Tiga Pilar Sejahtera Food, Tbk

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1 Market Value Added Market risk Equity Valuation Tiga Pilar Sejahtera Food, Tbk Primary Report Target Price Low High 1,690 1,850 Food and Agriculture Stock Performance JCI 5,500.0 AISA 1, , , , , , , Robust Growth Trend Remain Intact 3,500.0 JCI AISA , Source: Bloomberg Stock Information Ticker code Rp AISA Market price as of 1,160 Market price 52 week high 1,530 Market price 52 week low 630 Market cap 52 week high (bn) 4,477 Market cap 52 week low (bn) 1,843 Market Value Added & Market Risk Des 11 Des 12 Mar Market Value Added Market risk Source: PT Tiga Pilar Sejahtera Food Tbk, Pefindo Equity & Index Valuation Division Shareholders* (%) PT Tiga Pilar Corpora Trophy Investors II Ltd 6.20 Primanex Pte Ltd Pandawa Treasures Pte Ltd 6.46 PT Permata Handrawina Sakti Public (each below 5%) *)As of July 31, 2013 Contact: Equity & Index Valuation Division Phone: (6221) is an integral part of this report PT Tiga Pilar Sejahtera Food Tbk (AISA) is a national food and agriculture company that began as a family business called Pabrik Mie Asia in 1959 in Sukoharjo, Central Java. It changed its name to PT Tiga Pilar Sejahtera in 1992 and established a dry vermicelli and dry noodles factory in In 2000, a new combined food factory was established on a 25-hectare area in Sragen, Central Java, becoming the pillar for AISA s growth in the food manufacturing business. Backed by strong growth, AISA now not only produces dry vermicelli and dry noodles but also instant noodles, biscuits and snacks. In 2003, the Company went public and changed its name to PT Tiga Pilar Sejahtera Food Tbk. In 2008, AISA acquired PT Poly Meditra Indonesia (PMI), which produces tamarind candies under the brand Gulas, and PT Bumi Raya Investindo (BRI), to enter the lucrative palm plantation business. AISA also acquired PT Patra Power Nusantara (PPN), which is now tasked with constructing a coal-fired power plant to fulfill the Company s internal needs. In 2010, AISA entered the rice industry through the establishment of a joint venture distribution company and acquiring the rice factory Jatisari Srirejeki Page 1 of 15 pages

2 INVESTMENT PARAMETER Impacts of Acquisition In 2012, AISA completed several strategic expansions to sustain its growth in the years ahead. Through PT Balaraja Bisco Paloma (BBP), AISA acquired PT Subafood Pangan Jaya (SPJ), a corn vermicelli producer. Through this acquisition, AISA s capacity increased to 31,200 tons/year, lifting its revenue from vermicelli products by 82% YoY in 1Q13. The acquisition of the TARO snack product also boosted AISA s revenue, as its revenue from wafer stick and snack extrusion products hit IDR88.9 billion in 1Q13, much higher than 1Q12 s IDR1.1 billion. Continue Expanding With the aim of fulfilling its own crude palm oil (CPO) needs, AISA plans to acquire another 770 ha of palm oil concessions in 2013, bringing its total palm oil concession to 93,669 ha. AISA also plans to start fulfilling its own CPO needs by operating its CPO mills in This mill will have a capacity of tons/hour of fresh fruit bunch (FFB) and will produce around 21,300 tons of CPO and 5,300 tons of kernels in AISA is also in the process of developing two rice mills in West and Central Java and another two silos, with a total investment of IDR369.5 billion. After completing the development, AISA s rice milling capacity will reach 540,000 tons/year and the silos capacity will increase to 116,000 tons. Stay Healthy We are of the view that AISA has the ability to maintain a healthy capital structure, as it is able to expand its assets amid decreasing of its interest bearing debt. During Q13 periods, AISA s total assets showed an increasing trend from IDR3.590 trillion to IDR3.931 trillion. Meanwhile, its interest bearing debt shows a decreasing trend, as it dropped from IDR1.602 trillion in 2011 to just IDR1.441 trillion. This highlights AISA s ability to stay healthy amid expansion. Business Prospect Although Indonesia s economy has been on a decelerating phase in 2013, we believe this would not hamper AISA s ability to grow. Our view is based on the increase of income per capita to USD3,500 and the widening of the middle class population in Indonesia, which serves as the source of growth for food manufacturers such as AISA. In consideration as well of its active expansion in 2013 (i.e. securing 770 ha of palm oil land, building another rice mill to boost milling capacity and other acquisitions to strengthen its food division business) we are of the view that AISA s prospects will remain bright in the future. However, AISA has to be cognizant of the impact of the weakening of the rupiah and the surge in salary costs, which may deteriorate its margin. Table 1: Performance Summary P 2014P Revenue [Rp bn] 705 1,753 2,748 3,752 4,503 Pre-tax profit [Rp bn] Net profit [Rp bn] EPS [Rp] EPS growth [%] P/E [x] * 9.4* PBV [x] * 1.4* Source: PT Tiga Pilar Sejahtera Food Tbk, Pefindo Equity & Index Valuation Division Estimates *) Share price as of Rp 1,160/share Page 2 of 15 pages

3 Growth Expectations Tiga Pilar Sejahtera Food, Tbk GROWTH-VALUE MAP Growth-Value Map provides overview of market expectations for the companies listed on IDX. Current Performance ( CP ) metric, running along the horizontal axis, is a portion of current stock market value that can be linked to the perpetuity of current company s performance in profitability. Growth Expectations ( GE ) metric, plotted on the vertical axis, is the difference between current stock market value and the value of current performance. Both metrics are normalized by the company s book value. Growth-Value Map divides companies into four clusters, they are: Excellent value managers ( Q-1 ) Market expects companies in Q-1 to surpass their benchmark in profitability and growth. Expectation builders ( Q-2 ) Market has relatively low expectations of profitability from companies in Q-2 in the short term, but has growth expectations exceed the benchmark. Traditionalists ( Q-3 ) Market has low growth expectations of companies in the Q-3, although they showed a good profitability in the short term. Asset-loaded value managers ( Q-4 ) Market has low expectations in terms of profitability and growth for companies in Q-4. Figure 1: Growth-Value Map (AISA; Food and Beverages Sub Industry; Consumer Goods Industry) 6 5 Q-2 Q STTP ADES PSDN AISA ULTJ CEKA Q-4 Q Current Performance (CP) Source: PT Tiga Pilar Sejahtera Food Tbk, Pefindo Equity & Index Valuation Division Currently, AISA is lying in the Excellent Value Managers cluster (Q1). Current performance and growth expectations of AISA are higher than market expectation. AISA has the opportunity to stay in this cluster by maintaining its aggressive expansion and keep the market informed of its latest performance to make investors aware of its economic potentials. Page 3 of 15 pages

4 BUSINESS INFORMATION AISA s Profile PT Tiga Pilar Sejahtera was registered in 1992 as a company producing primarily dry vermicelli and dry noodles. However, it traces its history of producing quality food at affordable prices to 1959, when company founder Tan Pia Soe started producing vermicelli under the brand name Cangak Ular in Sukoharjo. The Company s name was changed to PT Tiga Pilar Sejahtera Food Tbk (AISA) in 2003 when the company went public. Todays, AISA s activities are divided into three main businesses: food manufacturing, rice processing and palm oil. In the food manufacturing business, AISA produces two types basic food and consumer food products. Basic foods refer to those that still need to be processed further, while consumer foods can be consumed instantly. AISA also set up an independent power producer to stabilize its factories supply of electricity. In the rice processing business, AISA carries out rice distribution and rice milling activities. As of 2012, AISA only produced and distributed FFB to its customers, but in 2013 AISA plans to sell crude palm oil as its new CPO mill is expected to begin commercially operations. Figure 2: AISA s Business Network Source: PT Tiga Pilar Sejahtera Food Tbk, Pefindo Equity & Index Valuation Division AISA has several subsidiaries to support its activities, namely: PT Poly Meditra Indonesia (PMI), acquired in 2008, which produces biscuits, stick wafers and candy under the brand names Gulas, Gulas Plus and Growie. PT Patra Power Nusantara (PPN), acquired in 2008, which generates 3MW of electricity to supply power and hot steam to AISA s factories. PT Bumiraya Investindo (BRI), acquired in 2008, which has palm oil plantations in Tanjung Seloka and Kebun Lontar, South Kalimantan. BRI has other subsidiaries, which are: o PT Mitra Jaya Agro Palm (MJAP) in Central Kalimantan. o PT Airlangga Sawit Jaya (ASJ) in West Kalimantan. o PT Charindo Palma Oetama (CPOE) in West Kalimantan. o PT Muara Bungo Plantation (MBP) in South Sumatra. o PT Tugu Palma Sumatera (TPS) in Riau. As of December 2012, BRI had a total of 92,899 ha, 15,805 ha of which is planted with palm oil. PT Dunia Pangan (DP), acquired in 2010, is active in the production and distribution of rice. DP has three subsidiaries, namely: o PT Indo Beras Unggul (IBU), which engaged in rice production and trading. o PT Jatisari Srirejeki (JSR), a rice producer. o PT Sukses Abadi Karya Inti (SAKTI), a rice producer. Page 4 of 15 pages

5 PT Balaraja Bisco Paloma (BBP), established in 2011, produces biscuits with an installed capacity of 27,000 tons per year. BBP has two subsidiaries, namely: o PT Putra Taro Paloma (PTP), acquired from PT Unilever Indonesia Tbk, has been actively producing TARO snacks for its customers. As of December 2012, PTP had an installed production capacity of 7,500 tons per year o Subafood Pangan Jaya (SPJ) acquired at the end of 2012, primarily produces corn vermicelli under the brand name Tanam Jagung, Panen Jagung and Pilihan Bunda. Indonesia s Macro Economy Outlook in 2013: Temporary Slow Down of Growth The weak global economy continues to be overshadowed by uncertainty, with the US economy not performing as expected, despite increases in production and consumption. The European economy has not shown significant improvement either. Meanwhile, the economic growth of India and China is lower than expected, though still high. Based on these developments, global economic growth in 2013 is expected to be 3.2%. This global slowdown is expected to be felt in Indonesia, which is projected to see a GDP growth of around 5.9% in 2013, in line with 1Q13 and 2Q13 figures of just 6.03% YoY and 5.81% YoY, respectively. CPI inflation ran fairly high in August 2013, reaching 8.8% YoY, following the hike in subsidized fuel price, which triggered Bank Indonesia to lift its benchmark rate to 7.0%. However, in 2014, we believe Indonesia s economy will grow faster, driven by household consumption that will receive an added boost from election-related activities. At the same time, exports are expected to chart higher growth in line with the expected global economic recovery. Table 2: Indonesia s Macroeconomy Indicators Q13 2Q P* GDP Growth [%, YoY] Inflation [%, YoY] BI Rate [%] Forex Reserves [million USD] Exchange Rate [Rp/USD] 9,670 9,719 9,929 10,050 Source: Bank Indonesia, Pefindo Equity & Index Valuation Division Estimates Notes: Pefindo Equity & Index Valuation Division Estimates Growing Indonesia s Food and Beverages Industry We believe Indonesia s food and beverages industry will continue to grow in Improvements in the Indonesian purchasing power (income per capita hike to USD3,500 in 2012) and population growth (around 250 million people) will fuel this growth and serve as the buffer for demand from rising inflation in As a result we estimate that the total sales in the food and beverage industry will reach IDR760 trillion in 2013, a 6.7% YoY increase. Page 5 of 15 pages

6 Figure 3: Total Sales in The Food and Beverages Industry P Sales in the Food and Beverages Industry (Rp, trillion) Source: Indonesian Food and Beverages Association, Pefindo Equity & Index Valuation Division Palm Oil Industry Remain Under Pressure in 2013 The global economic slowdown, particularly in China and India, has affected the global demand for CPO. Malaysia, one of the leading CPO producers in the world, saw its June 2013 exports to China and India decrease by 14% YoY and 55% YoY, respectively. The same trend is seen in Indonesia. The decline in global CPO stocks in June 2013 was not strong enough to lift global CPO price, as stocks are expected to rise again during the peak production season that will start in September. Impact of SPJ Acquisition In November 2012, AISA acquired SPJ through its subsidiary BBP. SPJ, a food producing company, can be considered a pioneer in the corn-vermicelli manufacturing business in the world. Through this acquisition, AISA s vermicelli production capacity is expected to increase by 30% in 2013 to reach 31,200 tons/year. The impact of the acquisition was already felt in 1Q13, as AISA s revenue from vermicelli jumped 82% to IDR67.9 billion from just IDR37.3 billion in 1Q12. Figure 4: Revenue from Vermicelli Products, 1Q12 Vs 1Q13 Rp, bn % YoY Q12 1Q13 1Q12 1Q13 Source: PT Tiga Pilar Sejahtera Food Tbk, Pefindo Equity & Index Valuation Division Page 6 of 15 pages

7 Strong Growth from Wafer Stick and Snack Extrusion Products Thanks to both organic and inorganic expansion during the latter part of 2011, especially the acquisition of the TARO snack product, the growth of the wafer stick and snack extrusion segment jumped significantly in Sales of wafer sticks and snack extrusion products in 2012 totaled 3,987 tons, 151.1% higher than 2011 s 1,588 tons. This led to revenue of IDR285.8 billion in 2012, a 356% increase from the previous year. Although the revenue from wafer stick and snack extrusion slightly drop in 1Q13, but we believe that the revenue from such product still has the possibility to outperform the 2012 period, since its total volume has already reach 1,253 tons. Figure 5: Revenue from Wafer Stick and Snack Extrusion Products, Q13 Rp, bn Q12 1Q13 Source: PT Tiga Pilar Sejahtera Food Tbk, Pefindo Equity & Index Valuation Division Continue the Expansion on the Palm Oil Business Despite the current unfavorable situation in the palm oil industry, AISA continues to expand its palm oil business, because CPO is one of the raw materials needed for its food production process and AISA plans to meet its own CPO needs. In 2010, AISA began construction on its first palm oil mill (POM), which is expected to begin operation in This POM is expected to have the capacity to handle around FFB tons/hour, and we estimate it will produce about 21,300 tons of CPO and 5,300 tons of kernel in In addition, AISA plans to acquire another 770 ha palm oil concession in 2013, which would bring its total concessions to 93,669 ha. Promising Growth in Rice Business Distribution Through DP, AISA now has a modern rice processing facility with a dry rice grain input capacity of 1,000 tons per day. The factory is located on a 74,000 sqm land with a storage capacity of 24,000 tons, which is not yet fully utilized. AISA has also entered a higher margin market by acquiring 10 brands of premium rice, including Rojo Lele Dumbo, Istana Bangkok, Vita Rice, Desa Cianjur and Rumah Adat, from AMS. AISA also currently owns big capacity silos that use advanced storage technology to store its dry rice grains, with total capacity of 44,000 tons of dry rice grains worth two months supply. As rice is the staple food for most of Indonesia s 240 million people, we believe that despite an increase in its price due to higher inflation in 2013, the demand for it will not decline significantly. With demand expected to continue growing, AISA is boosting supply by developing two rice mills in West Java and Central Java with total investment of IDR369.5 billion in In 1Q13, the revenue from rice production supported the growth of AISA s revenue, rising 73% YoY to IDR558.4 billion. Page 7 of 15 pages

8 Figure 6: Rice Production Revenue, Q13 Rp, bn 1, , , , , % YoY 1, % YoY Q12 1Q Q12 1Q13 Source: PT Tiga Pilar Sejahtera Food Tbk, Pefindo Equity & Index Valuation Division Estimates Recipient of Several Awards in 2012 In recognition of its performance, AISA received several awards in Indonesia s Coordinating Ministry of Economic Affairs recognized AISA as one of the companies driving and executing the government s MP3EI program (Master Plan for the Acceleration and Expansion of Indonesian Economic Development). Two of its products, TARO and MIE KREMEZZ, were also recognized to be among Indonesia s Best Brands in 2012 by SWA Magazine. Asiamoney also named AISA as Indonesia s Best Small Cap Company in At the end of 2012, AISA also won the Indonesia s Best Corporate Transformation award from SWA Magazine. Attractive to Foreign Investors In July 2013, several of AISA s shareholders agreed to sell their shares to Kohlberg Kravis Roberts & Co. L.P. (KKR), an American multinational private equity firm that is making its first investment in Indonesia through AISA. KKR is expected to buy about 9.5% of AISA s shares. This transaction shows that AISA is very attractive to foreign investors, as AISA plans to increase its exports by 10% in 2015 and keep the Company s pace of growth. KKR has a history of being beneficial to prospective shareholders, as what it did with RJR Nabisco a leading producer of food products in the United States with famous known brand such as Oreo Cookies, Ritz Crackers, etc, by providing financial flexibility to RJR Nabisco. FINANCE Strong Growth Remain Intact AISA s revenue before discounts in 2012 showed a significant increase of 58% YoY. This was a continuation of 2011 s growth, with revenue before discount significantly up by 151% YoY. This strong growth remained intact in 1Q13, with revenue increasing by 46% YoY to IDR872.2 billion. This strong growth in 1Q13 was buoyed by the rising sales from the palm oil business (77.8% YoY) and rice (72.5% YoY). Page 8 of 15 pages

9 Figure 7: AISA s Revenue Before Discount Rp, bn 3, , , , , , , Q12 1Q13 Revenue from food manufacturing (Rp, bn) Revenue from palm oil business (Rp, bn) Revenue from rice production (Rp, bn) Source: PT Tiga Pilar Sejahtera Food Tbk, Pefindo Equity & Index Valuation Division Managing Its Interest Bearing Debt We believe that AISA is capable of managing its interest bearing debt, as seen in its decline from Q13. AISA s total interest bearing debt as of December 2011 was IDR1.6 trillion, and it declined to IDR1.56 trillion in 2012 and went further down to IDR1.44 trillion in 1Q13. A declining interest bearing debt during a period of expansion shows AISA s ability in securing capital. Figure 8: AISA s Assets, Equity and Interest Bearing Debt, Q13 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, ,868 3,931 3,590 2,033 2,109 1,833 1,602 1,560 1, Q13 Assets (Rp, bn) Equity (Rp, bn) Interest bearing debt (Rp, bn) Source: PT Tiga Pilar Sejahtera Food Tbk, Pefindo Equity & Index Valuation Division Margins Under-Pressure Although AISA entered a higher-margin segment in 2013 when it began selling TARO snacks and Growie biscuit, they weren t immediately able to lift AISA s margins. The rise in minimum wage and transportation costs kept AISA s margins down. Direct labor costs for food manufacturing rose to IDR13.1 billion in 1Q13, from just IDR4.6 billion in 1Q12. Transportation costs also almost tripled to IDR21.1 billion in 1Q13 from just IDR7.2 billion the year before as a result of increasing business activity. Page 9 of 15 pages

10 Figure 9: Transportation Costs & Direct Labor Costs for Food Processing Figure 10: AISA s Margins, 2012 vs 1Q Q Q % 20.0% 15.0% 10.0% 5.0% 0.0% 22.0% 21.3% 16.7% 14.2% 9.2% 8.8% Q13 Gross profit margin (%) Operating profit margin (%) Direct labor costs for food manufacturing (Rp, bn) Transportation costs (Rp, bn) Net profit margin (%) Source: PT Tiga Pilar Sejahtera Food Tbk, Pefindo Equity & Index Valuation Division Estimates Source: PT Tiga Pilar Sejahtera Food Tbk, Pefindo Equity & Index Valuation Division Estimates Although imported raw materials make up a small portion of AISA s manufacturing process, the Company still has to be cautious about the depreciation of the rupiah, which has already weakened from IDR9,795/USD on January 1, 2013 to IDR10,409/USD as of August 15, 2013, in order to keep its margins stable. Figure 11: Exchange Rate IDR/USD Exchange Rate IDR/USD Source: Bloomberg, Pefindo Equity & Index Valuation Division Estimates Margins are Still Competitive Although AISA saw its margins decline in 1Q13, they were still competitive compare to its peers. AISA s gross, operating and net profit margins in 1Q13 were 21.3%, 14.2% and 8.8%, respectively. Only AISA s gross profit margin registered below the average gross profit margin of its peers, while its operating and net profit margins outperformed the average of its peers. Figure 12: Margins Comparison, 1Q % 25.0% 20.0% 21.3% 24.7% 24.6% 18.5% 22.6% 15.0% 10.0% 5.0% 14.2% 8.8% 9.9% 5.7% 12.6% 13.0% 8.2% 8.4% 11.8% 7.5% 0.0% AISA INDF MYOR STTP Average Gross profit margin (%) Operating profit margin (%) Net income margin (%) Source: Bloomberg, Pefindo Equity & Index Valuation Division Estimates Page 10 of 15 pages

11 SWOT ANALYSIS Table 3: SWOT Analysis Strength Long experience in consumer food business. Equipped with higher-margin products. Wide distribution network with more than 60 distributors. International recognition. Secure resources for operation continuity. Opportunity Better economic growth in Large population and higher disposable income for Indonesians. Produces staple food, which is more resilient amid inflation. Weakness Disruption in raw material supply, mainly flour, will affect production. Exchange rate risk exposure, though small. Food products can be contaminated or expire. Threat Continued weakening of the rupiah. Increasing number of imported consumer food products. Prolonged weakening of CPO price. Page 11 of 15 pages

12 TARGET PRICE VALUATION Methodology We apply Discounted Cash Flow (DCF) method as the main valuation approach considering the income growth is a value driver instead of the asset growth. Furthermore, we also apply Guideline Company Method (GCM) as comparison method. This valuation is based on 100% shares price as of, and Financial Report as of March 31, 2013 as the basis for the fundamental analysis. Value Estimation We use the cost of capital of 10.87% and cost of equity of 11.38% based on the following assumptions: Table 4: Assumption Risk free rate [%]* 8.76 Risk premium [%]* 2.91 Beta [x]** 0.90 Cost of Equity [%] Marginal tax rate [%] 25.0 Debt to Equity Ratio 0.7 WACC [%] Source: Bloomberg, Pefindo Equity & Index Valuation Division Estimates * As of ** Based on PEFINDO s Beta report as of August 29, 2013 Target price for 12 months based on valuation as per, is as follows: Using DCF method with discount rate assumption 10.87% is IDR1,513 IDR1,711 per share. Using GCM method (P/E 19.8X and P/BV 2.9X) is IDR2,118 IDR2,164 per share. In order to obtain a value which represents both value indications, we have weighted both DCF and GCM methods by 70%:30%. Based on the above calculation, target price of AISA for 12 month is IDR1,690 IDR1,850 per share. Table 5: Summary of DCF Method Valuation Conservative Moderate Optimist PV of Free Cash Flows [IDR bn] Terminal Value [IDR bn] 5,387 5,671 5,954 Non-Operating Asset [IDR bn] Net Debt [IDR bn] (1,441) (1,441) (1,441) Number of Share [mn shares] 2,926 2,926 2,926 Fair Value per Share [Rp] 1,513 1,612 1,711 Source: Pefindo Equity & Index Valuation Division Estimates Page 12 of 15 pages

13 Table 6: GCM Comparison AISA INDF MYOR CEKA STTP Average Valuation, P/E [x] n.a P/BV [x] Source: Bloomberg, Pefindo Equity & Index Valuation Division Table 7: Summary of GCM Method Valuation Multiple [x] Est. EPS [Rp] Est. BV/share [Rp] Value [Rp] P/E ,118 P/BV ,164 Source: Bloomberg, Pefindo Equity & Index Valuation Division Estimates Table 8: Fair Value Reconciliation Fair Value per Share [Rp] DCF GCM Average Upper limit 1,711 2,164 1,850 Bottom limit 1,513 2,118 1,690 Weight 70% 30% Source: Pefindo Equity & Index Valuation Division Estimates Note: average price is rounded according to the fractional price prevailing on the IDX Page 13 of 15 pages

14 %, ROA, ROE x, Assets Turnover P/E P/BV Tiga Pilar Sejahtera Food, Tbk Table 9: Consolidated Statement of Comprehensive Income (Rp bn) P 2014P Net sales 705 1,753 2,748 3,752 4,503 COGS (521) (1,330) (2,142) (2,963) (3,559) Gross profit Operating expense (58) (114) (185) (232) (278) Operating profit Other income (charges) (32) (123) (96) (119) (171) Pre-tax profit Tax (15) (35) (71) (110) (124) Net profit Source: PT Tiga Pilar Sejahtera Food Tbk, Pefindo Equity & Index Valuation Division Estimates Figure 13: Historical P/E and P/BV P/E P/BV Source: Bloomberg, Pefindo Equity & Index Valuation Division Table 10: Consolidated Statement of Financial Position (Rp bn) Assets P 2014P Cash and cash equivalents Receivables ,045 Inventories ,024 Other Current Asset Fixed Assets ,234 1,311 1,381 Plantation Other non-current assets Total assets 1,937 3,590 3,868 4,782 5,862 Liabilities Trade payables Short-term debt ,230 1,385 Other short-term liabilities Long-term debt ,488 Other long-term liabilities Total liabilities 1,347 1,757 1,834 2,626 3,349 Total equity 590 1,833 2,033 2,156 2,512 Source: PT Tiga Pilar Sejahtera Food Tbk, Pefindo Equity & Index Valuation Division Estimates Figure 14: Historical ROA, ROE and Total Asset Turnover Source: PT Tiga Pilar Sejahtera Food Tbk, Pefindo Equity & Index Valuation Division Table 11: Key Ratios Growth [%] P 2014P Net sales Operating profit Net profit Profitability [%] ROA ROE Assets Turnover Gross margin Operating margin Net margin ROA ROE Solvability [x] Debt to equity Debt to asset Liquidity [x] Current Ratio Quick Ratio Source: PT Tiga Pilar Sejahtera Food Tbk, Pefindo Equity & Index Valuation Division Estimates Page 14 of 15 pages

15 DISCLAIMER This report was prepared based on the trusted and reliable sources. Nevertheless, we do not guarantee its completeness, accuracy and adequacy. Therefore we do not responsible of any investment decision making based on this report. As for any assumptions, opinions and predictions were solely our internal judgments as per reporting date, and those judgments are subject to change without further notice. We do not responsible for mistake and negligence occurred by using this report. Last performance could not always be used as reference for future outcome. This report is not an offering recommendation, purchase or holds particular shares. This report might not be suitable for some investors. All opinion in this report has been presented fairly as per issuing date with good intentions; however it could be change at any time without further notice. The price, value or income from each share of the Company stated in this report might lower than the investor expectation and investor might obtain lower return than the invested amount. Investment is defined as the probable income that will be received in the future; nonetheless such return may possibly fluctuate. As for the Company which its share is denominated other than Rupiah, the foreign exchange fluctuation may reduce the value, price or investor investment return. This report does not contain any information for tax consideration in investment decision making. The share price target in this report is a fundamental value, not a fair market value nor a transaction price reference required by the regulations. The share price target issued by Pefindo Equity & Index Valuation Division is not a recommendation to buy, sell or hold particular shares and it could not be considered as an investment advice from Pefindo Equity & Index Valuation Division as its scope of service to, or in relation to some parties, including listed companies, financial advisor, broker, investment bank, financial institution and intermediary, in correlation with receiving rewards or any other benefits from that parties. This report is not intended for particular investor and cannot be used as part of investment objective on particular shares and neither an investment recommendation on particular shares or an investment strategy. We strongly recommended investor to consider the suitable situation and condition at first before making decision in relation with the figure in this report. If it is necessary, kindly contact your financial advisor. PEFINDO keeps the activities of Equity Valuation separate from Ratings to preserve independence and objectivity of its analytical processes and products. PEFINDO has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process. The entire process, methodology and the database used in the preparation of the Reference Share Price Target Report as a whole is different from the processes, methodologies and databases used PEFINDO in doing the rating. This report was prepared and composed by Pefindo Equity & Index Valuation Division with the objective to enhance shares price transparency of listed companies in Indonesia Stock Exchange (IDX). This report is also free of other party s influence, pressure or force either from IDX or the listed company which reviewed by Pefindo Equity & Index Valuation Division. Pefindo Equity & Index Valuation Division will earn reward amounting to Rp 20 mn each from IDX and the reviewed company for issuing report twice per year. For further information, please visit our website at This report is prepared and composed by Pefindo Equity & Index Valuation Division. In Indonesia, this report is published in our website and in IDX website. Page 15 of 15 pages