INVESTOR DIGEST HIGHLIGHT SECTOR. Equity Research 10 September Equity Research 10 September 2014

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1 INVESTOR DIGEST Equity Research 10 September 2014 Equity Research 10 September 2014 Economic Data Latest 2014F BI Rate (%), eop Inflation (YoY %) US$ 1 = Rp, period avg 11,771 11,740 HIGHLIGHT Infrastructure: A busy month for toll road development Cement demand up by 3% YoY in 8M14 Apple unveiled iphone 6 and iphone 6 Plus Stock Market Data (9 Sep 2014) JCI Index 5, % Trading T/O ( Rp bn ) 3,978.0 Market Cap ( Rp tn ) 5,165.1 Market Data Summary* 2014F 2015F EBITDA growth (%) EPS growth (%) EV/EBITDA (x) P/E (x) P/BV (x) Div. Yield (%) Earnings Yield (%) Net Gearing (%) ROE (%) * Aggregate of 76 companies in MS research universe, representing 64.5% of JCI s market capitalization SECTOR Infrastructure: A busy month for toll road development Indo contractor s signed new contract (as of Aug14) was slowing down on yoy basis. WSKT and PTPP signed the most new contract YTD. Due to rich valuation in the sector, we think that potential share price upside from this level may be limited. We like to focus on stocks with potential earnings upgrade. During last month, we noticed several new toll road projects were being started by the concession owners. Weak Aug14 new contract achievement. Indonesia contractors, as of last month, secured only 34% (WIKA IJ) to 57% (WSKT IJ) of their FY14 management new contract target. This represents 15% yoy decline and 47% yoy growth, respectively, compared to the same period last year. We think that net earnings for this year will mostly be achievable (due to carry over contract from last year and improving margin this year), except for ADHI which we expect a downgrade on FY14 management guidance. Several toll road projects made progress last month. Last month was an active month for toll road projects. 1) JSMR consortium won 44km (US$550mn) Medan-Kualanamu toll road, 2) WSKT acquired 57km Pejagan Pemalang toll road concession from MNC Group, 3) CMNP is finalizing appointment of WSKT, PTPP and Hutama Karya to construct 21.4km (US$300mn) Depok Antasari toll road and 4) Government plans to expedite the construction of 39km (US$350mn) Manado Bitung toll road. Nusantara Infrastructure (META IJ) plans 10% NPR. META IJ (US$275mn Mcap), a Rajawali group-owned infrastructure company, is planning to raise US$33mn (@Rp250/share) via non-preemptive rights issue (NPR). It currently has toll road, water and port assets (Figure 5). Together with Providence Equity Partner, META recently also develops telecommunication tower business Handoko Wijoyo ( ) handoko. wijoyo@mandirisek.co.id Page 1 of 7

2 Cement demand up by 3% YoY in 8M14 Cement demand up by 3% YoY in 8M14. As of 8M14, cement sales was 37.4mn MT, up by 3% YoY. The number is inline with our expectation of 4% YoY growth. We expect stronger cement sales in Sept-Dec, as politics overhang has been removed. Stronger construction pick-up. According to Bisnis Indonesia, cement demand in the month of August is up by 37.4% YoY. The head of Indonesia Cement Association (Mr. Widodo Santoso) believes that strong cement demand in August is contributed by both better than expected construction on infrastructure and property. This is in addition to longer working days in August 2014 (as last year was Lebaran holidays). Maintain overweight with SMGR as top pick. We think the next catalyst for Indonesia cement sector is stronger infrastructure building program by our new President and cabinet. Cement demand which is higher than 10% YoY would ease the worries on oversupply in FY16F. At this juncture, we prefer the new President to keep some of the MP3EI program, in order to speed the infrastructure building. Liliana S Bambang ( ) liliana.bambang@mandirisek.co.id CORPORATE Apple unveiled iphone 6 and iphone 6 Plus Apple launched the long waited new iphone 6 and iphone 6 Plus with 4.7 inches and 5.5 inches screen size respectively. The iphone 6 Plus is very similar to Samsung Galaxy Note 4 size which was launched last week in Germany. For 2 years contract plan in US, it will cost US$199 upfront for a 16GB iphone 6, US$299 for 64GB and US$399 for 128GB, while for off contract price has not been announced yet. In addition, Apple also announced Apple Watch which will start selling by early next year. (Forbes). Comment: The handset is expected to enter Indonesia officially within 2-3 months after its official announce in the US. The newly launch handset will bring positive catalyst for Erajaya and Trikomsel as official distributor for Apple products in Indonesia. Apple contributes around 10%-15% to ERAA s top line and provides margin of 8%-10%. We expect the retail price will be above Rp10m, more premium than our estimate of Samsung Galaxy Note 4 and Edge price tag of Rp8m-9m. iphone 6 and iphone 6 Plus Size comparison Apple Watch Source: Apple Matthew Wibowo ( ) matthew.wibowo@mandirisek.co.id Page 2 of 7

3 MARKET Market Recap Sep 9th 2014; JCI: 5, (-0.94%); USD/IDR: 11,771; Total Value: Rp5.39tn After hitting new all-time high of 5,246; Indo market was hit by profit taking right from the start. The JCI quickly slide to 5210 and basically spent the rest of afternoon consolidating near 5205 level. Finally, the index closed down 0.9% to slightly below 5200 level, thanks to last minute selling into UNVR (from -1.3% to cls -1.7%) INTP (from -1.8% to cls -2.1%) ICBP (from -0.7% to cls -1.1%). Most heavy weight names including SMGR (cls-2.3%) EXCL (cls-2.5%) TLKM (cls-0.5%) traded lower, yet in less volume than yesterday. Overall regular market volume stayed moderate at Rp 4tn (USD $339MN) excluding $25MN MYRX crossing. Foreign participants at 40% came up as a seller for Rp 122bn (USD 10mn). Losers beat gainers by 9 to 2. TOP TURNOVER: BBRI TLKM BBCA UNTR WSKT SMGR ASII SSMS BBNI BMRI INDF WIKA INTP PTBA ADRO ADHI (35% of T/O) ADVANCING SECTOR: NONE DECLINING SECTOR: cement-1.7%; mining-1.6%; property & telco-1.4%; auto-1.3%; consumer-1.2%; infra & plantation -0.8%; financial-0.2% The yield of 10-year government increased to 8.09% (+1.05%) and Rupiah depreciated to Rp 11,771 (-0.38%). Sales Team FROM THE PRESS Branchless banking regulation The Financial Service Authority (OJK) will issue regulation on branchless banking at end of the year. This service will only be permitted for banks under BUKU 2 to 4 (paid up capital of more than Rp1tr) which will be able to offer micro savings (maximum Rp20m), insurance and credit. (Kontan). Bukit Asam allocates capex Rp2.5tn for 2015 PTBA allocates capex Rp2.5tn for 2015 which will be used for expansion such as developing power plants. (Investor Daily) Tata Power plans to divest all of its stake in Kaltim Prima Coal Tata Power, India-based Energy Company, plans to divest the remaining 25% of its stake in Kaltim Prima Coal, a subsidiary of Bumi Resources (BUMI) as buying coal supplies from BUMI is no longer profitable, according to the company. (Kontan) Metropolitan Land reported 8M14 marketing sales of Rp605bn MTLA reported 8M14 marketing sales of Rp605bn (52.6% of full year target of Rp1.1tn). Residential sales Rp383bn, offices sales Rp2bn and recurring income from malls, hotels and sports facility Rp220bn are contributors to the marketing sales. (Kontan) ATM transaction tariff increase ATM network providers and related bank members will increase tariff charges for interbank transactions including interbank fund transfer, check balance and cash withdrawal. The tariff will be revised in October 2014 with an average of 50% increase. (Kontan) Per October 2014 Previously Interbank transfer Rp 7,500 Rp 5,000 Check balance Rp 4,000- Rp 4,500 Rp 2,000 - Rp 3,000 Cash withdrawals Rp 7,500- Rp8,000 Rp 5,000 Page 3 of 7

4 Indices Currencies and ADRs Major Commodities Last (pts) Chg (%) Currency Last (pts) (%) Last (pts) Chg (%) JCI 5, Rp/US$ 11, Oil spot (US$/bl) Dow Jones 17, EUR/US$ Nickel spot (US$/mt) 18, , Nikkei 15, YEN/US$ Gold spot (US$/oz) 1, SET 1, SGD/US$ Tin 3-month (US$/mt) 20, Hang Seng 25, CPO futures (Ringgit/ton) 2, STI 3, ADR Stocks Soybean oil (US$/100gallons) S&P 500 1, TLK in Rp 14, Rubber forward (US /kg) IIT in Rp 3, Coal (US$/ton)* Ishares indo Coal (US$/ton) * weekly price Baltic Dry Index 1, 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) P/E 14F P/E 15F ROE 14F ROE 15F BSDE Buy 27, ,590 2,000-60% 4,002 3% 1, % 20.0% PWON Buy 20, % % % 32.2% SMRA Buy 17, ,225 1,550-61% 3,106 80% % 20.7% CTRA Neutral 16, , % 1,647 39% % 19.0% JRPT Buy 13, ,000 1,130-65% 2,817 87% % 27.0% ASRI Neutral 8, % 1,538 14% % 23.2% APLN Buy 7, % 721 9% % 16.1% LPCK Buy 5, ,200 9,850-58% 19,300 74% 4, % 27.6% MDLN Neutral 6, % 1,270 2% % 12.9% CTRS Buy 4, ,245 4,000-72% 8,077-19% 2, % 23.4% BKSL Neutral 3, % 1,010-47% % 10.8% Simple average -60% % 20.2% Plantation Valuation Ticker Rec. Market Cap (Rp bn) Share price Target Price planted (US$) EV/ha PER EV/EBITDA ROE Mature (US$) FY14F FY15F FY14F FY15F FY14F FY15F AALI Buy 39,841 25,300 33,200 15,205 17, % 27.3% BWPT Buy 4,702 1,055 1,750 10,590 16, % 22.5% LSIP Buy 12,656 1,855 3,200 7,872 9, % 18.0% SGRO Buy 4,120 2,180 3,000 6,329 8, % 14.4% Weighted average 11,509 14, % 22.5% SIMP* Not Rated 13, ,567 8, % 7.0% SSMS* Not Rated 13,335 1,400 33,339 34, % 33.8% *) Consensus numbers Page 4 of 7

5 Equity Valuation Shares Price Price Mkt Cap Net Profit EPS Growth PER (x) EV/EBITDA (x) P/BV (x) Div.Yield Code Rating (Mn) (Rp) Target (Rp Bn) Mandiri Universe 3,328, , , % 17.6% % 2.3% Banking 790,376 60,324 72, % 20.2% N.A. N.A % 2.0% BBCA Neutral 24,655 12,525 11, ,804 15,573 18, % 18.9% N.A. N.A % 1.3% BBNI Neutral 18,649 5,675 5, ,831 9,285 10, % 17.9% N.A. N.A % 2.6% BBRI Buy 24,660 10,825 13, ,044 23,215 28, % 21.3% N.A. N.A % 2.2% BBTN Buy 8,836 1,115 1,500 11,547 1,601 1, % 21.2% N.A. N.A % 4.2% BDMN Neutral 9,585 3,810 4,500 36,517 3,936 4, % 26.7% N.A. N.A % 3.2% BJBR Neutral 9, ,048 1,080 1, % 11.1% N.A. N.A % 6.0% BJTM Neutral 14, , , % 12.2% N.A. N.A % 9.1% BTPN Buy 5,840 4,360 5,000 25,464 2,303 2, % 25.5% N.A. N.A % 0.0% PNBN Buy 24, ,000 20,475 2,366 2, % 17.8% N.A. N.A % 2.3% Infrastructure 300,575 16,613 18, % 13.6% % 2.1% SMCB Neutral 7,663 2,800 2,700 21,459 1,288 1, % 12.9% % 1.8% INTP Buy 3,681 24,000 24,000 88,350 5,582 6, % 11.7% % 2.0% SMGR Buy 5,932 15,925 18,300 94,459 5,901 6, % 12.9% % 3.1% ADHI Buy 1,801 2,995 2,500 5, % 40.9% % 2.1% PTPP Buy 4,842 2,420 2,100 11, % 20.2% % 1.3% WIKA Buy 6,106 2,840 2,300 17, % 18.2% % 1.2% WSKT Neutral 9, , % 20.3% % 1.5% WTON Neutral 8,715 1, , % 18.5% % 1.0% JSMR Neutral 6,800 6,350 6,200 43,180 1,566 1, % 10.5% % 1.5% Consumer 504,638 19,255 22, % 18.3% % 1.9% AISA Buy 3,000 2,465 3,000 7, % 31.5% % 0.0% GGRM Buy 1,924 54,150 68, ,189 5,571 6, % 15.0% % 2.1% ICBP Neutral 5,831 10,850 10,700 63,266 2,292 2, % 11.4% % 1.8% INDF Buy 8,780 7,000 8,200 61,460 4,048 5, % 29.1% % 0.0% MYOR Neutral ,900 27,200 27, % 16.4% % 0.9% UNVR Buy 7,630 31,300 34, ,819 5,907 6, % 16.9% % 2.5% WIIM Neutral 2, , % -30.6% % 2.5% DYAN Buy 4, % 41.8% % 0.0% Healthcare 89,166 2,625 3, % 25.4% % 1.2% KLBF Buy 46,875 1,675 1,820 78,516 2,156 2, % 27.5% % 1.1% SIDO IJ Buy 15, , % 16.0% % 1.8% Transportation 2, % 26.2% % 1.6% TAXI Buy 2,146 1,360 1,600 2, % 26.2% % 1.6% Retail 90,627 3,783 4, % 23.8% % 1.7% ACES U/R 17, U/R 16, % 18.1% % 0.8% ERAA U/R 2,900 1,210 U/R 3, % 10.1% % 3.8% LPPF U/R 2,918 16,250 U/R 47,416 1,610 2, % 28.8% % 1.7% MAPI U/R 1,660 5,850 U/R 9, % 38.9% % 0.7% RALS U/R 7, U/R 6, % 14.7% % 3.8% RANC U/R 1, U/R % 16.2% % 0.9% TELE U/R 6, U/R 5, % 22.3% n/a n/a 2.2% 2.5% Automotive 315,794 21,517 24, % 13.6% % 3.3% ASII U/R 40,484 7,500 U/R 303,627 20,671 23, % 13.1% % 3.4% IMAS U/R 2,765 4,400 U/R 12, , % 26.6% % 1.5% Heavy Equipment 81,441 6,505 6, % 4.3% % 3.0% HEXA Buy 840 3,700 4,250 3, % 26.4% % 2.7% UNTR Neutral 3,730 21,000 23,000 78,333 6,214 6, % 2.2% % 3.0% Plantation 61,320 4,608 5, % 29.2% % 3.5% AALI Buy 1,575 25,300 33,200 39,841 2,848 3, % 22.4% % 3.8% BWPT Buy 4,457 1,055 1,750 4, % 77.6% % 1.5% LSIP Buy 6,823 1,855 3,200 12,656 1,101 1, % 28.6% % 3.5% SGRO Buy 1,890 2,180 3,000 4, % 40.4% % 2.8% Property 133,297 12,340 14, % 14.2% % 1.5% APLN Buy 20, , , % 22.6% % 2.4% ASRI Neutral 17, ,735 1,354 1, % 17.8% % 5.3% BKSL Neutral 31, , % 35.7% % 0.0% BSDE Buy 17,497 1,590 2,000 27,820 2,155 2, % 17.7% % 1.9% CTRA Neutral 15,166 1, ,455 1,209 1, % 25.7% % 1.5% CTRS Buy 1,979 2,245 4,000 4, % 30.3% % 2.7% JRPT Buy 13,750 1,000 1,130 13, % 30.4% % 0.8% LPCK Buy 696 8,200 9,850 5, % 5.2% % 0.0% MDLN Neutral 12, ,517 1, % -43.5% % 0.0% PWON Buy 48, ,901 1,523 1, % 26.0% % 1.7% SMRA Buy 14,425 1,225 1,550 17,670 1,134 1, % 24.2% % 0.0% Poultry 84,122 3,127 3, % 26.9% % 1.0% CPIN Neutral 16,423 3,965 4,100 65,116 2,429 3, % 26.6% % 1.1% JPFA Sell 10,499 1,275 1,000 13, % 25.2% % 1.1% MAIN Neutral 1,695 3,315 3,000 5, % 33.0% % 0.8% Page 5 of 7

6 Shares Price Price Mkt Cap Net Profit EPS Growth PER (x) EV/EBITDA (x) P/BV (x) Div.Yield Code Rating (Mn) (Rp) Target (Rp Bn) Energy 281,209 15,869 18,523 N/M 4.1% % 3.7% ADRO Buy 31,986 1,330 1,450 42,541 3,253 3, % 5.3% % 3.1% BUMI U/R 52, U/R 10,330-1, % -50.0% % 5.6% HRUM Neutral 2,699 2,170 2,400 5, % 8.6% % 5.0% ITMG Neutral 1,130 27,650 25,750 31,242 2,423 2, % 7.9% % 6.5% PTBA Neutral 2,304 13,500 9,700 31,111 1,717 2, % 25.8% % 3.5% ENRG U/R 44, U/R 4, % 0.0% n/a n/a n/a n/a n/a n/a 0.0% 0.0% MEDC U/R 3,332 3,570 U/R 11, % 243% % 1.2% PGAS Buy 24,240 5,925 6, ,631 9,319 9, % 8.6% % 3.4% Metal 66,045 1,405 3,043 N/M 154% % 1.7% ANTM U/R 9,538 1,190 U/R 11, % 95.3% , % 1.0% BRMS U/R 25, U/R 10, % 75.0% n/a n/a 0.0% 0.0% INCO U/R 9,936 4,470 U/R 44,415 1,802 2, % 29.4% % 2.2% Telecommunication 431,987 18,296 21, % 18.4% % 2.6% EXCL Buy 8,524 6,750 6,700 57, N/M N/M % 0.3% ISAT U/R 5,434 4,060 U/R 22, ,115 N/M 92.8% % 2.2% TBIG Buy 4,657 8,275 7,200 39,691 1,474 1, % 32.0% % 0.0% TOWR Neutral 10,203 4,010 3,750 40,914 1,110 1, % 22.1% % 0.0% TLKM Buy 96,010 2,820 2, ,728 15,343 16, % 7.1% % 3.9% Media 94,516 3,919 4, % 22.9% % 2.2% SCMA Buy 14,622 3,875 4,700 56,659 1,760 2, % 23.4% % 1.7% MNCN Buy 14,099 2,685 3,800 37,857 2,159 2, % 22.6% % 2.9% Note: - *) means Company Data is using Bloomberg Data - U/R means Under Review - n/a means Not Available - N/M means Not Meaningful - N.A means Not Applicable Page 6 of 7

7 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 Research), (Equity Sales) RESEARCH John Rachmat Head of Equity Research, Strategy john.rachmat@mandirisek.co.id Tjandra Lienandjaja Banking tjandra.lienandjaja@mandirisek.co.id Handoko Wijoyo Construction, Toll Road handoko.wijoyo@mandirisek.co.id Hariyanto Wijaya, CFA, CFP, CPA Plantation, Heavy eq., Energy hariyanto.wijaya@mandirisek.co.id Herman Koeswanto, CFA Consumer, Poultry herman.koeswanto@mandirisek.co.id Liliana S Bambang Property, Building Material liliana.bambang@mandirisek.co.id Ariyanto Kurniawan Telecom, Coal & Metal Mining ariyanto.kurniawan@mandirisek.co.id Matthew Wibowo Retail matthew.wibowo@mandirisek.co.id Rizky Hidayat Property, Media rizky.hidayat@mandirisek.co.id Vanessa Ariati Tanuwijaya Banking, Health Care vanessa.tanuwijaya@mandirisek.co.id Aldian Taloputra Economist aldian.taloputra@mandirisek.co.id Leo Putra Rinaldy Economist leo.rinaldy@mandirisek.co.id Aditya Sastrawinata Research Assistant aditya.sastrawinata@mandirisek.co.id Wisnu Trihatmojo Research Assistant wisnu.trihatmojo@mandirisek.co.id Yudha Gautama Research Assistant yudha.gautama@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 Andrew Handaya Institutional Sales andrew.handaya@mandirisek.co.id Cindy Amelia P. Kalangie Institutional Sales cindy.amelia@mandirisek.co.id Jane Theodoven Sukardi Institutional Sales jane.sukardi@mandirisek.co.id Janefer Amanda Soelaiman Institutional Sales janefer.soelaiman@mandirisek.co.id Karmia Tandjung-Nasution Institutional Sales karmia.tandjung@mandirisek.co.id Mirna Santikara Salim Institutional Sales santikara.salim@mandirisek.co.id Oos Rosadi Institutional Sales oos.rosadi@mandirisek.co.id Vera Ongyono Institutional Sales vera.ongyono@mandirisek.co.id Yohan Setio, CFA Institutional Sales yohan.setio@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 RETAIL SALES Ridwan Pranata Head Retail Equities ridwan.pranata@mandirisek.co.id Boy Triyono Jakarta Branch boy.triyono@mandirisek.co.id Yohanes Triyanto Kelapa Gading Branch yohanes.triyanto@mandirisek.co.id Hendra Riady Mangga Dua Branch hendra.riady@mandirisek.co.id Umar Abdullah Pondok Indah Branch umar.abdullah@mandirisek.co.id Indra Mas ari Bandung Branch indra.mas ari@mandirisek.co.id Yuri Ariadi Pontianak Branch yuri.ariadi@mandirisek.co.id Ruwie Medan Branch ruwie@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). 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.