INVESTOR DIGEST HIGHLIGHT ECONOMY. Equity Research 17 October 2016

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1 INVESTOR DIGEST Equity Research 17 October 2016 Economic Data Latest 2016F 7-DRRR (%), eop Inflation (YoY %) US$ 1 = Rp, period avg 13,045 13,348 Stock Market Data (14 Oct 2016) JCI Index 5, % Trading T/O ( Rp bn ) 4,919.0 Market Cap ( Rp tn ) 5, ,016.2 HIGHLIGHT Sept16 Trade Preview: Expect a Larger Surplus Plantation: Key Takeaways from Malaysia POTS 2016 Bank Jabar: 9M16 Results: Slightly Below Expectations Bank Negara Indonesia: Upgrade 2016 earnings (BBNI; Rp5,475; Buy; TP:Rp6,300) Semen Indonesia: Weak September performance (SMGR; Surya Semesta Internusa: 9M16 achievement (SSIA; Rp570; Neutral; TP: Rp700) Market Recap Oct 14 th 2016; JCI: 5, (+1.11%); USD/IDR: 13,045; Total Value: Rp7.47tn ECONOMY 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 68.8% of JCI s market capitalization Sept16 Trade Preview: Expect a Larger Surplus Expect a larger surplus. Sep16 trade data is out Monday, 17 Oct16 and we are projecting a US$900mn surplus (consensus: US$546mn) due to increasing monthly exports and otherwise for imports. In annual term, we estimate export and import to grow 3.3% YoY and 4.7% YoY, up from -0.7% YoY and -0.5% YoY, respectively Friendly export environments. We spotted export-friendly indications from both commodity price and overseas activity in Sep16. CPO, coal, and rubber prices were going up substantially in annual term (exhibit 2). Seasonal demands from festivals in India (Deepavali) and China (mooncake) pushed CPO price while coal s was supported by supply cut from the latter country. Furthermore, PMI manufacturing expansion in trading partners such as US, euro zone, China, Japan, Singapore, and India provided the basis for export volume improvement. No signs of significant import improvement. Domestic demand, especially investment, showed no significant signs of improvement. Indonesia s import from China contracted deeper to -9.7% YoY in Sept16 from -2.3% YoY in Aug16, preliminary cement sales indicated disappointing result, and government capital spending contracted. Expect healthy 3Q16 CAD. Our forecast implies 3Q16 trade surplus of US$1.7bn, slightly lower than US$1.9bn in 2Q16. All in all, we expect 3Q16 CAD to be similar with 2Q16. In greater picture, foreign exchange reserve increased US$5.9bn in between 2Q16 and 3Q16, pointing to a decent surplus in the balance of payment last quarter. Bank Indonesia will publish 3Q16 balance of payment data on Friday, 11 Nov16. Page 1 of 12

2 TRADE SUMMARY Aug-16 Sep-16 MS Forecast Market Consensus Exports (% YoY) Imports (% YoY) Trade balance (US$ mn) Sources: Bank Indonesia, Mandiri Sekuritas estimate Leo Rinaldy( ) Wisnu Trihatmojo ( ) SECTOR Plantation: Key Takeaways from Malaysia POTS 2016 We attended Malaysia Palm Oil Trade & Seminar in Kuala Lumpur, Oct Except for Dorab Mistry, most speakers generally viewed that CPO price is likely to rally at end of FY16 or early FY17 on combination of El Nino impact on production as well as seasonally low production months. Entering 2H17, they turn bearish on the CPO price outlook on favorable weather and production recovery. Expecting another rally before a decline. With the exception of Dorab Mistry, most of the speakers at the Malaysia Palm Oil Seminar generally have the same view that CPO price is likely to rally within 4Q16 and 1H17 on the back of lingering effect of El Nino on CPO production as well as seasonally low production months. Thereafter, they expect neutral weather conditions and strong production recovery in 2H17, which imply a bearish signal for CPO price. Both Thomas Mielke and Ling Ah Hong were the most bullish on CPO price. Both speakers were in agreement that CPO price would rally at the end of FY16 and within 1H17, potentially reaching MYR3,000/ton on supply disruption and seasonally low inventory level, before turning bearish on the CPO price outlook, mainly due to expected neutral weather conditions and strong production recovery in 2H17. However, both speakers did not provide their respective CPO price target for 2H17. James Fry was rather bearish. Like Thomas Mielke and Ling Ah Hong, James generally has the same view regarding the direction of CPO price movement and the respective reasoning. In 2H17, he forecasts CPO price to fall to MYR2,100/ton on surging outputs. Dorab Mistry was the most bearish, in our view, since he believes that strong production recovery will quickly result in surpluses. Absence of La Nina, in turn, increases chance that soybean harvests will be smooth, hence adding pressure to CPO price. He forecasts CPO price to fall to MYR2,200/ton by Dec16. We think he is the most bearish among the speakers as he is the only speaker who did not expect any CPO price rally. Meanwhile, he did not provide any price forecast for FY17. Other key developments. Aside from the supply side, the speakers also pointed out some key concerns which may negatively impact CPO demand and price going forward, such as: 1) Chinese government's plan to release rapeseed oil amounting to mn tons starting 12-Oct, 2) persistently low crude oil price, and 3) possible revision of India import duties post Diwali festival. What is our view on pricing? We are expecting CPO price to rally to MYR2,800-2,900/ton in Dec16 or early FY17 on seasonally lower outputs and lingering impact of the El Nino as well as potential surge in China import in anticipation for the Chinese New Year Season. After that, we are of the same view with most of the speakers that neutral conditions and production recovery will induce another price correction. We are currently assuming average CPO price assumption of MYR2,700/ton for FY17. Maintain overweight on the sector for now with both AALI and LSIP as our top picks Page 2 of 12

3 SUMMARY OF CPO PRICE OUTLOOK OF RESPECTIVE SPEAKERS FY16 Estimate CPO Output Speaker CPO Price (MYR/ton) (mn tons) Dorab Mistry (Godrej) 4Q16-2,200 Indonesia Malaysia Comments Changeover from tightness to surpluses. Demand could be negatively affected by China government's release of rapeseed oil and revision in India import duties. James Fry (LMC International) Thomas Mielke (Oil World) 4Q16-2,400-2,450 2H17-2,100 4Q16/1Q17-2,900-3,000 No estimates given Indonesia Malaysia Expect CPO inventory to fall in 1Q17 as a result of lower monthly production on a seasonal basis. Then, expect output and inventory to surge as El Nino impact vanishes. Low palm inventory and slower than expected production recovery in 4Q16/1Q17. Better production expected starting 2Q17 onwards. Ling Ah Hong (Gan Ling) 4Q16-2,400-2,700 1Q17/2Q17-3,000 Indonesia Malaysia Mini recovery in output in 4Q16, in line with peak production season. Expect production decline to resume in 1Q17/2Q17. Source: Malaysia Palm Oil Trade & Seminar (2016), Respective Speakers Yudha Gautama ( ) yudha.gautama@mandirisek.co.id CORPORATE Bank Jabar: 9M16 Results: Slightly Below Expectations BJBR reported consolidated net income of Rp1.2tn, +35%yoy, accouting for 71% of consensus expectations and 66% of ours. The bank continues to book strong loan growth of +15%yoy and managed to lower bank only NPL to 1.7% in Sept- 16. BJBR booked consolidated net income of Rp1.2tn in 9M16, +35%yoy, accounting for 71% of consensus expectations and 66% of ours, while bank only net income stood at Rp1.4tn, +56%yoy. Consolidated net income was dragged down by the syariah unit, which booked a net loss of Rp231bn in 9M16. In 3Q16 alone, net income totaled to Rp309bn, +10%yoy/ -24%qoq. Robust loan growth of +15%yoy/+4%qoq was supported by commercial loans at +34%yoy (19% of total loans) and consumer loans at +15%yoy (68% of total loans). Expansion within West Java and Banten, and to Sumatera, Kalimantan, and Sulawesi resulted in strong pension loan growth of +89%yoy and civil servant loan growth of +7%yoy. Meanwhile, commercial loan growth was driven infra-related projects. The bank distributed a Rp500bn syndicate loan to Waskita Karya in 3Q16 for the Palembang LRT project. Bank only NPL hitting new lows, however syariah NPF remains a concern. Bank only NPL declined to 1.7% in Sept-16 from 2.0% in Jun-16, we note this is the lowest level since Dec-12. Decline in NPL was seen across all segments, with the highest decline from micro loans at 12% in Sept-16 (from 14% in Jun-16) and mortgages to 6% (from 7%). The bank wrote off Rp823bn of bad debts in 9M16 and approximately Rp219bn in 3Q16 alone. Bank only coverage ratio declined to 62% in Sept-16 from 63% in Jun-16. Despite improvements, we still remain cautious on the syariah unit's high NPF at 12% in Sept-16 (vs. 17% in Jun-16). The bank targets NPF of 7% by year end. Deposit growth -5%yoy/+6%qoq, due to decline in time deposits of 10%yoy and demand deposits of 7%yoy. CASA stood at 53% in Sept-16 vs. 50% in Sept-15 while LDR stood at 88% in Sept-16 vs. 73% in Sept-15. NIM improved to 6.9% in 9M16 from 5.8% in 9M15 as cost of funds declined by 75 bps while asset yield increased by 14 bps. Maintain Neutral with TP of Rp1,500, the counter is trading at 1.5x FY17 P/BV. Page 3 of 12

4 Income Statement (Rp bn) 9M15 9M16 % YoY 3Q15 2Q16 3Q16 % YoY % QoQ FY16F Net interest income 3,575 4, ,243 1,506 1, , Non interest income (6) Fees and Commisions (9) (28) Forex Income (38) (46) (24) 24 Others (7) Operating income 3,965 4, ,387 1,671 1, , , Provision expense (255) (389) 52 (124) (75) (285) (283) 138 Operating expense (2,566) (3,050) 19 (889) (1,063) (1,051) 18 (1) (3,999) 76 Personnel Expenses (1,289) (1,587) 23 (439) (563) (534) 22 (5) (2,106) 75 Other Expenses (1,277) (1,463) 15 (450) (500) (517) 15 3 (1,893) 77 Operating profit 1,144 1, (25) 2, , PPOP 1,399 1, , Pre-tax profit 1,102 1, (26) 2, , Net profit 861 1, (24) 1, , % FY16F FY16 Cons % of FY16F Cons Balance Sheet (Rp bn) Sep-15 Jun-16 Sep-16 % YoY % QoQ Gross loan 59,694 65,911 68, Demand deposit 29,786 26,366 27,583 (7) 5 Saving deposit 10,804 13,199 13, Time deposit 41,311 34,315 37,095 (10) 8 Total deposit 81,900 73,879 78,117 (5) 6 CASA to deposits (%) Ratio (%) 9M15 9M16 3Q15 2Q16 3Q16 CAR Tier 1 CAR LDR NIM ROE NPL, cat Loan loss coverage (bank only) Cost to Income Restructed Loans Priscilla Thany ( ) priscilla.thany@mandirisek.co.id Bank Negara Indonesia: Upgrade 2016 earnings (BBNI; Rp5,475; Buy; TP:Rp6,300) Upgrade 2016 earnings and recommendation to BUY with TP of Rp6,300. Factoring the one-off interest income from the RGM Group, coupled with lower loan growth (20% vs. 21%) and higher NIM (6.1% vs. 6.0%), we increase 2016 earnings by 8%. We tweak 2017 earnings and roll over the valuation to next year; we set new TP at Rp6,300 (from Rp6,000) based on 1.2x P/BV (GGM with ROE of 15%, COE of 13.25%, and growth rate of 6%). Providing a 15% upside potential we also upgrade our call to BUY from Neutral. Risks are lower GDP, weakening commodity prices, and more government intervention on lending rates. Page 4 of 12

5 FORECAST CHANGE Year-end Dec 31 Old New Change (%) (Rp bn) 2016E 2017E 2018E 2016E 2017E 2018E 2016E 2017E 2018E Net interest income 28,924 31,410 34,862 29,286 30,969 35,061 1 (1) 1 Net interest margin (%) Total income 39,567 43,237 48,421 40,124 42,912 48,741 1 (1) 1 Pre provision operating profit 21,347 22,976 25,901 21,905 23,149 26, Operating profit 12,555 16,376 18,677 13,902 16,184 19, (1) 2 Reported net profit 9,953 13,174 15,017 10,783 12,995 15,316 8 (1) 2 Loan growth Deposit growth LDR NIM NPL Coverage ratio Cost to income ROE CAR Source: Company, Mandiri Sekuritas estimates FINANCIAL SUMMARY YE Dec (Rp Bn) 2014A 2015A 2016F 2017F 2018F Pre-Provision Profit 16,609 18,390 21,905 23,149 26,833 Net Profit 10,783 9,067 10,783 12,995 15,316 EPS EPS Growth (%) 19.1 (15.9) P/E Ratio (x) BVPS 3,047 3,977 4,570 5,093 5,705 P/BV Ratio (x) Dividend Yield (%) ROAE (%) CAR (%) Source: Company ( ), Mandiri Sekuritas ( ) Tjandra Lienandjaja ( ) tjandra.lienandjaja@mandirisek.co.id Semen Indonesia: Weak September performance (SMGR; Weak September performance, but better than peers. On Sept-16, SMGR booked cement sales of 2.4mn MT, down by 1% YoY and 4% MoM. The company s sales volume, however, is better compared to overall Indonesia market which is down by 3% YoY. According to the company, the weak September sales is due to prolonged Idul Adha lebaran this year. We think that there is a risk that demand is simply weak, as last year s Idul Adha holiday fell on Thursday September 24 th. As of 9M16, SMGR s cement sales is up by 2.4% YoY to 18.6mn MT. ASP still down on September. SMGR s ASP in September is still down by 2% MoM to Rp782k/MT. As of YTD, SMGR s ASP is down by 7% YoY. We have not seen pricing stabilize just yet. SMGR s ASP decline is much better compared to INTP. INTP s ASP is down by 10% YTD, as many new players attacked INTP s main market in Java. Remain Cautious. We remain cautious on the sector on the back of lackluster cement demand recovery and potential pressure on margin due to rising coal price. Coal comprise of 20-25% of cement s total cost. Coal price has gone up 60% YTD. Local coal price only slightly goes up, by 20% YTD, but we think that it would catch up to international coal price. Liliana S Bambang ( ) liliana.bambang@mandirisek.co.id Page 5 of 12

6 Surya Semesta Internusa: 9M16 achievement (SSIA; Rp570; Neutral; TP: Rp700) Lackluster performance. SSIA only managed to book 1.1ha of marketing sales up to 9M16, 3% of ours and company s FY16F target. With lackluster marketing sales and low sales backlog at 3.8ha or Rp80bn, we see risk in SSIA s earnings not meeting our expectation for 3Q16. On the construction business, company posted Rp1.98tn new contracts up to 9M16, 72% of our FY16F estimate. We think there will still be difficulties in obtaining infrastructure projects going forward. We are cautious that the new contracts achievement would fall short of our FY16 estimate of Rp2.75tn. We also still expect SSIA to post loss on the Cipali toll-road in 3Q16. Hospitality performance largely solid. Gran Melia Jakarta s occupancy rate as of 9M16 currently sits lower than our FY16F estimate by 1,040bps, bringing 9M16 room revenue to Rp100bn, 68% of our estimate. Meanwhile, Gran Melia Bali posted strong occupancy rate of 80.2% in 9M16, higher than our FY16F estimate by 1020bps, bringing its room revenue to Rp182bn, exceeding our FY16F estimate by 5%. Banyan tree s 9M16 room revenue reached Rp102bn, 85% of our FY16 estimate. Occupancy rate for Batiqa hotel in 9M16 reached 50.8% on average vs. our FY16F estimate at 63%, while 9M16 ARR stood at Rp306k lower than our estimate of Rp422k by 27% on average. Weak Batiqa performance is due to opening of new hotels in Pekanbaru and Lampung. Expectations beyond Q3. We maintain Neutral with TP of Rp700 on the back of potential weak earnings on the coming quarters. We would turn positive on toll road divestment and potential JV on its Karawang land. Stock is currently trading at 66%disc to NAV and FY17 PE of 10.4x. Ferdy Wan ( ) ferdy.wan@mandirisek.co.id TAX AMNESTY Page 6 of 12

7 MARKET Market Recap Oct 14 th 2016; JCI: 5, (+1.11%); USD/IDR: 13,045; Total Value: Rp7.47tn Chinese data set the tone again on Friday, easing some concerns about the health of the world s second-biggest economy. The PPI rose 0.1% in Sept from a year earlier, thanks to stronger commodity prices (vs consensus of a decline of 0.3%), after a drop of 0.8% in Aug. While the increase was slight, it was the first time producer prices have expanded on an annual basis since Jan 2012, and came a bit earlier than the year-end timeframe that some analysts had expected. The producer price increase will be good news for Beijing as it struggles to reduce a mountain of corporate debt. At the same time, consumer price inflation also beat expectation. It quickened more than expected to 1.9% in Sept year-on-year due to higher food prices. Analysts had expected the consumer price index (CPI) to rise 1.6% compared with a 1.3% increase in Aug, a 10-month low. Meanwhile, other Asian stocks bounced alongside the greenback, the Indo market stayed out of the limelight. Earlier in the day, the trading pace was dull and subdued due to ongoing lack of domestic catalysts. However, right after the appointment of former transport Chief Jonan for Energy Minister with sacked minister Arcandra Tahar returning in the deputy post, the JCI charged ahead, led by the big banks: BBRI (+2.1%), BMRI (+2.7%), BBNI (+1.9%), BBCA (+2.3%) and consumer plays: ICBP (+3.4%), HMSP (+2.8%), INDF (+1.4%), UNVR (+1.1%). At the same time, news report that Finance Minister Sri Mulyani currently in talks with S&P put fresh hope for the country s rating upgrade. Blue chips returned to their almighty position. On the other hand, shares of three Indo poultry companies fell after antitrust body known as KPPU ordered them to pay a total of Rp60.8bn fine for poultry cartel practice: JPFA (-1.7%), CPIN (-0.3%) and MAIN (-2.3%). In the end, the JCI jumped +1.1% at 5399 level in good volume of US$367mn (excluding US$34mn KPIG; US$14mn ULTJ; US$12mn DOID; and US$7.7mn MYRX crossing). Regular market transaction was recorded at Rp4.9tn (US$375.6mn) vs this week average of Rp4.72tn (US$361.8mn). Excluding foreign net sell from KPIG crossing, foreign still posted a net sell of Rp182.47bn (US$13.99mn) and totaling to a net sell of Rp1.29tn (US$98.89mn) for the week. Foreign participants rose to 40% and came up better seller for 5%. Gainers beat losers by 13 to 10. Investors will have another chance to gauge whether the world's biggest economy is ready for tighter monetary policy through US indicators due later including Sept retail sales and the University of Michigan consumer sentiment report. The markets will also tune into speeches by Fed Chair Janet Yellen and Boston Federal Reserve President Eric Rosengren for hints about the timing of the next interest rate hike. TOP TURNOVER: TLKM ASII BBCA BMRI BBRI BBNI UNTR PGAS ANTM UNVR HMSP INDF WSKT LPPF WSBP (30%) ADVANCING SECTOR: auto +2.5%; financial +1.8%; consumer +1.7%; mining +0.7%; plantation & cement +0.6%; property +0.4%; construction +0.2%; telco flat DECLINING SECTOR: NONE The yield of 10-year government went down to 7.027% (-0.59%) and Rupiah strengthened to Rp13,045 (-0.25%). Sales Team Page 7 of 12

8 FROM THE PRESS Construction for 2x1,000MW PLTU Java 7 to commence The steam-fired power plant (PLTU) Java 7 project would be commenced after the consortium of China Shenhua Energy (70%) and Pembangkitan Jawa Bali (30%) as the project owner has signed USD1.8bn financial closing with China Development Bank. The power plant plans to use critical boiler which is fueled by low calories coal (4,000-4,600 kkal/kg). (Bisnis Indonesia) National Broadcasters get license extension Indonesian Broadcasting Committee has recently renewed national broadcasting licenses for 10 FTAs, namely RCTI, MNCTV, Global TV, SCTV, Indosiar, ANTV, TvOne, Trans7, Trans TV, and Metro TV. Furthermore, the committee also asks for commitment from the companies to improve their broadcasting quality on information, education, and entertainment. (Kontan) Robusta and Arabica coffee price will likely remain high According to International Coffee Organization (ICO), global coffee supply is expected to increase by 0.9% YoY in 2016, however weather issues have been disrupting coffee production in Indonesia this year, and will likely continue in Brazil s production, as the largest coffee producers in the world, is expected decline by 5.4% YoY in US Department of Agriculture estimates global Robusta production to be the lowest in the last 4 years, due to shrinking supply from Brazil, Vietnam, and Colombia. Arabica price is also expected to stay in the high base due to weather issues disrupting bean quality. (Bisnis Indonesia) Wijaya Karya Beton (WTON) aims Rp130bn contracts from PLTU Cilacap The 1,000MW steam-fired power plant (PLTU) project would become one of the main focus for WTON, apart from other infrastructure project such as Jakarta Light Rail Transit (LRT) and Kereta Api Indonesia s railroad project. (Bisnis Indonesia) 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 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 41,958 2,180 2,350-57% 5,038 41% 1, % 11.6% PWON Buy 33, % 1,207 67% % 24.7% SMRA Neutral 25,676 1,780 1,600-55% 3, % % 14.7% CTRA Buy 23,886 1,575 1,600-40% 2, % % 14.0% JRPT Buy 11, ,300-75% 3,242 19% % 20.4% ASRI Neutral 7, % 1,161 95% % 6.3% LPCK Buy 4,089 5,875 10,000-76% 24,683 25% 4, % 14.6% MDLN Buy 4, % 1,165 40% % 6.6% CTRS Buy 5,580 2,820 4,000-79% 13,390-30% 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 4,089 5,875 10,000-76% 24,683 25% 4, % 14.6% MDLN Buy 4, % 1,165 40% % 6.6% Simple Average -67% % 10.2% Page 9 of 12

10 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 5,400 5,550 4,174, , , % 15.9% % 1.8% Banking 947,489 68,158 83, % 22.6% N.A. N.A % 1.9% BBCA Neutral 15,800 13,000 (17.7) 389,549 18,174 21, % 17.7% N.A. N.A % 1.4% BBNI Buy 5,475 6, ,101 10,783 12, % 20.5% N.A. N.A % 3.2% BBRI Buy 12,225 14, ,581 25,817 30, % 19.1% N.A. N.A % 2.1% BBTN Buy 1,950 2, ,651 2,439 2, % 21.0% N.A. N.A % 2.4% BDMN Sell 3,980 3,500 (12.1) 38,147 3,375 3, % 9.5% N.A. N.A % 1.9% BJBR Neutral 1,700 1,500 (11.8) 16,484 1,772 2, % 15.6% N.A. N.A % 4.3% BJTM Neutral ,906 1,032 1, % 7.2% N.A. N.A % 8.7% BNGA Buy 900 1, ,618 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 820 1, ,752 2,129 2, % 11.3% N.A. N.A % 0.0% Building Materials 135,260 9,374 10, % 7.0% % 3.7% INTP Neutral 17,250 20, ,501 4,368 4, % 5.3% % 5.5% SMCB Sell 1, (11.3) 7, N/M 10.1% % 1.6% SMGR Neutral 10,075 11, ,760 4,501 4, % 5.4% % 2.3% ARNA Buy , % 147.5% % 1.7% Constructions 88,317 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 2,760 3, , % 23.9% % -1.3% WSKT Buy 2,620 3, ,058 1,634 1, % 12.7% % 1.1% WTON Buy 900 1, , % 54.2% % 1.2% Toll road 31,552 1,612 1, % -6.2% % 1.0% JSMR Neutral 4,640 5, ,552 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 1,186,675 33,682 37, % 10.7% % 1.0% ICBP Neutral 9,800 9,050 (7.7) 114,287 3,464 3, % 8.2% % 1.4% INDF Buy 8,825 10, ,492 3,801 3, % 2.2% % 2.6% MYOR Neutral 1,515 1, ,874 1,346 1, % 7.2% % 1.6% ULTJ U/R 4,800 U/R U/R 13, % 19.6% % 0.0% UNVR Neutral 45,000 41,400 (8.0) 343,350 6,358 7, % 13.5% % -1.9% GGRM Buy 64,800 72, ,681 5,902 7, % 21.7% % 1.5% HMSP Neutral 4,110 3,750 (8.8) 478,067 12,021 12, % 7.2% % 2.5% 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 98,605 3,281 3, % 11.7% % 1.4% KLBF Neutral 1,725 1,500 (13.0) 80,860 2,156 2, % 11.2% % 1.1% SIDO Neutral , % 12.9% % 3.0% TSPC Neutral 2,110 2,100 (0.5) 9, % 12.1% % 2.7% Hospital 53, % 12.2% % 0.5% MIKA Buy 2,840 3, , % 11.1% % 0.7% SILO Neutral 10,775 10, , % 17.7% % 0.0% Retail 101,250 3,980 4, % 21.6% % 2.7% ACES Neutral , % 10.4% % 1.9% ERAA Neutral (7.7) 1, % 49.7% % 4.2% LPPF Buy 18,400 22, ,690 2,082 2, % 14.3% % 3.5% MAPI Buy 4,790 5, , % 194.2% % 0.0% MPPA Neutral 1,885 1, , % 49.9% % 0.5% RALS Neutral 1,175 1, , % 6.5% % 3.0% TELE Buy 690 1, , % 18.6% % 4.2% Automotive 340,828 16,763 18, % 10.0% % 2.2% ASII Neutral 8,325 8,200 (1.5) 337,026 16,492 18, % 9.5% % 2.2% Page 10 of 12

11 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 1,375 U/R U/R 3, N/M 53.7% % 1.3% Heavy Equipment 73,945 4,686 4, % 2.9% % 1.9% HEXA* U/R 2,770 U/R U/R 2, % 50.0% n/a n/a 0.0% 0.0% UNTR Sell 19,200 11,000 (42.7) 71,619 4,554 4, % 1.8% % 1.9% Plantation 40,047 2,145 3, % 40.5% % 1.7% AALI Buy 15,075 16, ,290 1,519 2, % 19.8% % 1.8% LSIP Buy 1,485 1, , % 85.0% % 1.4% SGRO U/R 1,920 U/R U/R 3, % 28.6% % 1.7% Property 164,906 11,167 11, % 6.1% % 0.6% APLN U/R 282 U/R U/R 5, , % 24.7% % 2.9% ASRI Neutral (21.5) 7,967 1, % -59.0% % 1.6% BSDE Buy 2,180 2, ,958 2,143 2, % 17.6% % 0.8% CTRA Buy 1,575 1, ,886 1,474 1, % -3.1% % -1.2% CTRS Buy 2,820 4, , % 1.8% % 2.1% JRPT Buy 825 1, , , % 11.6% % 1.0% LPCK Buy 5,875 10, , % -15.9% % 0.0% MDLN Buy , % -2.2% % 0.0% PWON Buy ,712 1,934 2, % 25.9% % 1.3% SMRA Neutral 1,780 1,600 (10.1) 25, , % 40.0% % 0.0% Industrial Estate 18,300 1,394 1, % 11.5% % 1.8% DMAS Buy , % 8.4% % 2.1% BEST Buy , % 18.8% % 0.4% SSIA Neutral , % 15.5% % 1.7% Poultry 82,218 3,547 4, % 22.2% % 1.2% CPIN U/R 3,700 U/R U/R 60,673 2,671 3, % 20.2% % 1.3% JPFA U/R 1,705 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 91,820 5,259 5, % 11.5% % 3.2% ADRO* Neutral 1,425 1,100 (22.8) 45, % 14.2% % 2.5% HRUM* Neutral 1,490 1,100 (26.2) 4, N/M 43.3% % 2.3% ITMG* Neutral 13,500 7,600 (43.7) 15, % 8.0% % 5.6% PTBA Neutral 11,700 9,200 (21.4) 26,963 1,542 1, % 12.7% % 3.2% Oil & Gas 62,058 7,044 7, % 8.0% % 5.7% PGAS* Sell 2,560 3, , % 10.5% % 5.7% Shipping 2, % 8.5% % 4.9% SOCI* Buy , % 11.0% % 4.9% Metal 35, N/M N/M % 0.4% ANTM Neutral (39.4) 7, % N/M % 0.1% INCO* U/R 2,740 U/R U/R 27, % 33.3% % 0.5% Telco 473,429 20,500 23, % 16.7% % 3.1% EXCL Neutral 2,530 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 4,210 3,800 (9.7) 413,320 19,083 20, % 9.5% % 3.3% Tower 68,234 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 3,820 5, ,975 2,420 2, % 20.4% % 0.0% Media 66,943 3,175 3, % 16.0% % 2.6% SCMA Buy 2,650 3, ,747 1,599 1, % 16.9% % 2.9% MNCN Buy 1,975 2, ,195 1,576 1, % 15.0% % 2.2% 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 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 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.