INVESTOR DIGEST HIGHLIGHT ECONOMY. Equity Research 13 January 2017

Transcription

1 INVESTOR DIGEST Equity Research 13 January 2017 Economic Data Latest 2017F 7-DRRR (%), eop Inflation (YoY %) US$ 1 = Rp, period avg 13,290 13,450 Stock Market Data (12 Jan 2017) HIGHLIGHT MoF meeting takeaways Government promulgated three regulations on mineral and coal mining Building Material: Ending FY16 with a Sour Tone Sido Muncul: Winds of Change (SIDO; Rp520; Buy; TP:Rp700) Market Recap Jan 12 th 2016; JCI: 5, (-0.16%); USD/IDR: 13,290; Total Value: Rp5.7tn JCI Index 5, % Trading T/O ( Rp bn ) 4,533.0 Market Cap ( Rp tn ) 5, ,941.8 Market Data Summary* EBITDA growth (%) EPS growth (%) EV/EBITDA (x) P/E (x) P/BV (x) Div. Yield (%) Earnings Yield (%) Net Gearing (%) ROE (%) * Aggregate of 80 companies in MS research universe, representing 68.6% of JCI s market capitalization ECONOMY MoF meeting takeaways The Ministry of Finance conducted an analyst meeting yesterday. Some points of interest are as following: Reassuring fiscal credibility. We think this is the main point of the event. Reasons: (1) the 2017 budget is set with 2016 realization projection as the benchmark unlike previous practice, (2) the MoF will be able to continue tax examinations post-tax amnesty, (3) tax amnesty data will be utilized. The MoF promises to act upon deviation of tax revenue progress (unexplained). It is fully aware of tax revenue shortfall risk and is ready to "close spending tap" to maintain maximum fiscal deficit of 3% (political process for revision is seen as too costly). Chasing tax amnesty potentials. The government has collected Rp4,310tn of tax amnesty declaration to date, but there is no disclosure to answer the question of the program s estimated revenue potentials. We estimate a baseline incremental revenue of between Rp80tn Rp100tn in The MoF will look for activities that could generate tax revenues, for example inventory stock and account receivables that have not been declared during tax amnesty instead of time deposits and not-for-rent houses. Finally, it is not hoping too much on the third phase of tax amnesty. The government has only collected additional Rp3tn revenue so far in 2017 (1 st phase: Rp97.2tn, 2 nd phase: Rp9.8tn). Assessing macroeconomic assumptions. The MoF sees upside risks on economic growth (5.1%), inflation (4.0%, might rise up to 4.5%), and ICP (US$45/barrel). It has mixed view on currency (Rp13,300/US$) provided expectations for stronger export performance and three federal funds rate hikes. Risky, but less severe. Overall, we view that fiscal risk remains in 2017 albeit not as strenuous as seen in Achieving tax target (16.8% with tax amnesty revenue, 27.4% without) will prove challenging, especially as we (and the government) only expect minor FY17F economic growth acceleration to 5.1% (FY16F: 5.0%). Our flattish private consumption outlook also limits income tax Page 1 of 11

2 growth prospect. Our baseline scenario (assuming minor tax reform) is for 7% - 10% tax revenue growth that implies 80tn 120tn shortfall and Rp50tn Rp100tn spending cut, leading to fiscal deficit widening to -2.6% of GDP against APBN 2017 s -2.41%. This compares with 2016 tax revenue shortfall of Rp255.6tn. Upside lies on commodity price upside which, if sustained, would be reflected in natural resources non-tax revenue (APBN 2017: Rp87tn). We therefore stress the importance of concrete reform (in terms of human resources, IT, business process, and regulations through tax law revisions, according to the MoF) and strict utilization of tax amnesty data. Wisnu Trihatmojo ( ) wisnu.trihatmojo@mandirisek.co.id Government promulgated three regulations on mineral and coal mining Government promulgated three regulations on mineral and coal mining: They are 1) PP No.1/2017 on mineral and coal mining and 2) Ministry of Energy and Mineral Resources (ESDM) regulation No.5/2017 and No.6/2017. The Ministry of Energy and Mineral Resources regulation No.5/2017 also includes article with regards to nickel which allow the export of low quality nickel ore (<1.7% nickel content) once the domestic demand is met and the use of low quality nickel ore (<1.7% nickel content) to be used with a minimum of 30% smelter s input capacity (blending with high quality nickel ore). We believe that ANTM is the key beneficiary of the nickel ore easing policy as nickel ore export will improve its cash flow due to stable margins. While we don t know how much nickel ore ANTM can sell, prior to nickel ore export ban in 2014, nickel ore sales accounted for around 30-40% of ANTM s revenue. Our discussion with ANTM also indicated that nickel ore with 1.8% nickel content is priced at around US$40/ton in the export market compare to domestic price of US$23/ton for 2% grade. ANTM currently trades at 1.2x FY17F PBV vs INCO of 1.2x. Our recommendation and target price are under review. Government Regulation (PP) No.1/2017 on mineral and coal mining stipulates 4 main points: 1) Extending the mining license renewal from the previous 2 years prior to the end of contract period to 5 years; 2) Revising the divestment regulation to 51% on gradual basis; 3) Regulating the benchmark prices for mineral and coal; 4) Annulling the previous clause which permitted contract of work (KK) holders to export refined products. Ministry of Energy and Mineral Resources Regulation (Permen) No.5/2017 stipulates that: 1) IUP OP and IUPK OP holders are obliged to process and refine mining products in accordance with the minimum requirements set by the government; 2) Mining products processing and refining may be conducted in cooperation with other party; 3) Low-quality nickel (<1.7%) and bauxite (<42%) must be absorbed by refining facilities with a minimum 30% of smelter s input capacity; 4) The excess of low-quality nickel and bauxite may be exported once the domestic demand is met; 5) Metal KK holders are allowed to export refined products once the minimum refinement criteria is met; 6) KK, IUP OP, and IUPK OP holders are permitted to export ore for the next five years under these conditions: 1) KK holders must switch to IUPK OP; 2) committed to build smelter; 3) obliged to be imposed a maximum 10% export tax in accordance to the physical and financial realization of smelter progress; 7) Exports are only permitted once the mining company obtains export recommendation approval from the directorate general on behalf of the minister. Ministry of Energy and Mineral Resources Regulation (Permen) No.6/2017 stipulates that: 1) Metal IUPK OP, Metal IUP OP, and processing & refining IUP OP must receive recommendation prior to exporting its products; Page 2 of 11

3 2) Metal IUPK OP, Metal IUP OP, and processing & refining IUP OP should submit the application for recommendation to the Minister of Energy and Mineral Resources (ESDM) c.q. Directorate General of Mineral and Coal; 3) Aforementioned recommendation would be a requirement to obtain export license; 4) Requirements to obtain export recommendation: a. Integrity pact to build smelter in Indonesia b. Clear and clean certification c. Independently verified smelter construction plan Gerry Harlan ( ) Ariyanto Kurniawan ( ) gerry.harlan@mandirisek.co.id ariyanto.kurniawan@mandirisek.co.id SECTOR Building Material: Ending FY16 with a Sour Tone Indonesia s December cement sales are weak, down by 3% YoY to 5.5mn MT. Hence, for this year, FY16 sales are ending with flat cement sales at 62mn MT. Despite expectation for a slight recovery in FY17F, we remain cautious on the sector over the potential oversupply. Flat growth in FY16. Indonesia is ending FY16 with only flat cement growth at 62mn MT. Bagged cement sales are down by 2% YoY, while bulk cement sales are up by 6% YoY. FY16 cement sales number is lower compared to our initial expectation of 2% growth, due to worse than expected sales in 4Q16. Weak 4Q16 cement sales. In 4Q16, cement sales are down by 7% YoY to 17.3mn MT. All regions booked weak cement sales. Java cement sales are down by 8% YoY in 4Q16. In 4Q16, bagged cement sales are down by 9% YoY, while bulk cement sales are up by 1% YoY. Companies accounted the cement sales weakness on the back of lower infrastructure spending on YoY basis coupled with higher-than-expected rainfall in 4Q16. Expecting 5% growth for this year. We expect a slight recovery in FY17F, up by 5% YoY. However, we think that this number also hinges on the efficiency of infrastructure spending, as major infrastructure budget relies on regional government (via transfer to region and village fund). INTP struggling until Dec-16. INTP's cement sales for FY16 are down by 4% YoY to 16.1mn MT. The company s market share is down by 110bps from 27.1% in FY15 to 26% for FY16. In 4Q16, INTP s cement sales are down by 8% YoY to 4.4mn MT. Sharp improvement by INTP is seen on Dec, as the company registered flat YoY cement sales in Dec (versus 10-13% YoY decline in Oct-Nov). Aggressive ASP cuts in 4Q16. INTP s weak cement sales in 4Q16 explain INTP s aggressive cement price cut in 4Q16 despite the increase in coal price. INTP s new 4.4mn MT cement plant has already been operational since the end of last year. New players register strong growth. Cement sales by the new players grew by 29%-269% YoY on their sales for FY16. The non Big Three booked 23% YoY cement sales growth to 10.8mn MT. Hence, the market share of the Big Three (including Lafarge) compressed from 85.9% in FY15 to 82.6% in FY16. Oversupply remains a risk. We believe that the oversupply condition for Indonesian cement companies still persists. We estimate that there is 34mn MT of oversupply in the sector (excluding export). We expect 21-23% earnings decline on FY17F for both SMGR and INTP, as price cuts were aggressive in FY16. In addition to ASP cuts, we also expect margin compression due to rising coal price. Page 3 of 11

4 INTP 12M16 12M15 Y/Y 4Q16 4Q15 Y/Y 3Q16 Q/Q Sumatera 1,545 1, % % % Kalimantan 985 1, % % % Sulawesi % % % Nusa Tenggara & Bali 1,169 1, % % % Papua % % % Java 11,571 12, % 3,167 3, % 2, % Total Domestic 16,115 16, % 4,416 4, % 3, % Export cement % % - n.a Export clinker % % % Indonesia domestic 12M16 12M15 Y/Y 4Q16 4Q15 Y/Y 3Q16 Q/Q Sumatera 13,614 13, % 3,997 4, % 3, % Kalimantan 4,196 4, % 1,114 1, % 1, % Sulawesi 5,442 4, % 1,568 1, % 1, % Nusa Tenggara 3,534 3, % 903 1, % % Eastern Indo 1,481 1, % % % Java 33,740 34, % 9,343 10, % 8, % Total Domestic 62,008 61, % 17,303 18, % 15, % Export cement % % % Export clinker 1, % % % Liliana S Bambang ( ) Ferdy Wan ( ) liliana.bambang@mandirisek.co.id ferdy.wan@mandirisek.co.id CORPORATE Sido Muncul: Winds of Change (SIDO; Rp520; Buy; TP:Rp700) This is a turn-around story for Sido Muncul (SIDO) with initiatives in place to settle distribution issues and revive dormant products. With c.rp2.7tn worth of muscle/joint remedy industry, we believe Tolak Linu could be the next growth anchor for SIDO. SIDO is the cheapest consumer stock with historic low forward P/E, highest earnings growth, and highest dividend yield among peers. We re-initiate with a BUY, with TP Rp700. Tolak Linu: Young blood. Tolak Linu is SIDO s modern remedy for sore muscles/joints, launched in Jun 15 under the same family as Tolak Angin. Riding the theme of remedy modernization (page 5), Tolak Linu should succeed with high growth opportunities. We estimate its market size of c.rp2.7tn, and expect Tolak Linu to reach 5%/7% of Tolak Angin s monthly gross sales in 2017F/18F. Our on-the-ground research covering 70 outlets also reveals high anticipation and demand for Tolak Linu, while merchants are welcoming Tolak Linu with open hands. Adding fuel to herbal remedies growth, we expect blended gross margin to rise by 170/150ppt to 43%/44% in 2017F/18F. F&B Business: When the going gets tough. SIDO is revitalizing its under-performing F&B segment by pushing the promising underdogs Susu Jahe and Kopi Jahe. This is taking place concurrently with Kuku Bima Ener-G s continuous volume recovery, which should put an end to F&B s contraction by 2018 at the latest, in our view. We also applaud SIDO s new venture, Café Jamu, which should act as a free marketing tool to highlight all SIDO products. Distribution sort-outs at one go. SIDO is clearing its bottlenecks through simultaneous initiatives: 1) more involvement in MT trading terms; 2) higher and more focused exports; 3) more distributors and bigger drop size to MT outlets. This is complemented with two professional hiring for MT and exports initiatives. We also think that the management reposition would add new colors to SIDO with a more uniformed and inclusive push across all brands. Page 4 of 11

5 A real bargain. We re-initiate SIDO with a BUY rating with target price at Rp700, derived from 3-stage DCF based on 3% LTG and 11% WACC. SIDO offers higher EPS CAGR at 15.4% in F, a turnaround from 5.2% in F. High FY17F dividend yield at 4% would partly give return assurance on top of the 35% upside. Stock is cheap and 12M forward P/E is at the historical lowest, while turn-around initiatives are in place. Our TP implies 19.8x 2017F P/E. FINANCIAL SUMMARY YE Dec (Rp b) 2014A 2015A 2016F 2017F 2018F EBITDA Net Profit Fully-diluted EPS (Rp) Fully-diluted EPS growth (%) P/E Ratio (x) EV/EBITDA (x) P/B Ratio (x) Dividend Yield (%) ROAE (%) Source: Company ( ), Mandiri Sekuritas ( ) Lakshmi Rowter ( ) Adrian Joezer ( ) lakshmi.rowter@mandirisek.co.id adrian.joezer@mandirisek.co.id TAX AMNESTY Page 5 of 11

6 MARKET Market Recap Jan 12 th 2016; JCI: 5, (-0.16%); USD/IDR: 13,290; Total Value: Rp5.7tn Finally the USD nursed widespread losses on Thursday after President-elect Donald Trump s long-awaited news briefing provided scant clarity on future fiscal policies, disappointing bulls wagering on major stimulus. Trump's first news conference since the Nov 8 th election contained no details on tax cuts and infrastructure spending, the two factors that had fueled the five-week rally in stocks and a selloff in global bond markets. The IDR recovered to level. Yet neither did Trump mention possible tariffs against Chinese exports, a relief for Asian share markets that have feared the outbreak of a global trade war. Accordingly, the JCI traded higher throughout the day and last minute selling into UNVR (close -0.06%) and HMSP (from -0.25% to close -1.3%) let the main gauge to close 0.15% lower at 5292 level (down from regular market closing at 5305 level). Turnover stayed thin at US$342mn (excluding US$16mn DILD; US$7.6mn MYRX crossing). Foreign posted a net sell of Rp155.7bn (US$11.7mn) and foreign participants at 25% came up better seller for 15%. Gainers beat losers by 12 to 10. The uncertainty about what policies will actually be pursued has seen yields on 10-year Treasury notes rally from a 2.64% peak over the last month to stand at 2.349% on Thursday. The USD, likewise, has had to surrender some of its gains in the last week or so. Wednesday's session was especially volatile with the dollar rallying hard into the Trump event, only to recoil at his vagueness on policy. The dollar index was nursing a grudge at on Thursday, having been as high as at one stage overnight. In commodity markets, oil was a shade softer after data showed rising US crude inventories. US crude was trading 7 cents lower at $52.18, though that followed gains of nearly 3% overnight. Brent crude was off 3 cents at $55.07 a barrel. TOP TURNOVER: ASII TLKM BBRI UNVR BBCA BMRI SMGR BBTN UNTR BEST BSDE ASRI DILD ADRO INCO INDF (25%) ADVANCING SECTOR: telco +0.9%; property +0.7%; financial +0.2% DECLINING SECTOR: plantation -0.8%; consumer & auto -0.6%; mining -0.3%; construction & cement -0.1% The yield of 10-year government went down to 7.69% (-0.7%) and Rupiah appreciated to Rp13,290 (+0.29%). Sales Team FROM THE PRESS 2017 deposit rate growth predicted at 7.2% The Deposit Insurance Agency (LPS) predicts 2017 deposit growth to reach 7.2%, higher than their previous prediction of 7%. LPS revised their forecast after seeing business plans submitted to OJk which seemed to be more bullish than expected. (Bisnis Indonesia) 2016 distribution of KUR reached Rp94.4tn Distribution of KUR reached Rp94.4tn in 2016, accounting for 79% of the total target set by the government at Rp120tn. Deputy Finance Ministry of Cooperatives and SMEs Braman Setyo Dawas states that along 2016, 38 institutions distributed KUR, which consists of 33 banks, 4 financing companies, and 1 cooperative. Meanwhile, 2017 s distribution of KUR target is currently at Rp106.4tn. (Investor Daily) Cigarette TV ads are in talks of prohibition Current regulation sets the length, content, and timing of TV ads, but plans to ban all cigarette TV ads are proposed by the parliament, also pushed by some NGOs. In 2016, cigarette industry is the 5 th biggest TV advertisement spender in (Kontan) Page 6 of 11

7 Comment: While the complete banning of tobacco ad on TV is not the first time to come up in the news, the ban will be negative for media companies given their current ad revenue contribution of around 10% for both SCMA and MNCN. Currently, tobacco ad can only be aired at late night from 21:30PM to 05:00AM (Government Regulation No. 109/2012). Should this prohibition take place, big cigarette companies will benefit more given their high brand loyalty. Deposit Insurance Agency (LPS) reviews additional premium for restructuring of banks LPS is preparing three policies relating to the Prevention and Crisis Management Financial System Policy, which is targeted to be complete by April Of the three rules that are being prepared, LPS together with the government is reviewing a policy relating to additional premium for restructuring of banks. Currently, the premium set by LPS is a flat rate. LPS and the government is reviewing a scheme that charges premium using a risk basis. (Investor Daily) Guaranteed Deposit Rate (LPS) unchanged LPS rate remains unchanged for the period of January 12, 2017 to May 15, The LPS rate remains at 6.25% for rupiah deposits and 0.75% for deposits in foreign currencies. (Kontan) Government assigned Pertamina and Perusahaan Gas Negara (PGAS) to develop gas network in 9 regions In 2017 State Budget, the government has earmarked Rp7tn to connect gas to 56,432 households. Pertamina has been assigned to develop gas network in Pekabaru, Pematang Ilir, Muara Enim, Mojokerto, Samarinda and Bontang while PGAS in Musi Banyuasin, Bandar Lampung, Jakarta and Mojokerto. (Bisnis Indonesia) Public Works Ministry to sign 2017 projects worth Rp33tn The Ministry of Public Works and Public Housing (PUPR) would soon sign Rp11tn contracts from early tender process and additional Rp22tn from multi-years contracts. Currently, the Public Works Ministry has tendered 5,162 packages from total 2017 packages which reached 10,000 projects. (Bisnis Indonesia) The rise in tobacco VAT this year may contribute to Rp1.3tn increase in the State Budget The Head of State Revenue Center of Fiscal Policy Office (BKF) Goro Ekanto stated that the rise in tobacco Value Added Tax by 0.4% this year (from 8.7% to 9.1%) would contribute to the tax revenue by Rp1.3tn. In 2016, tobacco VAT also rose by 0.3% from 8.4% to 8.7%, yet the contribution to tax revenue was only Rp800bn. (Kontan) Bank Rakyat Indonesia (BBRI) allocates 20% of KUR for farmers BBRI will allocate 20% of 2017 s total KUR to the farming sector. BBRI s Director of MSME Mohammad Irfan states that in 2016 BBRI distributed Rp69.5tn of KUR, of which Rp15.1tn or equivalent to 21.71% of the total was distributed to the farming sector. BBRI distributed KUR to 4mn debtors with an NPL ratio of 0.32%.Irfan states that the amount of KUR to be distributed in 2017 is still being reviewed by the government. Overall, the government targets distribution of KUR to be Rp tn. (Bisnis Indonesia) Maybank (BNII) transfers 68.5% of its shares in WOM to Reliance Capital management BNII to transfer 68.5% of its shares in Wahana Ottomitra Multiartha to Reliance Capital Management, the transaction totals to approximately Rp673.8bn. The acquisition is targeted to be complete by 1Q17. This is part of BNII s strategy to conduct efficiencies in its business line, particularly those related to 2W financing. (Bisnis Indonesia) SRIL targeting 8%-15% revenue growth this year Revenue for this year is targeted to be US$706.7mn (vs. US$675.4mn target in 2016), net income to be US$73.4mn from US$63.9mn. The growth is mostly coming from the new capacity expansion since mid The company sets US$15mn capex for this year, lower than last year budget at US$60mn. (investor daily) Page 7 of 11

8 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$/bl) Dow Jones 19, US$/EUR Nickel spot (US$/mt) 10, Nikkei 19, YEN/US$ Gold spot (US$/oz) 1, SET 1, SGD/US$ Tin 3-month (US$/mt) 21, Hang Seng 22, CPO futures (Ringgit/ton) 3, STI 2, ADR Stocks Soybean oil (US$/100gallons) S&P 500 2, TLK in Rp 9, 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 17F 18F 17F 18F BSDE Buy 33,393 1,735 2,570-63% 4,673 12% 1, % 10.5% PWON Buy 28, % 1,207 42% % 25.5% SMRA Neutral 19,618 1,360 1,575-65% 3, % % 17.2% CTRA Buy 19,261 1,270 1,600-59% 3,073 63% % 14.0% JRPT Buy 12, ,300-73% 3,242 26% % 18.7% ASRI Neutral 7, % 1,161 65% % 5.3% LPCK Buy 3,602 5,175 10,000-79% 24,683 10% 4, % 11.9% MDLN Buy 4, % 1,165 18% % 7.9% CTRS Buy 5,363 2,710 4,000-80% 13,390-33% 4, % 12.2% Simple Average -68% % 13.7% 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 17F 18F 17F 18F DMAS Buy 10, % % % 11.8% BEST Buy 2, % % % 9.9% SSIA Neutral 2, % 1,701-41% % 10.3% LPCK Buy 3,602 5,175 10,000-79% 24,683 10% 4, % 11.9% MDLN Buy 4, % 1,165 18% % 7.9% Simple Average -71% % 10.4% Page 8 of 11

9 Equity Valuation Price Price % of Mkt Cap Net Profit EPS Growth PER (x) EV/EBITDA (x) P/BV (x) Div.Yield Code Rating (Rp) Target PT (Rp Bn) MANSEK universe 5,293 5,550 4,008, , , % 13.7% % 2.0% Banking 933,887 81,172 95, % 17.5% N.A. N.A % 2.0% BBCA Neutral 15,325 15,150 (1.1) 377,838 21,729 24, % 11.2% N.A. N.A % 1.3% BBNI Buy 5,550 6, ,500 12,995 15, % 17.9% N.A. N.A % 3.8% BBRI Buy 11,875 13, ,946 28,258 34, % 22.2% N.A. N.A % 2.4% BBTN Buy 1,885 2, ,962 2,843 3, % 18.6% N.A. N.A % 2.8% BDMN Neutral 3,750 3,575 (4.7) 35,942 4,060 4, % 13.2% N.A. N.A % 2.0% BJBR Sell 2,810 1,600 (43.1) 27,247 1,780 1, % 10.5% N.A. N.A % 2.6% BJTM Neutral (10.6) 9,174 1,107 1, % 12.2% N.A. N.A % 7.5% BNGA Buy 880 1, ,116 3,290 3, % 21.2% N.A. N.A % 0.0% BNLI Buy , ,434 N/M 75.7% N.A. N.A % 0.7% BTPN Neutral 2,590 2, ,126 1,730 1, % 10.5% N.A. N.A % 0.0% PNBN Buy 760 1, ,307 2,565 2, % 11.8% N.A. N.A % 0.0% Building Materials 117,423 6,356 7, % 10.9% % 1.8% INTP Neutral 15,025 14,400 (4.2) 55,311 3,252 3, % 10.4% % 1.9% SMCB Sell (11.1) 6, % 14.2% % 0.0% SMGR Neutral 8,700 8,600 (1.1) 51,604 3,207 3, % 8.4% % 1.9% ARNA Buy , % 18.2% % 2.3% Constructions 113,056 6,339 7, % 15.2% % 1.3% ADHI Neutral 2,200 2,020 (8.2) 7, % 35.2% % 1.3% PTPP Buy 3,710 4, ,002 1,323 1, % 22.7% % 1.2% WIKA Buy 2,490 3, ,311 1,239 1, % 11.9% % 1.1% WSKT Buy 2,600 3, ,791 1,842 2, % 10.2% % 1.2% WTON Buy 830 1, , % 13.8% % 1.4% WSBP Buy , % 7.8% % 1.6% TOTL Buy 800 1, , % 14.1% % 5.2% Toll road 30,846 1,805 1, % 4.6% % 1.8% JSMR Buy 4,250 5, ,846 1,805 1, % 4.6% % 1.8% Rice Mill 6, % 27.9% % 0.7% AISA U/R 2,000 U/R U/R 6, % 27.9% % 0.7% Consumer 1,101,679 37,839 41, % 10.8% % 1.1% ICBP Neutral 8,550 9, ,709 3,904 4, % 14.0% % 1.8% INDF Buy 7,875 11, ,158 4,221 4, % 11.5% % 3.2% MYOR Neutral 1,750 1,550 (11.4) 39,128 1,443 1, % 19.7% % 1.5% ULTJ U/R 4,350 U/R U/R 12, % 10.2% n/a 0.6% 0.6% UNVR Neutral 39,950 41, ,819 7,274 8, % 11.1% % -2.4% GGRM Buy 63,250 75, ,699 7,272 7, % 8.9% % 1.6% HMSP Neutral 3,900 3,850 (1.3) 453,640 12,996 14, % 9.7% % 2.8% WIIM U/R 458 U/R U/R 962 n/a n/a 0.0% 0.0% n/a n/a n/a n/a n/a n/a 0.0% 0.0% Healthcare 88,309 3,779 4, % 11.9% % 2.4% KLBF U/R 1,530 U/R U/R 71,719 2,569 2, % 11.2% % 2.0% SIDO Buy , % 15.0% % 5.3% TSPC U/R 1,920 U/R U/R 8, % 12.4% % 3.7% Hospital 49, , % 21.7% % 0.7% MIKA Buy 2,480 3, , % 16.1% % 0.9% SILO Neutral 11,800 10,820 (8.3) 13, % 49.4% % 0.0% Retail 90,666 4,846 5, % 17.9% % 3.4% ACES Neutral , % 15.3% % 2.4% ERAA U/R 625 U/R U/R 1, % 25.2% n/a n/a 5.6% 6.7% LPPF Buy 15,250 19, ,498 2,355 2, % 17.0% % 4.8% MAPI Buy 5,375 6, , % 35.5% % 0.6% MPPA Neutral 1,425 1, , % 25.1% % 1.1% RALS Neutral 1,230 1,180 (4.1) 8, % 6.5% % 3.1% TELE U/R 855 U/R U/R 6, % 14.2% % 2.2% Automotive 324,482 18,303 19, % 6.0% % 2.5% Page 9 of 11

10 Price Price % of Mkt Cap Net Profit EPS Growth PER (x) EV/EBITDA (x) P/BV (x) Div.Yield Code Rating (Rp) Target PT (Rp Bn) ASII Neutral 7,925 8, ,832 18,054 18, % 4.5% % 2.5% IMAS U/R 1,320 U/R U/R 3, % 267.7% % 0.2% Heavy Equipment 81,785 5,799 5, % -0.3% % 2.2% HEXA* U/R 3,110 U/R U/R 2, % 0.0% % 4.2% UNTR Neutral 21,225 21,000 (1.1) 79,172 5,623 5, % -0.4% % 2.1% Plantation 48,173 3,099 3, % 14.0% % 2.3% AALI Buy 17,175 16,500 (3.9) 33,057 2,008 2, % 14.0% % 2.1% LSIP Buy 1,690 1, , % 7.5% % 2.7% SGRO U/R 1,900 U/R U/R 3, % 31.4% % 2.1% Property 138,160 11,477 12, % 9.8% % 0.8% APLN U/R 228 U/R U/R 4, % -12.6% % 2.8% ASRI Neutral , % -46.1% % 1.5% BSDE Buy 1,735 2, ,393 2,648 2, % -6.4% % 1.0% CTRA Buy 1,270 1, ,261 1,429 1, % 11.4% % -1.5% CTRS Buy 2,710 4, , % -3.1% % 2.2% JRPT Buy 875 1, ,031 1,074 1, % 9.4% % 0.9% LPCK Buy 5,175 10, , % -7.1% % 0.0% MDLN Buy , % 29.5% % 0.0% PWON Buy ,655 2,435 3, % 27.1% % 2.0% SMRA Neutral 1,360 1, , , % 148.5% % 0.0% Industrial Estate 15,689 1,554 1, % 12.0% % 2.3% DMAS Buy , , % 2.8% % 2.8% BEST Buy , % 20.4% % 0.6% SSIA Neutral , % 37.1% % 2.1% Poultry 73,354 5,544 6, % 18.8% % 2.4% CPIN U/R 3,190 U/R U/R 52,310 3,525 4, % 17.6% % 2.3% JPFA U/R 1,600 U/R U/R 18,257 1,688 2, % 22.2% % 2.4% MAIN U/R 1,245 U/R U/R 2, % 12.8% % 2.6% Coal 106,496 8,370 8, % 3.4% % 4.0% ADRO* Sell 1,715 1,200 (30.0) 54, % 2.9% % 2.6% HRUM* Sell 2,080 1,600 (23.1) 5, % 7.3% % 4.9% ITMG* Sell 15,850 12,250 (22.7) 17, % -9.3% % 7.0% PTBA Sell 12,200 9,500 (22.1) 28,115 2,256 2, % 12.4% % 4.5% Oil & Gas 66,179 5,529 5, % 5.9% % 4.3% PGAS* U/R 2,730 U/R U/R 66, % 5.9% % 4.3% Shipping 2, % N/A % 0.0% SOCI* U/R 330 U/R U/R 2, n/a 0.0% % 5.0 n/a 7.0 n/a n/a n/a 0.0% 0.0% Metal 37, % N/M ### % 0.9% ANTM Neutral (42.2) 8, % -13.3% % -3.6% INCO* U/R 2,950 U/R U/R 29, % 125.0% % 2.2% Telco 452,038 23,840 27, % 17.6% % 3.8% EXCL Neutral 2,770 2,400 (13.4) 29, % 37.7% % 0.5% ISAT U/R 6,175 U/R U/R 33,555 1,871 2, % 43.5% % 3.4% TLKM Buy 3,960 4, ,921 21,439 24, % 14.9% % 4.1% Tower 58,733 4,471 5, % 16.1% % 0.0% TBIG Neutral 4,970 6, ,839 1,558 1, % 25.6% % 0.0% TOWR Buy 3,420 5, ,894 2,913 3, % 11.0% % 0.0% Media 67,083 3,681 4, % 14.8% % 3.0% SCMA Buy 2,850 3, ,672 1,870 2, % 13.6% % 3.1% MNCN Buy 1,780 2, ,411 1,812 2, % 16.0% % 2.9% Textile 4, % N/A % 0.0% SRIL* U/R 226 U/R U/R 4, n/a 33.3% % 4.3 n/a 5.5 n/a 0.8 n/a 5.8% 0.0% Note: - *) net profit in USD mn - U/R means Under Review - n/a means Not Available - N/M means Not Meaningful - N.A means Not Applicable Page 10 of 11

11 Mandiri Sekuritas A subsidiary of PT Bank Mandiri (Persero) Tbk Plaza Mandiri 28 th Floor, Jl. Jend. Gatot Subroto Kav , Jakarta 12190, Indonesia General: , Fax : (Equity Sales) RESEARCH Tjandra Lienandjaja Deputy Head of Equity Research, Banking tjandra.lienandjaja@mandirisek.co.id Liliana S Bambang Property, Building Material liliana.bambang@mandirisek.co.id Adrian Joezer Consumer, Strategy adrian.joezer@mandirisek.co.id Ariyanto Kurniawan Telecom, Coal, Metal, Automotive ariyanto.kurniawan@mandirisek.co.id Bob Setiadi Construction, Toll Road bob.setiadi@mandirisek.co.id Francis Lim Quant, Health Care, Hospital francis.lim@mandirisek.co.id Yudha Gautama Mining, Plantation yudha.gautama@mandirisek.co.id Laura Taslim Retail laura.taslim@mandirisek.co.id Priscilla Thany Banking priscilla.thany@mandirisek.co.id Ferdy Wan Building Material, Industrial Est., Media ferdy.wan@mandirisek.co.id Lakshmi Rowter Research Assistant lakshmi.rowter@mandirisek.co.id Gerry Harlan Research Assistant gerry.harlan@mandirisek.co.id Leo Putera Rinaldy Chief Economist leo.rinaldy@mandirisek.co.id Wisnu Trihatmojo Economist wisnu.trihatmojo@mandirisek.co.id Aziza Nabila Amani Research Assistant aziza.amani@mandirisek.co.id INSTITUTIONAL SALES Lokman Lie Co-Head Institutional Equities lokman.lie@mandirisek.co.id Silva Halim Co-Head Institutional Equities silva.halim@mandirisek.co.id Aditya Sastrawinata Institutional Sales aditya.sastrawinata@mandirisek.co.id Andrew Handaya Institutional Sales andrew.handaya@mandirisek.co.id Cindy Amelia P. Kalangie Institutional Sales cindy.amelia@mandirisek.co.id Feliciana Ramonda Institutional Sales feliciana.ramonda@mandirisek.co.id Kevin Halim Institutional Sales kevin.halim@mandirisek.co.id Mirna Santikara Salim Institutional Sales santikara.salim@mandirisek.co.id Oos Rosadi Institutional Sales oos.rosadi@mandirisek.co.id Zahra Aldila Niode Institutional Sales zahra.niode@mandirisek.co.id Kusnadi Widjaja Equity Dealing kusnadi.widjaja@mandirisek.co.id Edwin Pradana Setiadi Equity Dealing edwin.setiadi@mandirisek.co.id Jane Theodoven Sukardi Equity Dealing jane.sukardi@mandirisek.co.id Michael Taarea Equity Dealing michael.taarea@mandirisek.co.id RETAIL SALES Andreas M. Gunawidjaja Head Retail Equities andreas@mandirisek.co.id Boy Triyono Plaza Mandiri boy.triyono@mandirisek.co.id A. A. Damargumilang Pondok Indah Office Tower damar.gumilang@mandirisek.co.id Herianto Pondok Indah Prioritas herianto@mandirisek.co.id Hendra Riady Mangga Dua hendra.riady@mandirisek.co.id Indra Mas'ari Bandung indra.mas ari@mandirisek.co.id Yogiswara P. Yogyakarta yogiswara.perdana@mandirisek.co.id Widodo Solo widodo@mandirisek.co.id Linawati Surabaya Linawati@mandirisek.co.id Bambang Suwanto Malang bambang.suwanto@mandirisek.co.id Ruwie Medan ruwie@mandirisek.co.id Aidil Idham Palembang aidil.idham@mandirisek.co.id Yuri Ariadi Pontianak yuri.ariadi@mandirisek.co.id INVESTMENT RATINGS: Indicators of expected total return (price appreciation plus dividend yield) within the 12-month period from the date of the last published report, are: Buy (15% or higher), Neutral (-15% to15%) and Sell (-15% 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.