Rp8,200TP. We anticipate better 4W volumes in the coming months driven by better macro outlook and new product deliveries. Nevertheless, we maintain our Neutral recommendation on ASII with Rp8,200TP due to rich valuation. ASII is trading at 17.7x 2017 P/E. 4W 3Q16 AND 9M16 WHOLESALES VOLUME (in '000s) 3Q15 3Q16 YoY % 2Q16 QoQ % 9M15 9M16 YoY % Astra Toyota Daihatsu (6.4) Total for Astra Non-Astra Honda (17.7) Suzuki (39.2) 20.8 (13.1) (26.8) Others (21.3) 46.5 (9.7) (17.8) Total for Non- Astra (14.5) (13.8) (5.6) Total 4W Wholesales (5.1) W Market Share (%) 3Q15 3Q16 YoY % 2Q16 QoQ % 9M15 9M16 YoY % Toyota Daihatsu (0.2) Astra's Market Share Honda (2.6) Others (10.9) 25.4 (1.5) (7.9) Non- Astra Market Share (9.3) 44.8 (4.1) (3.9) Source: Gaikindo, Mandiri Sekuritas FIGURE 2. 2W 3Q16 AND 9M16 WHOLESALE VOLUME (in '000s) 3Q15 3Q16 YoY % 2Q16 QoQ % 9M15 9M16 YoY % Astra Honda 1, ,015.8 (10.5) 1,067.8 (4.9) 3, ,174.2 (2.8) Non-Astra Yamaha (26.0) (6.9) 1, ,054.0 (23.2) Others (42) (36) (31) Total for Non-Astra (37.0) (33.6) Total 2W Wholesales 1, ,388.0 (15.7) 1,457.8 (4.8) 4, ,349.9 (9.8) 2W Market Share (%) 3Q15 3Q16 YoY % 2Q16 QoQ % 9M15 9M16 YoY % Astra Honda (0.1) Yamaha (3.3) 24.7 (0.5) (4.2) Others (0.9) (1.0) Source: AISI, Mandiri Sekuritas Ariyanto Kurniawan ( ) ariyanto.kurniawan@mandirisek.co.id Page 3 of 13

4 Cigarette: Inside the Pack Oct 16 October retail price survey serves us icing on a cake after the 2017 excise tax news: 1) the 20K cigarettes may give Gudang Garam (GG) Surya 16 a leeway amid current weak volumes; 2) prices for the low-price brands are crawling up, which should partly reduce the competition on the big brands. Three musketeers in the 20K battle. We add Djarum Super 16 to our tracker starting this month to reconfirm that Surya 16 is no longer alone jumping through the 20K magic price, now together with GG Surya 16 and Sampoerna A Mild 16. We argued earlier that this could support GG Surya 16's volumes, while increasing ASP becomes easier when playing fields are similar. Sampoerna A Mild 16, however, is a lone ranger in the mild segments (i.e. GG Surya and Djarum Super belong to full-flavored category) as other 16-stick mild cigs are still under Rp20,000, and pressure on volume is evident as market share fell from 15.0% in 2Q15 to 14.2% in 2Q16. Low-price brands are off the hook. Although there is still a big gap between the low-price and premium brands, we notice prices for the former have started crawling up in the past few months. There is arm-in-arm ASP growth from Djarum Super MLD 20 (+3.0% MoM in Sep 16, +0.4% MoM in Oct 16) and Lucky Strike Mild 16 (+3.8% MoM in Oct 16), retailing at Rp18,025 and Rp13,700, respectively. Djarum LA Bold 20 recorded 0.6% MoM increase in Oct 16, but already up 7.5% YTD. Interesting update from U Bold that keeps peeking through the hood: it has not been launched in Jakarta but its retail price tag at the minimart we surveyed was further adjusted to Rp11,500 this month (+7.5% MoM). This should alleviate some pressure on the big brands, whose market shares have been affected by the low-price brands. HMSP s ASP growth is stable, the mild the merrier. HMSP s average retail price increase was 1.5% MoM in Oct 16 or 12.0% YTD. A Mild 12 and U Mild 16 increased the highest (+3.8% and +3.9% MoM) in Oct 16, followed by A Mild 16 (+2.6% MoM). The rest grew at <0.8% MoM in Oct 16. Additionally, banderole price for A Mild 16 increased by 2.7% to Rp17,750. GGRM ranks bottom in ASP growth. GGRM only saw 0.5% MoM average retail price growth in Oct 16 (vs. 2.9% MoM in Sep 16), totaling 6.6% YTD. Most of it is credited to GG International 12 (+2.9% MoM), followed by GG Signature Mild 20 and 16 (0.4% and 0.2% MoM). RMBA #1 and WIIM #2 in Oct 16. RMBA s average retail price increase bounced back to 3.5% MoM in Oct 16 (vs. -0.9% MoM in Sep 16), equally pushed by Dunhill Mild 20 (3.1% MoM) and Lucky Strike Mild (3.8% MoM). Wismilak has been mirroring growth (WIIM: 11.5% vs HMSP: 12.0% YTD) to hit the brake on volumes as not to surpass the Tier-1 volume threshold. Diplomat 12 led the herd (+2.9% MoM), up by 17.1% YTD. As we noted in our cigarette highlight, Wismilak will benefit from the increasing Tier-2 threshold from 2bn to 3bn sticks. Adrian Joezer ( ) Lakshmi Rowter ( ) adrian.joezer@mandirisek.co.id lakshmi.rowter@mandirisek.co.id CORPORATE Arwana Citra Mulia: 9M16 Results Slightly Below (ARNA; Rp575; Buy; TP:Rp610) Slightly below 9M16 results. ARNA booked NPAT of Rp61bn in 9M16 (+15% YoY), which is 65% of ours and 38% of consensus. Slight miss on earnings is on the back of lower than expected sales volume as 9M16 sales volume is recorded at only around 33.8mn sqm (+20% YoY) or 69% of our FY16F estimate. Revenue in 3Q16 is up by 25% YoY to Rp355bn. The company recorded strong growth in sales outside Java in 3Q16 (+30% QoQ, +60% YoY), while Java sales posted lackluster growth of -17% QoQ and 6% YoY. ARNA s gross margin in 3Q16 improved by about 60bps QoQ due to sales shift into higher margin UNO product. High growth tick in promotion and advertising in 3Q16 of 30% QoQ and 613% YoY to Rp4.3bn was due to traveling expense for distributors who had achieved sales target in Sep 16. Page 4 of 13

5 Balance sheet remains in-check. ARNA stands at net debt of Rp218bn and net gearing of 24%vs. 6% in FY15. Higher net gearing was caused by additional bank loan which is used to repay some of the payables due to Sacmi Hongkong and B&T Group S.p.A for machinery and equipment purchase. Total bank loan as of 9M16 amounts to Rp222bn. Operating cash flow improved to Rp70bn in 9M16 vs. Rp56bn in 9M15. Maintain Buy with TP of Rp610. We think sales will continue to improve in 4Q16. In addition, ARNA will benefit from lower gas price effective in beginning of FY17, which will further boost its earnings. Better property market outlook in FY17 could bring an additional upside to company s sales volume going forward. Despite improving fundamentals of the company, we see risk in consensus numbers. The counter is currently trading at 18.1x FY17F P/E. ARNA 9M16 results Rpbn 9M16 9M15 %yoy 3Q16 2Q16 %qoq 3Q15 %yoy FY16F Revenue 1, , , Gross profit Operating profit Pretax profit Net profit % of ours FY16C % of cons. Gross margin (%) Operating margin (%) Pretax margin (%) Net margin (%) Ferdy Wan ( ) ferdy.wan@mandirisek.co.id Bank Jabar: Upgrade 2016 Earnings (BJBR; Rp1,635; Neutral; TP:Rp1,600) Maintain Neutral with revised TP of Rp1,600 (from Rp1,500). We roll over our valuation to 2017F and upgrade our TP to Rp1,600 based on 1.4x FY17 P/BV (GGM: CoE 13.3%, ROE 17%, and growth rate of 6.75%). Furthermore, we revise our earnings forecast by -14%/-13% for 2016/2017F and increase expected blended NPL to 2.4%/2.2% for 2016/17F (from 2.2%/2.0%) to take into account the syariah unit s net loss and high NPF ratio. On the contrary, we increase loan growth to 14.0%/14.4% in 2016/17F (from 13.5%/14.0%), mainly driven by strong commercial and consumer loan growth. The stock has outperformed the index by 43% over the past 3 months and is currently trading at 1.5x fwd FY17 P/BV, equivalent to its 5-year mean. FORECAST CHANGE Year-end Dec 31 Old New Change (%) (IDRb) 2016E 2017E 2018E 2016E 2017E 2018E 2016E 2017E 2018E Net interest income 5,832 6,293 6,843 5,879 6,386 6, (0.6) Net interest margin (%) Total income 6,469 7,048 7,717 6,504 7,115 7, (0.9) Pre provision operating profit 2,470 2,765 3,218 2,467 2,752 2,973 (0.1) (0.5) (7.6) Operating profit 2,187 2,600 2,958 1,949 2,306 2,556 (10.9) (11.3) (13.6) Reported net profit 1,772 2,048 2,291 1,522 1,780 1,966 (14.1) (13.1) (14.2) Loan growth Deposit growth LDR NIM NPL Coverage ratio Cost to income ROE CAR Source: Mandiri Sekuritas Estimates Page 5 of 13

6 FINANCIAL SUMMARY YE Dec (Rp Bn) 2014A 2015A 2016F 2017F 2018F Pre-Provision Profit 1,987 1,868 2,467 2,752 2,973 Net Profit 1,104 1,377 1,522 1,780 1,966 EPS EPS Growth (%) (19.8) P/E Ratio (x) BVPS ,028 1,149 1,278 P/BV Ratio (x) Dividend Yield (%) ROAE (%) CAR (%) Source : Company, Mandiri Sekuritas estimates Priscilla Thany ( ) priscilla.thany@mandirisek.co.id Indocement: Booked a Weak Cement Sales in Sept (INTP; Rp16,950; Neutral; TP:Rp20,200) Weak September sales. INTP booked a decline in its cement sales, down by 7% YoY to 1.4mn MT. The decline is much lower compared to Indonesia cement sales, which is down by 3% YoY. The company accounted the weak sales due to closure of roads during the Idul Adha holiday. In September, the company reported 10% YoY decline in its Java cement sales, versus overall Java market which is down by 5% YoY. The company s Java sales proportion has slightly gone down from 74% in 9M15 to 72% in 9M16. Its Java market share is down from 36.5% to 34.4%. This, in our view, reflecting the heavy competition in Java market. The non-big three cement players have strongly increased its Java market share from 7.7% to 12.5%. Remain cautious on the sector. As of YTD, the company has reduced ASP by 10%. The company recently introduced a new brand, Semen Rajawali, which is priced lower compared to Semen Tiga Roda brand. However, margin should remain the same as clinker content is lower. We view that this brand should slowly help INTP regain back its market share. We remain cautious on the sector, as we think that there is risk that the cement competition would still be intense in FY17F. INTP 9M16 9M15 Y/Y Sep-16 Sep-15 Y/Y Aug-16 M/M Sumatera 1, % % % Kalimantan % % % Sulawesi % % % Nusa Tenggara & Bali % % % Papua % % % Java 8,403 8, % 1,047 1, % 1, % Total Domestic 11,699 11, % 1,434 1, % 1, % Export cement % - - n.a - n.a Export clinker % 21 - n.a % Liliana S Bambang ( ) liliana.bambang@mandirisek.co.id Page 6 of 13

7 TAX AMNESTY MARKET Market Recap Oct 17 th 2016; JCI: 5, (+0.19%); USD/IDR: 13,069; Total Value: Rp6.56tn Earlier in the day, Indo equities was on bearish mode as the USD held firm near seven-month high against a basket of major currencies after comments from Federal Reserve Chair Janet Yellen boosted long-dated US bond yields. The IDR slightly weakened to level. Coal prices continue to climb and for the first time this year reaching $90/ton, hence, mining shares led the rally with PTBA (close +6.2%) as the leader of the pack. Other players also followed suit: HRUM (+7.4%), DOID (+3.8%), and ITMG (+3.7%). At the same time, CPO plays also rallied on seasonally lower outputs and lingering impact of El Nino as well as potential surge in China import in anticipation for Chinese New Year season: AALI (+4%), LSIP (+4%), BWPT (+4.7%) and SIMP (+4.3%). The JCI has returned to positive territory since mid morning when the banks: BBCA (+0.6%), BMRI (+0.2%), BBNI (+0.4%) and construction sector: TOTL (+0.6%), ADHI (flat), PTPP (flat), WSKT (flat) played catch up. In the end, the JCI was up 0.2% at 5410 level. Market turnover was normal at US$361mn (excluding US$29mn KPIG; US$19mn IIKP; US$10mn MYRX; and US$9.2mn ULTJ crossing). Regular market transaction was recorded at Rp4.8tn (US$367.28mn) and excluding foreign net sell from KPIG and IIKP crossing, foreign posted a net buy of Rp141.96bn (US$10.86mn). Foreign participants declined to 30% and came up better seller for 6%. Gainers beat losers by 12 to 10. Chinese economic data on Wed, including third-quarter GDP, will be a key focus of this week. China's economy likely grew by a steady 6.7% in the third quarter from a year earlier, the same pace as in the previous quarter, as increased government spending and a property boom offset stubbornly weak exports, according to a Reuters poll of 58 economists. But the expected rate of expansion would still be near the weakest since the global crisis, and analysts are increasingly worried that growth is becoming too reliant on government spending, ballooning debt levels and a housing market that is showing signs of overheating. Some market players are wary of a possible hit to investors' risk appetite after Iraq's Prime Minister Haider al-abadi on Monday announced the start of an offensive to retake Mosul, the capital of Islamic State's so-called caliphate in Iraq. The assault on Mosul is backed by the US-led coalition and could be one of the biggest Page 7 of 13

8 military operations in Iraq since the 2003 US-led invasion that toppled Saddam Hussein. Oil prices logged their fourth straight week of gains last week, extending their advance since the OPEC announced last month its first planned output cut in eight years. US crude futures traded at $50.17 per barrel in early Monday trade, down 0.4% from last week. Brent crude futures stood at $51.88 per barrel, down 0.1%. TOP TURNOVER: BBCA TLKM BBRI ANTM DOID BMRI UNTR ASII BBNI INAF LSIP AALI PGAS HRUM UNVR ELSA (40%) ADVANCING SECTOR: plantation +1.9%; mining +1.6%; construction +0.5%; consumer +0.3%; financial +0.1% DECLINING SECTOR: auto & cement -1.5%; telco -0.6%; property -0.5% The yield of 10-year government went up to 7.092% (+0.925%) and Rupiah weakened to Rp13,069 (-0.184%). Sales Team FROM THE PRESS BI loosens digital financial services regulation BI issued a circular letter 18/21/DKSP regarding loosening of digital financial services policy. There are two main points made, the first is that BI will allow smaller banks, those in BUKU III and regional development banks (BPD) BUKU I and II, to provide digital services for clients. Previously, only banks in BUKU IV were allowed to provide digital services. Secondly, BI has increased the limit of electronic money to Rp10mn from Rp5mn. (Kontan) Deposit rates to potentially decline by another 20 bps According to LPS, deposit rates will continue to decline until the end of the year following the decline in the seven day reverse repo rate and LPS rate. According to Dody Ariefianto, Director of Banking Risk and Financial System of LPS, deposit rates may potentially decline by 20bps in early December Dody states that deposit rates have declined by approximately 10 bps from September to early October. (Kontan) External debt growth slowed in Aug16 Bank Indonesia reported external debt outstanding of US$323bn in Aug16, down US$1.2bn from Jul16 position. It grew 6.3% YoY, slower than 6.6% YoY in Jul16, affected by decelerating private external debt (-3.9% YoY from -3.0% YoY). Government portion, on the other hand, expanded faster (19.2% YoY from 18.7% YoY) (Bank Indonesia, Bisnis Indonesia) Ministry of Public Work and Public Housing (PUPR) to raise Jakarta Cikampek Toll Road Tariff PUPR has approved 7-11% tariff increase for Jakarta Cikampek toll road (72.5km) starting October 22nd Note that this increase followed bi-annual and inflation adjusted scheme set out in PUPR Ministry Regulation No. 799/KPTS/2016, UU No.38/2004, and Government Regulation No.15/2005. (Investor Daily) Adhi Karya (ADHI): Progress for 3 routes in Greater Jakarta Light Rail Transit (LRT) project reached 3-13% Haris Gunawan, the ADHI s Finance Director, stated that progress for Cibubur-Cawang route has reached 12.7% while Cawang-Bekasi route reached 4.8% and Cawang-Dukuh Atas reached 2.9%. ADHI also expects to sign contracts with Ministry of Finance in November 2016 at the earliest. (Kontan) Page 8 of 13

9 Bank Jatim s (BJTM) syariah unit to become a regional owned enterprise (BUMD) BJTM s syariah unit will become a regional owned enterprise (BUMD) once the spin off has been complete. President Director of BJTM R. Soeroso states that the provincial government wants to increase contribution of the syariah unit to the provincial revenue. The bank targets to complete the spin off process by (Bisnis Indonesia) Bank Panin (PNBN) uses funds from bond issuance for working capital needs PNBN obtained Rp2tn from its sustainable bond offering II Phase I 2016 and Rp100bn from its subordinate bond issuance II Phase I In total, the bank obtained Rp2.09tn after emission costs has been deducted. The funds obtained will be used for working capital, in particular to increase loan distribution and long term funding. The subordinate bonds will help strengthen the bank s tier 2 capital. (Bisnis Indonesia) PLN to delay construction of PLTU Java V PLN (Indonesia state electricity company) plans to wait for a revision in Electricity Procurement Business Plan (RUPTL) prior to commencing the construction of 2x1,000MW steam-fired power plant (PLTU) Java V. (Bisnis Indonesia) Foreign instant noodle players target non-local flavor segment for more market share PT Nissin Indonesia has been aggressively launching Japanese-flavored instant noodles now at 1% market share as not to compete head-to-head with Indofood. According to Euromonitor, market share for instant noodles is still dominated by Indofood (72%) and Wings (15%). The association for instant noodles estimates 10% YoY to 16 bn instant noodle packs in (Kontan) Page 9 of 13

10 Indices Currencies and ADRs Major Commodities Last Chg (%) YTD Chg (%) Currency Last Chg (%) YTD Chg (%) Last Chg (%) YTD Chg (%) JCI 5, Rp/US$ 13, Oil spot (US$/bl) Dow Jones 18, US$/EUR Nickel spot (US$/mt) 10, Nikkei 16, YEN/US$ Gold spot (US$/oz) 1, SET 1, SGD/US$ Tin 3-month (US$/mt) 19, Hang Seng 23, CPO futures (Ringgit/ton) 2, STI 2, ADR Stocks Soybean oil (US$/100gallons) S&P 500 2, TLK in Rp 21, 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 41,765 2,170 2,350-57% 5,038 40% 1, % 11.6% PWON Buy 33, % 1,207 64% % 24.7% SMRA Neutral 25,243 1,750 1,600-56% 3, % % 14.7% CTRA Buy 23,356 1,540 1,600-41% 2,628 97% % 14.0% JRPT Buy 11, ,300-75% 3,242 19% % 20.4% ASRI Neutral 7, % 1,161 93% % 6.3% LPCK Buy 4,106 5,900 10,000-76% 24,683 26% 4, % 14.6% MDLN Buy 5, % 1,165 44% % 6.6% CTRS Buy 5,620 2,840 4,000-79% 13,390-29% 4, % 13.9% Simple Average -61% % 14.1% 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 12, % % % 12.5% BEST Buy 2, % % % 9.0% SSIA Neutral 2, % 1,701-34% % 8.1% LPCK Buy 4,106 5,900 10,000-76% 24,683 26% 4, % 14.6% MDLN Buy 5, % 1,165 44% % 6.6% Simple Average -67% % 10.2% Page 10 of 13

11 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 5,410 5,550 4,181, , , % 15.9% % 1.8% Banking 947,720 67,909 83, % 22.7% N.A. N.A % 1.9% BBCA Neutral 15,900 13,000 (18.2) 392,015 18,174 21, % 17.7% N.A. N.A % 1.4% BBNI Buy 5,500 6, ,568 10,783 12, % 20.5% N.A. N.A % 3.2% BBRI Buy 12,150 14, ,730 25,817 30, % 19.1% N.A. N.A % 2.1% BBTN Buy 1,940 2, ,545 2,439 2, % 21.0% N.A. N.A % 2.4% BDMN Sell 4,000 3,500 (12.5) 38,338 3,375 3, % 9.5% N.A. N.A % 1.9% BJBR Neutral 1,635 1,600 (2.1) 15,853 1,522 1, % 16.9% N.A. N.A % 3.8% BJTM Neutral ,981 1,032 1, % 7.2% N.A. N.A % 8.7% BNGA Buy 890 1, ,367 1,670 3, % 97.0% N.A. N.A % 0.0% BNLI Buy , ,069 N/M N/M N.A. N.A % 0.0% BTPN Sell 2,600 2,200 (15.4) 15,185 1,648 1, % 10.4% N.A. N.A % 0.0% PNBN Buy 810 1, ,511 2,129 2, % 11.3% N.A. N.A % 0.0% Building Materials 133,003 9,374 10, % 7.0% % 3.8% INTP Neutral 16,950 20, ,397 4,368 4, % 5.3% % 5.6% SMCB Sell 1, (10.0) 7, N/M 10.1% % 1.6% SMGR Neutral 9,900 11, ,722 4,501 4, % 5.4% % 2.3% ARNA Buy , % 147.5% % 1.7% Constructions 88,126 4,132 5, % 21.8% % 0.6% ADHI Buy 2,310 3, , % 32.0% % 1.3% PTPP Buy 4,200 5, , , % 19.2% % 0.9% WIKA Buy 2,750 3, , % 23.9% % -1.3% WSKT Buy 2,620 3, ,058 1,634 1, % 12.7% % 1.1% WTON Buy 885 1, , % 54.2% % 1.2% Toll road 31,008 1,612 1, % -6.2% % 1.0% JSMR Neutral 4,560 5, ,008 1,612 1, % -6.2% % 1.0% Rice Mill 6, % 16.9% % 0.5% AISA U/R 2,050 U/R U/R 6, % 16.9% % 0.5% Consumer 1,190,339 33,682 37, % 10.7% % 1.0% ICBP Neutral 9,600 9,050 (5.7) 111,954 3,464 3, % 8.2% % 1.4% INDF Buy 8,625 10, ,736 3,801 3, % 2.2% % 2.6% MYOR Neutral 1,520 1, ,986 1,346 1, % 7.2% % 1.6% ULTJ U/R 4,750 U/R U/R 13, % 19.6% % 0.0% UNVR Neutral 44,725 41,400 (7.4) 341,252 6,358 7, % 13.5% % -1.9% GGRM Buy 65,100 72, ,258 5,902 7, % 21.7% % 1.5% HMSP Neutral 4,190 3,750 (10.5) 487,373 12,021 12, % 7.2% % 2.4% WIIM U/R 505 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 99,433 3,281 3, % 11.7% % 1.4% KLBF Neutral 1,735 1,500 (13.5) 81,328 2,156 2, % 11.2% % 1.1% SIDO Neutral (2.7) 8, % 12.9% % 2.9% TSPC Neutral 2,140 2,100 (1.9) 9, % 12.1% % 2.6% Hospital 52, % 12.2% % 0.6% MIKA Buy 2,780 3, , % 11.1% % 0.7% SILO Neutral 10,675 10, , % 17.7% % 0.0% Retail 102,354 3,980 4, % 21.6% % 2.7% ACES Neutral , % 10.4% % 1.9% ERAA Neutral (8.4) 1, % 49.7% % 4.1% LPPF Buy 18,600 22, ,273 2,082 2, % 14.3% % 3.5% MAPI Buy 4,940 5, , % 194.2% % 0.0% MPPA Neutral 1,855 1, , % 49.9% % 0.5% RALS Neutral 1,195 1,180 (1.3) 8, % 6.5% % 3.0% TELE Buy 705 1, , % 18.6% % 4.1% Automotive 336,710 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 11 of 13

12 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 1,350 U/R U/R 3, N/M 53.7% % 1.3% Heavy Equipment 76,267 4,686 4, % 2.9% % 1.8% HEXA* U/R 2,870 U/R U/R 2, % 50.0% n/a n/a 0.0% 0.0% UNTR Sell 19,800 11,000 (44.4) 73,857 4,554 4, % 1.8% % 1.9% Plantation 41,493 2,145 3, % 40.5% % 1.7% AALI Buy 15,675 16, ,337 1,519 2, % 19.8% % 1.8% LSIP Buy 1,545 1, , % 85.0% % 1.4% SGRO U/R 1,915 U/R U/R 3, % 28.6% % 1.7% Property 163,364 11,167 11, % 6.1% % 0.6% APLN U/R 280 U/R U/R 5, , % 24.7% % 2.9% ASRI Neutral (20.8) 7,895 1, % -59.0% % 1.6% BSDE Buy 2,170 2, ,765 2,143 2, % 17.6% % 0.8% CTRA Buy 1,540 1, ,356 1,474 1, % -3.1% % -1.3% CTRS Buy 2,840 4, , % 1.8% % 2.1% JRPT Buy 825 1, , , % 11.6% % 1.0% LPCK Buy 5,900 10, , % -15.9% % 0.0% MDLN Buy , % -2.2% % 0.0% PWON Buy ,230 1,934 2, % 25.9% % 1.3% SMRA Neutral 1,750 1,600 (8.6) 25, , % 40.0% % 0.0% Industrial Estate 18,011 1,394 1, % 11.5% % 1.8% DMAS Buy , % 8.4% % 2.2% BEST Buy , % 18.8% % 0.4% SSIA Neutral , % 15.5% % 1.7% Poultry 81,607 3,547 4, % 22.2% % 1.2% CPIN U/R 3,640 U/R U/R 59,689 2,671 3, % 20.2% % 1.4% JPFA U/R 1,740 U/R U/R 18, % 25.8% % 0.8% MAIN U/R 1,505 U/R U/R 3, N/M 36.3% % 1.2% Coal 95,472 5,259 5, % 11.5% % 3.1% ADRO* Neutral 1,460 1,100 (24.7) 46, % 14.2% % 2.5% HRUM* Neutral 1,600 1,100 (31.3) 4, N/M 43.3% % 2.1% ITMG* Neutral 14,000 7,600 (45.7) 15, % 8.0% % 5.4% PTBA Neutral 12,425 9,200 (26.0) 28,633 1,542 1, % 12.7% % 3.0% Oil & Gas 62,786 7,044 7, % 8.0% % 5.7% PGAS* Sell 2,590 3, , % 10.5% % 5.7% Shipping 2, % 8.5% % 4.8% SOCI* Buy , % 11.0% % 4.8% Metal 35, N/M N/M % 0.4% ANTM Neutral (40.1) 7, % N/M % 0.1% INCO* U/R 2,750 U/R U/R 27, % 33.3% % 0.5% Telco 475,777 20,500 23, % 16.7% % 3.0% EXCL Neutral 2,470 3, , ,179 N/M 172.1% % 0.9% ISAT U/R 6,425 U/R U/R 34,913 1,013 1,908 N/M 76.0% % 2.1% TLKM Buy 4,240 3,800 (10.4) 416,266 19,083 20, % 9.5% % 3.3% Tower 69,050 3,540 4, % 26.3% % 0.0% TBIG Neutral 6,100 6,000 (1.6) 29,259 1,120 1, % 39.1% % 0.0% TOWR Buy 3,900 5, ,791 2,420 2, % 20.4% % 0.0% Media 67,132 3,175 3, % 16.0% % 2.6% SCMA Buy 2,580 3, ,724 1,599 1, % 16.9% % 3.0% MNCN Buy 2,060 2, ,409 1,576 1, % 15.0% % 2.1% Textile 4, % 19.2% % 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 12 of 13

13 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 John Rachmat Head of Equity Research, Strategy john.rachmat@mandirisek.co.id Tjandra Lienandjaja Banking tjandra.lienandjaja@mandirisek.co.id Liliana S Bambang Property, Building Material liliana.bambang@mandirisek.co.id Adrian Joezer Consumer 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.