Equity Research 29 March 2016 THE BOTTOM LINE MARKET OUTLOOK FOR Mar-13 4,545. 3,000 JCI Fcast by Mansek 2,500 Jan-11. Dec-12. Dec-11.

Transcription

1 INVESTOR DIGEST Equity Research 29 March 2016 Economic Data Latest 2016F BI Rate, eop Inflation (YoY %) US$ 1 = Rp, period avg 13,370 14,150 Stock Market Data (28 Mar 2016) JCI Index 4, % Trading T/O ( Rp bn ) 2,945.0 Market Cap ( Rp tn ) 5, ,592.1 HIGHLIGHT Handle with care Adaro Energy: Key meeting takeaways (ADRO; Rp670; Neutral; TP Rp690) Aneka Tambang: Key meeting takeaways (ANTM; Rp460; Neutral; TP Rp500) Bank Rakyat Indonesia: 2M16 results - within expectations (BBRI; Rp11,100; Neutral; TP:Rp12,000) Bukit Asam: Key meeting takeaways (PTBA; Rp6,550; Buy; TP Rp7,500) Puradelta Lestari: In-line FY15 Result 98% to consensus estimates (DMAS, Rp205, Buy, PT: Rp270) Sampoerna Agro: In-line FY15 Results (SGRO; Rp1,920; Not Rated) Timah: Key meeting takeaways (TINS; Rp735; Not Rated) Vale Indonesia: Key meeting takeaways (INCO; Rp1,770; Not Rated) 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 75 companies in MS research universe, representing 71.7% of JCI s market capitalization STRATEGY Handle with care A confluence of global factors (the weakening USD, slower than expected pace of Fed Funds Rate increases, ECB and BOJ pushing deeper into negative interest rate, rebounding oil and commodity prices) and series of BI rate cuts sparked a rally in JCI. Some of these trends are reversing, we urge caution to investors. THE BOTTOM LINE MARKET OUTLOOK FOR ,000 5,500 5,000 4,500 4,000 3,500 Mar-13 4,545 Oct-13 4,000 Apr-14 4,800 Dec-13 4,000 Aug-14 5,200 Dec-14 5,200 Feb-15 5,100 Oct-14 4,800 Jul-15 5,000 Oct-15 4,500 Dec-15 4,500 May-16 4,500 Aug-16 4,250 Dec-16 5,000 3,000 JCI JCI Fcast by Mansek 2,500 Jan-11 May-11 Sep-11 Dec-11 Apr-12 Aug-12 Dec-12 Apr-13 Aug-13 Dec-13 Apr-14 Aug-14 Dec-14 Apr-15 Aug-15 Dec-15 Apr-16 Aug-16 Dec-16 Source: Bloomberg, Mandiri Sekuritas Happy times - the Jakarta Composite Index had enjoyed a 11.3% rally from late Jan to mid Mar We believe this rally has been largely driven by global factors (the slower than expected pace of Fed Funds Rates hike, moves by BoJ and ECB deeper into negative interest rate areas, weakening USD, rebound in Page 1 of 12

2 crude oil and other commodity prices), helped by a number of positive development in the Indonesian domestic macro condition. Inflation in Jan and Feb 2016 was more benign than the last 5-year average, and this allows aggressive rate cuts by Bank Indonesia. Earnings are not supportive - we always believe that any equity rallies that are not supported by earnings performance can not be sustained in the long run. Listed Indonesian firms have delivered EPS performance which missed (by significant margin) consensus forecasts consistently in 2013, 2014 and Yet we are now witnessing the same error being repeated, with consensus forecasts for 2016 EPS implying well over 50% yoy growth (not including those which have not released their FY 2015 statements). Earnings disappointment is therefore a big risk in our opinion, starting with the 1Q16 results that would appear in late April Mansek Top Picks - we are replacing ACES (risk of earnings disappointment) with WTON (regulatory breakthrough on their high speed train project). John Rachmat ( ) john.rachmat@mandirisek.co.id CORPORATE Adaro Energy: Key meeting takeaways (ADRO; Rp670; Neutral; TP Rp690) Still weak coal price outlook and more cost-cutting ahead. Overall, ADRO is still very cautious about the coal sector outlook in FY16, owing to weak demand and fierce competition from low CV coal. The company guided coal ASP at USD37-41/ton in FY16 (down from USD46.9/ton in FY15) and flat production target between 52-54mn tons. Stripping ratio is planned to be further reduced to 4.71x for FY16 (from 5.2x in FY15). Meanwhile, the company targets to maintain cash cost between USD26-28/ton in FY16 (from USD28/ton in FY15) through more cost-cutting initiatives, mainly through negotiation of better pricing with its mining contractors. Additionally, lower oil price will also provide some cost relief for ADRO. Impairment policy. ADRO booked USD65mn of impairment in investment in associates in 4Q15. ADRO indicates that Impairment charges are based on management discretion and the company guided that there should not be any impairment charges in FY16. Recall that we are surprised that ADRO did not do impairment on its US$2bn mining properties given the sharp drop in coal price (US$41mn impairment in 2014). United Tractors (UNTR, Rp15,300, Sell, Rp13,250TP) posted a Rp5.3tr impairment cost in 2015 or 60% of its total mining properties. Batang project is progressing well, with land acquisition (12.5ha) finally completed and preparation for construction kick-off underway. The company expects construction activity to commence shortly after financial closure, which is estimated by 1H16, and construction will take around 4-5 years to complete. Maintain neutral. We maintain our neutral call on ADRO with TP Rp690, based on 11.0x FY16 target P/E. The counter is currently trading at 10.4x FY16 P/E. Yudha Gautama ( ) yudha.gautama@mandirisek.co.id Aneka Tambang: Key meeting takeaways (ANTM; Rp460; Neutral; TP Rp500) Still weak nickel price outlook in FY16. Similar to INCO, ANTM is still very cautious on the outlook for nickel price and hinted lower ferronickel ASP in FY16. As per 2M16, ANTM s ferronickel ASP has fallen to USD4.2/lb (from USD4.97/lb in FY15). We expect ANTM financials to remain under pressure amid sluggish nickel price outlook. Lower cash cost ahead. ANTM s ferronickel cash cost fell by 21% YoY to USD4.31/lbs in FY15 thanks to lower oil price, which accounts for 40% of production cost. They hinted further decline in ferronickel cash cost, citing cash cost of Page 2 of 12

3 USD3.8/lbs as of 2M16. Going forward, ANTM expects cost savings of around USD1/lbs upon operational commencement of the 2x30MW power plant, which allows some energy switch from oil to coal. Meanwhile, its gold cash cost declined by 11% to USD723/toz in FY15. Pomalaa expansion project (P3FP) remains on track with construction progress reaching 99.1% per Jan-16 and targeted to be completed within 1H16. Upon completion, ferronickel production capacity will increase from 18-20k TNi/year to 27-30k TNi/year. This year, ANTM targets ferronickel production volume of 20k TNi (+16%). Maintain neutral. We maintain our neutral call on ANTM with TP Rp500, based on blended valuation of EV/EBITDA and PBV. The counter is currently trading at 11.2x FY16 EV/EBITDA and 0.4x PBV based on our estimate. Yudha Gautama ( ) Bank Rakyat Indonesia: 2M16 results - within expectations (BBRI; Rp11,100; Neutral; TP:Rp12,000) Bank Rakyat Indonesia booked Rp3.9tn net profit in 2M16, flat yoy growth, accounting for 15% of FY16 s consensus and our expectations. On a monthly basis, Feb-16 s net income stood at Rp1.9tn, -3% yoy/-11% mom. Strong growth in BRI s net interest income of +15% yoy was used to increase provisions significantly at +82% yoy. Loan growth +15% yoy, deposit growth +6% yoy. Deposit growth was mainly driven by growth in demand deposits of +29% yoy and savings deposits of+15% yoy, while time deposits declined by -7% yoy bringing Feb-16 s CASA ratio to 56.5% vs. Feb-15 s CASA of 50.5% and Jan-16 s of 57.3%. Meanwhile, Feb-16 s LDR stood at 86.6% compared to Feb-15 s LDR of 80.3% and Jan-16 s of 88.0%. 2M16 NIM improved to 7.6% vs. 2M15 NIM of 7.3%. On a monthly basis, however, Feb-16 s NIM deteriorated to 7.3% from 8.0% in Jan-16 resulted in -10% mom decline in net interest income in the month. However, on a yearly basis, NIM still improved from 7.2% in Feb-15. The rising KUR is likely affected the bank s NIM given their lower yield than the regular micro loan yield. 2M16 cost to income ratio relatively flat at 43.9%. Meanwhile, Feb-16 s cost to income ratio deteriorated to 48.9% vs. Jan-16 s of 39.8% due to decline in operating income of -18% mom. 2M16 provisioning expenses increased significantly by +82% yoy to Rp2.2tn from Rp1.2tn in 2M15. On a monthly basis, Feb-16 s provision expense stood at Rp969bn, +41% yoy/-23% mom, the majority of provision expense was booked in Jan-16. We estimate 2M16 write offs to total to Rp509bn while total provisioning to total loans deteriorated to 3.3% in Feb-16 from 3.2% in Jan-16. Trading at 2.1x P/BV 2016 we maintain our NEUTRAL call on the stock with TP of Rp12,000. Income Statement (Rp bn) Feb-15 Jan-16 Feb-16 % MoM % YoY 2M15 2M16 % YoY FY16F % of FY16F FY16 Cons % of FY16F Cons Net interest income 4,205 5,180 4,675 (10) 11 8,571 9, , Non interest income 1,192 1, (49) (41) 2,024 2, , Operating income 5,397 6,561 5,377 (18) (0) 10,594 11, , , Provision expenses (685) (1,253) (969) (23) 41 (1,223) (2,222) 82 (13,639) 16 Operating expenses (2,410) (2,611) (2,629) 1 9 (4,616) (5,240) 14 (35,127) 15 Operating profit 2,301 2,697 1,779 (34) (23) 4,755 4,476 (6) 30, , PPOP 2,987 3,950 2,748 (30) (8) 5,978 6, , Pre-tax profit 2,369 2,796 2,109 (25) (11) 4,878 4, , , Net profit 1,919 2,091 1,857 (11) (3) 3,930 3, , , Page 3 of 12

4 Balance Sheet (Rp bn) Feb-15 Jan-16 Feb-16 % MoM % YoY Gross loans 478, , ,523 (0) 15 Demand deposits 83, , , Saving deposits 217, , ,425 (1) 15 Time deposits 295, , ,491 3 (7) Total deposits 595, , , CASA to deposits Ratio Feb-15 Jan-16 Feb-16 2M15 2M16 LDR NIM ROE Cost to income Tjandra Lienandjaja ( ) tjandra.lienandjaja@mandirisek.co.id Bukit Asam: Key meeting takeaways (PTBA; Rp6,550; Buy; TP Rp7,500) More cost efficiency ahead. PTBA has lowered its cash cost by 10% to Rp357k/ton in FY15 and expects to lower it by another 5-10% in FY16. Some cost efficiency strategies include 1) negotiation of better pricing terms with contractors and 2) electrification of some mining equipments. PAMA s contract fee has declined by 5% and going forward PTBA will increase contribution from its subsidiary SBS for coal production and overburden removal. In addition, they have managed to cap railway tariff increase at 4% in FY16 after negotiation with PTKA. Railway capacity optimization. Post the completion of double-track railway in FY15 (Tj. Enim Prabumulih), PTBA targets 23.7mn tons/year (+50%yoy) of railway capacity in FY16 from 15.8mn tons/year in FY15. Going forward, the company will work towards building a double-track railway from Prabumulih to Tarahan port (COD: 2018), which is expected to add an additional capacity of 20mn tons, putting total railway capacity at 45mn tons by FY18. Coal resources and reserves upgrade. PTBA has announced an upgrade of its coal resources and reserves to 8.27bn tons (from 7.29bn tons) and 3.33bn tons (from 1.99bn tons) respectively. FY16 guidance. PTBA expects 29.1mn tons of sales volume (+52%) in FY16F with around 53% for domestic market. This is higher than our forecast of 22mn tons. Stripping ratio will be maintained between 4.5x-4.7x and PTBA expects blended ASP to fall not more than 4% from FY15's blended ASP of Rp707k. Key risks to company s sales target include 1) execution risk by the National Railway Company (PTKA), operator of PTBA s railway and 2) weaker than expected coal demand for the export market. We see upside risk on earnings from higher sales volume if PTBA can achieve its sales target. Maintain buy at TP Rp7,500 based on 10x FY16 target PE. The counter is currently trading at 8.7x FY16 PE. We like PTBA for its 1) large exposure to the domestic market (50%); 2) upside in production to partially offset lower ASP; and 3) huge reserves base. Yudha Gautama ( ) yudha.gautama@mandirisek.co.id Page 4 of 12

5 Puradelta Lestari: In-line FY15 Result 98% to consensus estimates (DMAS, Rp205, Buy, PT: Rp270) In-line FY15 result. DMAS recorded in-line FY15 NPAT of Rp1.37tn which is 98% to ours and consensus estimates. The earnings was supported by large land sales recognition from Mitsubishi, Maxxis, and GM China. DMAS revenue grew by 37% QoQ from 3Q15 as it recognized half of its land sales to GM China in 4Q15. However, gross margin decreased from 72.2% in 3Q15 to 57.3% in 4Q15 as the large land sales to GM China offer lower margin due to discount in ASP. On the pretax and net profit level, the earnings declined qoq as DMAS recorded high forex gain in 9M15 as a result of the weak IDR. Most of DMAS cash are forex denominated. Thus, the stronger IDR in the end of FY15 resulted to lower forex gain overall for the year. Clean balance sheet. DMAS have a net cash position of Rp1.17tn as of FY15. Sales advance is booked at Rp636bn as of FY15 vs. Rp521bn in FY14. Meanwhile, operating cash flow remains healthy at Rp968bn. Maintain Buy at Rp270PT. DMAS is still our top pick among industrial estate players. The company has the most landbank and should be able to cater more industrial land sales. Moreover, smaller land sales should help increase the estate s land ASP. DMAS is currently trading at 9.5x FY16F PE and 70% discount to NAV. The counter is also trading below its IPO price of Rp210. We maintain our Buy call on DMAS with Rp270 PT. DMAS FY15 results Rpbn FY15 FY14 %yoy 4Q15 3Q15 %qoq % of ours % of cons. Revenue 2,286 1, Gross profit 1,449 1, Operating profit 1,297 1, Pretax profit 1,495 1, Net profit 1, Gross margin Operating margin Pretax margin Net margin Rizky Hidayat ( ) Kevin Halim ( ) rizky.hidayat@mandirisek.co.id kevin.halim@mandirisek.co.id Sampoerna Agro: In-line FY15 Results (SGRO; Rp1,920; Not Rated) In-line results. SGRO reported 4Q15 net profit of Rp53bn, putting total FY15 net profit at Rp248bn (-27% YoY), accounting for 104% of consensus. FY15 revenue was recorded at Rp3tn (-7.5% YoY), slightly above consensus estimate. Gross margin improved by 100bps to 27.8%, in which we suspect due to lower cost of FFB purchase from 3 rd parties and plasma. However, net margin fell by 220bps to 8.3% as a result of higher selling & marketing expense (+11%), G&A expense (+13%) and interest expense (+110% YoY). Balance sheet. As at Dec-15, balance sheet remains relatively healthy with net gearing of 65%, down from 75% net gearing in 9M15. Meanwhile, SGRO posted net borrowing of Rp1tn during the FY15 period. We have yet to receive full details of the results. SGRO is currently trading at 13x FY16 P/E based on consensus estimate and we have no rating on the counter. Page 5 of 12

6 SGRO12M15 Results Rpbn 12M15 12M14 %yoy 4Q15 3Q15 %qoq 4Q14 %yoy % of cons. Revenue 2,999 3, Gross profit Operating profit Pretax profit Net profit Gross margin Operating margin Pretax margin Net margin Yudha Gautama ( ) yudha.gautama@mandirisek.co.id Timah: Key meeting takeaways (TINS; Rp735; Not Rated) Impact of revised regulation on tin prices and supplies. Based on our discussion with the management, the revised tin mining regulation is set to curb illegal mining activities and if successfully implemented, it would be positive for tin price outlook, as it will significantly reduce tin supplies to the global market. Note that Indonesia is the 2 nd largest tin producers after China, producing around 70k tins in FY15. The management expects Indonesia s tin production to be lower than 70k tins in FY16 with more regulated tin mining practice. New revised tin mining regulation. The Ministry of Trade issued a new revised regulation No. 33/2015 on tin mining regulation effective on 1 st November The new regulation will replace the Ministry of Trade regulation no. 44/2014 and allow 3 categories of tin products to be exported, namely 1) pure tin bars 2) tin solders and 3) other tin alloys. In addition, all transactions of pure tin bars, both domestic and export, have to be traded at ICDX (Indonesia Commodities & Derivatives Exchange). As part of the mandatory requirement, mining companies need to have 1) Registered Exporter certification (ET) 2) Clean & Clear (CnC) certification and other necessary tin purchase documents and 3) verification from government appointed surveyor prior to exporting tin. FY16 guidance. TINS guided flat tin production target between 28-30k in FY16. Moreover, the company is working on developing other business strategies to support income such as downstream products, property business, hospital business and shipbuilding yard business. At this juncture, we have no rating on the counter and TINS is currently trading at 1.3x FY16 PBV based on consensus estimate. Yudha Gautama ( ) yudha.gautama@mandirisek.co.id Vale Indonesia: Key meeting takeaways (INCO; Rp1,770; Not Rated) Bleak nickel price outlook in FY16. INCO is still cautious on the outlook for nickel price in FY16 as industry consolidation has not occurred and LME's inventory is still at its record high level. Taking a clue from LME's price, we expect nickel ASP will be lower in 1Q16 as compared to 4Q15, which stood at USD7,642/ton. Meanwhile, production target is still pegged at 80k tons. Further cost saving ahead. This year, INCO plans to further lower its cost structure, mainly through the Coal Conversion Program (CCP2). They conducted the CCP2 trial throughout FY15 and the result was a success with 60% coal conversion rate (10 bbl of oil = 3 tons of coal). Gradual cost savings over 3-4 years should be expected through progressive implementation of CCP2 in each of the five reduction kilns. Page 6 of 12

7 Sorowako expansion plan is delayed as necessary licenses have yet to be obtained. Furthermore, the persistent low nickel price environment will continue to undermine the feasibility of the expansion plans. At this juncture, we have no rating on the counter and INCO is currently trading at 0.7 FY16 PBV based on consensus estimate. Yudha Gautama ( ) MARKET Market Recap Mar 28 th 2016; JCI: 4, (-1.11%); USD/IDR: 13,370; Total Value: Rp4.6tn When the USD firmed against major currencies the dollar index rose 0.2% to its highest level in almost two weeks at (the IDR weakened to 13343), Indo market usually turned south. In the past week, the USD has been helped by comments from some Fed officials indicating that policymakers think they could raise interest rates as early as next month. US PCE inflation data due later tonight could fan expectations of an early rate move if it shows increasing inflationary pressure. The PCE inflation has been rising of late. The Fed has said the prices will be key in determining policy so the data should attract a lot of attention. The annual core PCE inflation rose 1.7% in Jan, the fastest pace since July The data will be followed by a speech from Federal Reserve Chair Janet Yellen on the economic outlook and monetary policy on Tue. A few other Fed policymakers are also due to speak on the same day, making the Fed s policy the biggest focus for now. Given that money markets are pricing only about a 50% of a rate hike in June, with hardly any significant likelihood in April factored in, signs of a tightening in the next quarter could rattle financial markets. Metal commodity prices were also a casualty of the USD strength. The JCI lost 1.1% to close at 4773 level in the longest losing streak in six months and was the biggest loser among Asian equities. All sectors were in red, except CPO and mining. CPO players (LSIP +4.8%) got a boost from lower CPO production in Malaysia which is expected to see stockpiles falling below 2 million tons amid severe-than-expected drought in Sabah. The CPO futures for June delivery on Bursa Malaysia Derivatives rise as much as 1.3% at 2759 ringgit/mt, highest intraday level for most active-contract since March Meanwhile, MEDC rose 13% to its highest level since Nov 2015 at 1195 as co-founder Arifin Panigoro and his brother Hilmi Panigoro, together with ex-trade Minister M. Lutfi, met with Presiden Jokowi to discuss business issues (rumored related to Newmont acquisitions) with plans for another meeting on Thursday. Volume was thin at US$217mn (excluding US$46mn BHIT crossing). Regular market transaction was recorded at Rp2.9tn (US$216.9mn) and foreign posted a net sell of Rp487.76bn (US$36.48mn). Foreign participants declined to 30% and came up better seller for 12%. Losers beat gainers by 5 to 2. TOP TURNOVER: TLKM ASII BMRI BBCA BBRI PGAS INDF UNVR ANTM ELSA BWPT GGRM LPPF BBNI (30%) ADVANCING SECTOR: plantation+0.6%; mining+0.2% DECLINING SECTOR: cement-2.1%; consumer-1.6%; financial-1.2%; construction & auto-0.9%; property-0.8%; telco-0.4% The yield of 10-year government went up to 7.831% (+0.72%) and Rupiah depreciated to Rp13,370 (-0.875%). Sales Team Page 7 of 12

8 FROM THE PRESS Government to announce new fuel prices and 11th economic package today The Coordinating Minister for Economic Affair Darmin Nasution says that the new, cheaper fuel prices will anticipate oil price movement in the next three months. Therefore, fuel tags are expected to fall, but still above economic prices. Separately, the government will also announce the 11th economic package (Kontan, Bloomberg) Indonesian Deposit Insurance Corporation (LPS) reviews lowering LPS rates earlier than planned LPS states as of March 2016, deposit rates have been cut by an average of 20bps. Furthermore, LPS also states that there is one bank that has cut deposit rates by 75bps, equivalent to BI s rate cut. In response to the significant financial changes, LPS will review lowering LPS rate next month. Initially, LPS planned to review lowering the LPS rate in May Chairman of LPS Board of Commissioners, Halim Alamsyah, states that under current conditions, there is a possibility that LPS rates will be cut. (Bisnis Indonesia) Jakarta government and Ministry of Transportation agreed with rolling stock and construction plan The Ministry of Transportation has agreed with the Jakarta administration s plan to use rolling stock with a gauge of 1,435mm for the planned Greater Jakarta light-rail-transit (LRT) project. Additionally, the Jakarta government has agreed to finance the construction of LRT lines inside Jakarta, segmented into nine corridors within the city, while the central government will construct LRT line outside Jakarta. The Jakarta government has prepared IDR4tn for the project and would team up with state construction companies, Adhi Karya, Waskita Karya and Wijaya Karya, to accelerate construction. (Koran Tempo, Kontan, The Jakarta Post) No decision yet in regards to the increase in BPJS Health member fee There has been no decision yet from the Government regarding the planned BPJS member fee increase in 1 April According to BPJS Health speaker, they are ready to follow any decision that the Government put out, even though there is a chance that member fee might not be increased. (Bisnis Indonesia) Indo Tambangraya Megah (ITMG) seeks to acquire coal mines ITMG is looking to boost its revenue through inorganic expansion starting this year, namely acquiring new coal mines to add to its depleting reserves. The company seeks to acquire coal mines in Sumatra and Kalimantan with min. reserves 30mn-50mn tons of coal in FY16. (Kontan) Lafarge Cement Indonesia obtains Rp200bn in loan Holcim Indonesia (SMCB) lends Rp200bn to its affiliate, PT Lafarge Cement Indonesia (LCI). The loan facility may be used for working capital needs and general business purposes. Moreover, the facility has a one-year term and matures in March 2017 with lower interest rate compared to current market interest rate. (Bisnis Indonesia) Mitra Adiperkasa (MAPI) targets FY16 revenue increase of 12%-13% yoy MAPI targets FY16 revenue increase of 12%-13%; from a single digit growth in FY15. SSSG in FY15 have slowed down to 2%, from 4% in FY14. The company have set 2 main strategies in FY16 to achieve its target; 1.) Strengthen the current popular brands and not bring in any new brands in FY16; 2.) Add 200 new stores (equivalent to around 65,000sqm) for its F&B, fashion and sport business. The Company targets FY16 capex of 600bn for the new stores. (Kontan) Tiga Pilar Sejahtera (AISA) to divest its subsidiaries AISA is planning to divest its subsidiaries, namely PT Golden Plantation (GOLL) and PT Dunia Pangan in FY16. The company have already hired an advisor for the divestment of GOLL; as of last year AISA have sold 21.83% stake of GOLL to public, while this year they are planning to sold the remaining 78.17%. As of today, the market cap of GOLL is Rp274bn. AISA said that the cash generated from divestment will be used for expansion purposes, with the company targeting Rp600bn capex in FY16. (Investor Daily) Page 8 of 12

9 Indices Currencies and ADRs Major Commodities Last Chg YTD Chg Currency Last Chg YTD Chg Last Chg YTD Chg JCI 4, Rp/US$ 13, Oil spot (US$/bl) Dow Jones 17, US$/EUR Nickel spot (US$/mt) 8, Nikkei 17, YEN/US$ Gold spot (US$/oz) 1, SET 1, SGD/US$ Tin 3-month (US$/mt) 17, Hang Seng 20, CPO futures (Ringgit/ton) 2, STI 2, ADR Stocks Soybean oil (US$/100gallons) S&P 500 2, TLK in Rp 16, 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) P/E 16F P/E 17F P/E 16F P/E 17F BSDE Buy 33,529 1,825 2,200-59% 4,475 18% 1, % 13.8% PWON Buy 24, % % % 24.4% SMRA Neutral 24,739 1,715 1,600-57% 3, % % 14.1% CTRA Buy 19,185 1,265 1,600-52% 2,628 62% % 13.9% JRPT Buy 9, ,300-79% 3,242-4% % 21.5% ASRI Neutral 6, % 1,161 65% % 6.3% LPCK Buy 4,889 7,025 13,500-72% 24,683 49% 4, % 16.8% MDLN Buy 5, % 1,165 43% % 6.6% CTRS Buy 4,047 2,045 3,600-75% 8,077-26% 2, % 14.7% Simple Average -63% % 14.7% Industrial 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 16F P/E 17F P/E 16F P/E 17F DMAS Buy 9, % 691 6% % 11.0% BEST Neutral 2, % % % 9.8% SSIA Neutral 3, % 1,639-2% % 12.7% LPCK Buy 4,889 7,025 13,500-72% 24,683 49% 4, % 16.8% MDLN Buy 5, % 1,165 43% % 6.6% Simple Average -64% % 11.4% Page 9 of 12

10 Equity Valuation Price Price Mkt Cap Net Profit EPS Growth PER (x) EV/EBITDA (x) P/BV (x) Div.Yield Code Rating (Rp) Target (Rp Bn) Mandiri Universe 4,774 5,000 3,650, , , % 12.8% % 2.6% Banking 798,974 66,526 76, % 15.3% N.A. N.A % 2.5% BBCA Neutral 13,175 13, ,830 18,174 21, % 17.7% N.A. N.A % 1.7% BBNI Buy 5,100 6,000 95,108 11,032 12, % 13.8% N.A. N.A % 3.5% BBRI Neutral 11,100 12, ,828 25,478 29, % 15.8% N.A. N.A % 3.2% BBTN Buy 1,745 2,100 18,466 2,379 2, % 19.5% N.A. N.A % 2.6% BDMN Sell 3,915 3,500 37,524 3,375 3, % 9.5% N.A. N.A % 1.9% BJBR Buy 945 1,100 9,163 1,378 1, % 7.8% N.A. N.A % 7.5% BJTM Neutral , , % 10.1% N.A. N.A % 9.4% BTPN Sell 2,735 2,200 15,973 1,648 1, % 10.4% N.A. N.A % 0.0% PNBN Buy 705 1,000 16,982 2,067 2, % 12.7% N.A. N.A % 0.0% Building Materials 142,121 10,626 11, % 5.0% % 4.0% SMCB Sell 1, , N/M 10.1% % 1.5% INTP Neutral 19,300 21,600 71,048 5,130 5, % 6.9% % 5.8% SMGR Neutral 10,600 12,100 62,874 5,086 5, % 2.7% % 2.4% Constructions 79,734 3,755 4, % 20.4% % 0.9% ADHI Buy 2,660 2,880 9, % 13.9% % 1.6% PTPP Buy 3,875 4,560 18, , % 30.7% % 0.0% WIKA Neutral 2,600 3,000 15, % 17.2% % 1.4% WSKT Buy 1,985 2,540 26,951 1,372 1, % 17.6% % 1.0% WTON Neutral 995 1,030 8, % 23.0% % 1.0% Toll road 38,080 1,620 1, % 7.4% % 1.8% JSMR U/R 5,600 U/R 38,080 1,620 1, % 7.4% % 1.8% Rice Mill 3, % 10.0% % 0.9% AISA U/R 1,185 U/R 3, % 10.0% % 0.9% Consumer 1,073,117 32,423 36, % 12.4% % 2.2% ICBP Neutral 15,100 14,000 88,047 3,298 3, % 10.7% % 1.9% INDF Neutral 6,875 6,000 60,369 4,160 4, % 13.5% % 3.4% MYOR Sell 30,775 24,500 23, % 19.8% % 0.7% ULTJ U/R 3,850 U/R 11, % 12.4% % 0.0% UNVR Neutral 42,000 41, ,460 6,051 7, % 18.4% % 1.9% GGRM Buy 59,300 56, ,098 5,665 6, % 11.7% % 1.8% HMSP Neutral 97, , ,569 11,712 12, % 9.3% % 2.5% WIIM U/R 410 U/R n/a 0.0% 0.0% n/a n/a n/a n/a n/a n/a 0.0% 0.0% Healthcare 76,013 3,281 3, % 11.7% % 1.8% KLBF Neutral 1,280 1,500 60,000 2,156 2, % 11.2% % 1.4% SIDO Neutral , % 12.9% % 3.2% TSPC Neutral 1,875 2,100 8, % 12.1% % 3.0% Hospital 43, , % 25.8% % 0.9% MIKA Buy 2,375 3,400 34, % 17.0% % 1.1% SILO Buy 7,600 11,000 8, % 73.2% % 0.2% Retail 93,084 4,300 5, % 18.8% % 2.5% ACES Neutral , % 14.4% % 1.5% ERAA Neutral , % 49.7% % 4.1% LPPF Buy 17,500 21,250 51,048 2,154 2, % 15.1% % 3.0% MAPI Sell 4,450 2,700 7, % 56.1% % 0.5% MPPA Neutral 1,640 2,175 8, % 24.2% % 1.2% RALS Neutral , % 8.3% % 3.8% TELE Buy 745 1,040 5, % 18.6% % 3.9% Automotive 299,036 18,406 20, % 9.3% % 2.7% ASII Buy 7,250 8, ,506 17,977 19, % 9.2% % 2.8% IMAS U/R 2,000 U/R 5, % 13.5% % 0.9% Heavy Equipment 57,262 5,632 5, % -1.3% % 2.8% HEXA* U/R 1,560 U/R 1, % 33.3% n/a n/a 0.0% 0.0% Page 10 of 12

11 Price Price Mkt Cap Net Profit EPS Growth PER (x) EV/EBITDA (x) P/BV (x) Div.Yield Code Rating (Rp) Target (Rp Bn) UNTR Sell 15,000 13,250 55,952 5,491 5, % -2.3% % 2.9% Plantation 42,429 2,866 3, % 17.5% % 2.9% AALI U/R 17,100 U/R 26,928 1,854 2, % 15.9% % 3.1% LSIP U/R 1,740 U/R 11, % 16.6% % 2.6% SGRO U/R 1,920 U/R 3, % 31.3% % 1.8% Property 137,991 12,199 12, % 1.7% % 1.4% APLN U/R 296 U/R 6, % 10.8% % 2.8% ASRI Neutral ,734 1, % -59.0% % 1.9% BSDE Buy 1,825 2,200 33,529 2,750 3, % 9.2% % 2.1% CTRA Buy 1,265 1,600 19,185 1,511 1, % -5.4% % 1.6% CTRS Buy 2,045 3,600 4, % 8.5% % 2.9% JRPT Buy 670 1,300 9, , % 11.5% % 1.2% LPCK Buy 7,025 13,500 4, % -5.6% % 0.0% MDLN Buy , % -7.6% % 0.0% PWON Buy ,561 1,958 2, % 25.3% % 1.8% SMRA Neutral 1,715 1,600 24,739 1,137 1, % 4.5% % 0.0% Industrial 15,822 1,426 1, % 19.7% % 2.8% DMAS Buy , % 1.7% % 3.8% BEST Neutral , % 42.7% % 0.5% SSIA Neutral , % 62.3% % 1.6% Poultry 68,918 3,045 3, % 26.5% % 1.3% CPIN U/R 3,515 U/R 57,639 2,557 3, % 22.5% % 1.3% JPFA U/R 785 U/R 8, N/M 51.7% % 1.2% MAIN U/R 1,300 U/R 2, N/M 39.8% % 1.0% Coal 46,432 4,579 5, % 19.8% % 6.3% ADRO* Neutral , % 13.4% % 4.3% HRUM* Neutral , % N/M % 10.7% ITMG* Neutral 6,725 6,000 7, % 13.8% % 11.0% PTBA Buy 6,550 7,500 15,094 1,619 1, % 11.3% % 6.0% Oil & Gas 62,907 7,517 7, % 5.9% % 5.9% PGAS* Sell 2,595 3,400 62, % 10.5% % 5.9% Shipping 3, % 6.3% % 4.1% SOCI* Buy , % 11.0% % 4.1% Metal 21, , % 17.4% % 2.5% ANTM Neutral , % N/M % 0.1% INCO* U/R 1,770 U/R 17, % 0.0% % 3.1% Telco 392,183 21,436 24, % 14.2% % 3.8% EXCL Buy 3,860 4,000 32,934 1,153 1,754 N/M 52.1% % 1.1% ISAT U/R 6,400 U/R 34,777 1,199 1, % 52.9% % 2.3% TLKM Buy 3,305 3, ,471 19,083 20, % 9.5% % 4.2% Tower 70,098 2,914 3, % 30.3% % 0.0% TBIG Neutral 5,925 8,000 28,419 1,167 1, % 32.8% % 0.0% TOWR Buy 4,085 5,000 41,679 1,747 2, % 28.6% % 0.0% Media 77,420 3,753 4, % 18.9% % 2.6% SCMA Neutral 3,190 3,000 46,643 1,769 2, % 19.5% % 2.7% MNCN Buy 2,090 2,200 30,778 1,984 2, % 18.4% % 2.6% Textile 5, % 16.8% % 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 11 of 12

12 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 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, Textile, Hospital matthew.wibowo@mandirisek.co.id Rizky Hidayat Property, Industrial, Media rizky.hidayat@mandirisek.co.id Aditya Sastrawinata Shipping, Construction aditya.sastrawinata@mandirisek.co.id Leo Putera Rinaldy Economist leo.rinaldy@mandirisek.co.id Wisnu Trihatmojo Research Assistant wisnu.trihatmojo@mandirisek.co.id Yudha Gautama Research Assistant yudha.gautama@mandirisek.co.id Kevin Halim Research Assistant kevin.halim@mandirisek.co.id Priscilla Thany Research Assistant priscilla.thany@mandirisek.co.id Ferdy Wan Research Assistant ferdy.wan@mandirisek.co.id Giovanni Dustin Research Assistant giovanni.dustin@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 Feliciana Ramonda Institutional Sales feliciana.ramonda@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 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 Yohanes Triyanto Kelapa Gading yohanes.triyanto@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.