2016 compendium -...

2016 Compendium

2

TABLE OF CONTENTS

MARKET STRATEGY 5-90 Global economy…………………………………………………………………….…………

Domestic economy…………………………………………………………………………………

SWOT analysis……………………………………………………………………………….……

GDP data……………………………………………………………………

IDR movement………………………………………………………

6

16

17

18

23

Monetary policy………………………………………………………………

Government budget…………………………………………………………

Macroeconomics assumption…………………………

Energy outlook…………………………………………………………

Local politics……………………………………………………………………………..………

24

32

48

49

56

Indonesian markets……………………………………………………

Indonesia equity and bond perfromance……………

IDR sensitivity……………………………………………………………

Sector performances……………………………………………

4Q15F results………………………………………………………………

75

76

78

79

86

Various policies……………………………………………………

Market valuation…………………………………………………

Top picks and index target…………………………………

2016 technical perspective…………………………………

87

88

89

90

SECTOR 91-129 Overweight

Consumer-Staples………………………………………………………………………………

Healthcare……………………………………………………………………………………………

Shipping…………………………………………………………………………………………………

Telecommunications………………………………………………

Tobacco………………………………………………………………………………

104

106

124

126

128

Neutral

Banks…………………………………………………………………

Construction & Toll…………………………………………………………………Construction and Toll Road

Consumer-Discretionary……………………………………………………………………..

Industrial Estates………………………………………………………………………

Media…………………………………………………………………………………………

94

100

102

108

112

Neutral

Metal Mining………………………………………………………………………………

Oil & Gas…………………………………………………………………

Plantations……………………………………………………………

Poultry……………………………………………………………………………………

114

116

118

120

Underweight

Automotive-related…………………………………………………………………..…

Cement………………………………………………………………………………………

Coal & Mining……………………………………………………

Land Transportation……………………………………………

Property………………………………………………………………

92

96

98

110

122

COMPANY 131-335 Automotive related

Astra International……………………………………………………………………….…………

Gajah Tunggal……………………………………………………………………………………………

Indomobil Sukses Internasional……………………………………

Aviation

Cardig Aero Services…………………………………………………………

Garuda Indonesia…………………………………………………………

Banks

Bank Bukopin………………………………………………………………………………………………

Bank Central Asia………………………………………………………………………………………

Bank Danamon……………………………………………………………………………………………

Bank Mandiri………………………………………………………………………………………………

Bank Negara Indonesia………………………………………………………………………………………

Bank Pembangunan Daerah Jabar Banten……………………………………………

Bank Pembangunan Daerah Jawa Timur………………………………………………….

Bank Rakyat Indonesia………………………………………………………………………………

Bank Tabungan Negara………………………………………………………………………………

Bank Tabungan Pensiunan Nasional………………………………………………………………………………………

Cement

Holcim Indonesia…………………………………………………………………………………………

Indocement Tunggal Prakarsa………………………………………………………………………………………

Semen Baturaja…………………………………………………………………………………………

Semen Indonesia…………………………………………………………………………………

Coal & mining contracting

Adaro Energy………………………………………………………………………………………………

Harum Energy……………………………………………………………………………………………

Indo Tambangraya Megah…………………………………………………………………………

United Tractors……………………………………………………………………………………………

Tambang Batubara Bukit Asam…………………………………………………………………………………………………

Construction & toll roads

Adhi Karya………………………………………………………………………………………………

152

198

220

182

200

156

158

160

166

168

162

164

170

172

174

210

214

286

288

134

204

212

322

304

136

Jasa Marga…………………………………………………………………………………………………

Krakatau Steel……………………………………………………………………………………

Pembangunan Perumahan…………………………………………………………………………

Total Bangun Persada……………………………………………………………………………………

Waskita Karya………………………………………………………………………………………

Wijaya Karya………………………………………………………

Wika Karya Beton……………………………………………………………………………………

Consumer - Discretionary

Ace Hardware Indonesia………………………………………………………………………

Electronic City……………………………………………………………………………

Hero Supermarket…………………………………………………………………

Matahari Department Store……………………………………………………

Matahari Putra Prima………………………………………………………………

Mitra Adiperkasa……………………………………………………………………

Multipolar……………………………………………………………………………

Ramayana Lestari Sentosa………………………………………………………………

Sri Rejeki Isman…………………………………………………………………

Consumer - Staples

Indofood CBP Sukses Makmur………………………………………………

Indofood Sukses Makmur………………………………………………………

Mayora Indah………………………………………………………………………………

Nippon Indosari Corpindo……………………………………………………………

Unilever Indonesia………………………………………………………………

Healthcare

Kalbe Farma……………………………………………………………

Kimia Farma………………………………………………………

Mitra Keluarga Karyasehat………………………………………………

Sido Muncul………………………………………………………………

Siloam International Hospitals………………………………………………

Tempo Scan Pacific……………………………………………………………

228

236

270

314

326

328

330

132

192

208

246

248

258

262

278

296

216

218

250

264

320

230

234

260

290

292

308

Industrial estates

Bekasi Fajar Industrial Estate………………………………………………………………

Kawasan Industri Jababeka…………………………………………

Lippo Cikarang……………………………………………………

Pura Delta Lestari………………………………………………

Surya Semesta Internusa……………………………………………………………

Land Transportation

Adi Sarana Armada………………………………………………

Blue Bird…………………………………………………………………

Express Transindo…………………………………………………

Media

Media Nusanatara Citra……………………………………………………………

Surya Citra Media…………………………………………………………………

Metal mining

Aneka Tambang…………………………………………………………………………

J Resources Asia Pacific…………………………………………………………

Merdeka Copper Gold…………………………………………………………

Timah……………………………………………………………………

Vale Indonesia………………………………………………………………………………

Oil & gas

AKR Corporindo………………………………………………………………………

Medco Energy…………………………………………………………………………………….…………………………

Perusahaan Gas Negara…………………………………………………………………………………

Plantations

Astra Agro Lestari…………………………………………………………………………………

Austindo Nusantara Jaya…………………………………………………………

Dharma Satya Nusantura………………………………………………………

London Sumatra Indonesia……………………………………………………

Salim Ivomas Pratama…………………………………………………………

Sampoerna Agro………………………………………………………………………

Tunas Baru Lampung…………………………………………………………

176

232

238

276

302

138

178

196

254

300

148

224

256

310

324

142

252

272

150

154

190

242

280

282

318

Poultry

Charoen Pokphand Indonesia…………………………………………………

Japfa Comfeed Indonesia……………………………………………………

Malindo Feedmill………………………………………………………………………

Property

Agung Podomoro Land…………………………………

Alam Sutera Realty………………………………………………………………

Bumi Serpong Damai………………………………………………………………

Ciputra Development………………………………………………………………

Ciputra Property………………………………………………………………………

Lippo Karawaci…………………………………………………………………………

Pakuwon Jati…………………………………………………………………………

PP Properti……………………………………………………………………………

Summarecon Agung……………………………………………………………………

Shipping

Pelayaran Tempuran Emas………………………………

Soechi Lines………………………………………………………

Wintermar Offshore Marine…………………………………………………………………………………….…………………………

Telecommunications

Anabatic Technologies……………………………………………………………

Erajaya Swasembada …………………………………………………………………

Indosat……………………………………………………………………………………

Sarana Menara Nusantara………………………………………………………

Telekomunikasi Indonesia………………………………………………………

Tiphone Mobile Indonesia……………………………………………………

Tower Bersama Infrastructure…………………………

XL Axiata……………………………………………………………

Tobacco

Gudang Garam………………………………………………

Hanjaya Mandala Sampoerna……………………………………………………………………………………

184

226

244

140

144

180

186

188

240

266

274

298

268

294

332

146

194

222

284

306

312

316

334

202

206

2016 Compendium

3

Sector coverage by rating

Source: Bahana

Stocks under coverage and as a % of JCI, 2011-2016

51

70

83 84

93

102

67.2

71.6 71.1

68.269.4

79.4

55

58

61

64

67

70

73

76

79

82

40

50

60

70

80

90

100

110

2011 2012 2013 2014 2015 2016

Stocks Bahana / JCI market cap

(Stocks) (%)

Source: Bahana

Stock coverage by rating

Source: Bahana

Bahana coverage turnover vs. JCI turnover, 2011-11M15

304.3271.7

321.6

270.6

213.6

69.9

72.4

70.9

71.8

72.8

65

66

67

68

69

70

71

72

73

74

0

50

100

150

200

250

300

350

2011 2012 2013 2014 11M15

Bahana turnover Bahana turnover / JCI turnover

(USDmn) (%)

Source: Bahana

OVERWEIGHT

23%

NEUTRAL

53%

UNDERWEIGHT

24%

BUY

63%HOLD

16%

REDUCE

21%

2016 Compendium

4

This page has been left intentionally blank

2016 Compendium

5

MARKET STRATEGY

2016 Compendium

6

Global economy

2016 Compendium

7

Improving developed markets; stimulus likely in emerging markets

IMF indicates that the developed markets should slightly recover in 2016

while developing-market growth momentum is quite low on weak

commodity prices and expectations of US monetary tightening.

A slowdown in emerging markets could be tackled by performing

stimulus on both the fiscal and monetary fronts. Some countries are

expected to continue monetary easing in 2016, with Indonesia seeing a

75bp cut in its policy rate, based on our forecasts.

From a trade perspective, sluggish global trade growth may see a slight

improvement next year.

IMF global economic outlook, 2015-16F

CountriesReal GDP CPI C. A. Balance

Old 2015F 2016F Old 2015F 2016F Old 2015F 2016F

World Output 3.3 3.1 3.6 - - - - - -

United States 2.4 2.6 2.8 1.6 0.1 1.1 (2.2) (2.6) (2.9)

Canada 2.4 1.0 1.7 1.9 1.0 1.6 (2.1) (2.9) (2.3)

Euro Area 1.6 1.9 2.0 1.2 0.7 1.5 1.7 2.2 2.0

Germany 1.6 1.2 1.5 0.6 0.2 1.2 (0.9) 8.5 8.0

Japan (0.1) 0.6 1.0 2.7 0.7 0.4 0.5 3.0 3.0

France 0.2 1.2 1.5 0.6 0.1 1.0 (0.9) (0.2) (0.4)

Italy (0.4) 0.8 1.3 0.2 0.2 0.7 1.9 2.0 2.3UK 3.0 2.5 2.2 1.5 0.1 1.5 (5.9) (4.7) (4.3)

Spain 1.4 3.1 2.5 (0.2) (0.3) 0.9 0.8 0.9 1.1

BrazilMexico

0.12.1

(3.0)2.3

(1.0)2.8

6.34.0

8.92.8

6.33.0

(4.4)(1.9)

(4.0)(2.4)

(3.8)(2.0)

China 7.3 6.8 6.3 2.0 1.5 1.8 2.1 3.1 2.8

India 7.3 7.3 7.5 5.9 5.4 5.5 (1.3) (1.4) (1.6)

Indonesia 5.0 4.7 5.1 6.4 6.8 5.4 (3.0) (2.2) (2.1)

Source: Bloomberg

Interest rate expectations in some Asian countries, 2014-16F

7.8

3.3

2.0

4.0

1.9

5.6

2.0

6.8

3.3

1.4

4.0

1.8

4.2

1.5

0

1

2

3

4

5

6

7

8

9

Indonesia Malaysia Thailand Philippines Taiwan China South Korea

(%)

2014 2015 2015F 2016F

Source: Bloomberg, as of 2 December 2015

Global trade growth, Jan 2007-July 2015

22.6

-24.6

21.4

-10.0

-30

-25

-20

-15

-10

-5

0

5

10

15

20

25

Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15

(%)

Source: IMF, Bloomberg

2016 Compendium

8

United States: Economy continues to improve

The US economy is improving with non-farm payroll jumping to 271k in

October 2015 and the average change in US hourly wages hitting a two-

year high at 2.5%.

The US unemployment rate in October 2015 fell to 5.0%, close to the

Fed’s NAIRU projection at 4.9%, a condition which is supportive of a rate

hike.

US manufacturing PMI data for October also increased to 54.1 with new

export sales continuing to rise modestly, while Markit’s survey

respondents acknowledged that the strong USD remains a headwind to

growth.

US non-farm payroll and unemployment rate, Sept 2014-Oct 2015

250

221

423

329

201

266

119

187

260245

223

153137

271

1.8

2.2

2

2.3

2

2.5

1.7

1.8

1.9

2

2.1

2.2

2.3

2.4

2.5

2.6

0

50

100

150

200

250

300

350

400

450

9/1/2014 11/1/2014 1/1/2015 3/1/2015 5/1/2015 7/1/2015 9/1/2015

(%)('000)

Change in US non-farm payroll (LHS) US average hourly earnings y-y (RHS)

Source: Bloomberg

US unemployment rate and jobless claims, Jan 2011-Oct 2015

276

5

4.9

240

290

340

390

440

3

4

5

6

7

8

9

10

('000)(%)

US initial jobless claims (RHS) US unemployment rate (LHS) US NAIRU (LHS)

Source: Bloomberg

US manufacturing PMI, Jan 2014-Oct 2015

53.7

57.1

55.555.4

56.4

57.3

55.8

57.957.5

55.9

54.8

53.953.9

55.1

55.7

54.1 5453.653.8

53 53.1

54.1

50

51

52

53

54

55

56

57

58

59

Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15

(pts)

Source: Bloomberg

2016 Compendium

9

United States: Room for a rate hike

Minutes from the Fed’s latest meeting revealed downward estimates on

economic data.

Nevertheless, only less than 25% of the consensus expects no rate hike

in December 2015, with the majority expecting at least a 75bp rate hike

by mid-2016.

However, we note that most FOMC members are expecting a 25bp rate

hike in December 2015 with no change in the Fed rate in 2016,

suggesting a slow and gradual rate normalization.

The Fed’s economic forecasts, 2015-2018

2015 2016 2017 2018Longer

run

Change real GDP (%) 2.1 2.3 2.2 2.0 2.0

June projection 1.9 2.5 2.3 n.a. 2.0

Unemployement rate (%) 5.0 4.8 4.8 4.8 4.9


PCE inflation (%) 0.4 1.7 1.9 2.0 2.0


Core PCE inflation (%) 1.4 1.7 1.9 2.0

June projection 1.3 1.8 2.0 n.a.

Fed funds rate (%) 0.4 1.4 2.6 3.4 3.5


Source: FOMC meeting

Consensus estimates on Fed rate hike timing & magnitude

22.0

19.4

9.78.3

4.8 4.12.6 2.0 1.3 1.0

78.0

71.3

45.3

40.3

26.9

23.4

16.4

13.3

9.37.2

0.0

9.4

40.3 41.0 40.738.5

33.1

29.3

23.6

19.9

0

10

20

30

40

50

60

70

80

Dec-15 Jan-16 Mar-16 Apr-16 Jun-16 Jul-16 Sep-16 Nov-16 Dec-16 Jan-17

(%)

0-0.25 0.25-0.5 0.5-0.75 0.75-1 1-1.25 1.25-1.5 1.5-1.75


FOMC members opinion on Fed-rate hike, 2015-2016

Source: Bloomberg

2016 Compendium

10

Fed rate hike impact: Temporarily stronger USD

It is interesting to note that during the last 5 Fed rate-hike cycles from

1972 through 2004, most of the hikes resulted in a lower Dollar Index as

early as 2-3 months thereafter. Additionally, in the Fed’s past up cycles,

USD strength was limited to less than 5%.

The backdrop of low US inflation, coupled with expectations of an

interest-rate hike, is one of the reasons behind the current strong USD.

However, some fund managers we spoke to have argued that the

current situation is quite different as other major countries are likely to

pursue further monetary easing actions (currency war).

Dollar Index after Fed rate hike

Source: Bloomberg

Dollar Index and US inflation, Jan 2009-Oct 2015

70

75

80

85

90

95

100-3

-2

-1

0

1

2

3

4

5

(pts)(%)

US inflation, reversed (LHS) Dollar index (RHS)

Source: Bloomberg

Some scenarios on Dollar movement after rate hikes

Fed rate Hhke

US inflation China economyOther major central

bank2016 Dollar

Index

Scenario 1Steep and fast Very low Hard landing Very aggressive easing130-150

(2% in 2016) (0.01-0.3%)(GDP 2016: 5.5%)

Scenario 2Fast Low Lower growth Aggressive easing 110-130

(1.5% in 2016) (0.3-0.8%)

(GDP 2016: 6.0%)

Scenario 3Modest ModerateSmooth slowdown

Quite aggressive easing 95-110

(1% in 2016) (0.8%-1.5%)(GDP 2016: 6.5%)

Scenario 4Small rate hike High inflation

Moderate adjustments No monetary easing 85-95

(0.75% in 2016) (>1.5%)

(GDP 2016: 6.7%)

Source: Bahana

2016 Compendium

11

Major central banks: Further balance-sheet expansions

Currently, the ECB is purchasing EUR60bn in assets per month until it

achieves EUR1.1tn in total easing by September 2016, while the BoJ’s

Kuroda stated that he is willing to do further easing as China’s slowdown

is threatening Japan’s inflation prospects.

The velocity of money (GDP/M2) of major economies is still decreasing

as the pace of economic recovery is still slow. It should limit the

possibility of aggressive monetary tightening.

As a consequence, the market is expecting the USD to modestly

appreciate against the EUR and JPY as a slower-than-expected US

recovery is reducing the magnitude of the likely US Fed rate hike in

2016.

Major central banks’ balance sheets, Jan 2010-Oct 2015

Source: Bloomberg

US, Japan & EU velocity of money (indexed), Jun 2003-Sept 2015

78.8

81.6

68.3

65

70

75

80

85

90

95

100

105

110

Jun-

03

Sep-

03

Dec-

03

Mar

-04

Jun-

04

Sep-

04

Dec-

04

Mar

-05

Jun-

05

Sep-

05

Dec-

05

Mar

-06

Jun-

06

Sep-

06

Dec-

06

Mar

-07

Jun-

07

Sep-

07

Dec-

07

Mar

-08

Jun-

08

Sep-

08

Dec-

08

Mar

-09

Jun-

09

Sep-

09

Dec-

09

Mar

-10

Jun-

10

Sep-

10

Dec-

10

Mar

-11

Jun-

11

Sep-

11

Dec-

11

Mar

-12

Jun-

12

Sep-

12

Dec-

12

Mar

-13

Jun-

13

Sep-

13

Dec-

13

Mar

-14

Jun-

14

Sep-

14

Dec-

14

Mar

-15

Jun-

15

Sep-

15

(pts)

US M2 velocity of money (indexed) Japan M2 velocity of money (indexed) EU M2 velocity of money (indexed)

Source: Bloomberg, Bahana

Consensus forecasts on FX and rates

Spot 4Q15F 1Q16F 2Q16F 3Q16F 4Q16F

EUR/USD 1.08 1.06 1.05 1.04 1.05 1.05

USD/JPY 123 123 124 125 125 125

The Fed rate (%) 0.25 0.5 0.7 0.85 1.05 1.25

10yr US t-bills yield (%) 2.22 2.26 2.39 2.56 2.68 2.79

3 month LIBOR (%) 0.57 0.59 0.71 0.86 1.03 1.25

ECB main refinancing rate (%) 0.05 0.05 0.05 0.05 0.05 0.05

10yr German govt bond yield (%) 0.58 0.57 0.65 0.76 0.88 1.01

3 month Euribor (%) -0.11 -0.08 -0.09 -0.08 -0.07 -0.06

BoJ Interest rate (%) 0.1 0.1 0.1 0.1 0.1 0.1

10yr Japan govt bond yield (%) 0.32 0.32 0.36 0.41 0.46 0.53

3 month Japan LIBOR (%) 0.08 0.11 0.1 0.11 0.11 0.13


2016 Compendium

12

Eurozone: ECB to continue stimulus

Eurozone GDP growth improved to 1.6% y-y in 3Q15 while the value of

exports to large developing countries dropped. Concerns over a longer-

than-expected economic recovery increase the chance of quantitative

easing in December.

Moreover, on the inflation front, core and headline inflation are still

below the ECB’s 2% target.

The EU’s industrial production data also suggests that the decline in

China demand is a problem, while a slump in the consumer sentiment

index is a concern.

German, France, Italy and Spain economic growth, 4Q13-2017F

Source: Bloomberg

Eurozone inflation, Jan 2010-Oct 2015

1.1

0.1

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Jan-

10

Mar

-10

May

-10

Jul-1

0

Sep-

10

Nov

-10

Jan-

11

Mar

-11

May

-11

Jul-1

1

Sep-

11

Nov

-11

Jan-

12

Mar

-12

May

-12

Jul-1

2

Sep-

12

Nov

-12

Jan-

13

Mar

-13

May

-13

Jul-1

3

Sep-

13

Nov

-13

Jan-

14

Mar

-14

May

-14

Jul-1

4

Sep-

14

Nov

-14

Jan-

15

Mar

-15

May

-15

Jul-1

5

Sep-

15

(%)

EU core inflation EU inflation

Source: Bloomberg

Eurozone production & consumer sentiment, Jan 2013-Oct 2015

Source: Bloomberg

2016 Compendium

13

China: Managing the slowdown

China GDP only grew 6.9% in 3Q15 (2Q15: 7.0%) with the continuing

imports decline indicating subdued domestic demand. Hence, while

exports dropped, China’s annualized trade balance continued to rise.

To maintain stabilization amid the global economic slowdown, PBoC cut

its benchmark lending interest rate to 4.35% while inflation is very low

at 1.6%. Preventing deflation is also a big concern for the government

and PBoC now.

While the CNY will be a part of the Special Drawing Rights (SDRs) in

October 2016, most investors believe it will depreciate over the long

term.

China trade balance, Jan 2010-Sept 2015


PBoC interest rate and inflation, Jan 2010-Sept 2015

Source: Bloomberg

IMF’s special drawing rights composition

CurrencyCurrency amount

Exchange rate

USD Equivalent

Old weight

New weight

(Old) (%) (%)

USD 0.66 1.00 0.66 41.90 41.73

EUR 0.42 1.06 0.45 37.40 30.93

JPY 12.10 122.67 0.10 9.40 8.33

GBP 0.11 1.51 0.17 11.30 8.09

CNY 6.39 10.92

1.37 100.00 100.00

Source: IMF, Zero Hedge

2016 Compendium

14

Unexciting manufacturing and commodity markets

Business activities in Brazil, Australia, South Korea and China have

remained unexciting, as shown by the purchasing managers index (PMI).

Indonesia’s PMI was created in 2011, and its level has contracted,

suggesting continued weak economic growth in 2015 and as we head

into 2016.

China, being the world’s main growth engine, continues to stall as shown

by the China PMI, which indicates likely continued weak commodity

prices ahead.

Purchasing Managers Index, Dec 2014-Oct 2015

Country Dec-14 May-15 Jun-15 Jul-15 Aug-15 Sept-15 Oct-15

America

Brazil 50.2 46.5 46.5 47.2 45.8 47.0 44.1

Canada 53.9 51.3 51.3 51.3 49.4 48.6 48.0

United States 53.9 53.6 53.6 53.8 53.0 53.1 54.1

Europe

Italy 48.4 54.1 54.1 55.3 53.8 52.7 54.1

France 47.5 50.7 50.7 49.6 48.3 50.6 50.6

Germany 51.2 51.9 51.9 51.8 53.3 52.3 52.1

Euro zone 50.6 52.5 52.5 52.4 52.3 52.0 52.3

Asia Pacific

Australia 46.9 44.2 44.2 50.4 51.7 52.1 50.2

China 50.1 50.2 50.2 50 49.7 49.8 49.8

Japan 52.0 50.1 50.1 51.2 51.7 51.0 52.4

Indonesia 47.6 47.8 47.8 47.3 48.4 47.4 47.8

Singapore 51.8 50.4 50.4 49.7 49.3 48.6 48.9

South Korea* 75.0 82.0 76.0 67.0 70.0 71.0 70.0

Source: Bloomberg, Markit *BSI Manufacturing Index

Brent oil and metal index price, June 2014–Oct 2015

Source: Bloomberg

China leading index, Jan 2011–Sept 2015

Source: Bloomberg

2016 Compendium

15

Emerging market vulnerability: Country comparison

Based on our analysis, Indonesia is seeing some weakness due to the

poor recovery in its current account deficit, a lower foreign-reserve level

and a low manufacturing export base. However, debt indicators suggest

Indonesia is safe.

The short-term debt-to-foreign-reserve ratio of Indonesian companies is

at 52.6%, lower than the 2013 taper tantrum period (61.0%), but still

above that of Asian peers.

However, we still need to be mindful with the high level of foreign

holding of government bonds which increase the risk on capital outflows.

Economic comparisons

BIS REER

GDP Growth (% 2014)

Average inflation

(%)

Manuf export (% of

exports)

Fiscal deficit

(% of GDP) 2014

CA balance (% of GDP)

2014

External debt

(% of GDP)

Govt debt (% of GDP)

Indonesia 89.0 5.0 6.2 37.8 -2.3 -3.1 36.8 23.9

Malaysia 90.4 6.0 2.3 61.8 -3.5 4.4 70.4 54.2

Thailand 102.3 0.9 1.5 76.3 -2.7 3.3 34.8 48.6

Philippines 117.1 6.1 3.1 79.1 -0.6 4.4 26.1 45.4

India 88.1 5.3 6.0 64.0 -5.9 -1.4 27.6 51.3

Korea 109.0 3.3 1.2 86.2 1.6 6.3 30.9 34.2

Turkey 80.8 2.9 7.9 78.5 -1.3 -5.8 57.4 36.5

Brazil 70.9 0.2 6.7 34.8 -4.0 -4.5 38.2 59.3

South Africa 76.8 1.5 5.5 49.5 -4.7 -5.1 45.1 47.3

Source: Bloomberg, World Bank, Bahana estimates

Foreign holding of government bonds – outstanding, June 2015

Source: ADB Asian Bond Online; Indonesia as of Sept ‘15 & India as of Jul ‘15

Short-term debt-to-foreign reserve ratio, March 2009-Sept 2015


2016 Compendium

16

Domestic economy

2016 Compendium

17

2016 SWOT analysis

Strengths

Improving fiscal policy mix since 2013 due to fuel-subsidy removal.

Underleveraged economy as external-debt-to-GDP ratio is quite low at

33.4%.

Plenty of room for monetary & fiscal easing amid global economic

slowdown.

Huge productive population base to provide sustained domestic economic

growth ahead.

Relatively stable political conditions among Southeast Asian nations.

Weaknesses

Relatively low foreign reserves to support short-term external debt.

Weak government spending ability.

High dependency on commodity-related sectors and reliance on imports.

High and increasing Incremental Capital Output Ratio (low productivity),

causing low connectivity to the global production network.

Slack in labor markets and labor militancy.

Opportunities

Further stimulus by BOJ and EU should open possibilities of capital flows.

Higher US economic growth.

Low oil prices.

Favorable GDP per capita level should attract more sophisticated

investments from developed markets.

Source: Bahana

Threats

Tight global market liquidity with market over-reaction to the Fed rate

hike.

Too strong Dollar and global currency war.

Further unfavorable policies on commodity markets.

Hard landing in China adversely impacting Indonesia’s economic growth

– every 1% drop in China’s GDP growth would result in a 0.5% decrease in Indonesia’s GDP growth.

2016 Compendium

18

Indonesia: still one of the fastest-growing economies

In line with the central bank’s forecast, we expect 4Q15 GDP growth to

come in at 4.78% (3Q15: 4.73%), and is expected to remain flat until

1Q16.

For now, our 2015 GDP growth forecast is at 4.72%, compared to the

consensus projection of 4.8% and the government’s estimate of 5.2%.

Looking at 2016, we expect GDP growth to rise slightly to 5.1%, slightly

lower than the government’s and central bank’s forecasts ranging

between 5.2-5.6%.

However, even at 4.7%, Indonesia’s economic growth would still remain

one of the highest next to India’s, China’s, Philippine and Malaysia .

Growth drivers include expected government infrastructure project

realizations and solid direct investments.

Forecast of regional GDP growth rates

Countries1Q15 2Q15 3Q15 4Q15F 1Q16F 2015F 2016F 2017F

(%) (%) (%) (%) (%) (%) (%) (%)

India 7.5 7.0 7.4 7.5 7.8 7.4 7.6 8.0

China 7.0 7.0 6.9 6.8 6.7 6.9 6.5 6.3

Philippines 5.2 6.0 7.3 5.9 6.5 6.2 6.3 6.2

Indonesia 4.7 4.7 4.7* 4.8 4.8 4.7 5.1 5.2

Malaysia 5.6 4.6 5.0 4.4 3.9 4.8 5.1 4.8

Thailand 3.0 3.3 3.3 2.9 2.6 3.4 4.0 3.9

Taiwan 3.4 0.6* 3.2 3.5 1.1 3.5 3.5 3.2

South Korea 2.5 2.2* 2.9 3.5 2.8 2.9 3.4 3.4

Singapore 2.8 1.7* 3.0 3.1 2.7 2.7 3.1 3.2

Hong Kong 2.1 2.6 2.3 2.6 2.3 2.5 3.0 2.8

Source: Bloomberg, Bahana estimates, *Actual; for India 2015-17F= FY16-18F

2015F GDP comparison in BRICS-MINT countries

7.4

6.9

6.2

4.8 4.7

3.5 3.4

2.92.7

2.5

0

1

2

3

4

5

6

7

8

India China Philippines Malaysia Indonesia Taiwan Thailand South Korea Singapore Hong Kong

(%)

Source: Bloomberg, *Consensus, **Bahana estimates

Real GDP growth, 2010-2016F

6,8647,288

7,7278,158

8,5688,973

9,4326.22

6.17

6.03

5.58

5.02

4.72

5.11

4.0

4.2

4.4

4.6

4.8

5.0

5.2

5.4

5.6

5.8

6.0

6.2

6.4

550

1,550

2,550

3,550

4,550

5,550

6,550

7,550

8,550

9,550

10,550

2010 2011 2012 2013 2014 2015F 2016F

(%)(IDRtn)

Indonesia GDP (LHS) GDP growth (RHS)

Source: Statistics Indonesia, Bahana estimates

2016 Compendium

19

Regional GDP: Slower growth in mining dependent areas

As a consequence of low commodity prices, provinces which have a high

dependency on commodity prices like South Kalimantan, Aceh, Bangka

Belitung and Papua experienced GDP growth that was lower than the

national average.

Interestingly, commodity-related regions like Jambi with 7.76% GDP

growth could outperform by exporting rubber-related products and

vegetable oils.

Industry wise, the information, communication and financial sectors still

recorded double-digit GDP growth while the mining and trade sectors

(wholesale and retail) booked very low growth.

Regional GDP growth, 2014

Source: Statistics Indonesia

Indonesia GDP by Industry growth, y-y 2014 & 3Q15

10.810.3

7.1 6.8

4.3

3.2

1.5

-5.6

10.0

4.9

8.0

7.0

4.64.2

4.8

0.5

-8

-6

-4

-2

0

2

4

6

8

10

12

Information &Com

Financial Transportation Const. Manufacturing Agr. Wholesales andRetail

Mining

(%)

3Q15 4Q14


Indonesia GDP composition by Industry, 9M15

Agriculture18%

Mining & Quarrying

10%

Manufacturing Industry

27%

Construction12%

Wholesales and Retail Trade

17%

Transportation & Storage

5%

Information & Communication

6%

Financial & Insurance

Activity5%

Others18%


2016 Compendium

20

Layoffs: The impact of the slowing economy

PMI data has shown 13 consecutive months of manufacturing

contraction, helping to trigger layoffs at several sectors. In addition to

the near 300k layoffs thus far, there is a possibility for an additional

quarter of a million severances, mainly coming from the property sector.

The weak PMI due to inflation pressure, continued weak IDR and

uncertainties regarding government policies, caused the production

utilization rate to drop to 75.4% in 3Q15, from 80% in 4Q14.

Generally, most industries experienced lower utilization rates in 3Q15,

except for electricity, gas and water supply.

Latest news from labor market in Indonesia

No Companies Industry Status Number of workers

1 SMEs Manufacture Laid off 155,000

2 SMEs Textile Laid off 36,000

3 SMEs Logistics Laid off 4,000

4 Krakatau Steel Metal Laid off 700

5 HM Sampoerna Cigarettes Laid off 4,900

6 Gudang Garam Cigarettes Laid off 4,288

7 PLTU Paiton Gas Laid off 45

8 Inti Bara Perdana Coal Laid off 125

9 CIMB Niaga Financial Laid off 2,000

10 Bank Danamon Financial Laid off 400

11 Other manufactures Laid off 74,900 282,358 Total

12 Maspion Group Manufacture Plan 1,800

13 SMEs Property Plan 250,000 251,800 Total

Total 534,158

Source: Kontan, Kompas, Tempo, liputan6.com, sindonews.com, Bahana

Indonesia’s production capacity utilization, 1Q12 – 3Q15

Source: CEIC

Indonesia’s Purchasing Managers Index, Aug 2013-Oct 2015

Source: Bloomberg

2016 Compendium

21

Economic slowdown: Close to reaching the bottom

In our view, the slowdown in GDP growth is close to reaching the

bottom, with inflation expected to drop to within the BI’s target and the

2015 current account deficit improving to around 2.0% of GDP. This

opens the window for the BI to cut its benchmark rate.

However, the Indonesian economic recovery is unlikely to be fast this

time around since commodity prices should still remain quite depressed

when the US decides to begin its tightening cycle.

Nevertheless, going forward, we need to be ready for possible economic

turbulence as the stability of foreign-capital inflows is correlated to low

US interest-rate levels.

GDP growth during periods of economic slowdown

Source: Bloomberg, Bahana estimates

Indonesia business cycle, 1Q13-1Q17


Economic cycle comparison, 2004-13

GDP growth prior to

slowdown (%)

2-year change in

commodity prices (%)

Current account balance

(% of GDP)

Global monetary conditions

BI rate change, post 2 years (%)

2004 4.53 32.04 1.34 Tightening -5%

2006 5.20 34.52 1.99 Tightening -3%

2009 6.35 29.05 0.92 Loosening -2%

2013 5.50 -29.18 -3.1 Tightening 0%

Source: Bloomberg, Statistics Indonesia, Bank Indonesia

2016 Compendium

22

Foreign exchange: Signs of a currency war

On a YTD basis, the IDR has depreciated vs. the USD by around 10%.

However, it has appreciated against the MYR, EUR and AUD due to the

weak Malaysian economy and continued monetary easing in the

Eurozone and Australia.

Interestingly, the trend changed in the past 6 months, with the IDR

appreciating vs. currencies of most of Indonesia’s trading partners.

Looking at changes in monetary policies across the region, there is a

pattern of countries cutting their interest rates faster than Indonesia and

seeing their currencies depreciate vs. the IDR. In our view, this signals

an ongoing currency war within the region. As a result, we expect BI to

continue easing its monetary policy.

IDR against currencies of major trading partners YTD


IDR against trading partners, 6M (May-November 2015)


Benchmark interest rate change YTD


2016 Compendium

23

IDR movements: Macro and micro factors

Recently, a combination of lower inflation, a gradual improvement in the

CA, tight monetary policy, government initiatives and further Fed delays

has brought a positive impact on the IDR/USD rates.

However, we are still aware that continued weak GDP growth, a growing

fiscal deficit and possible CNY devaluation are downside risks for the

IDR. Hence, we maintain our end-2015F IDR/1USD exchange rate target

at 14k.

At this stage of the cycle, we still foresee IDR depreciation continuing

into 2016, to 14.5k with IDR movements heavily influenced by reactions

to the Fed rate hike. Under a second scenario of lower inflation and a

subdued US interest rate hike, the IDR could stay at 13.7k by end-2016.

Current situation of IDR/1USD fundamental factors

Indicators Positive Negative

Inflation Strong positive

Trade balance/CAD Mild positive

GDP growth Negative

Fiscal deficit Mild negative

Government policy Positive

Oil price Mild positive

Interest rate Mild positive

China devaluation Strong negative

The Fed rate & US t-bills Positive

Source: Bahana

Change on Real Effective Exchange Rate, June 2013 – Oct 2015


IDR/1USD exchange-rate forecasts and scenario, 1Q15-4Q16F


2016 Compendium

24

Monetary policy: Lower RR first, BI rate cuts later

BI acknowledges that Indonesia requires monetary easing with the Fed

rate hike, China economic slowdown, low commodity prices and

administered price hikes being the main problems in the economy.

At this stage, given softer inflation ahead, lower interest rates appear

possible as real interest rate differentials are expected to improve.

However, a recent BI statement indicates that rate cuts ahead will be

dependent on the Fed’s decision and the severity of capital outflows. As

a substitute, BI may further cut the primary RR to help liquidity. With

every 50bp cut in the RR, banks’ loan growth would rise by 0.4%.

Indonesia to US real int. rate difference, Jan 2013–Dec 2015F


Recent global interest rate changes Current

interest rateLatest change

Latest change

Number of interest change

(%) (bps) (x)

India: Repo rate 6.75 (50) 29-Sept-15 4

Cash reserve ratio 4.00 (25) 29-Sept-15 4

Norwegia 0.75 (25) 24-Sept-15 1

New Zealand 2.75 (25) 10-Sept-15 7

China: Interest rate 1.75*/4.60** (25) 25-Aug-15 5

Reserve requirement 18.00 (50) 25-Aug-15 1

Russia 11.00 (50) 31-Jul-15 1

Brazil 14.25 50 30-Jul-15 6

Canada 0.50 (25) 15-Jul-15 2

Sweden (0.35) (10) 2-Jul-15 1

South Korea 1.50 (25) 11-Jun-15 7

Australia 2.00 (25) 05-May-15 9

Turkey 7.50 (25) 24-Feb-15 1

Indonesia 7.50 (25) 17-Feb-15 1

Switzerland (0.75) (25) 15-Jan-15 1

Euro Zone 0.10 (5) 4-Sep-14 1

Vietnam 6.50 (50) 17-Mar-14 1

Thailand 2.00 (25) 12-Mar-14 5

The Philippines 3.50 (25) 25-Oct-12 3

Hong Kong 0.50 8 19-Jun-12 1

Taiwan 1.88 13 30-Jun-11 5

Source: Bloomberg *Deposit rate **Lending rate

Primary reserve requirement and BI rate, Jan 2010–Dec 2016F

Source: Bank Indonesia, Bahana estimates

2016 Compendium

25

Balance of Payments; Sensitivity analysis on CAD, oil & IDR

The Current Account Balance improvement is largely supported by the

steep drop in oil prices, while the primary deficit is a big concern during

a period of money outflows. Due to continued low oil prices, we forecast

next year’s current account deficit (CAD) to edge slightly higher, to 2.3%

of GDP.

Given the likely upcoming US rate-hike cycle, we expect the balance of

payments to remain in deficit through 2Q16, with the biggest downside

being with negative portfolio investment flows.

Our sensitivity analysis on oil prices and the CAD indicate that faster

economic growth will increase the CAD and lead to IDR depreciation. We

expect the CAD-to-GDP ratio to increase to 2.3% in 2016F.

Indonesia’s current account balance,1Q10-4Q17F


Indonesia’s financial accounts, 1Q10-3Q15

Source: Bahana estimates

Current account balance sensitivity to oil prices and IDR

ScenarioCA Deficit

(% of GDP)Oil price

(USD/Barrel)IDR/1USD

GDP growth (%)

Scenario 1 1.90 45 13,500 4.3

Scenario 2 2.10 50 14,000 4.9

Scenario 3 2.30 55 14,500 5.1

Scenario 4 2.50 60 15,000 5.4

Scenario 5 2.70 70 16,000 5.6


2016 Compendium

26

Global deflation threat: Low inflation, low growth

In 2013–14, Indonesia’s high inflation rate was due to fuel-price hikes in

June 2013 and November 2014. With the absence of a fuel-price shock

in 2016, coupled with weaker demand, inflation should be at 3.9% in

2016.

On the producer-price side, most of Indonesia’s Asian counterparts and

trading partners have already experienced PPI deflation. It should result

in lower pressure from imported inflation ahead, and could be a positive

factor as long as Indonesia’s domestic demand does not drop with

domestic producers maintaining their competitiveness against trading

partners.

From the domestic side, Indonesia has a number of policy measures at

its disposal, including monetary easing and fiscal stimulus.

Indonesian inflation,1Q12-4Q16F

2.9

4.5

2

3

4

5

6

7

8

9

(%)


PPI comparisons, October 2015

Source: Bloomberg

Indonesia producer price index, 1Q11-3Q15

Source: Bloomberg

2016 Compendium

27

International trade: The changing exposure

Given China’s economic slowdown, Indonesia’s trade structure is

experiencing a change as the country’s exposure to the US is increasing,

while its exposure to Japan and China continues to drop.

Indonesia’s commodity exports dropped with 9M15 exports of coal as a

percentage of total exports falling to 12.3% (2014: 14.2%) and 11.5%

for CPO (2014: 11.9%). Meanwhile, the mix of textile and textile-export

products rose to 9.3% in 9M15 (2014: 8.8%).

Imports of electric components and processed foods continued to

increase, while imports of metal-based products continued to drop amid

lower investment growth in 2015. Going forward, we expect this change

in trade structure to remain.

Growth in oil & gas and non-oil & gas imports, Jan 2010-Oct 2015

76.8

111.9

93.8

94.5

75

80

85

90

95

100

105

110

115

(%)

China Japan United States EU Singapore


Growth in export by economic group, Jan 2013-Oct 2015

12.3%

11.5%

9.3%

7.8%

6.6%5.8%

4.5%

4.5%3.3%

2.8%

31.6%

9M15

Coal

Palm oils

Textile

Other manufacture

Electrical

Base metal product

Processed rubber

Processed food

Footwear

Processed woord products

Others

14.2%

11.9%

8.8%

8.6%

6.9%6.2%

4.3%

4.8%2.8%

1.4%

30.1%

Coal

Palm oils

Textile

Other manufacture

Electrical

Base metal product

Processed food

Processed rubber

footwear

Articles of gold

Others

2014


Indonesia’s import product mix, 2014 vs. 9M15

14.4%

12.7%

6.9%

6.2%

6.1%5.4%

3.3%2.8%

2.4%

2.1%

37.7%

9M15

Electrical

Base metal products

Chemical

Plastic material

Textile

Other agriculture

Processed food

parts of vehicles

14.1%

13.6%

7.2%

6.2%

5.6%5.5%

3.4%2.8%

2.6%

2.6%

36.4%

2014

Electrical

Base metal products

Chemical

Plastic material

Textile

Other agriculture

Processed food

parts of vehicles

Cattle fodder

Motor vehicle 4 wheels &more


2016 Compendium

28

Imports: The drop was driven by price

The value of imports dropped by an annualized 18.2% driven by lower oil

& gas, which fell by 37.4% y-y, while non-oil & gas dropped in 3Q15 by

11.8% y-y.

For the economy, the continued drop y-y in imports of raw materials at

18.8%, capital goods at 16.8% and consumption goods at 14.2%

indicate no early recovery for GDP growth prospects.

However, the import price index data indicates that the recent steep

drop was driven by lower import prices, a consequence of the global

deflation trend. The non-oil & gas import price index fell by 19.4% y-y

while import volume was still increasing at 1.4% y-y.

Growth in oil & gas and non-oil & gas imports, Jan 2010-Oct 2015

Source: IMF, Statistics Indonesia, Bahana

Growth in imports by economic group, Jan 2013-Oct 2015


Import price index, Jan 2013-Oct 2015

Source: Bank Indonesia, CEIC

2016 Compendium

29

Exports: New trade partners amid lower commodity prices

Indonesia’s proportion of the global export market has declined from its

peak (2011), undergoing normalization to 0.95% of global trade value.

Interestingly, Indonesia’s major export destination recently changed as

US outstripped China on the strengthening US economy and low

commodity prices. Textile, rubber, electronics and F&B are the main

contributors to US exports.

As a consequence of the high reliance on the commodities market,

Indonesia’s export sensitivity to changes in exchange rate is more

limited today.

Export share in global market, August 2005 –September 2015

0.70

0.75

0.80

0.85

0.90

0.95

1.00

1.05

1.10

1.15

(%)

10yr average: 0.95%

NormalizationThe rise of China and economic boom

Source: IMF, BPS, Bahana

Relationship between REER and export growth

Indonesia

India

Singapore

Korea

China

Malaysia

Thailand

Philippine

-6

-4

-2

0

2

4

6

8

10

12

-14 -12 -10 -8 -6 -4 -2 0 2(%)

(%)

y-y change in Annualized exports exports

y-y

chan

ge in

REE

R


Export share by country destination, December 2010 – August 2015

7.5

8.0

8.5

9.0

9.5

10.0

10.5

9.0

10.0

11.0

12.0

13.0

14.0

15.0

16.0

17.0

18.0

(%)(%)

China (LHS) Japan (LHS) EU (LHS) US (RHS)

Source: Bank Indonesia, Bahana estimates

2016 Compendium

30

Consumption: Waiting for monetary easing

Indonesian private consumption growth dropped from 5.7% in 2012 to

only 5.0%, in line with BI’s tight monetary policy. Possible BI policy

easing in 2016 should boost consumption growth to 5.1% in 2017.

Apart from F&B and equipment, consumption growth has had a steep

drop, especially for apparel goods.

Housing loans for flats, apartments, and shop houses experienced the

steepest slowdown.

Indonesia private consumption growth

5.0 5.0

5.1

4.5

4.7

4.9

5.1

5.3

5.5

5.7

1Q11 4Q11 3Q12 2Q13 1Q14 4Q14 3Q15 2Q16F 1Q17F 4Q17F

(%)


Consumption growth breakdown

Source: CEIC

Consumption loan growth breakdown

14.1

27.1

17.0

25.0

5.9

9.5

11.812.8

10.1

4.0

17.8

10.510.28.1

-0.8

3.4

6.7

12.6

-5

0

5

10

15

20

25

30

Consumption Housing Flat & apartment Shophouse Vehicle Others

(%)

2013 2014 9M15

Source: Bank Indonesia

2016 Compendium

31

Investment: Need improvement in business sentiment

Investment growth remained sluggish in 3Q15 as it only grew by 4.62%

y-y. We forecast it growing by 3.6% y-y in 2015, with a pick up to 5.0%

in 2016 as economic sentiment should improve on both the domestic and

foreign-investor fronts.

However, foreign direct investment (FDI) has been sluggish as it

dropped by 15.6% y-y in 3Q15, driven by a lower realization of Japanese

investment in the manufacturing sector.

Sector wise, we see that due to the IDR depreciation, dollar-based

industries such as fishing, agriculture and trade posted the fastest FDI

growth in 3Q15.

Indonesia’s investment y-y growth, 1Q11-4Q17F

3.6

5.0

6.6

3

4

5

6

7

8

9

10

1Q11 4Q11 3Q12 2Q13 1Q14 4Q14 3Q15 2Q16F 1Q17F 4Q17F

(%)


FDI y-y growth (USD), 3Q11-3Q15

-15.6

-20

-10

0

10

20

30

40

50

60

3Q11 1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15 3Q15

(%)

Source: CEIC

FDI y-y growth by industry, 3Q15

90

64

25

6

-3-16 -19

-32-45

-75-87

-197

-250

-200

-150

-100

-50

0

50

100

150

(%)

Source: CEIC

2016 Compendium

32

Govt expenditures: Trying to pick up in 2016

We expect government expenditures to continue growing due to the low-

base effect from early 2015 and possible government action on capital

spending.

On the tax-revenue front, we expect tax-revenue growth to remain

subdued at 15.1% y-y in 2016F, reflecting weak economy. Moreover,

recent government moves to cut tax rates are not favorable to a

scenario of a steep increase in tax revenues.

Composition wise, weak capital-spending execution is already decreasing

the proportion of capital expenditures as a percentage of total

government spending.

Indonesia’s government expenditure, 1Q13-4Q17F

5.4

6.76.1

0

1

2

3

4

5

6

7

8

9

1Q13 3Q13 1Q14 3Q14 1Q15 3Q15 1Q16F 3Q16F 1Q17F 3Q17F

(%)

Source: IMF, Statistics Indonesia, Bahana estimates

Government tax revenue and GDP growth, 2004-2016F

5.1

15.1

-10

-5

0

5

10

15

20

25

30

35

40

4.4

4.9

5.4

5.9

6.4

6.9

2007 2008 2009 2010 2011 2012 2013 2014 2015F 2016F

(%)(%)

GDP growth (LHS) Tax revenue growth (RHS)


Composition of government expenditure, 2014 and 9M15

12.3%

11.5%

9.3%

7.8%

6.6%5.8%

4.5%

4.5%

3.3%2.8%

31.5%

Coal

Palm oils

Textile and textile products

Other manufacture products

Electrical apparatus, measuringinstruments and optical

Base metal products

Processed rubber

Processed food

Footwear

Processed wood products

Others

9M15

14.2%

11.9%

8.8%

8.6%

6.9%6.2%

4.3%

4.8%2.8%

1.4%

30.0%

Coal

Palm oils

Textile and textile products

Other manufacture products

Electrical apparatus, measuringinstruments and optical

Base metal products

Processed food

Processed rubber

Footwear

Articles of gold

Others

2014

Source: Bank Indonesia

2016 Compendium

33

Fiscal risk: Slower government spending required

The 9M15 government deficit rose to IDR259tn, or equal to 2.3% of

GDP. The regional transfer-fund realization increased to IDR78tn in

September, or IDR511.2tn in 9M15 (76.2% of 2015 target), while the

government revenues did not show any significant improvement, at

IDR122tn in September.

Component wise, disappointment came from the oil & gas income tax

which dropped 33.2% y-y and only achieved 58.5% of the 2015 target.

VAT fell 3.3% while property taxes dropped 6.4%.

As a consequence, the government is required to either slow down the

rate of spending, or increase tax collection to maintain a fiscal deficit

below 3%.

Government budget realization, January–September 2015

Source: Ministry of Finance

Tax revenue analysis, 9M15


Composition of government expenditure, 2014 and 9M15

Source: MoF, Bahana estimates

2016 Compendium

34

2016 state budget: Challenging

In its 2016 state budget, the government has targeted an optimistic

2016 GDP level of 5.3%, down from 2015’s target of 5.7%.

If we make a comparison to 2015, 2016 budget should be challenging as

it tries to increase tax revenue by 47.4% y-y to nearly IDR1,360tn.

At this point, our calculation indicates that the 2016 tax revenue could

realistically grow 15.1% y-y (excluding custom and duties) to

IDR1,062.4tn due to moderate economic growth at 5.1%. Hence, we see

the room for government spending to be lower and we expect 2016

disbursement should only be at IDR1,843tn or 88% of FY2016 target,

reflecting 2.7% of GDP fiscal deficit.

2016 state budget deficit, various spending targets

Achievement of spending target

GD

P g

row

th

80% 85% 88% 90% 95%

5.7% -0.1 1.6 2.1 2.4 3.3

5.4% 0.3 2 2.5 2.8 3.7

5.1% 0.7 2.4 2.7 3.2 4.1

4.8% 1.1 2.8 3.3 3.6 4.5

4.5% 1.5 3.2 3.7 4.1 4.9


Draft state budget: Macroeconomic assumptions, 2016

Assumptions

2014 2015 2015 2016

Revised

budget

State

budget

Revised

state

budget

Bahana

forecast

Draft state

budget

Bahana

forecast

GDP Growth (% y-y) 5.5 5.8 5.7 4.7 5.3 5.1

Inflation (% y-y) 5.3 4.4 5 2.9 4.7 4.5

IDR/USD 11,600 11,900 12,500 14,000 13,900 14,500

Average 3-mo govt T-Bill rate (%) 6 6 6.2 - 5.5 -

Oil price (USD/bbl) 105 105 60 55 50 57

Oil lifting (k’ bbl/day) 818 900 825 - 830 -

Gas lifting (k’ boe/day) 1,224 1,248 1,221 - 1,155 -

Source: Ministry of Finance, Bahana estimates

State budget summary (IDRtn), 2015-16

2015 2015 2016 2016 % %

Revised State changes changes

Budget Budget Target Bahana

Revenues & grants 1,761.60 1,321.20 1,822.50 1,509.60 37.9 14.3

Tax (excluding custom & duties) 1,294.30 923.00 1360.1 1,062.37 47.4 15.1

Non-tax 467.3 398.2 462.4 447.227 16.1 12.3

Expenditures 1,984.10 1,616.70 2,095.70 1,843.00 29.6 14.0

Central govt 1,319.50 1,054.30 1325.5 1,161.10 25.7 10.1

Infrastructure 290 200 313 275 56.5 37.5

Energy subsidies 137.8 128.8 102.1 89.8 -20.7 -30.3

Transfer regions 664.6 562.4 770.2 681.9 36.9 21.2

Surplus/deficit (IDRtn) -222.5 -295.5 -273.2 -333.4 -7.5 12.8

% of GDP -1.9 -2.7 -2.2 -2.7 - -

Bahana’s

estimate

Bahana’s

estimate

Source: Ministry of Finance, Bahana estimates

2016 Compendium

35

Infra progress: Ongoing, but behind schedule

In 2015, the government has allocated an infrastructure budget of

IDR290tn with the following majority (65%) breakdown: Ministry of

Public of Works (36%, IDR105.5tn), Transportation Ministry (18%,

IDR52.5tn) and several SOEs (11%, IDR30.8tn) through capital

injections.

Based on the e-procurement system of the Ministry of Public Works,

around 86% of the projects have been awarded, including some of the

bigger contracts.

That said, there are some multi-year and bigger contracts still

undergoing the tender process (circa 21%), creating opportunities for

listed SOE companies to book additional gov’t contracts in 4Q15.

IDR290tn infrastructure budget breakdown by recipient, 2015F

36%

18%

16%

11%

10%

5%2% 2%

Ministry of Public Works and Public Housing

Ministry of Transportation

Other Ministries/Institutions

State Capital Participation (PMN)

Special allocation funds

Others

Ministry of Energy and Mineral Resources

Infrastructure investments

Source: Ministry of Public Works, Bahana

Public Works Ministry’s project breakdown, Oct 2015

Tender invitation Ongoing tender Awarded tender

>200bn 1,195 16,357 13,329

50-200bn 849 5,369 16,210

<50bn 181 1,591 56,468

Total 2,225 23,317 86,007

Tender invitation Ongoing tender Awarded tender

>200bn 3 46 32

50-200bn 6 40 214

<50bn 25 450 12,190

Total 34 536 12,436

Project progress (IDRbn)Amount

(IDRbn)

Amount

(IDRbn)

Number of package (unit)


Public Works Ministry’s tender progress, Oct 2015

27.4%

48.1%

58.2%64.7%

70.8%86.0%

30.3%

22.7%

24.0%20.5%

26.3%23.3%

16.3%

9.6%

4.1%5.3%

2.9% 2.2%

25.9%19.6%

13.6%9.5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Mar-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15

Not yet tendered

Tender invitation

Ongoing tender

Awarded tender


2016 Compendium

36

Infra progress: Awarding of bigger projects

With the Public Works Ministry almost completed the tender process of

its 2015 budget, we notice that the projects are evenly awarded to all

listed construction companies, with no apparent bias to a particular

company.

However, there are still a number of large and multi-year projects which

currently still under tender process such as the Karangnongko-Wagon

road reconstruction (IDR1.55tn), the Manado-Bitung toll road (IDR1.1tn)

and the Kendari Bay bridge (IDR749bn).

On the back of its effort to evenly distribute the 2016 budget, we notice

that the Public Works Ministry has begun the tender process for its 2016

contracts, although those projects are still relatively small in value.

Awarded project tenders (above IDR100bn), Oct 2015

No Projects IDRbn Region Project winner

1 Pulau Balang II bridge construction 1,391.0 East Kalimantan Hutama Karya- ADHI-Bangun Cipta (JO)

2 Manado-Bitung toll road 1,133.8 North Sulawesi Hebei Road and Bridge Group - Hutama Karya

3 Tapin dam construction 937.1 South Kalimantan Brantas Abipraya - WSKT (JO)

4 Holtekamp bridge construction 906.8 Papua PTPP - Hutama Karya - Nindya Karya (JO)

5 Balikpapan-Samarinda toll road construction 865.2 East Kalimantan Beijing Urban Construction-WIKA-PTPP

6 Paselloreng Main Dam construction 755.1 South Sulawesi WIKA - Bumi Karsa (JO)

7 Solo-Kertosono toll road (section I) 563.8 Central Java WIKA - WSKT - Nindya Karya (JO)

8 Batuaji-Kuaro road widening 430.0 East Kalimantan WSKT - Nindya Karya

9 Tanju and Mila dams 377.8 West Nusa Tenggara Nindya Karya - Hutama Karya (JO)

10 Sibolga-Tapsel road widening 364.3 North Sumatra PTPP

11 Gede Bage access road construction 340.0 West Java WIKA

12 Salubatu-Mambi road and bridge construction 330.5 West Sulawesi Hutama Karya-Passokorang-Tuju Wali Wali

13 Molosipat-Lambunu-Mepanga road widening 318.6 Central Sulawesi Modern Widya Technical

14 Jabung irrigation construction III 298.4 Lampung WSKT - Abdi Mulia Berkah

15 Manggar river bridge 289.6 East Kalimantan WIKA

16 Tomata-Beteleme road widening 285.6 Central Sulawesi JKON-Multigraha Istika Makmur

17 Jabung irrigation construction III 254.8 Lampung ADHI

18 Grindulu Brige construction 253.9 East Java Nindya Karya

19 Ogoamas - Siboang road widening 251.1 Central Sulawesi Perdana Bumi Syariharti

20 Flood control facility in Padang 248.4 West Sumatra PTPP-Ashfri Putralora Source: Ministry of Public Works, Bahana

Public Works Ministry’s project breakdown, Oct 2015 No Projects IDRbn Region

1 Karangnongko-Wangon road reconstruction 1,554.7 Central Java

2 Kendari Bay bridge construction 749.0 Southeast Sulawesi

3 Bintang Bano main dam construction 686.7 West Nusa Tenggara

4 Manado-Bitung toll road construction (PA1) 549.2 North Sulawesi

5 Manado-Bitung toll road construction (PA1) 524.2 North Sulawesi

6 Simpang Empat-Simpang Air Balam 519.5 West Sumatra

7 Rotiklot dam 497.0 East Nusa Tenggara

8 Sindang Heula dam construction 459.5 Banten

9 Kambang/Inderapura road widening 457.6 West Sumatra

10 Batas Serawak-Kembayan road widening 450.0 West Kalimantan

11 Jakarta coastal protection Phase II (Package 2) 416.0 Jakarta

12 Trisakti port access road construction 408.1 South Kalimantan

13 Jakarta coastal protection Phase II (Package 1) 385.5 Jakarta

14 Manggopoh-Pariaman road construction 377.3 West Sumatra

15 Simpang Tanjung - Aruk II road widening 373.8 West Kalimantan

16 Nipa-Nipa pond construction 369.9 South Sulawesi

17 Rehabilitation of Klambu Kiri channel 357.4 Central Java

18 Construction of Diversion Channel in Putih River 328.6 Jogjakarta

19 Floodway Cisangkuy construction (Package I) 325.8 West Java

20 Floodway Cisangkuy construction (Package II) 316.7 West Java

21 Manado-Bitung toll road construction (PA1) 305.4 North Sulawesi Source: Ministry of Public Works, Bahana

Upcoming project tenders (above IDR100bn), Oct 2015

No Projects IDRbn Region

1 Musi IV bridge construction 553.6 South Sumatra

2 Batu Mundom - Natal road reconstruction 326.2 North Sumatra

3 Rianiate - Batu Mundom road reconstruction 315.5 North Sumatra

4 Sp. Jam flyover construction 187.4 Riau

5 Gantung bridge material 182.0 Jakarta

6 D.I. Lhok Guci irrigation phase I -package I 145.8 Aceh

7 D.I. Lhok Guci irrigation phase I -package II 145.8 Aceh

8 Gaplek flyover construction 130.0 Jakarta


2016 Compendium

37

Infrastructure spending: Toning down expectations

In the government’s 2016 infrastructure spending breakdown,

infrastructure spending is expected to increase to IDR313.5tn (2015

revised state budget: IDR290.3tn). Note that as of 11M15, the Ministry

of Public Works only managed to disburse 62.1% of their full-year

budget while the Ministry of Transportation only spent 41.2% of their

full-year target.

Government infrastructure spending pattern is different from 2015 as

the government transfer to the village fund disbursement and

government financing while cutting budget allocation on ministerial

spending.

With expected lower tax revenue next year, we expect infrastructure

spending to only reach IDR275tn at most in 2016.

Ministerial spending realization, 11M15

73.1

62.1

0

10

20

30

40

50

60

70

80

90

100

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

(%)

Target Realization

Ministry of Public Works

50.2

41.2

0

10

20

30

40

50

60

70

80

90

100

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

(%)

Target Realization

Ministry of Transportation


Infrastructure spending plan

Spending category (IDRtn)

2015 revised

stated budget

(IDRtn)

2016 state

budget

(IDRtn)

Growth

(%)

Economic infrastructure 279.9 302.3 8.0

1 Ministerial 196.4 167.5 -14.7

- Public works & housing 111.1 101.2 -8.9

- Transportation 59.1 47.2 -20.1

- Agirculture 8.9 6.2 -30.3

- Energy and Mineral 8.1 3.6 -55.6

- Others 9.2 9.3 1.1

2 Non ministrial Spending 6.8 5.1 -25.0

- Viability Gap Funding (VGF) 1.2 1.1 -8.3

- Grants 4.5 4 -11.1

- Others 1.1 0 -

3 Village fund 41 79.4 93.7

- Specific allocations 29.7 57.2 92.6

- Infrastructure 8.3 18.8 126.5

- Others 3 3.4 13.3

4 Financing 35.7 50.3 40.9

- Gov’t infrastructure investment 5.1 9.2 80.4

- Gov’t capital allocation 28.8 40.2 39.6

- Others 1.8 0.9 -50.0

Social infrastructure 6.5 6.5 0.0

- Ministy of Education and Culture 4.4 6.1 38.6

- Ministry of Religious Affairs 2.1 0.5 -76.2

Infrastructure support 3.9 4.7 20.5

- BPN 1.3 1.6 23.1

- Ministry of Industry 0.6 0.5 -16.7

- Others 2 2.6 30.0

Total 290.3 313.5 8.0 Source: 2016 state budget

2016 Compendium

38

Government finance: IDR532tn of gross bond issuance

To finance 2016’s budget deficit, the government plans to issue around

IDR532tn of gross bond issuance or IDR372tn of net bond issuance to

finance the 2016 budget deficit of IDR273.2tn (Bahana: IDR333.4tn), of

which 24.4% of total bond (IDR130tn) is non-IDR bonds. In December

2015, the government had already issued USD3.5bn of non-IDR global

bonds for 2016 budget prefunding.

In 2016, the government needs to pay USD11.2bn (IDR162tn) for both

the principal and interest on the government bonds; 35% of the interest

and principal payments are for non-IDR bonds. January, March, May and

September are the months with large government bond payments.

Composition wise, 41% of outstanding government bonds are non-IDR

bonds. Next year, the government is also willing to issue Panda bonds

(CNY denominated) as a source of financing.

Indonesia government bond maturity profile, 2016

1,358

54209 192

68 0

502

54209 192

68

546

242

1,393

222

1,361

254

546

242

2,378

222

662

254

0

500

1,000

1,500

2,000

2,500

Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16

(USDmn)

Non-IDR bond IDR bond

Source: Bloomberg

Composition of government bond issuance, 2016


Debt positions according to main currencies, 2010-2015F

903 993 1,098 1,2641,478

1,692358

402482

692

759

928

298302

281

278

232

247

1,5591,697

1,861

2,2342,469

2,867

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2010 2011 2012 2013 2014 2015

(IDRtn)

IDR USD JPY


2016 Compendium

39

Government stimulus: Preventing further slowdown

To maintain market confidence, the government finally announced 6

economic stimulus packages ranging from deregulation, cuts in energy

price, tax incentives and special economic zones.

From monetary side, BI continues to maintain IDR stability using the

stabilization package and interventions, both in spot and forward

markets.

At this point, most of the policies are largely structural and will only

provide significant impact over the medium term.

BI policy to tackle IDR depreciation

No. IDR stabilization package

1. Maintaining IDR stability

BI will intervene in forward markets by the beginning of October

2. Enhancing IDR liquidity management

BI to issue certificates of deposits and reverse repurchase orders of SBNs with 2-week tenors to absorb excess IDR liquidity

3. Advancing forex supply and demand management

BI will increase the limit of non-underlying forex/IDR forward transactions from USD1mn to USD5mn, issue SBBIs in foreign currencies, lower SBI holding period from 1 month to 1 week, additional incentives for term deposits from exports earnings and enhancing transparency of foreign exchange management

Source: Bank Indonesia, Bahana

Stimulus package summary Focus: Deregulation, bureaucratic reform and law supremacy

1. Advance export-financing activities through national interest account.

2. Determine specific-gas prices for certain industries.

3. Continue development of special industrial zones.

4. Extend role of SMEs in the national economy.

5. Ease regulations in the trade sector.

6. Ease restrictions on foreign visas.

7. Enhance maritime industry by converting fisherman fuel demand from diesel to gas.

Focus: Cuts in energy prices (avtur, diesel, gas) and business deregulation

8. Cattle-market stabilization.1. Energy price cut

Focus: Incentives for asset revaluations and abolishing double taxation for real estate investment trusts (REITs).

Focus: lower taxes on labor-intensive industries, building-permit process, and stimulus measures for real sectors

9. Advance village fund realization. 2. Business regulation easing1. Lower tax on revaluations

1. Employee income tax (PPh 21)

10. Provide 2 additional months of subsidized rice (raskin) to the poor.

Package 2 3. 6 OJK initiatives in financial sector Package 42. Removal of REIT double taxation

Package 62. Industry investment taxes

Package 1Focus: Investment, tax allowances, and lower taxes for strategic sectors.

Package 3 Focus: Labor market policies Package 5 Focus: Special economic zones, water resources and FDA policy.

Package 7

1. Easing investment regulations:1. New regulation on wages

1. Special economic zone incentives

2. Lower taxes for strategic sectors and incentives for bonded logistics

2. Subsidized micro loans for overseas and domestic workers 2. Water resources policy

3. More details on tax allowances3. Export financing for 30 companies 3. Food & Drug administration policy (e-

based system)

4. Lower time-deposit taxes forexporters

Source: Government

2016 Compendium

40

Government’s moves to strengthen domestic demand

The government plans to raise the tax-free threshold of personal

income from the current IDR24.3mn to IDR36mn to bolster purchasing

power, generating an additional IDR50k for those with a monthly

salary of IDR5mn.

If the non-taxable income is raised to IDR50mn, consumers could have

IDR107k of extra cash in their pocket. Recently, the government also

cut the income tax for labor-intensive industries by 50% for employees

with income of less than IDR50mn a year.

Note that the government has disbursed IDR600k (USD46) per

household at the beginning of April 2015 to support domestic

purchasing power due to higher fuel prices, and IDR450k per year per

student in September.

Earnings calculation on different taxable income thresholds

Current Rule 36mn nontaxable income 50mn nontaxable income

Salary components

Core salary (Jakarta’s minimum wage) 5,000,000 5,000,000 5,000,000

Accident insurance premium 15,000 15,000 15,000

Death insurance premium 9,000 9,000 9,000

Gross salary5,024,000 5,024,000 5,024,000

Deductions

Allowance 136,200 136,200 136,200

Pension contribution 50,000 50,000 50,000

Old age insurance contribution 60,000 60,000 60,000

-246,200 -246,200 -246,200

Monthly net income 5,270,200 5,270,200 5,270,200

Annualised income (12x) 63,242,400 63,242,400 63,242,400 63,242,400 63,242,400 63,242,400

Status of dependence: TK/0

non-taxable income -24,300,000 -36,000,000 -50,000,000

Taxable income for the year 38,942,400 27,242,400 13,242,400

Tax paid (5% x taxable income) -1,947,120 -1,362,120 -662,120

Earnings for the year 61,295,280 61,880,280 62,580,280

Monthly savings generated under the proposed

rule 48,750 107,083

Savings/monthly income 0.00% 0.95% 2.05%

Source: Taxation General, Bahana

Cash transfer scheme due to Jokowi’s policy

Source: Source: Ministry of Culture and Elementary and Secondary Education

Cash transfer scheme due to fuel price hike (Jokowi regime)

Source: Ministry of Finance, PSKS

Elementary school = IDR450K/year per

student

In 2015, the Government has distributed around IDR12.4tn

(USD846mn) to around 20.3mn poor students from disadvantaged families


student


student

In 2015, the Government had

distributed around IDR9.8tn

(USD760mn) to 16.4mn poor households

In 2014, the Government had

distributed around IDR6.2tn

(USD504mn) to around 15.15mn poor households

Nov – Dec = IDR400k per

household

Jan – Mar = IDR600K per

household

2016 Compendium

41

Spending support ahead: Simultaneous regional elections

On 9 December 2015, the General Election Commission (KPU) conducted

phase 1 of the simultaneous regional elections: 269 elections in total.

Recent news indicated that a party with conflicts like Golkar is losing its

share in regional elections.

Looking at TLKM’s top line growth, past election spending provided

support with Telkomsel’s 1Q-3Q14 growth still up, despite TLKM’s

decelerating growth.

Stimultaneous election schedule

Phase Campaign period

Election Up for re-election in

Total # of elections

1 Aug-Dec 2015 9-Dec-15 2015 - Jun

2016

269: 9 provinces (governors), 36 cities

(mayors) and 224

regencies (regents)

2 Oct-Feb 2016* February-17 Jul 2016 - Dec 2017

TBC

3 Feb-Jun 2018* June-18 2018-19 TBC

4 Mar-July

2020* 2020

Result of 1st

phase election TBC

5 TBC 2022 Result of 2nd phase election

TBC

6 TBC 2023 Result of 3rd phase election

TBC

7 TBC 2027 Result of 4th phase election

TBC

Source: Bahana, Election Committee, *Expected

Court settlement of inter-party conflict

Source: Bahana

TLKM y-y revenue growth, 1Q04-3Q15

-10

-5

0

5

10

15

20

25

30

35

3Q04 3Q05 3Q06 3Q07 3Q08 3Q09 3Q10 3Q11 3Q12 3Q13 3Q14 3Q15

(%)2009 election 2014 election2004 election


2016 Compendium

42

Tax amnesty: A game changer?

The government has announced some policy actions to help achieve its

2016 tax target by providing tax incentives, income tax optimization and

some technical related policies.

Currently, the government expects IDR100tn of extra tax revenue from

this tax amnesty program with 2% in 1Q16, 4% in 2Q16 and 6% in 2H16.

Based on our study, the success of past tax amnesty programs depended

on three factors: 1. Economic uptrend; 2. Uniqueness perception (the

only one or not); 3. Allowance of money to be parked offshore; 4.

Certainty on rule of law.

Tax amnesty comparison in some nations

Country

Accompanied by enhanced enforcement(Rule of law)

Implemented for first time(Uniqueness)

Designed to attract flight

capital

Geared to domestic capital

Accompanied by tax rate adjustment

Result

Argentina No No Yes No No Unsuccessful

Belgium No No Yes Yes No Unsuccessful

Colombia Yes Yes No Yes Yes Successful

France No No Yes No Yes Unsuccessful

India No No Yes Yes No Successful

Ireland Yes Yes No Yes No Successful

Indonesia No ? Yes No Yes ???

Source: FRBNY Quarterly review, Bahana

Government tax initiatives

No. Policy Explanation and implication

1 Change in RUU KUP

a. Paperless self-assessments (e-registrations, e-tax

payments and e-filings)

b. Obligation to use IDR for tax payments

2 Income tax optimization, without disturbing business investment environment

Excise tax supervision and internal funding quality improvement

3 National economy stability and purchasing power maintenance related policy

Higher non-taxable income (PTKP)

4 Competitiveness and national industry value-added improvement related policy

Increasing consumption goods excise tax policy (PMK 132/ 2015)

5 Taxable goods consumption maintenance Excise tax adjustments

6 Tax incentives

a. Tax allowances

b. Tax holidays

c. Government-borne duties (BMDTP)

7 Tax technical policy

a. Taxpaying obedience improvement, for individuals and companies

b. Tax ratio and tax buoyancy improvement, through

extension, intensification, law effectiveness, administration and regulation improvement

c. Tax coverage improvement

d. Tax data basic improvement, either internal or external

8 Excise tax policy

a. Strengthening legal framework and implementing excise tax regulation

b. Developing and perfecting IT system and procedures

c. Import supervising optimization

d. Excise tax legal framework

e. Export supervising optimization

f. Organizations, human resources and infrastructure

balancing

9 Non-taxable income (PTKP) PTKP hike for individual from IDR24.3mn to IDR36mn

per annum

Source: 2016 state budget

2016 Compendium

43

Minimum wages: Execution risk (compliance issue)

Since 2009 – 2015, Indonesia’s minimum wages have been growing by

13% CAGR.

The government already announced new minimum wages policy using

GDP and inflation as the formula. However, 15 provinces will reportedly

not comply with this rule in 2016 and will raise the minimum wages by

an average of 11.43%.

However, in comparison with other ASEAN nations, Indonesian wages

are still one of the lowest.

Indonesia minimum wages

508603

672746

842909

9891,089

1,297

1,506

1,782

19

8

18

0

5

10

15

20

25

40

240

440

640

840

1,040

1,240

1,440

1,640

1,840

2,040

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

(%)(IDR'000)

Monthly minimum wages (LHS) Change in monthly minimum wages, y-y (RHS)

Source: CEIC

Regional wages comparison, Oct 2015

302.7286.6

255.5

216.3

126.5117.5

0

50

100

150

200

250

300

350

Philippines China Thailand Malaysia Indonesia Vietnam

(USD/month)

Source: World Bank

Regional minimum wages Cha nge Cha nge

2 0 15 2 0 16 F (%) 2 0 15 2 0 16 F (%)

1 Riau Island 1,954,000 2,178,710 11.5 16 Central Kalimantan 1,896,367 2,057,558 8.5

2 West Kalimantan 1,560,000 1,739,400 11.5 17 North Sulawesi 2,150,000 2,400,000 11.6

3 West Nusa Tenggara 1,330,000 1,482,950 11.5 18 Central Sulawesi 1,500,000 1,670,000 11.3

4 West Sumatera 1,615,000 1,800,725 11.5 19 Maluku 1,650,000 1,775,000 7.6

5 Jambi 1,710,000 1,906,650 11.5 20 West Papua 2,015,000 2,237,000 11.0

6 Nanggroe Aceh Darusalam 1,900,000 2,118,500 11.5 21 West Sulawesi 1,655,500 1,864,000 12.6

7 South Kalimantan 1,870,000 2,085,050 11.5 22 Bengkulu 1,500,000 1,605,000 7.0

8 Banten 1,600,000 1,784,000 11.5 23 Riau Island 1,878,000 2,095,000 11.6

9 Gorontalo 1,600,000 1,875,000 17.2 24 DKI Jakarta 2700000 3,100,000 14.8

10 West Java 1,887,000 2,250,000 19.2 25 North Kalimantan 2,026,126 2,161,253 6.7

11 Bali 1,621,172 1,807,600 11.5 26 South Sulawesi 2,000,000 2,250,000 12.5

12 North Sumatera 1,625,000 1,811,875 11.5 27 North Kalimantan 2,026,126 2,175,340 7.4

13 Bangka Belitung 2,100,000 2,341,500 11.5 28 Lampung 1,581,000 1,763,000 11.5

14 Central Kalimantan 1,896,367 2,057,558 8.5 29 South East Sulawesi 1,652,000 1,850,000 12.0

15 Bangka Belitung 2,100,000 2,341,500 11.5 30 North Maluku 1,577,617 1,681,266 6.6

Ave ra ge 1,8 0 5 ,8 7 6 2 ,0 0 8 ,8 4 8 11.2

Minimum wa ge s (IDR/Month)

No. Provinc e

Minimum wa ge s (IDR/Month)

No. Provinc e

Source: Kontan

2016 Compendium

44

1998 vs 2015: Similar condition?

The current condition is different from that in 1998. Prior to the 1998

crisis, Indonesia was growing at 8% above its capacity, compared to the

current condition of no overheating, particularly since Bank Indonesia

has already introduced tight monetary policies since 2013.

On the external balance front, the Current Account Deficit to GDP is

similar to the 1998 level, but has been improving of late helped by the

current economic slowdown resulting in lower imports.

Balance sheet wise, the 1998 foreign debt to GDP was 150% and

corporate net gearing reached 160% while the 2014 debt to GDP ratio

was at 33.4% with corporate net gearing of just 19.0%, likely falling to

18.3% in 2015.

Output gap, 1990-2015

7.8

-13.6

5.0

6.4

4.5

6.4

4.8

-8

-6

-4

-2

0

2

4

6

8

10

-15

-10

-5

0

5

10

4Q1991 2Q1993 4Q1994 2Q1996 4Q1997 2Q1999 4Q2000 2Q2002 4Q2003 2Q2005 4Q2006 2Q2008 4Q2009 2Q2011 4Q2012 2Q2014

(%)(%)

Output Gap (RHS) Annualized GDP Growth (LHS)

Economic Overheating

Asian Crisis

SubprimeMortgage

GlobalSlowdown

Source: Statistics Indonesia, Bahana Estimates

Balance Sheet comparison

2014Debt to GDP: 33%

Corporate net gearing: 19%

1998Debt to GDP: 150%

Corporate net gearing: 160%


Current Account Deficit to GDP, 1990-2015

-3.6

5.3

3.0

-2.5

-5

-4

-3

-2

-1

0

1

2

3

4

5

6

4Q91 4Q92 4Q93 4Q94 4Q95 4Q96 4Q97 4Q98 1Q00 1Q01 1Q02 1Q03 1Q04 1Q05 1Q06 1Q07 1Q08 1Q09 1Q10 1Q11 1Q12 1Q13 1Q14 1Q15

(% of GDP)

Source: Bloomberg

2016 Compendium

45

Sovereign rating: Possible investment upgrade from S&P

Recently, S&P has upgraded the outlook to positive from stable as a

result of fuel subsidy removal and lower fiscal deficit in the last 3 years.

Fot its fiscal discipline, Indonesia’s sovereign rating received investment

grade from Fitch & Moody’s back in 2012.

S&P stated that its rating may be raised to investment grade in the next

12 months should the government achieve its objective of improving the

quality of expenditures, which was slightly up in 1H15.

Compared to its EM peers, generally Indonesia’s sovereign ratings are

still below those of Mexico, South Africa, Brazil and India.

Indonesia’s historical sovereign rating, 1995-2015

Asian monetary crisis hit in 1997-

1998

Commodity booming 2002-2008

0

1

2

3

4

5

6

7

8

9

10

11

12

13

0

1

2

3

4

5

6

7

8

9

10

11

12

13

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

S&P Moody's Fitch

Baa1

Baa2

Baa3

Ba1

Ba2

Ba3

B1

B2

B3

Caa1

Caa2No

n-i

nv

est

me

nt

gra

de

Inv

est

me

nt

gra

de

A

Aa

Aaa

A

BBB

BBB -

BB+

BB

BB -

B+

B

B-

CCC+

CCC

AA -

AA

AAA

Source: Bloomberg

9M14 vs. 9M15 budget realization

1,234.8

1,081.3

1248.9

989.8

800

850

900

950

1,000

1,050

1,100

1,150

1,200

1,250

1,300

Spending Revenue

(IDRtn)

9M14 9M15

+1.1% y-y

-8.5% y-y


Latest BRICS-MINT countries’ sovereign ratings

Country

Name

Moody's S&P Fitch

Date Rating Outlook Date Rating Outlook Date Rating Outlook

China Apr-13 Aa3 STABLE Dec-10 AA- STABLE Oct-13 A+ STABLE

Mexico Feb-14 A3 STABLE Dec-13 A STABLE May-13 A- STABLE

South Africa Nov-14 Baa2 STABLE Jun-14 BBB+ STABLE Jun-14 BBB+ NEG

Brazil Sep-14 Baa2 NEG Mar-14 BBB+ STABLE Apr-15 BBB NEG

India Apr-15 Baa3 POS Sep-14 BBB- STABLE Jun-13 BBB- STABLE

Indonesia Jan-12 Baa3 STABLE May-15 BB+ POS Dec-11 BBB- STABLE

Turkey Apr-14 Baa3 NEG May-15 BBB- NEG Nov-12 BBB STABLE

Russia Feb-15 Ba1 NEG Jan-15 BBB- NEG Jan-15 BBB-NEG

Nigeria Nov-12 STABLE Mar-15 B+ STABLE Mar-15 BB NEG

Source: Bloomberg

This report uses credit ratings assigned by Moody’s, Standard & Poor’s and Fitch, which are not registered with Japan’s Financial Services Agency pursuant to Article 66, Paragraph 27 of the Financial Instruments and Exchange Act. Investors should read the related attachment for information on ratings assigned by unregistered rating agencies.

2016 Compendium

46

Summary of latest macro developments

2015 Nov FX reserves of USD100.2bn

10M15 trade balance: USD8.1bn surplus

3Q15 CAD: 1.86% of GDP

CPI: Nov: 4.88% y-y; 2015F: 2.9%

BI rate: 7.5%, expect a 25bps rate cut in 1Q16

3Q15 GDP growth: 4.73% y-y, slightly improved from 4.67 % in 2Q15;

we expect 2015 GDP growth of 4.72%

Indonesia’s macroeconomic indicators, 2011-15 YTD

Indicators Nov-15 Oct-15 Sep-15 Aug-15 2014 2013

FX reserves

(USDbn) 100.2 100.7 101.7 105.3 111.9 99.40

CPI (% y-y) 4.88 6.25 6.83 7.18 8.36 8.08

BI rate (%) 7.50 7.50 7.50 7.50 7.75 7.50

IDR/1USD 13,841 13,405 14,651 14,053 12,350 12,170

Trade balance

(USDmn) 1,019 1,029 327.6 -1.89 -4.08

Source: Bloomberg

Govt revenue progress, 10M15

11M15

(Unofficial)

(IDRtn)

10M15

(IDRtn)

Growth

(%, y-y)

Realization

of 2015

target,

11M15

(%)

Realization

of 2015

target,

10M15

(%)

Realization

of 2014

target (%)

Tax & custom revenue 946 894 -1.4 63.5 60.0 72.7

Tax 806 767.1 -1.0 62.3 59.3 72.2

Custom and duties 140 126.9 -3.8 71.8 65.1 75.9

Total Govt spending

1,384 -2.1

69.7 75.3

Personnel Expenditure

234.2 15.1

78.2 78.7

Goods expenditure

131.5 16.3

50.6 57.9

Capital expenditure

99.1 38.8

39.2 44.4

Land clearing 4.2

na 93 na na

Subsidy

151.4 -57.3

71.4 88.0

Regional transfer

553.9 14.8

83.3 80.9

Source: Ministry of Finance, Bahana

Quarterly GDP growth, 2Q09-3Q15

6.48

6.27

6.015.94

6.116.21

5.945.87

5.615.595.50

5.61

5.145.03

4.925.01

4.714.674.734.794.77

5.19

4.97

4.0

4.5

5.0

5.5

6.0

6.5

(%)

Source: Statistics Indonesia, Bahana

2016 Compendium

47

Economic indicators

3Q14 4Q14 1Q15 2Q15 3Q15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15

Car sales (units) 290,558 275,351 282,345 243,113 239,191 82,172 55,615 90,538 93,038 88,325

(% change, y-y) (5.1) (14.4) (14.1) (22.5) (17.7) (25.7) (39.1) (6.3) (9.3) (16.1)

Motorcycle sales (units)

1,850,626 1,814,363 1,605,043 1,569,119 1,647,029 574,714 421,838 622,089 603,102 602,882

(% change, y-y) (0.9) (7.1) (19.1) (29.3) (11.0) (23.5) (21.1) 2.1 (14.7) (10.8)

Cement production

('000 tonnes)

13,693 16,940 13,450 13,357 13,729 4,680 3,543 4,942 5,244 5,646

(% change, y-y) 0.0 6.5 (5.5) (9.8) 0.3 (9.3) (17.3) 16.0 1.8 (2.9)

Cement sales

('000 tonnes) 14,230 16,933 13,735 14,345 14,906 5,049 3,581 5,530 5,795 6,471

(% change, y-y)

0.9 2.6 (2.5) (3.9) 4.8 (2.8) (6.6) 16.9 2.3 12.2

Regular fuel price

(IDR/litre) 6,500 7,833 6,933 7,400 7,400 7,400 7,400 7,400 7,400 7,400

(% change, y-y)

0.0 20.5 6.7 13.8 13.8 13.8 13.8 13.8 13.8 13.8

LPG 12kg 8,136 9,397 11,083 11,750 4,250 11,750 11,750 11,750 11,217 11,217

(% change, y-y)

39.1 60.6 47.0 55.8 (47.8) 55.8 55.8 55.8 20.3 20.3

Rice price (IDR/litre) 11,381 11,808 12,778 12,410 12,729 12,425 12,509 12,709 12,968 13,067

(% change, y-y) 4.2 7.4 12.2 10.2 11.8 10.4 10.5 11.6 13.4 13.4

Consumer Confidence

Index 119.9 119.1 119.1 110.5 106.7 111.3 109.9 112.6 97.5 99.3

Industrial Production

Index

121.6 123.7 122.8 125.5 126.8 - - - - -

Retail Sales Index

174.3 171.0 173.6 182.3 186.8 188.1 204.2 177.5 178.8 178.3 Source: CEIC, Bahana estimates

2016 Compendium

48

Economic forecasts

1Q15 2Q15 3Q15 4Q15F

1Q16F 2Q16F 3Q16F 4Q16F

2014A 2015F 2016F 2017F

Real sectors

GDP growth (% y-y)

4.7 4.7 4.7 4.8

4.8 5.2 5.0 5.5

5.0 4.7 5.1 5.2 Private spending (%y-y)

5.0 5.0 5.0 5.1

5.1 5.1 5.0 5.3

5.3 5.0 5.0 5.1 Investment (%y-y)

4.4 3.6 4.6 2.0

5.8 4.7 4.4 5.2

4.1 3.6 5.0 6.6 Government spending (%y-y)

2.2 2.3 6.6 8.9

6.1 6.3 8.3 6.1

2.0 5.4 6.7 6.1 Total exports (%y-y)

-0.5 -0.1 -0.7 1.5

3.5 3.5 1.4 1.4

1.0 0.3 2.4 1.0 Total imports (%y-y)

-2.2 -6.8 -6.1 -4.0

2.0 3.6 2.5 1.4

2.2 -4.1 2.4 3.3

FX and interest rate

BI rate (%)

7.5 7.5 7.5 7.5

7.3 7.3 7.0 6.8

7.8 7.5 6.8 6.3 FASBI (%)

5.5 5.5 5.5 5.5

5.3 5.3 5.0 4.8

5.8 5.5 4.8 4.5 Lending facility (%)

8.0 8.0 8.0 8.0

7.8 7.8 7.5 7.3

8.5 8.0 7.3 7.0 10yr ID govt bond yield (%)

7.4 8.3 9.6 8.2

8.0 8.2 7.9 7.8

7.8 8.2 7.8 7.5 JIBOR 1M

6.6 6.7 8.2 7.5

7.1 6.6 6.4 7.0

6.6 7.5 7.0 6.5 IDR/1USD (end of period)

13,075 13,333 14,670 14,000

14,200 14,300 14,700 14,500

12,385 14,000 14,500 14,000 IDR/1USD (Average)

12,958 13,233 13,948 13,850

14,188 14,424 14,621 14,900

11,917 13,515 14,533 14,115

Prices & commodities

Headline inflation (%)

6.4 7.3 6.5 2.9

4.1 3.4 3.9 4.5

8.4 2.9 4.5 5.0 Core inflation (% y-y)

5.0 5.0 5.1 4.8

4.8 4.3 4.0 4.0

4.9 4.8 4.0 4.5 Brent oil price (USD/barrel)

64.9 49.6 52.7 55.0

52.0 55.0 60.0 57.0

99.4 55.0 57.0 60.0 Coal price (USD/Mt)

56.9 58.6 52.3 58.0

58.0 55.0 54.0 53.0

70.9 58.0 53.0 54.0 Regular gasoline price, RON 88 (IDR/Liter)

7,400 7,400 7,400 7,400

7,400 7,400 7,400 7,400

8,500 7,400 7,400 7,400

External balance

CA balance (% of GDP)

-2.0 -2.0 -1.9 -2.0

-1.9 -2.5 -2.3 -2.1

-3.1 -2.0 -2.3 -2.3 Trade balance (USDmn)

2320.0 2082.0 2741.0 2700.0

2366.4 2123.6 2329.9 1755.0

-1942.4 9843.0 8574.9 5573.7 Fiscal deficit (% of GDP)

- - - -

- - - -

-2.2 -2.7 -2.7 -2.5

Others

GDP per capita (USD)

- - - -

- - - -

3,523 3,212 3,222 3,470 Population (Mn)

- - - -

- - - -

252 256 259 262 Source: CEIC, IMF, Bahana estimates

2016 Compendium

49

Energy outlook

2016 Compendium

50

Oil: Global oil oversupply likely to persist (1)

Both EIA and OPEC estimate the global oil oversupply of about 1.5m b/d

to persist due to the shale oil boom amid weaker global demand. China

and the US account for around 32% of global oil consumption.

As US horizontal rig counts jumped over the period of QE1 to QE3, we

believe the increase in money supply moved not only to developing

countries, but also to fund investments in horizontal rigs.

As for the impact, US crude-oil inventory levels have surged 47% since

January 2012, to November 2015’s level of 487mn barrels, well above

historical average. However, going forward, we expect lower supplies as

O&G companies have 30% capex investment reduction in 2015.

US rig counts, 2005–15

(rigs) QE1 : USD600bn Dec-08 and

rose to USD750bn in Mar-10

0

200

400

600

800

1,000

1,200

1,400

1,600

US horizontal US vertical US directional

Horizontal rigsadded by 144 rigs in 2008

QE2: USD75bn/month Nov-10 to Jun-11

QE3:USD85bn/month Dec-12 to Oct-14

as of 13/11/15, horizontalrigs were 587 rigs

Numbers of horizontal rigs was plunged on declining oil prices

Source: Baker Hughes, Bloomberg, Bahana

Oil production and consumption, 1Q14–4Q15F

(mn b/d)

91.892.1

92.7

94.294.4

94.894.5

95.596.0

90.3 90.3

91.9

92.9

91.5 91.4

93.494.0

95.7

87

88

89

90

91

92

93

94

95

96

97

1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 2016

World oil supply World oil demand

Source: Bloomberg, EIA, Bahana

DOE crude oil stocks, 2000–November 2015

('000 barrel)

250,000

300,000

350,000

400,000

450,000

500,000

Average: 335,244

Source: US Department of Energy, Bahana

2016 Compendium

51

Oil: Global oil oversupply likely to persist (2)

The US is the biggest oil consumer with a 21% market share of the

global oil market, while China has an 11% market share.

It is worth noting that while the US oil consumption per capita has

declined, China’s consumption per capita has escalated in the past 10

years.

Historically, oil prices have the propensity to rise whenever there is a

war involving oil-producing nations. However, with the US shale oil

production rising, and OPEC’s decision to keep pumping above 30mn

b/d, a significant jump in oil prices appears unlikely at this stage of the

market cycle.

Oil consumption market share, 2014

Source: Bloomberg

Oil prices, 1989–present

(USD/barrel)

0

20

40

60

80

100

120

140

160

WTI Brent

Gulf War: 1990-1991

War in Afganistan:2001Twin tower attacks:9/11 2001

Iraq war: 2003 - 2011Gaza war: 2008 - 2009

France bombing:June 1995

Boom in shale plays

2015 avg. ytd: USD54.9/barrel

Brent avg. 1990-2015 ytd price: USD48.4/barrel


Oil consumption per capita, 2005-14

(barrels/year)

25.6

25.325.0

23.4

22.322.6

22.2

21.621.8 21.8

2.12.0 2.0 2.0 2.1

2.22.4

2.3

2.42.4

1.9

2.1 2.2 2.2 2.32.5 2.6

2.8 2.93.0

4.8 4.74.8

4.7 4.6 4.7 4.7 4.7 4.74.7

20

21

22

23

24

25

26

0

1

2

3

4

5

6

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

World (LHS) Indonesia (LHS) China (LHS) US (RHS)

Oil supply 10 years CAGR: 1% 2014 output: 93.4mn b/d


2016 Compendium

52

Oil: Indonesia’s paradigm shift

O&G Agency (SKK Migas) expects 2015 O&G non-tax revenue

(USD12.3bn) to be lower than the recovery cost (USD13.8bn), causing a

deficit and a paradigm shift in the oil and gas sector.

The government plans to simplify O&G explorations and production

permits from 104 to only 4, increasing the chance of achieving the

USD26mn O&G investment target (Bahana: only 70% of the target

expected) in 2016.

In 2016, we expect oil production to rise on additional 74k b/d from

Cepu blocks, while consumption to be higher on increased GDP growth.

Refinery operations are expected to reduce 2016 oil deficit by 30%.

Oil consumption market share, 2014

(USDmn)

3,970 4,6266,349

9,3388,195

12,433

5,604

8,643

134167

232

344

497

635

242

374

11,535 11,854

13,986

16,517

18,993

18,718

11,800

18,200

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

2009 2010 2011 2012 2013 2014 2015E 2016F

Annual transaction commitment ASR funds Investment

4,104 4,793

6,581

9,6828,692

13,068

5,846

9,017

Source: Upstream Oil and Gas Regulatory Special Task Force (SKK Migas), Bahana

State income proportion, 2008–2016F

(IDRtn)

675 662

771 927

1,030 1,126 1,330 1,631 1,703

304185 221 278 302 306 305

131 120 0

200

400

600

800

1000

1200

1400

1600

1800

2000

2008 2009 2010 2011 2012 2013 2014 2015E 2016F

O&G income Non O&G income

847992

1,2051,332

1,432

1,6351,762 1,823

979

Going forward, government expect state income will be more from non-O&G sector


Oil consumption per capita, 2005-14

('000 b/d)

1,718 1,698 1,718 1,6601,582

1,663

918 875 828 790 785859

(800) (823)(890) (870)

(792)(611)

-1,000

-500

0

500

1,000

1,500

2,000

2011 2012 2013 2014 2015E 2016F

Production Consumption Deficit

30% lower deficit due to production escalate of refineries operation

+74k b/d from Cepu's operation


2016 Compendium

53

Oil: Indonesia’s unresolved oil scarcity

In 2013-20, crude oil demand is expected to increase at a 3.3% CAGR

from 297mn barrels (2013) to 373mn barrels (2020), according to

Applied Technology Agency (BPPT).

Nevertheless, crude-oil production should continue to decline at a CAGR

of 5.8% over the same period.

Fortunately, the government has taken actions to resolve the scarcity.

Following construction of the Cilacap refinery and the restart of the

Tuban refinery in October 2015, the country should be able to reduce its

gasoline imports by 30% in 2016.

Oil trade balance, 2013–20F

Source: BPPT Outlook 2015, Bahana

Government actions to resolve oil scarcity

No. Action

1

Developing at least 6 new oil plants to produce 300,000 barrels/day in 2020, 2025, 2030, 2035, 2040, and 2045

To develop new plants, Pertamina has prepared 2 new programs in oil processing, such as:

a. Refinery Development Master plan Program (RDMP) to revitalize old plants

b. New Grass Root Refinery (NGRR) to develop new plants

2

To maintain national security of oil fuel supply, the government has set a national fuel buffer stock to be increased from 18 days to 30 days

Construction of facilities and infrastructure to support the buffer stock will be handed over to the private sector in 5 years


Oil exports and imports, 2013–30F


2016 Compendium

54

Gas: Huge one off jump in supplies

While there was a huge jump in gas supplies in 2015 due to additional

output from Chevron and Total stemming from 2014 investments, we

expect flat gas production in 2016 due to lower gas investments.

Several plans are spreading as the government is willing to reduce its

gas portion to have lower gas selling prices and support industrial energy

cost savings; for examples, PGAS-Pertagas joint operation

The Energy and Mineral Resources Ministry (ESDM) reports additional

gas reserves of 2.03Tcf, or 1.4% y-y to 151.33Tcf. Indonesia’s natural

gas infrastructure investment is expected to require at least USD22bn in

the western and eastern parts of Indonesia, to be able to lower gas

deficit in 2019.

Satisfaction with social welfare performance, Jan-Oct 2015

(bbtupd)

5,877 5,882

5,715

6,349 6,347

6,688

7,004

7,715

7,345

7,181 7,176 7,039

8,052 8,052

5,500

6,000

6,500

7,000

7,500

8,000

8,500

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016F


Indonesia’s gas balance 2015-30

Details (mmscfd) 2015 2019 2023 2027 2030

Contracted demand

Domestic 4,827 2,830 1,471 769 256

Export 2,786 2,041 1,311 786 562

Committeddemand

Domestic 1,107 3,477 4,871 5,547 5,582

Potential demand

Power 35GW

52 902 1,057 1,063 1,063

Industry 150 393 914 1,261 1,616

Supply 6,907 7,708 7,179 6,451 4,616

Import - 1,777 1,920 2,363 3,267

Source: Ministry of Energy and Mineral Resources (ESDM), Bahana

Indonesia’s gas consumers, 2014


2016 Compendium

55

Coal: Diminishing function as fuel energy

In order to cut carbon dioxide (CO2) emissions, US and China share

similar views on clean energy policy and look to reduce coal-fired power

plant utilization. US with the clean power plan and China with the clean

coal action plan. This will mean continued pressure on coal demand

ahead.

China’s coal-fired power plants contribute 76% of China’s electricity

output, while around 35% of the US electricity are generated by coal.

Thus, we believe the coal industry is in diminishing phase on global

energy market and unlikely to bounce back in the short-term.


Source: Energy Information Association (EIA), Bahana

Global coal emisssions, 2013

Source: www.globalcarbonatlas.org, Bahana

China’s clean coal action plan, 2013–20F

Plan Action Impact

Coal upgrades Further coal washing and processing to improve coal quality

In 2017, more than 70% of raw coal to be washed in China and over 80% in 2020

Thermal plant & boiler retro-fitting

Coal-fired industrial boilers should shift to burnt natural gas

Existing boilers with low efficiencies or those failed to meet emission standards would be eliminated or upgraded

Coal chemical upgrades China plans to upgrade traditional coal chemical industry

Improve technological level and energy conversion efficiency and reduce negative impact on environment

Residential coal use The sale and burning of high-ash (above 16%) and high-sulphur (above 1%) coal is to be banned

China aims to cut coal consumption by over 80mn mt by 2017 and by more than 160mn mt by 2020

Waste Increase efforts in utilizing coal gangue, coal slurry, coal mine gas and other resources that have not be used effectively in the past

By 2020, more than 80% of coal gangue should be utilized comprehensively


2016 Compendium

56

Local politics

2016 Compendium

57

Year 1 of Jokowi’s administration: Synopsis

Compared to September 2014, the fuel subsidy in September 2015

dropped to IDR148.8tn, from IDR283.3tn in the previous year,

allowing Jokowi to divert government spending to capital expenditure,

which increased by 28.4% y-y.

Generally on the social and political fronts, the sinking of illegal

foreign ships, fuel subsidy cut, execution of drug suspects and village

fund program are events that stood out, while the conflict between

the corruption commission against the police continues to remain a

problem.

Post the 2014 elections, the political power has shifted from the

masses back to the political elite, requiring Jokowi to play his cards

correctly and to continuously balance his power base.

Government budget spending comparison, 9M14-9M15

Source: 2014 & 2015 State Budget

Stimulus package summary

• Corruption Commission named Chief of Police candidate as suspect

• Shifting economic development to villages

• Sinking of foreign ships in Natuna Sea, Riau Island and North

Sulawesi

• Police set Bambang Widjajanto and Abraham Samad as suspects

• The first phase of village fund was distributed in April 2015

• Until September 2015, 42 foreign

ships were sank by Maritime Ministry, navy police, and the navy

• President fired Corruption

Commission's Speaker and formed Corruption Commission selection

committee

• Village fund was distributed as

much of IDR16.61tn to villages and regions

• Fisheries production volumes

increased 24.23% from previously Fuel subsidy diversion

• President inaugurated Badrodin

Haiti as Chief of Police and Budi Gunawan as Vice Chief of Police Executions of drug suspects

• Village fund of IDR7.8tn has been

received by villages.

Sinking of illegal foreign ships

• Fuel prices up by IDR2,000/ liter in November 2014

Corruption commission-police conflicts

• President refused clemency for drug suspects

Village fund program

• Fuel price decreased due to fall in

world oil prices starting in January

2015; However, the government has back tracked on their plan to

have a monthly review

• Execution of 9 suspects, excluding Mary Jane from the Philippines

• Fuel subsidy of as much of IDR200tn has been diverted to

productive programs, such as sea toll and roadway in Kalimantan and

Papua

Source: Government

2016 Compendium

58

Jokowi: Greater legitimacy

A recent survey shows a trend reversal with respondents being more

satisfied with the Jokowi government. We believe it is partly related to

the poor parliamentary performance.

In the past one year, the parliament has become weaker as more House

members are impacted by graft cases while Jokowi’s cabinet members

thus far have remained clean.

Currently, all eyes are on the Freeport case with recordings involving the

Speaker of the House with Jokowi appearing as the victim, resulting in

him gaining public support.

People’s approval rating on Jokowi, Jan 2014–Oct 2015

69.0

62.0

47.0

40.7

50.6

0

10

20

30

40

50

60

70

80

January 2014* January-15 March-15 June-15 October-15

(%)

Source: Kompas

Cases involving Parliament members

No.

The House' problems Party

1 House members’ higher allowances

2 The House‘s aspiration fund as much as IDR20bn

3 The House's building budget in 2016 State Budget

4 Adriansyah's bribery case PDIP

5 Puan, Tjahjo Kumolo and Pramono Anung's double post, both in the House and the cabinet

PDIP

6

Patrice Rio Capella's corruption on social support fund in

North Sumatra

Nasdem

7

Setya's meeting with Donald Trump Golkar

8 Setya's Freeport case Golkar

9 Mustofa Assegaf and Muljadi's fighting in the meeting of energy discussion

PPP & Democratic

Party

10 Kahar Muzakkir and Ridwan Bae’s dual positions in the House Golkar

Source: Various sources, Bahana

People’s satisfaction with Jokowi and his ministries, Jul-Oct 2015

Source: Kompas

2016 Compendium

59

People’s satisfaction: Thumbs up for social welfare

Satisfaction with social welfare performance in Jokowi’s era has been

solid, especially on mutual assistance development programs.

However, poverty reduction has been ranked the lowest, implying that

people still do not have much prosperity, especially in Sumatra and

Kalimantan regions.

On the other hand, rural citizens are much more satisfied than urban

citizens, reflecting urban cities’ much more critical disposition towards

Jokowi’s programs.


Source: Kompas

Satisfaction in rural and urban, Oct 2015

Source: Kompas

Satisfaction levels by region, Oct 2015

Source: Bahana, various sources

Rural Urban

2016 Compendium

60

Changing coalition: House control

The political condition has changed as Jokowi has managed to secure a

majority in the parliament (256 seats or 51.3% of total), helped by

PAN having joined the coalition.

As a consequence, we expect Jokowi to share some ministerial

positions for PAN’s party members in the next cabinet reshuffle.

Interestingly, most of the House commission chairman posts are still

filled by the opposition coalition. It is also worth noting that during the

SBY regime, his coalition controlled 75% of the total House seats.

House commissions

Commission Function Head of Commission / Party

Commission I Defense, inteligence, foreign affairs, communication and information

Mahfudz Siddiq / PKS

Commission II Domestic affairs, state administrative and bureaucracy Rambe Kamarul Zaman / Golkar

Commission III Law, human rights and national security Azis Syamsuddin / Golkar

Commission IV Agriculture, plantation, forestry, maritime, fishery and food security

Edhy Prabowo / Gerindra

Commission V Transportation, public works, housing and disadvantaged areas

Fary Djemy Francis / Gerindra

Commission VI Trade, industry, investments, and SMEs Hafisz Tohir / PAN

Commission VII Energy and mineral resources, research and technology and environment

Kardaya Warnika / Gerindra

Commission VIII Religion, social and women empowerment Saleh Partaonan Daulay / PAN

Commission IX Labors, demography and health Dede Yusuf / Demokrat

Commission X Education, culture, tourism, creative economy and sports

Teuku Riefky Harsya / Demokrat

Commission XI Finance, banking and national development planning Marwan Cik Asan / Demokrat

Source: dpr.go.id

House seats, by party 2014-19

Source: General Election Committee (KPU)

House coalition breakdown, by seat

KMP's coalition with PAN

59%

KIH's coalition41%

Preceding

KMP's coalition without PAN

49%KIH's coalition

51%

Current

Source: General Election Committee (KPU)

2016 Compendium

61

Jokowi’s economic team: Improvement with Darmin

Amid the slow government expenditure realization, Jokowi’s economic

team has seen a positive addition in the form of Darmin Nasution.

Going into 2016, we believe that both the central bank and the finance

ministry would like to move away from the “stability over growth”

strategy to more aggressive stimulus measures to accelerate economic

growth, more in line with Jokowi’s objective.

Additionally, recent economic stimulus packages appear to have helped

improve market sentiment.

Minister breakdown, by background

Source: Kompas

The Jokowi’s economic team

Source: Bahana

Details of economic team

No Ministry Minister Background

1 Coordinating Ministry of

Economics Darmin Nasution (67) Former Governor of Bank Indonesia

2 Finance Bambang Brodjonegoro (48) Former Deputy Finance Minister, Academician

3 Energy and Mineral Resources

Sudirman Said (51) CEO of Pindad (State-owned company)

4 Industry Saleh Husin (51) Lawmaker, Hanura politician

5 Trade Thomas Lembong (42) CEO & managing partner of Quvat Capital

6 National Development

Planning Sofyan Djalil (61)

Former SOE Minister, Former Minister of Communications

and Information, close to Jusuf Kalla

7 State-owned Enterprises Rini M. Soemarno (56) Head of Jokowi’s Transition Team, former Trade and

Industry Minister, close to Megawati

8 Agriculture Amran Sulaiman (46) PTPN IX staff member, founder of Tiran Group, close to

Jusuf Kalla

9 Labor Hanif Dhakiri (42) Lawmaker, PKB politician

10 Public Works and Public Housing

Basuki Hadimuljono (49) Director General for Spatial Planning at Public Work Ministry

11 Small Medium Enterprises AA Gede N. Puspayoga (49) Former Deputy Governor of Bali, PDIP politician

12 Transportation Ignasius Jonan (51) Former CEO of PT KAI (state-owned railway company)

13 Agrarian and Spatial

Planning Ferry Mursyidan Baldan (53) NasDem politician, lawmaker

Source: Bahana

Note: Professionals with affiliation Politically linked

2016 Compendium

62

Ministries: Lack of coordination continues

Based on more recent comments in social media and major local

newspapers, the “Working Cabinet” (Kabinet Kerja) appears to be

working hard.

However, we have heard of continued uncoordinated meetings with

outcomes or conclusions often remaining undecided.

Conflicts amongst ministers and house members appear to be escalating

of late, particularly given the possible cabinet reshuffle no. 2.

Ministry changes

No Old New

1 Ministry of Public Works

Ministry of Public Housing Ministry of Public Works and Public Housing

2 Ministry of Forestry

Ministry of Environmental Ministry of Environmental and Forestry

3 Ministry of Education and Culture

Ministry of Research and Technology

Ministry of Culture, Elementary and Secondary Education

Ministry of Research, Technology and Higher Education

4

Ministry of Labor and Transmigration

Ministry of Development of Disadvantage Areas

Ministry of Labor

Ministry of Transmigration and Development of Disadvantage Areas

5 Coordinating Ministry of Social Welfare Coordinating Ministry of Human Development

and Culture

6 Ministry of Economic Creative and

Tourism Ministry of Tourism

7 - Ministry of Agrarian and Spatial Planning

Source: Bahana

Jokowi’s remaining “Working Cabinet”

Source: Bahana

Cabinet details No Description

14 Coordinating Minister of Maritime Affairs – Rizal Ramli (60): Ex MoF

15 Coordinating Minister for Political, Legal and Security Affairs - Luhut Panjaitan (67): Chief of Staff

16 Coordinating Minister of Human Development and Culture – Puan Maharani (41): PDI-P politician

17 Secretary of State – Pratikno (58): Rector of University of Gajah Mada

18 Minister of Domestic Affairs - Tjahjo Kumolo (58): PDI-P politician, legislator

19 Minister of Foreign Affairs – Retno Lestari P Marsudi (44): Indonesian Ambassador for Netherlands

20 Minister of Culture, Elementary and Secondary Education - Anies Baswedan (45): Member of Team 8 in the Corruption

Eradication Commission

21 Minister of Defence – Ryamizard Ryacudu (64) Former Army Chief of Staff

22 Minister of Social Affairs – Khofifah Indar Parawansa (49): Jokowi-JK’s team, Former Minister of Women's Empowerment,

PKB elite party member

23 Minister of Justice and Human Rights – Yasonna H Laoly (51): PDI-P politician, legislator

24 Minister of Religious Affairs – Lukman Hakim Saifuddin (51): Former Minister of Religious Affairs

25 Minister of Communication and Information - Rudiantara (55): Former President Director of PLN

26 Minister of Tourism – Arief Yahya (49): CEO of Telkom

27 Minister of Environmental and Forestry – Siti Nurbaya Bakar (58): NasDem politician

28 Minister of Health – Nila Djuwita Anfasa (45): President’s special envoy for MDGs, Professor at UI Medical School

29 Minister of Administrative Reforms – Yuddy Chrisnandi (44), Hanura politician

30 Minister of Villages, Transmigration and Development of Disadvantage Regions – Marwan Jafar (43): PKB politician,

lawmaker

31 Minister of Youth and Sports – Imam Nahrawi (41): PKB politician, legislator

32 Minister of Research, Technology and Higher Education – M. Nasir (54): Rector of Diponegoro University

33 Minister of Maritime Affairs and Fisheries – Susi Pudjiastuti (49): CEO and owner of Susi Air

34 Minister of Women’s Empowerment and Child Protection – Yohana Susana Yembise (54): Cendrawasih University lecturer

Source: Bahana

14 15 16 17 18 19 20

21 22 23 24 25 26 27

28 29 30 31 32 33 34

10 1312

2016 Compendium

63

Outcome of reshuffle No. 1: No panacea

Jokowi announced the cabinet reshuffle on 12 August 2015. Six

ministers were replaced with no change in the split between politician

(47%) and professional (53%) as Andi Widjajanto is a non-PDIP

member.

In the economic team, Darmin Nasution was appointed as the new

Economic Affairs Minister, while Rachmat Gobel was replaced by

Thomas Trikasih Lembong.

It is interesting to see that former MoF Rizal Ramli who is close to

Megawati and Luhut has become Coordinating Maritime Minister.

New Jokowi ministers

Source: Various Sources, Bahana

No. Position Predecessor New minister Background

1 Economic Affairs Minister Sofyan Djalil (61) Darmin Nasution (66) Ex BI's Governor, Ex Tax

Office Chief

2 Political Affairs Minister Tedjo Edhi Pujiatno (62) Luhut Panjaitan (67) Chief of Staff

3 Coordinating Maritime Minister Indroyono Susilo (60) Rizal Ramli (60) Ex MoF

4 National Planning Minister Andrinof Chaniago (52) Sofyan Djalil (61) Ex Economic Affairs Minister

5 Trade Minister Rachmat Gobel (52) Thomas Trikasih Lembong (44) CEO of Quvat Management

6 Cabinet Secretary Andi Widjayanto (43) Pramono Anung (52) PDIP Politician

Source: Bahana

2016 Compendium

64

Reshuffle No. 2: Possible positions for new joiner

Speculation is rife that we will have a 2nd cabinet reshuffle as National

Mandate Party (PAN) has joined Jokowi’s coalition. Some names like

PAN’s Wahyu Sakti Trenggono and former constitutional court

chairman Hamdan Zoelfa could join the government.

Some news also indicate low public acceptance for MoF Bambang

Brodjonegoro, Energy and Mineral Minister Sudirman Said, Attorney

General M. Prasetyo and SOE’s Minister Rini Soemarno.

Some changes on the political-party composition in the cabinet favor

PAN and GOLKAR while NASDEM and HANURA may be disadvantaged.

Potential minister for 2nd cabinet reshuffle

Source: Various Sources, Bahana

Position Incumbent Potential candidate Background

1 SOE’s Minister Rini Soemarno (57) Wahyu Sakti Trenggono CEO of Indonesian Tower, PAN’s politician

2 Minister of Finance Bambang Brodjonegoro (58) Sri Adiningsih (54) UGM’s economic prof.,

Jokowi’s close friend

3 Energy and Mineral Minister Sudirman Said (52) R. Sukhyar (60)

Former Director General of

Mineral and Coal of Energy and Mineral Ministry

4 Attorney General M. Prasetyo (68) Hamdan Zoelfa (53) Former Chairman of

Constitutional Court Source: Bahana

2016 Compendium

65

Tax collection: Huge shortfall

Due to the tax shortfall issue, tax office chief, Sigit Priadi Pramudito,

resigned from his position, citing inability to reach the IDR1,435tn tax

revenue target in 2015. The MoF replaced him with Former East Java tax

office chairman, Ken Dwijugiasteadi, as acting head with immediate

effect.

The government has already introduced some tax-related policies.

Ironically, more tax rate cut adjustments will be introduced in 2016 while

tax revenue target is at 43% higher.

In the past 6 months, the government’s economic packages have lowered

the corporate income tax and provided some tax incentives, which are

counter-intuitive to the government’s need to raise tax revenues.

Ministry changes

Preceding Tax Chief Current Tax Chief

Name Background

Sigit PriadiPramudito (55)

Former Large Taxation Office Chairman

Name Background

Ken Dwijugiasteadi(58)

Former East Java tax office chairman

Source: Bahana

Institutions linked to tax office No Institution

1 Investment Board (BKPM)

2 Maritime Directorate of General, Ministry of Transportation

3 Ministry of Trade

4 Oil and Gas Directorate of General, Ministry of Energy and Mineral Resources

5 Oil and Gas Agency (SKK Migas)

6 National Aviation and Aerospace Agency (LAPAN)

7 Ministry of Public Works

8 Ministry of Education

9 Immigration Directorate of General, Ministry of Law

10 Law Administration Directorate of General, Ministry of Law

11 Ministry of Industry

12 Air Transportation Directorate of General, Ministry of Transportation

13 Land Transportation Directore of General, Ministry of Transportation

14 Ministry of Health

15 SOEs

16 Ministry of Religion

17 Mineral and Coal Directorate of General, Ministry of Energi and Mineral Resources

18 Data and Information Center (Pusdatin), Ministry of Energy and Mineral Resources

19 Ministry of Agriculture

20 Ministry of Communication and Informatics

21 Ministry of Maritime

22 Ministry of Labor and Transmigration

23 General Election Commission

24 Indonesia Police

25 Ministry of Defense

26 Ministry of Environment and Forestry

27 Ministry of Cooperatives and SMEs

28 Statistics Agency

Source: Directorate General of Taxation (Dirjen Pajak), act no. 191/2014

Recent and possible upcoming tax regulations No Description Sector Status Comment

1 PMK91 (Taxes must be paid in the last 5 years but

without interests and penalties) - Signed Effective May-December 2015

2 Tax revision: Tax allowance and tax holiday for

exports oriented production All Signed -

3 22% excise tax hike Consumer Signed -

4 20% ore export tax Metals Signed -

5 Lower thresholds for luxury properties under PPh22 Property Signed Effective 30 May 2015

6 E-Invoice Tax for taxable employers (PKP) All Signed Effective in Jawa and Bali since 1 Jul 2016, nationwide will be in January 2016.

7 Lower corporate income tax to 15-20% All Plan To equal SG/HK

8 Possible property tax (PBB) removal Property Plan For selected group

9 Lower archaic luxury sales tax Various Plan Effective June 2015

10 Higher import tax ruling from 7.5% to 10% Various Plan Implemented along with luxury sales tax cuts

11 Government to grant criminals amnesty through

govt. bonds - Plan Lead to more than IDR100tn state revenue

12 Criminal law conviction for having no tax id (NPWP) - Plan -

13 Tax ID ownership obligation for land purchase - Plan -

14 10% VAT on 15 toll roads Toll roads Plan For private vehicles only

15 Export tax for coal Coal Plan -

16 Higher sales tax for watches, bag & shoes Retail Plan -

17 Additional 20% luxury goods tax for mobile phones Telcos Plan -

18 Increased luxury tax to 10% for LCGC Auto Plan -

19 Lower thresholds for luxury properties under PPNBM Property Plan -

20 Possible higher tax on revenues (current: 1.2%) Shipping Plan Cancelled

21 Possible higher VAT on tobacco of around 10% Consumer Plan Cancelled

Source: Bahana

2016 Compendium

66

Political friction continues with House members

According to PDI-P politicians, Luhut and Rini are individuals with

political power and direct access to Jokowi’s important policies.

With the upcoming cabinet reshuffle, politicians have launched fresh

attacks on SOE Minister, Rini Soemarno, whom they claim to have

caused losses for the country due to unfavorable SOE-related policies

(e.g. China’s money in SOE banks).

Going forward, it will be interesting to observe whether Jokowi’s political

inner circle can survive the cabinet reshuffle.

Jokowi’s political inner circle

Source: Bahana

Government capital injection plan

State Owned EnterprisesRevised State

Budget (IDRbn)State Owned Enterprises

Revised State Budget (IDRbn)

Sarana Multi Indonesia (SMI) 20,357 Pindad 700

Aneka Tambang (ANTM IJ) 3,500 Geo Dipa Energi 607

Perusahaan Listrik Negara 5,000 Pelayaran Nasional Indonesia (Pelni) 500

Hutama Karya 3,600 Pertani 470

Waskita Karya (WSKT IJ) 3,500 Sang Hyang Seri 400

PTPN III 3,150 Dirgantara Indonesia 400

Indonesia Bureau of Logistics 3,000 Djakarta Loyd 350

Angkasa Pura II 2,000 Garam 300

Kereta Api Indonesia 2,750 Perum Perikanan Indonesia 300

Pelindo IV 2,000 RNI 280

Perusahaan Pengelola Aset (State-run Asset Management)

1,000 Pengembangan Pariwisata Indonesia 250

Perumnas (State-owned House Developer) 1,000 BPUI 250

PAL Indonesia 1,500 Perikanan Nusantara 200

The Institution of Engineers Indonesia (PII) 1,500 Dok dan Perkapalan Surabaya 200

Adhi Karya (ADHI IJ) 1,400 Industri Kapal Indonesia 200

Sarana Multigriya Finansial (SMF) 1,000 PTPN IX 100

Permodalan Nasional Madani (State-owned Financing)

1,000 PTPN X 98

ASDP Indonesia Ferry 1,000 PTPN XII 70

Askrindo dan Jamkrindo 1,000 PTPN XI 65

Dok dan Perkapalan Kodja Bahari (DKB) 900 PTPN VII 18

TOTAL 64,800


Appointments by Minister of SOE

Name Before After Replacing

Alex J. Sinaga

President director of Telkomsel

President director of TLKM Arief Yahya

Budi Karya

Sumadi

President director of Jakarta Propertindo

President director of Angkasa Pura II

Tri Sunoko

Dwi Soetjipto

President director of SMGR President director of Pertamina

Muhamad Husein

Lenny Sugihat

Director of risk management of BBRI

President director of Indonesia Bureau of

Logistics (BULOG)

Soetarto Alimoeso

Silmy

Karim

Policy committee advisor of

defense industry

President director of

Pindad

Sudirman

Said

Sofyan

Basir

President director of BBRI President director of PLN Nur Pamudji

Suparni Director of Production and R&D of SMGR

President director of SMGR Dwi Soetjipto

Source: Bahana

Luhut Panjaitan

Minister of Political Affairs

Rini M. Soemarno

Minister of SOE

2016 Compendium

67

Megawati’s political influence on Jokowi

Public perception: Megawati continues to exert influence in the

appointments of important political posts with the most recent example

being Iman Sugema, Economist of Megawati Institute as President

Commissioner of PGAS.

This continues to remain a political risk, although the appointment of

Luhut was against Megawati’s wishes.

A survey by the Cyrus Network revealed that 83% of respondents

believe that Megawati has influence in determining Jokowi’s cabinet.

Jokowi’s appointments

Source: Bahana

Polling on Megawati’s influence on Jokowi’s policies

Source: Cyrus Network

Details of recent appointmets

No Position Name Background

1 National police chief Badrodin Haiti (56) Acting National Police Chief

2 Chief of Presidential

Staff Luhut Panjaitan (67)

Former Golkar Politician, Retired Armed Forces Military,

Former Trade and Industry Minister

3

Head of Indonesian

Presidential Security Forces

Andika Perkasa (50) AM Hendropriyono’s son in-law, Chief of Military Army Information

4 Constitutional Court

Justice I Dewa Gede Palguna (54) Former Senior Member of PDI-P, Former Court Justice

5 Attorney General HM Prasetyo (58) NasDem Politician, Lawmaker and Former deputy attorney general for general crimes

6 Chairman of

Constitutional Court Arief Hidayat (58) Academician, from Diponegoro University and lawyer

7 Chairman of Economy Creative Board

Triawan Munaf Former member of Giant Step band, former Jokowi’s campaign team and a PDI-P politician

8 Directorate General of

Taxes Sigit Priadi Pramudito (55) Large Tax Office Chairman.

9 President Commissioner of PGAS

Iman Sugema (51) Academician from Bogor Agricultural University, former Jokowi’s campaign team

10 President

Commissioner of JSMR Refly Harun (45)

Staff member of State Secretary, constitutional law expert

and former success team of Jokowi.

Source: Various sources, Bahana

2016 Compendium

68

The new Military & Intelligence Agency Chiefs

For an emerging market like Indonesia, military developments remain of

paramount importance, particularly with the installation of Gatot as new

Military Chief, replacing Moeldoko (58).

It is interesting to see that Megawati was not able to assert her choice

(#2) for the Military Chief.

Additionally, against PDI-P’s wishes, Jokowi has inaugurated Sutiyoso as

the new National Intelligence Agency Chief and Gatot as the new Military

Chief.

Chief of National Armed Chief of Intelligence Agency

Source: Bahana

Military Chief appointments, 2006-15

General Edi Sudradjat

1993(Army)

General Feisal Tanjung

1993 - 1998(Army)

General Wiranto

1998 - 1999(Army)

Admiral Widodo Adi Sutjipto

1999 - 2002(Navy)

General Endriartono Sutarto

2002 - 2006(Army)

Marshal Djoko Suyanto

2006 - 2007(Air Force)

General Djoko Santoso

2007 - 2010(Army)

Admiral Agus Suhartono

2010 - 2013(Navy)

General Moeldoko

2013 - 2015(Army)

General Gatot Nurmantyo

2015(Army)

Source: Bahana

Personal details

No Position Name/Age Background

1 Military Chief Gatot Nurmantyo/ (55)

Former Commander of Army’s Strategic

Reserves, Former Governor of Military

Academy

2 Navy Chief Ade Supandi/ (54) Former Chief of General Staff, Former

Governor of Navy Academy

3 Army Chief Mulyono/ (54)

Former Commander of Army’s Strategic

Reserves, Former Commander of

Jayakarta’s Military Command

4 Air Force Chief Agus Supriatna/ (56) Former Chief of General Staff , Former

Commander of Air Force Operations

5 National Intelligence

Agency Chief Sutiyoso/ (70)

Former Jakarta Governor, Former Deputy

Commander of Army’s Special Forces

Source: Bahana

2016 Compendium

69

National Police Chief: An important political determinant

Generally, Kompolnas (Police Watchdog) would propose the National

Police Chief candidates with remaining tenure of around two years.

Note that the National Police Chief Badrodin Haiti will retire in July

2016.

Thus, despite PDI-P’s strong support for Budi Gunawan to become the

next National Police Chief, his chances could be undermined by the

fact that he needs to retire in December 2017, translating to just 18

months of service.

Moreover, there are several eligible candidates based on rank and

experience including Syafrudin (no.3) Unggung Cahyono (no.7),

creating an intrigue in terms of how Luhut and Megawati will play

their cards.

Who’s the next Police Chief

Source: Bahana

Other possible National Police Chief candidates

Source: Bahana

Possible National Police Chief background

Source: Bahana

2016 Compendium

70

Corruption Commission Chief: Chaotic

On 1 September 2015, the KPK selection committees selected 8

candidates for the post of KPK Chief with Johan Budi (# 7) as the

front runner for the KPK chairman post.

Jimly Asshiddique was earlier stated as the likeliest contender to be

the KPK Chief; however, selection committees have selected other

candidates who are assessed to have better individual qualifications.

The KPK election process is subject to House approval with no

certainty on this issue until today. In fact, the law on KPK is

currently being reviewed by the House with the possibility of weaker

power for the KPK. Finally, we note the continued friction between

KPK and the national police, highlighting the importance of the new

upcoming National Police Chief.

Corruption Commission (KPK) Chief candidates

Source: Bahana

No. KPK division Candidate name Background

1 Prevention Thony Saut Situmorang Expert Staff, State Intelligence Agency (BIN) & UI law lecturer

2 Prevention Surya Tjandra Trade Union Center Director & Atma Jaya lecturer

3 Action Alexander Marwata Ad Hoc Judge, Graft cases (Tipikor)

4 Action Basaria Panjaitan Indonesian police senior officer

5 Management Agus Rahardjo Chief of national procurement agency (LKPP)

6 Management Sujanarko KPK’s Director of internal affair

7 Supervision Johan Budi KPK Chief Tasks Executor

8 Supervision Laode M. Syarif Hasanuddin University law lecturer Source: Bahana

2016 Compendium

71

Simultaneous regional elections: Unexpected results

At 9 December 2015, Indonesia conducted its first simultaneous regional

elections which brought some interesting and unexpected results with

Golkar having lost some of its stronghold in Sulawesi and Papua.

PDIP claimed to win 15 elections in North Sumatra and 14 elections in West

Java, while Nasdem, led by Surya Paloh, a former Golkar cadre, is expected

to win 129 out of the contested 269 regional elections.

Our check based on quick count of 52 districts indicates that Golkar is

losing its share from 21% in 2014 to only 13% after the elections.

Regional mayors elections comparison

PDIP21%

Golkar21%

PKB6%

PPP4%

PAN8%PKS

6%

Gerindra6%

Demokrat17%

Nasdem9%

Hanura2%

Old

PDIP23%

Golkar13%

PKB10%PPP

6%

PAN15%

PKS6%

Gerindra8%

Demokrat6% Nasdem

11%

Hanura2%

New

Source: Bahana, as of 10 December 2015

Quick count results of regional elections No. Province Incumbent / Party Current / Party

1 West Sumatera Irwan Parayitno / PKS Irwan Parayitno / PKS 2 Bengkulu Junaidi / PDIP Ridwan Mukti / NasDem 3 Jambi Hasan Basri Agus / Demokrat Zumi Zola / PAN 4 Riau Island Muhammad Sani / NasDem Muhammad Sani / Demokrat 5 North Sulawesi Sinyo Sarundajang / Demokrat Olly Dondokambey / PDIP 6 North Kalimantan Irianto Lambrie / PDIP Irianto Lambrie / PDIP 7 South Kalimantan Rudy Ariffin / PPP Sabirin Noor / PDIP 8 Central Sulawesi Longki Djanggola / Gerindra Longki Djanggola / Gerindra

No. City / District Incumbent / Party Elected / Party

1 Banyuwangi Dist. Abdullah Anas / PDIP Abdullah Anas / PDIP 2 North Bengkulu Dist. Sultan Bakhtiar Najamudin / PDIP Ridwan Mukti / PAN 3 Bima Dist. Ferry Zulkarnain / Golkar Indah Damayanti / Golkar 4 Gowa Dist. Ichsan Yasin Limpo / Golkar Tenri Yasin Limpo / PPP 5 Gresik Dist. Sambari Radianto / PKB Sambari Radianto / PKB 6 Indramayu Dist. Anna Sophanah / Gerindra Anna Sophanah / Gerindra 7 Kediri Dist. Haryanti Sutrisno / PPP Haryanti Sutrisno / PPP 8 West Kutai Dist. Ismael Thomas / PDIP FX. Yapan / PKB 9 Kutai Kartanegara Dist. Rita Widyasari / Golkar Rita Widyasari / Golkar

10 North Kutai Dist. Ardiansyah Sulaiman / PKS Ardiansyah Sulaiman / PKS 11 Central Lombok Dist. Moh. Suhaili / Gerindra Moh. Suhaili / Gerindra 12 North Lombok Dist. Djohan Sjamsu / Demokrat Najmul Akhyar / PDIP 13 Malang City Rendra Kresna / Golkar Rendra Kresna / Golkar 14 Soppeng Dist. HA Soetomo / Demokrat Kaswadi Razak / Gerindra 15 East Tanjung Jabung Dist. Zumi Zola/ PAN Romi Hariyanto / PAN 16 West Tanjung Jabung Dist. Usman Ermulan / Golkar Anwar Sadat / PAN 17 Trenggalek Dist. Mulyadi WR / PDIP Emil Dardak / PDIP 18 Depok City Nur Mahmudi Ismail / PKS Mohammad Idris / PKS 19 Palu City Rusdi Mastura / Golkar Hidayat / PAN 20 Batam City Ahmad Dahlan / Demokrat Muhammad Rudi / Demokrat 21 Samarinda City Syahari Jaang / Demokrat Syahari Jaang / Demokrat 22 Surabaya City Tri Rismaharini / PDIP Tri Rismaharini / PDIP 23 Medan City Dzulmi Eldin / PDIP Dzulmi Eldin / PDIP 24 Semarang City Hendrar Prihadi / PDIP Hendrar Prihadi / PDIP 25 Denpasar City I Gusti Ngurah Jaya Negara / PDIP Ida Bagus Rai Dharmawijaya / PDIP 26 Gresik Dist. Sambari Radianto / PKB Sambari Radianto / PKB 27 Mataram Dist. Ahyar Abduh / PKS Ahyar Abduh / PKS 28 Pemalang Dist. Junaedi / PDIP Junaedi / PDIP 29 Tanjungbalai City Thamrin Munthe / GOLKAR M. Syahrial / Golkar 30 Serdang Bedagai Dist. Soekirman / PAN Soekirman / PAN 31 South Tapanuli Dist. Syahrul Pasaribu / Golkar Syahrul Pasaribu / Golkar 32 Toba Samosir Dist Pandapotan Tasmin S. / Demokrat Darwin Siagian / NasDem 33 Binjai City Timbas Tarigan/Demokrat Juliadi / PDIP 34 Labuhanbatu Dist. Tigor Siregar / Nasdem Tigor Siregar / Nasdem 35 Sibolga City Syarfi Hutauruk / NasDem Syarfi Hutauruk / NasDem 36 Asahan Dist. Taufan Simatupang / PDIP Taufan Simatupang / PDIP 37 West Pakpak dist. Remigo Berutu / NasDem Remigo Berutu / NasDem 38 Humbang Hasundutan Dist. Maddin Sihombing/Golkar Dosmar Banjarnahor / PKB 39 North Labuhanbatu Dist. Kharuddin Syah / Hanura Kharuddin Syah / Hanura 40 South Labuhanbatu Dist. Wildan Tanjung / NasDem Wildan Tanjung / NasDem 41 Solok City Irza Ilyas / Demokrat Zul Elfian / PPP 42 Dharmasraya Dist. Adi Gunawan / NasDem Sutan Riska Kerajaan / PDIP 43 Bukittinggi City Ismet Amzis / Demokrat Ramlan Nurmatias / PDIP 44 South Solok Dist. Muzni Zakaria / PAN Muzni Zakaria / PAN 45 West Pasaman Dist. Baharuddin R. / PPP Zulkenedi / Golkar 46 Pasaman Dist. Benny Utama / PKB Benny Utama / PKB 47 South Pesisir Dist. Nasrul Abit / Gerindra Hendrajoni / Gerindra 48 West Pesisir Dist. Kherlani / Demokrat Agus Istiqlal / NasDem 49 Sijunjung Dist. Yuswir Arifin / PDIP Muchlis Anwar / Demokrat 50 Tanah Datar Dist. Shadiq Pasadigoe / Golkar Edi Arman / PAN 51 Padang Pariaman Dist. Ali Mukhni / PAN Ali Mukhni / PAN 52 Lima Puluh Kota Dist. Alis Marajo / Golkar Azwar Chesputra / Golkar

Source: Quick count, Elections Committee

2016 Compendium

72

Recent BI and government actions (1)

No Regulation/Planning Sector Comment

1 BKPM’s new ruling: Tax holiday must be processed within

65 working days All sectors

2 Restrictions on foreigners’ bank accounts eased Bank & finance This should help to raise USD supplies domestically.

3 Money changers required to collect underlying

transactions Banking & finance

4 ADB to lend Indonesia USD400m for financial inclusion Banking & finance

5 SOE banks signed USD3bn loan agreement with China

Development Bank Banking & finance

Based on our understanding through our channel checks, the funds to be

loaned out to infrastructure companies could be in USD or in IDR post swap.

On the RMB borrowings, the funds will be utilized for procurements of

Chinese-related products.

6 Foreigners to be able to open bank accounts with up to

USD50k limit Banking & finance

Positive for commercial banks’ liquidity and should help to raise USD supplies

on the ground.

7 Lower rate on the People Business Credit Program (KUR)

from 22-23% to 12% Banking & finance Negative for BBRI's KUR exposure (around a third of its loans portfolio)

8 Advancing forex supply and demand management Banking & finance

BI will increase the limit of non-underlying forex/IDR forward transaction from

USD1mn to USD5mn, issue SBBI in foreign exchange, lower SBI holding

period from 1 month to 1 week, provide additional incentive for term deposits

from exports earnings and enhance transparency of foreign exchange

management.

9 Maintaining IDR stability Banking & finance BI will intervene in forward market by the beginning of October.

10 Enhancing IDR liquidity management Banking & finance BI to issue certificate of deposit and reverse repurchase order of SBN with 2

weeks tenor to absord excess IDR liquidity.

11 Auto and consumer companies to enjoy lower import

duties Consumer

12 Deregulation: Possible relaxation on minimarkets to sell

< 5% alcohol content Consumer This should be positive for retailers with minimarket formats

13 Cigarette products: Possible higher excise tax in 2016 Consumers This should weaken sentiment on the cigarette sector, as excise makes up

some 70% of cigarette companies’ COGS.

14 Govt to ease permits required for exports and imports Consumers This regulation should be positive in limiting inflationary pressure arising from

staple foods in the near future.

15 Vice President: Indonesia to import rice preventing

deficit Consumers

Note that in 2014, Indonesia imported 844k tons of rice, which was up around

79% y-y.

16 Cattle market stabilization Consumers On the poultry sector, we continue to have a NEUTRAL stance on the longer

dry season, creating supply constraints.

17 Water resources policy Consumers

Government will provide water resources following the Constitutional Court’s

revocation of Act no. 7/2004 related to water resources. Constitutional Court

set up six principals for water. The government has given permission to some businesses to provide clean water.

18 Food & Drug administration policy Consumers

Government will simplify FDA systems for medicines, imports of raw materials

for medicines, and also foods. Import permission will be simple and processed

online. An online import service will also improve FDA’s efficiencies.

19 Enchance maritime industry by converting fishermen fuel

demand from solar to gas Fisheries Positive for fishermen's incomes.

20 Govt plan to limit foreign private debt Government budget We think this would be a positive move in curbing USD demand and help to

strengthen the IDR ahead.

Source: Government

2016 Compendium

73



21 The Govt to issue Bonded Zones regulation Industrial area

This could be beneficial to the Industrial Estates players since the government

will implement the development through private companies allowing for

expansion opportunities

22 Industry Ministry: New industrial estates in Padang Industrial Area

23 Land Industrial area Special economic zones administrators can provide industrial land services.

24 Permits Industrial area

Administrators could issue principal licenses and business permits through

one-way service in special economic zones, extended permits issued in 3

hours’ time.

25 Investors required to appoint contractors and operators

prior to toll-road tender process Infrastructures

26 President Jokowi signs three Presidential Decrees on LRT

development Infrastructures

With the signing of Perpres on LRT, we expect ADHI to soon commence the

LRT construction using the rights issue proceeds.

27 Govt plans to issue almost USD1bn in Islamic bonds for

projects Infrastructures

28 SOEs to continue fast train project without government

capital injection Infrastructures

As the government is disallowing the use of the State Budget for the fast-train

project, WIKA plans to use the planned capital injection for other

infrastructure projects.

29 Jokowi inaugurated first TBM for MRT project; Subsidy to

come from ERP implementation Infrastructures

Possible ERP implementation has us UNDERWEIGHTING the automotive and

taxi industries.

30 Labor Labor Wage commission is formed in special economic zones.

31 Immigration Labor To ease VISA extending facility to 5 times every 30 days.

32 Determine some specific gas prices for certain industries Manufacturing Positive for Indonesian manufacturers, but negative for PGAS on possible

lower gas prices.

33 Tax cut in employee income tax (PPh21) Manufacturing The Investment Coordinating Board (BKPM) has proposed income tax cuts to

support the labor intensive footwear and textile industry by as much as 50%

34 Indonesia to keep ban on nickel ore exports Mining

35 Mineral export relaxation to adversely impact smelters Mining

36 Government plans to cut industrial gas price Oil & gas

Although industrial users propose 10-40% gas price cuts, we only price in a

5% gas price discount from Perusahaan Gas Negara as the government is also planning to establish a gas infrastructure board consisting of PGAS and

Pertagas.

37 Government sweetens profit sharing for oil and gas

blocks Oil & gas

38 Freeport to increase its local content consumption; In

discussions with several SOEs Oil & gas

39 Govt opens downstream to private oil companies Oil & gas This news represents a threat for the distribution and logistics business of AKR

Corporindo going forward.

40 Tax allowance for sugar mill construction Plantation

Tunas Baru Lampung is the only company under our coverage that is currently

constructing a new sugar mill in Lampung with total investment of around

IDR1tn for around 1.2mn tons of capacity per annum.

Source: Government

2016 Compendium

74



41 Ahok scraps land and building taxes for properties under

IDR1bn Property

While this would increase affordability of homes under IDR1bn, we think it

would not be sufficient to offset unfavorable conditions due to policy risks and

eroded purchasing power.

42 Property: IDR2bn luxury tax threshold back on the cards Property

Such a move would present an additional stumbling block for the sector which

is already weakened from eroded purchasing power and existing policy risks,

including the continued aggressive taxation drive and the recent

implementation of lowered PPh22 (5%) thresholds.

43 Property: MoF revoking IDR2bn luxury tax threshold Property A higher luxury property tax threshold would benefit the property stocks under

our coverage.

44 Finance Minister: Property luxury tax threshold at

IDR10bn Property

This IDR10bn threshold would have minimal adverse impact on home builders

under our coverage. We believe that the government’s decision is heavily

influenced by the current weak economy, which at the same time indicates a

challenging operating business condition for the property market

45 Property: Tax top brass reckons no change in PPh22

thresholds Property

46 Easing foreign ownership restriction on apartments

(>IDR10bn) Property

Mildly positive for CTRP; Virtually no impact on other listed property stocks

under our coverage.

47 Increase property sector investment, especially at the

low-end market segment Property Positive for construction companies.

48 Foreign Property Ownership Property Foreigners are able to have property in special economic zones.

49 Income tax Taxation

Tax Holiday with income tax reduction of 20-100% for 10-25 years with investment above IDR1tn, income tax reduction of 20-100% for 5-15 years

with investment above IDR500mn. Tax Allowances: Net income reduction of

as much as 30% for 6 years, faster depreciation, income tax on dividend of as

much as 10%, loss compensation for 5-10 years.

50 Value-added tax and Sales on luxury goods tax Taxation

No VAT for import, no VAT for transportation between custom office areas, no

VAT for transactions within special economic zones (KEKs) and in the other

KEKs.

51 Customs Taxation Tariffs will depend on certificates of origin.

52 Government to add 47 countries to visa-free list Tourism

53 Tourism Special Activity Tourism Building tax and entertainment tax reduction by 50-100%.

54 Airlines’ price floor lowered due to weak purchasing

power Transportation

55 Jokowi to lower Jet Fuel prices Transportation

56 President urges quick completion of LRT project Transportation

57 Govt revises rule to cut down on dwelling times Transportation

58 The government reportedly plans to cut regular gasoline

price and add more tax incentives Transportation

Source: Government

2016 Compendium

75

INDONESIAN MARKET

2016 Compendium

76

Equity: Cautiously optimistic; Bonds: Yields likely to drop

For the equity market, with growth scarcity (although improving) and

continued political dynamics, foreign investors are taking money out of

the market. At the April 2015 peak, there were around IDR11.3tn in

foreign inflows, which have reversed to total net foreign outflows of

IDR22.1tn YTD 2015.

By the end of 2013, the “taper tantrum” caused IDR44tn in net foreign

outflows, followed by IDR40tn in net foreign inflows in 2014.

In bonds, the December yield is currently 8.72%, versus US 10-year

notes at 2.18%, with foreign inflows reaching IDR19.8tn in November

and IDR87.2tn YTD. Going forward, with the possible BI rate cut, there is

room for yields to fall.

Foreign equity capital flows in JCI, 2013-YTD Dec 2015

19,487

(24,741)

53,256

(7,402)

(3,232)

5,281

(7,955)

212

10,608

(5,426)

5,896

(3,460)(4,089)

132

(9,820)(7,183)

(4,710)(3,335)

(618)

(30,000)

(20,000)

(10,000)

0

10,000

20,000

30,000

40,000

50,000

60,000

4M13 2013 8M14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15

(IDRb)

IDR44tn net outflow

8M14 net inflow:

Sep-Dec 2014: net foreign outflows of IDR13.3tn

Source: Bloomberg as of 3 December 2015

Government bond-yield movements

Source: Bloomberg

BI & foreign ownership in government bonds, 2013-Nov 2015

-20.7

14.4

3.3

18.1

2.8

-2.7

60.6

-110.9

-0.9

8.6

-8.2

41.3

-3.3

14.7

32.4

6.2

-3.1-7.9 -7.5

-2.0

15.4

-11.5 -7.9

3.9

17.6 15.6 15.620.9

6.4 8.4

22.213.2 12.5

21.3

-19.9

39.5

6.8

-3.6

4.1 6.3

23.0

-3.9-8.0

-2.3

5.4

19.8

30.0

32.0

34.0

36.0

38.0

40.0

42.0

44.0

(120)

(105)

(90)

(75)

(60)

(45)

(30)

(15)

0

15

30

45

60

Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15

(%)(IDRt)

Bank Indonesia Foreign Foreign ownership


2016 Compendium

77

IDR stability: 50% external, 50% internal

The IDR movements continue to be dependent on the Fed rate hike and

regional currency wars, most importantly the yuan. Internally, FX

reserves, CAD and external private debt should continue to be important

determinants of the IDR, with the 2015 median estimate at

IDR14,068/1USD (Bahana: IDR14,000), before worsening to IDR14,700

in 2016 (Bahana: 14,500).

In 2016, the market is looking at continued IDR weakness on a stronger

USD in the lead-up to the Fed rate hike. This could complicate the need

for the Indonesian central bank to lower rates to support growth.

The Indonesian stock market has been the worst performing market in

USD terms, down more than 24% YTD.

Consensus forecasts on regional currencies

Current 2014 2015F 2015F 2015F 2016F Appreciation

rate per End End End End End Potential (%)

Country Currency 1USD Low Median High Median 2015 2016 India INR 67 63.0 65.0 66.6 67.5 67.0 0.0 (0.6) Philippines PHP 47.1 44.7 45.0 47.2 48.0 48.1 (0.1) (2.0) Taiwan TWD 32.8 31.7 32.1 33.0 34.0 33.8 (0.7) (3.1) Thailand THB 35.8 32.9 35.0 36.2 37.5 37.0 (1.1) (3.3) Singapore SGD 1.4 1.3 1.4 1.4 1.5 1.5 (1.4) (4.3) Indonesia IDR 13,797 12,385 13,150 14,068 14,800 14,700 (2.0) (6.5) Korea KRW 1,164 1,091 1,110 1,188 1,250 1,216 (2.0) (4.4) Malaysia MYR 4.2 3.5 4.1 4.4 4.6 4.4 (2.8) (4.0) Source: Bloomberg as of 3 December 2015

Various stock market performances

Stock market

YTD YTD in USD 2014 Stock market YTD YTD in USD 2014 Asia Last (%) (%) (%) Others Last (%) (%) (%) SHENZHEN (China) 2,244 57.8 54.8 36.3 Nasdaq (USA) 5,038 6.4 6.4 8.1 Nikkei (Japan) 19,940 11.8 9.5 20.8 SMI (Swiss) 8,852 (1.5) 2.4 16.8 SHCOMP (China) 3,585 9.0 6.0 55.4 CAC 40 (France) 4,730 10.7 1.1 7.0 VNI (Vietnam) 574 4.7 (0.2) 9.5 FTSE 100 (UK) 4,125 3.6 0.8 17.7 KOSPI (Korea) 1,994 3.1 (3.2) (0.9) DAX (Germany) 10,789 10.0 0.4 7.5 Hang Seng (HK) 22,417 (6.0) (5.9) 1.3 S&P 500 (USA) 2,050 (0.5) (0.5) 16.3 PCOMP (Phil.) 6,994 (4.3) (9.5) 23.5 Dow Jones (USA) 17,478 (1.9) (1.9) 13.1 SENSEX (India) 25,887 (6.6) (12.0) 31.9 RTSI (Russia) 827 5.6 (4.5) 13.4 TWSE (Taiwan) 8,456 (9.8) (13.2) 14.3 NZSE (New Zealand) 1,178 4.6 (9.6) 20.9 SET (Thailand) 1,341 (11.0) (19.2) 15.9 MADX (Madrid) 1,019 (2.2) (11.8) 16.6 STI (Singapore) 2,884 (14.7) (19.6) 11.1 ASX (Australia) 3,456 (2.2) (12.3) 39.6 KLCI (Mal.) 1,674 (5.3) (22.5) 1.1 S&P/TSX (Toronto) 13,325 (8.9) (21.9) 11.4 IDX (Indonesia) 4,537 (13.8) (24.3) 24.1 IBOV (Brazil) 46,393 (7.2) (36.5) 9.6 Source: Bloomberg as of 3 December 2015, Bahana

USD performance relative to other currencies

Asia exc. Japan currencies YTD 2014 Other currencies YTD 2014 HKD (Hong Kong) 0.1 (0.0) JPY (Japan) (2.3) (13.7) CNY (China) (3.0) (2.5) GBP (UK) (2.8) (6.3) TWD (Taiwan) (3.4) (6.2) EUR (EU) (9.6) (13.6) VND (Vietnam) (4.9) (1.4) RUB (Russia) (10.0) (84.8) SGD (Singapore) (5.0) (4.9) AUD (Australia) (10.2) (9.1) PHP (Philippines) (5.2) (0.7) MXN (Mexico) (11.7) (13.2) INR (India) (5.4) (2.0) ARS (Argentina) (12.9) (29.8) KRW (Korea) (6.3) (3.9) CAD (Canada) (13.0) (9.4) THB (Thailand) (8.2) (0.6) NZD (New Zealand) (14.2) (5.4) IDR (Indonesia) (10.5) (1.8) TRY (Turkey) (19.1) (8.7) MYR (Malaysia) (17.2) (6.8) BRL (Brazil) (29.3) (12.5) Source: Bloomberg as of 3 December 2015, Bahana

2016 Compendium

78

Impact from weaker IDR

Each 1% IDR depreciation would lower the EPS of our covered stocks

by 1.8% overall, based on our estimates.

IDR weakness should benefit dollar earners, although the positive

impact could be offset by stronger dollar which would cause lower

commodity prices.

A stronger dollar should in general spell bad news for corporates with

large USD debt.

IDR depreciation: Sensitivity analysis

Non-IDR 9M15 Sensitivity

Non-IDR 9M15 Sensitivity

Sales Cost Cash Debt Net to net profit

Sales Cost Cash Debt Net to net profit

Ticker gearing on 1% IDR Ticker gearing on 1% IDR

(%) (USDmn) (%) Depreciation (%)

(%) (USDmn) (%) Depreciation (%)

HRUM* 100 100 165.2 0.0 nc 21.2 TAXI 0 5 1.1 0.0 183.5 (0.4)

ANTM 77.7 66 141.7 452.4 50.3 7.3 ASSA 0 7 0.0

196.4 (0.5)

MEDC* 98 12 215.1 1,100.7 100.5 6.7 CTRA 4.6 27 8.9 0.0 15.0 (0.6)

SGRO 100 60 0.1 0.0 66.3 4.8 GGRM 0 10 19.8 0.0 41.0 (0.6)

SIMP 100 65 35.9 183.6 46.9 4.2 ASII 35 40 1,009.7 2,810.2 46.0 (0.7)

PGAS* 100 100 779.5 2,449.8 51.8 4.0 HMSP 0 10 3.5 490.0 10.4 (0.9)

ADRO* 78 80 617.5 1,675.9 26.2 3.9 INTP 0.9 51.2 36.3 0.0 nc (1.0)

ANJT* 100 60 20.5 18.0 16.9 3.9 SMBR 0 47.7 3.9 0.0 nc (1.0)

LSIP 100 40 25.4 0.0 nc 3.6 PWON 36.1 25 86.8 268.5 27.2 (1.1)

UNTR 100 82 947.8 147.0 nc 3.2 GJTL 50 70 17.2 2.3 108.8 (1.1)

CASS 45 15 4.5 8.2 28.5 2.9 SMGR 1.3 41 6.2 0.0 3.7 (1.2)

PSAB* 100 60 7.7 303.3 105.8 2.8 ATIC 80 90 16.2 43.1 nc (1.3)

WINS* 100 100 0.8 0.0 45.2 2.7 TMAS 0 30 0.0 0.0 133.1 (1.3)

MYOR 42 59.5 72.9 0.0 56.9 2.5 SIDO 5 16.8 0.7 0.0 nc (1.4)

SRIL 45 12 0.9 39.8 149.9 2.5 TINS 96 75.6 8.6 98.6 39.2 (1.6)

INCO* 95 75 310.4 145.8 nc 2.3 UNVR 5 85 14.8 0.0 nc (1.6)

DSNG 100 60 1.6 49.5 106.9 2.2 MNCN 4 20 1.3 250.0 36.3 (1.8)

AKRA 90 85 737.2 980.6 36.7 1.9 JCI**

7,380 13,594 42.9 (1.8)

DMAS 95 0 100.1 0.0 nc 1.8 INDF 29 53 237.5 183.8 34.0 (1.9)

BSDE 17.6 25 305.2 21.0 4.8 1.7 TOWR 40 10 157.0 467.0 151.6 (2.0)

ITMG* 87 100 334.4 0.0 nc 1.7 KLBF 4.7 75 64.1 8.7 nc (2.1)

TBLA 100 60 24.7 118.3 150.7 1.3 ROTI 0 70 0.1 0.3 46.5 (2.2)

AALI 100 60 8.4 493.6 32.2 1.0 MPPA 0 10 0.0 0.0 13.2 (2.2)

PTBA 54 63 85.5 84.5 nc 1.0 RALS 0.0 30.0 12.0 0.0 nc (2.6)

APLN 22.4 30 49.1 0.0 36.3 0.5 TBIG 22.0 10.0 19.2 1,353.0 481.2 (2.7)

ADHI 15 15 7.8 0.0 136.5 0.4 ICBP 8.5 75.5 15.2 18.1 nc (3.2)

SOCI 100 15 11.3 98.9 55.6 0.4 TSPC 5.0 70.0 51.9 2.0 nc (3.2)

SSIA 20 15 42.6 0.9 5.9 0.4 ISAT 0.0 10.0 55.0 505.6 185.6 (4.8)

LPCK 29.5 10.4 0.4 0.0 nc 0.2 ACES 0.0 80.0 0.2 0.0 nc (5.0)

WSKT 5 5 2.9 0.0 0.9 0.2 KIJA 73.0 7.6 29.0 264.1 61.0 (5.1)

ERAA 0 0 2.9 0.0 32.2 0.1 BEST 93.4 15.0 28.4 108.1 29.8 (5.2)

WIKA 15 15 20.4 12.7 58.5 0.1 KAEF 6.3 75.0 3.5 4.2 nc (5.4)

TELE 0 0 0.4 0.0 69.4 0.0 ASRI 5.0 25.0 29.8 511.1 113.2 (5.4)

SCMA 0 10 10.7 0.0 nc 0.0 CPIN 0.0 60.0 77.9 225.6 59.7 (5.8)

CTRP 15.6 25 5.0 0.0 42.2 0.0 LPKR 13.9 20.0 13.9 803.3 56.8 (6.2)

MIKA 0 4 1.7 0.0 nc 0.0 PPRO (2Q15) 0.0 20.0 0.0 0.0 nc (6.8)

MDKA 100 90 16.4 0.0 nc n/a MAPI 3.0 60.0 1.1 0.0 111.3 (6.9)

TLKM 0 10 528.6 225.6 10.0 (0.0) ECII 0.0 60.0 0.0 0.0 nc (7.8)

JSMR 0 5 0.0 0.0 120.4 (0.1) MAIN 0.0 60.0 9.4 7.4 196.8 (8.2)

KRAS* 90 85 1.9 0.0 72.2 (0.1) GIAA* 45.0 40.0 242.0 1,362.0 110.7 (8.9)

PTPP (2Q15) 12 15 22.7 0.0 28.8 (0.1) SILO 0.0 70.0 0.4 0.0 14.1 (10.0)

SMRA 24 25 5.8 0.0 73.3 (0.1) EXCL 0.0 10.0 145.6 1,196.8 191.8 (11.5)

TOTL 0 20 6.8 0.0 nc (0.1) IMAS 10.0 10.0 28.4 199.9 209.1 (13.1)

WTON 10 15 1.0 0.0 nc (0.2) SMCB 5.0 54.3 3.8 73.2 85.4 (15.4)

BIRD 0 10 1.0 0.0 38.5 (0.3) JPFA 0.0 60.0 25.9 339.3 na (26.6)

LPPF 0 25 0.6 0.0 nc (0.3) MLPL 4.0 10.0 47.1 257.0 na (43.0)

HERO 0 15 2.9 0.0 1.6 (174.8)

Source: IDX, companies, Bahana *USD reporting **Excluding HERO, JPFA and MLPL due to low-base

JCI index vs. IDR currency

12,300

12,600

12,900

13,200

13,500

13,800

14,100

14,400

14,7004,000

4,200

4,400

4,600

4,800

5,000

5,200

5,400

5,600

3-Jan 3-Feb 3-Mar 3-Apr 3-May 3-Jun 3-Jul 3-Aug 3-Sep 3-Oct 3-Nov 3-Dec

(IDR)(JCI)

JCI index USDIDR

Some convergence between IDR/USD and

JCI provides comfort

Source: Bloomberg as of 3 December 2015, Bahana

2016 Compendium

79

Sectors – Ranked by YTD performance: First

Consumer staples: With scarcity of growth on the ground, staples remain

as one of the most defensive and resilient sectors.

Telcos: Outperformance due to its strong growth caused by higher data

usage and also by its defensive nature amid current market volatility.

Property: In spite of weak marketing sales, the sector has benefited

from positive sentiment on government regulations and possible lower BI

rates ahead.

Consumer staples sector: relative performance

20.3

(2.2)

8.5

19.3

33.7

29.8

9.2

(5)

0

5

10

15

20

25

30

35

40

(5)

0

5

10

15

20

25

30

35

40

ytd 1M 3M 6M 9M 12M 2014

(%) (%)

Consumer staples sector relative to JCI

Source: Bloomberg

Telco sector: relative performance

15.6

10.3 11.6

14.6

24.1

16.6

8.9

0

5

10

15

20

25

30

0

5

10

15

20

25

30

ytd 1M 3M 6M 9M 12M 2014

(%) (%)

Telco sector relative to JCI

Source: Bloomberg

Property sector: relative performance

14.9

6.8

15.8

8.3 7.0

7.8

28.1

0

5

10

15

20

25

30

0

5

10

15

20

25

30

ytd 1M 3M 6M 9M 12M 2014

(%) (%)

Property sector relative to JCI

Source: Bloomberg

2016 Compendium

80

Sectors – Ranked by YTD performance: Second

Consumer retail: Defensive grocery demand has supported the

performance of retailers.

Banks: Outperforming, helped by sentiment from lower Primary Reserve

Requirements and possible lower BI rates, despite current rising NPLs.

Infrastructure: Perceived as a market proxy, it has performed relatively

in line with the index.

Consumer retail sector: relative performance

6.6

5.0 5.1

0.1

(2.2)

3.6

6.7

(4)

(2)

0

2

4

6

8

(4)

(2)

0

2

4

6

8

ytd 1M 3M 6M 9M 12M 2014

(%) (%)

Consumer retail relative to JCI

Source: Bloomberg

Banks sector: relative performance

6.1

2.4

4.2 4.7

0.8

5.3

18.9

0

2

4

6

8

10

12

14

16

18

20

0

2

4

6

8

10

12

14

16

18

20

ytd 1M 3M 6M 9M 12M 2014

(%) (%)

Banks sector relative to JCI

Source: Bloomberg

Infrastructure sector: relative performance

0.7

(0.8) (3.1)

2.9

(1.5)

13.2

118.9

(10)

10

30

50

70

90

110

(10)

10

30

50

70

90

110

ytd 1M 3M 6M 9M 12M 2014

(%) (%)

Infrastructure-related sector relative to JCI

Source: Bloomberg

2016 Compendium

81

Sectors – Ranked by YTD performance: Third

Automotive: Weak purchasing power coupled with continued huge

discounting environment has resulted in market underperformance.

Poultry: Underperforming due to weak IDR as well as low DOC and

broiler prices caused by oversupply conditions.

Consumer media: Suffered from FMCG companies’ lower TV ad spend

and their shift to cheaper advertising media (e.g. online and direct

marketing), though the sector has improved recently on a slightly better

economic outlook.

Automotive sector: relative performance

(3.0)(3.3)

(1.7) (1.7)(2.9)

(0.7)

(16.1)

(20)

(15)

(10)

(5)

0

(20)

(15)

(10)

(5)

0

ytd 1M 3M 6M 9M 12M 2014

(%) (%)

Automotive sector relative to JCI

Source: Bloomberg

Poultry sector: relative performance

(4.2)

9.1

48.3

6.6

(1.0)

(19.3) (20.2)(30)

(20)

(10)

0

10

20

30

40

50

60

(30)

(20)

(10)

0

10

20

30

40

50

60

ytd 1M 3M 6M 9M 12M 2014

(%) (%)

Poultry sector relative to JCI

Source: Bloomberg

Consumer media sector: relative performance

(6.5)

0.5

14.2

11.2

(9.5)

1.1

(4.2)

(12)

(8)

(4)

0

4

8

12

16

(12)

(8)

(4)

0

4

8

12

16

ytd 1M 3M 6M 9M 12M 2014

(%) (%)

Consumer media relative to JCI

Source: Bloomberg

2016 Compendium

82

Sectors – Ranked by YTD performance: Fourth

Industrial estates: Concerns on investment outlook have hurt the

performance of the sector.

Plantations: Disadvantaged by lower CPO and soybean prices due to

global oversupply conditions.

Coal: Underperformance on continued weak coal price due to the

implementation of China’s clean air policy.

Industrial estates sector: relative performance

(9.6)(10.3)

0.4

(18.2)

(25.2)(23.7)

52.2

(30)

(20)

(10)

0

10

20

30

40

50

60

(30)

(20)

(10)

0

10

20

30

40

50

60

ytd 1M 3M 6M 9M 12M 2014

(%) (%)

Industrial estate sector relative to JCI

Source: Bloomberg

Plantations sector: relative performance

(11.4)

(5.4)

(0.4)

(16.3)(17.5)

(16.8)

(13.5)

(20)

(15)

(10)

(5)

0

(20)

(15)

(10)

(5)

0

ytd 1M 3M 6M 9M 12M 2014

(%) (%)

Plantations sector relative to JCI

Source: Bloomberg

Coal sector: relative performance

(12.8)

(17.8)(19.3)

(24.2)

(19.5)(18.6)

(32.1)(35)

(30)

(25)

(20)

(15)

(10)

(5)

0

(35)

(30)

(25)

(20)

(15)

(10)

(5)

0

ytd 1M 3M 6M 9M 12M 2014

(%) (%)

Coal sector relative to JCI

Source: Bloomberg

2016 Compendium

83

Sectors – Ranked by YTD performance: Fifth

Oil-related: Has been underperforming on depressed oil price outlook on

oversupply condition as well as the lifting of Iran sanctions.

Transportation: The taxi industry has been hurt by decreased demand on

weak purchasing power and lower utilization rates on intensifying

competition from online mobile-based transportation applications.

Metals: Suffering from weak sentiment due to stronger USD and global

economic weakness, negatively affecting prices of base metals.

Oil-related sector: relative performance

(12.8)

1.4

7.5

(7.0)

(9.5) (9.1)

(1.7)

(15)

(10)

(5)

0

5

10

(15)

(10)

(5)

0

5

10

ytd 1M 3M 6M 9M 12M 2014

(%) (%)

Oil-related sector relative to JCI

Source: Bloomberg

Transportation sector: relative performance

(16.9)

5.1

0.7

(7.1)

(37.4)

(49.0)

(39.2)

(60)

(50)

(40)

(30)

(20)

(10)

0

10

(60)

(50)

(40)

(30)

(20)

(10)

0

10

ytd 1M 3M 6M 9M 12M 2014

(%) (%)

Transportation sector relative to JCI

Source: Bloomberg

Metals sector: relative performance

(18.5)(20.3)

(10.9)

(36.6)(39.2)

(48.3)

5.3

(50)

(40)

(30)

(20)

(10)

0

10

(50)

(40)

(30)

(20)

(10)

0

10

ytd 1M 3M 6M 9M 12M 2014

(%) (%)

Metals sector relative to JCI

Source: Bloomberg

2016 Compendium

84

Sectors – Ranked by YTD performance: Last

Shipping: Suffering from weak sentiment due to softer-than-expected

GDP growth performance.

Cement: The sector has been hurt by sentiment on competition, the

oversupply situation and weak margins.

Aviation: Has been impacted by slower GDP growth and natural

disasters, despite lower oil prices.

Shipping sector: relative performance

(18.6)

(6.7)

5.7

11.1

1.2

(13.0)

(39.1) (40)

(30)

(20)

(10)

0

10

20

(40)

(30)

(20)

(10)

0

10

20

ytd 1M 3M 6M 9M 12M 2014

(%) (%)

Shipping sector relative to JCI

Source: Bloomberg

Cement sector: relative performance

(18.9)

7.3

10.1

(0.7)

(5.2)

(15.2)

(6.2)

(22)

(18)

(14)

(10)

(6)

(2)

2

6

10

(22)

(18)

(14)

(10)

(6)

(2)

2

6

10

ytd 1M 3M 6M 9M 12M 2014

(%) (%)

Cement sector relative to JCI

Source: Bloomberg

Aviation sector: relative performance

(22.1)

(2.8)

(4.8)

(15.6)

(12.6)

(20.8)

(10.4)

(25)

(20)

(15)

(10)

(5)

0

(25)

(20)

(15)

(10)

(5)

0

ytd 1M 3M 6M 9M 12M 2014

(%) (%)

Aviation sector relative to JCI

Source: Bloomberg

2016 Compendium

85

3Q15 results review: The good, the bad & the ugly

Growth deceleration in overall 3Q15 operating and net profit.

At the operating profit level, the market has thus far booked around

6.1% y-y growth in 3Q15, better than our estimate of 3% y-y growth.

However, on the bottom line, 3Q15 net profit contracted by nearly 6%

y-y, which was worse than our estimate of a 1.4% contraction.

The culprits of the earnings slowdown are lower-than-expected GDP

growth and IDR depreciation.

Market performance (%)

Operating profit y-y growth Net profit y-y growth

3Q14 3Q15 3Q14 3Q15

Bahana universe* 8.8 6.1 10.9 (5.9) Source: Company, Bloomberg, Bahana estimates *SRIL, EXCL and ISAT

The good


3Q14 3Q15 3Q14 3Q15

Coal-related 82.0 25.6 2.3 44.5

Infra-related 6.3 20.3 8.0 26.5

Banks 3.1 8.9 6.3 7.9

Poultry (62.4) 101.3 (60.8) 7.0

Telco-related* 0.6 17.4 17.3 2.9 Source: Company, Bloomberg, Bahana estimates

The bad


3Q14 3Q15 3Q14 3Q15

Property 24.4 8.0 32.0 (22.6) Source: Company, Bloomberg, Bahana estimates,

The ugly


3Q14 3Q15 3Q14 3Q15

Plantations 63.3 (50.8) 118.4 na

Consumer 5.9 3.8 11.6 (9.1)

*Discretionary (2.3) (8.8) 0.1 (28.5)

Staples 9.1 7.6 17.1 (5.3)

Automotive 0.3 (2.2) (3.2) (22.9)

Cement (8.5) (19.9) (0.9) (24.2)

Oil-related 12.7 (25.8) 27.2 (65.7)

Metals na (42.3) na (69.7) Source: Company, Bloomberg, Bahana estimates, *Excluding SRIL

Operating and net profit growth, 3Q11-3Q15

6.1

27.1 25.4

10.6

6.9 6.1

2.9 2.6

6.9

(2.7)

0.7

5.2

2.2

10.9

-0.4

-6.8

-12.7

-5.9

(15)

(10)

(5)

0

5

10

15

20

25

30

3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15

(%)

Opt profit y-y growth Net profit y-y growth

Source: Companies, Bahana estimates

2016 Compendium

86

4Q15F results preview: The good, the bad & the ugly

For the whole market in 4Q15F, we expect overall growth in operating

profit to fall to 4.5% y-y, while net profit should increase by 17.5% y-

y, from 3.7% in 4Q14.

We expect 4Q15F earnings to experience some y-y improvement due

to the relatively weak levels seen in 4Q14. This should be supported

by pockets of above-market growth rates, such as in the metals, coal,

telco and infrastructure-related sectors.

Note that after stripping out the commodity-related sectors, our

growth forecast for operating profit would drop to 1.5%, and that for

net profit to 3.6%.

Market performance* (%)


4Q14 4Q15F 4Q14 4Q15F

Bahana universe 8.7 4.5 3.7 17.5

Bahana universe* (9.3) 1.5 0.1 3.6 Source: Company, Bloomberg, Bahana estimates *excluding commodity-related companies

The good


4Q14 4Q15F 4Q14 4Q15F

Metals 4.5 5.4 (72.5) 378.9

Coal-related 1.7 20.5 (61.4) 352.8

Telco-related 42.4 19.2 (4.4) 57.5

Infra-related 7.2 21.2 16.1 13.7 Source: Company, Bloomberg, Bahana estimates

The bad


4Q14 4Q15F 4Q14 4Q15F

Oil-related (14.8) (47.5) (11.6) 34.0

Poultry (51.1) 105.9 na na

Consumer 48.8 11.8 68.6 (3.7)

Staples 25.0 7.7 19.5 (8.6)

Discretionary* (19.8) 25.0 69.3 (28.4) Source: Company, Bloomberg, Bahana estimates, *Excluding SRIL

The ugly


4Q14 4Q15F 4Q14 4Q15F

Plantations (22.7) (26.9) (28.7) 19.0

Automotive (7.1) (16.6) (21.4) 4.3

Property 76.1 (10.3) 117.3 2.3

Banks 3.7 (4.5) 6.7 (0.9)

Cement (6.6) (31.3) (2.8) (21.9) Source: Company, Bloomberg, Bahana estimates

Operating and net profit growth, 4Q11-4Q15F

6.14.5

27.1 25.4

10.6

6.9 6.1

2.9 2.6

6.9

(2.7)

0.7

5.2

2.2

10.9

-0.4

-6.8

-12.7

-5.9

17.5

(15)

(10)

(5)

0

5

10

15

20

25

30

3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15F

(%)

Opt profit y-y growth Net profit y-y growth


2016 Compendium

87

Government & central bank policies: Impact on sectors

No. Automotive Status Impact

1 Higher taxes on motor vehicles Plan Negative for ASII and IMAS

2 ERP policy (Jakarta) Plan Negative for ASII, IMAS, TAXI and BIRD

3 2W cartel allegation Plan Negative for ASII

4 Relaxation of LTV regulations Signed Positive for ASII and IMAS

5 Flexible pricing on regular gasoline Signed Positive/negative for ASII and IMAS

6 Motorcycle ban in several main roads (Jakarta) Signed Negative for ASII and IMAS

7 Progressive tax on cars Signed Negative for auto and consumer sector

8 Limitation on tire imports Signed Positive for GJTL

No. Aviation Status Impact

1 Higher ticket price ceiling Plan Positive for GIAA

2 No new airline establishment Signed Positive for GIAA

No. Banking Status Impact

1 BI to increase the maximum limit for electronic money Plan Improve Digital Finance Services (LDK)

2 One-year lock-up period for verifying DSIB (Domestic Systematically Important Banks) included in JPSK bill

Plan Positive for big banks in terms of size and complexity

3 Regulation on banks’ taxable income provisions Plan Negative for industry

4 Lower KUR rates to 9% in 2016 from 12.0% in 2015 and 21.0% in 2014 Plan Pressured banks’ NIM

5 Stricter regulation on bank deposit tax submission Plan Negative for banks that do not comply on tax submission

6 Lowering RWA for the government prioritized sectors (infrastructure, maritime, and agriculture)

Plan Positive for BBRI

7 Setting minimum CAR for banks with large conglomeration Plan More prudent

8 Incentives for bank M&A, including tax reduction, leeway in RR, and easing new-branch establishment

Plan Positive for small banks

9 BI cut the reserve requirement ratio (GWM) from 8% to 7.5% Signed Increase liquidity in banking industry

10 The relaxation of a single obligor NPL policy to provide room for banks in doing debt restructuring on a project basis and its related cash flows on those debtors

Signed Helping BI to maintain NPL

11 Lowering tax rates for exporters’ profit TD by around 10% Signed Helping BI to maintain USD/IDR

12 Leeway on regulation regarding account opening for foreigners Signed Helping BI to maintain USD/IDR

13 Simplification for foreigners to open bank account in foreign currency Signed Helping BI to maintain USD/IDR

14 Lower the maximum limit os USD purchase through spot transactions from USD100,000/month to USD 25,000/month

Signed Helping BI to maintain USD/IDR

15 Changing LDR to LFR terms with ceiling limit of 94%, if banks fulfill MSME regulation and NPL below 5%

Signed More flexibility

16 Lower KUR rates to 12% in 2015 with govt. interest subsidized of 7% Signed Spur loan growth

17 Loosening LTV program 22-70 sq m: 70-80%; >70 sq m: 60-80%; shophouses: 70-80%) Signed Positive for BBCA, BBNI, and BMRI

18 Subsidized mortgage rates will be decreased from 7.25% to 5.0% Signed Spur loan growth especially BBTN

No. Cement Status Impact

1 Price cut by IDR3,000 per 50kg bag Signed Negative for all cement players

No. Coal Status Impact

1 China lifted 6% import tariffs on Australian coal Plan Positive for prices, negative for Indo coal volumes

2 All transactions must use L/Cs Plan Lower illegal mining; Positive for price

3 Presidential decree to reduce coal license approval for supporting 35GW projects Plan Positive for domestic coal suppliers

4 Europe decarbonisation Plan Negative for Industry

5 Export tax for coal Plan Negative for covered stocks

6 Limited approved export ports Plan Negative on higher transportation costs

7 China’s coal ban on high sulfur and ash usage Signed Positive for Indonesia’s coal mining

8 Requirement as registered exporters Signed Short-term negative on longer shipment time; Long-term positive in cutting illegal mining

9 Increased royalties on coal sales Delayed Negative impact on IUP holders

10 Gradual divestment post 5-year production with maximum ownership of 49% after 10 years

Signed As the policy is not retroactive, there is likely no impact on stocks in our coverage

No. Consumer Status Impact

1 Pharmaceutical sector to be opened to foreigners with Jokowi calling for lower px Plan Negative for KLBF, TSPC, SIDO and KAEF

2 Possible ban on sugar imports Plan Negative for MYOR

3 Possible higher VAT on tobacco Plan Negative for GGRM

4 TV and radio cigarette advertisement ban in Indonesia Plan Negative for GGRM

5 Tax on drinks with added sugar Plan Negative for ICBP, KLBF and SIDO

6 Blended 8% excise tax hike Signed Negative for GGRM

7 Pictorial health warnings on cigarette packaging Signed Negative for GGRM

8 Outdoor cigarette advertisement ban in Indonesia Signed Negative for GGRM

9 Tax on drinks with added sugar Plan Negative for ICBP, KLBF and SIDO

No. Currency related Status Impact

1 Possible FX settlements to book USD on same day Signed Negative for IDR volatility

2 All local payments/transactions must utilize IDR Signed Negative for property rentals, AKRA, etc

3 25% hedge for net short-term foreign liabilities Signed Negative due to higher hedging costs

4 Lowering FX purchases without underlying limit to USD25,000

Plan Lowering possibility of currency speculation

5 Lower SBI holiday period to 1 week Signed Trigger capitalization 6 Lower tax rate to 0-10% for exporters Signed Improve IDR stability

No. Health-care Status Impact

1 Private hospitals to accept BPJS patients Plan Negative due to lower expected margins

No. Infrastructure Status Impact

1 Putting a time limit on project permit process Plan Positive for construction sector 2 IDR314tn infrastructure spend in 2016 State Budget Signed Positive for construction sector

No. Land transportation (taxi) Status Impact

1 Possible lower tariffs Plan Negative for BIRD 2 Removal of taxi quota limitation Plan Negative for BIRD and TAXI

No. Media Status Impact

1 TV and radio cigarette ads banned in Indonesia Plan Negative for SCMA and MNCN on lower ad spend 2 1 broadcasting right owned by 1 person/entity Signed Negative for media companies

No. Metal Status Impact

1 Increased royalty on mineral sales Plan Negative for all miners 2 Standardized tin content & packaging (non-ingots) Plan TINS: limited impact; reducing illegal mining 3 Limitation on tin production to 40k tons in 2015 Plan Lower volumes for TINS, but higher prices 4 Export ban of ores in 2014/Possible relaxation Signed/plan Negative for ANTM/Positive for ANTM

5 Foreign ownership divestment: Up to 51% for unintegrated miners; <51% for integrated miners; no divestment for smelters/refineries

Signed Negative for INCO

6 Local trading and higher tin content for tin exports Signed Lower volumes for TINS, but higher prices 7 20% ore export tax Signed Negative for ANTM

8 Subsidized-fuel prohibition Signed Limited impact for covered stocks

No. Oil & Gas Status Impact

1 Possible reduction on gas-selling price Plan Negative on PGAS 2 Permit simplification Plan Positive for ELSA 3 Reduction of oil & gas blocks up for bidding Plan Less exploration and lower production 4 Work contracts from production- to revenue-based Plan Negative for MEDC 5 Gas aggregator establishment Plan Positive impact for PGAS 6 Regulated margin Plan Limited impact for PGAS 7 Lower government take Plan Positive for MEDC 8 Open access for gas pipelines Signed Limited impact for PGAS for now

No. Plantations Status Impact

1 Limit peat land plantation Plan Negative for all planters under coverage 2 B20 biodiesel mandatory program Plan Positive for all planters under coverage 3 CPO Supporting Fund: export levies Signed Neutral for all planters under coverage 4 B15 biodiesel mandatory program Signed Positive for all planters under coverage

No. Poultry Status Impact

1 GPS (Grand Parent Stock) import quota Plan Positive for all poultry players covered 2 DOC price floor Plan Positive for all poultry players covered 3 Corn import restriction Plan Negative for all poultry players covered

No. Property Status Impact

1 Leeway for foreigners to own luxury houses and apartments (including non-resident foreigners)

Plan Positive, to benefit CTRP most

2 Revised tax thresholds for luxury properties, including houses and apartments

Signed Lower PPh22 signed effective 30 May 2015/higher PPNBM to >IDR20bn (non strata) and >IDR10bn (strata) effective 4 Dec 2015

3 Relaxation of LTV regulation Signed Positive for all property developers 4 Mortgages based on % of completion for 2nd homes Signed Negative for companies with high apartment exposure like APLN/CTRP 5 Licensing limitation on high-end apartments Signed Negative for the likes of APLN and LPKR 6 Moratorium on malls in Jakarta Signed Positive for PWON

No. Retail Status Impact

1 One zone one minimarket Plan Most negative for MDRN and AMRT 2 Import duty increase for consumer goods Signed Most negative for ACES and MAPI 3 Imported goods must be less than 20% of inventory Signed Most negative for RANC

4 Maximum 150 privately-owned outlets – the rest franchised

Signed Most negative for MDRN and AMRT

5 Minimarkets not to sell category A alcoholic beverages

Signed Most negative for MDRN and AMRT

No Shipping Status Impact

1 Possible higher tax on revenues (current: 1.2%) Cancelled Positive for all shipping companies

No SOE Status Impact

1 Government to increase ownership in SOEs Plan Negative for BBRI (57%), PGAS (57%), ADHI (51%), PTPP (51%), SMGR (51%) and TLKM (53%)

No. Telco Status Impact

1 Additional 20% luxury goods tax for mobile phones Plan Negative for ERAA and TELE 2 Obligation to build local factory for cellular makers Signed Negative for ERAA and TELE

No. Toll roads Status Impact

1 10% VAT hike on toll roads for private vehicles Plan Negative for JSMR 2 25-35% toll-road tariff dicounts around Lebaran Signed Negative for JSMR

Source: Bahana

2016 Compendium

88

Market valuation: More reasonable - POSITIVE

With the JCI having been the worst performing market in the region in

dollar terms, we have raised our rating from neutral to POSITIVE. The

JCI’s valuation is currently at a 2016F P/E of 16.1x, no longer the

highest in the region. However, excluding UNVR’s & HMSP’s high

multiples and market capitalization, our 2016F market P/E would

further fall to 14.0x, below the regional average.

We expect 2016F EPS growth to reach 14.3% y-y, slightly above the

regional average, as well as the Bloomberg consensus of 13.8% y-y

growth. This is most likely due to consensus not having downgraded

2015 earnings.

On the other hand, we look for a 2016 PEG of 1.0x, which is also no

longer the highest in the region. Excluding UNVR & HMSP, our 2016F

PEG would further decrease to 0.9x.

Regional P/E comparison, 2016F

19.518.7

16.5 16.3 16.114.9 14.8

14.0

12.612.0

0

2

4

6

8

10

12

14

16

18

20

22

India Philippines Malaysia South

Korea

Indonesia China Thailand Indonesia* Singapore Hong Kong

(x)

Average**: 15.7x

Source: Bloomberg as of 3 December 2015, Bahana *excluding UNVR and HMSP **excluding Indonesia*

Regional EPS growth comparison, 2016F

34.9 32.5

14.3

11.9 9.9 9.2

7.6

3.5

(0.6)(5)

0

5

10

15

20

25

30

35

South Korea Thailand Indonesia Philippines Malaysia Singapore Hong Kong India China

(%)

Average: 13.7%

Source: Bloomberg as of 3 December 2015, Bahana

Regional PEG comparison, 2016F

5.6

1.7 1.6 1.6 1.4 1.0 0.9 0.5 0.5

(24.0)(25.0)

(20.0)

(15.0)

(10.0)

(5.0)

0.0

5.0

10.0

India Malaysia Hong Kong Philippines Singapore Indonesia Indonesia* South

Korea

Thailand China

(x)

Average**: (1.1x)

Source: Bloomberg as of 3 December 2015, Bahana *excluding UNVR and HMSP **excluding Indonesia*

2016 Compendium

89

Sector and stocks: A mixed bag

Looking ahead to 2016, our index target is 5,100, in line with our y-y

EPS growth of around 14% in 2016 (2015 index target: 4,500).

At this stage, we believe it is too early to move entirely into higher

beta stocks given the lack of earnings visibility, particularly in 1H16.

Hence, out of our top-10 picks, six are mass-market counters in

staples and telcos that can provide stability amid the current market

uncertainty. However, as we expect some economic improvements

ahead due to possible lower BI rates, we have four stocks that would

benefit from this rate cut outlook: BBNI, WSKT, DMAS and ADHI.

On the flip side, we dislike auto-based related plays: ASII and BIRD

on intense competition. As we are UNDERWEIGHT property on the

government’s aggressive taxation drive, APLN is one of our top stocks

to avoid on a lack of projects, and high reclamation and interest costs.

On competition and oversupply, we also dislike the cement sector with

INTP as our top sell. Finally, HERO rounds up our top 5 sells.

Favored stocks (10 Stocks), stocks to avoid (5 stocks), 2016F

Stock Mkt cap. Price TP Upside EPS

growth P/E P/BV Yield ROAE

YTD

perf.

(USDm) (IDR) (IDR) (%) (%) (x) (x) (%) (%) (%)

HMSP 32,804 97,600 115,000 18 6.4 40.8 13.3 2.5 32.6 43.2

TLKM 22,100 3,035 3,750 24 12.6 17.2 3.7 3.8 22.6 6.5

UNVR 20,256 36,750 46,000 25 12.4 42.4 49.5 2.2 125.1 13.8

GGRM 7,169 51,575 65,000 26 9.3 16.7 2.5 2.5 15.4 (15.0)

BBNI 6,722 4,990 5,700 14 31.7 8.4 1.3 2.4 16.4 (18.2)

ICBP 5,339 12,675 16,800 33 15.0 20.9 4.2 2.1 21.2 (3.2)

ISAT 2,120 5,400 6,800 26 na 22.0 2.1 1.4 10.0 33.3

WSKT 1,637 1,670 1,975 18 17.3 20.0 2.3 1.0 12.1 16.5

DMAS 707 203 290 43 12.2 5.7 1.1 5.2 21.2 10.0*

ADHI 568 2,210 2,550 15 (17.4) 14.7 1.5 1.4 10.6 (25.2)

ASII 18,424 6,300 5,550 (12) 4.9 14.5 2.2 3.1 16.2 (16.8) INTP 5,299 19,925 16,400 (18) 0.3 16.8 3.0 5.3 17.9 (20.1) BIRD 1,206 6,675 4,700 (30) 3.6 19.2 3.7 2.1 20.2 (27.6) APLN 449 303 220 (27) 6.7 9.6 0.8 2.1 9.2 (9.0) HERO 332 1,100 650 (41) na 80.1 0.8 0.0 1.0 (40.6) Source: Bloomberg as of 3 December 2015, Bahana estimates *Since IPO

Sectoral rating summary, 2016F

Rating Operating growth (%) Net profit

growth (%) P/E (x)

OW N UW Bahana Cons. Bahana Cons. Bahana Cons.

Automotive √ 6.5 10.9 10.9 15.5 14.8 13.4

Banks √ 10.5 14.9 10.4 13.9 11.1 10.9

Cement √ 2.8 10.0 4.7 7.8 16.3 14.2

Coal mining √ (8.1) (8.4) (7.4) (9.6) 7.9 8.6

Const. & infra. √

27.3 26.5 25.0 30.1 20.3 18.0

Consumer √

9.5 11.8 15.5 14.0 28.8 28.0

Industrial estates √

13.9 8.8 13.7 3.6 6.3 6.8

Metal mining √

56.3 27.3 124.9 46.1 20.6 17.9

Oil and gas √ 16.6 14.2 22.4 12.2 12.2 11.6

Plantations √

37.7 23.5 80.3 37.8 14.6 13.3

Poultry √

32.1 34.8 84.5 52.3 18.3 20.8

Property √ 10.5 11.4 14.6 15.4 12.5 11.4

Shipping √

53.9 48.1 38.8 29.4 5.4 4.8

Telcos √

14.1 14.3 32.0 21.1 19.8 18.7

Transportation √ 11.2 24.1 6.3 29.3 18.1 13.1

Source: Bloomberg as of 3 December 2015, Bahana estimates

Market data

14A 15F 16F

Operating profit growth (%) 6.1 (1.3) 11.8

Operating profit growth (%) - consensus 6.1 1.5 13.8

Net profit growth (%) 4.2 (4.9) 15.5

Net profit growth (%) – consensus 4.2 (3.3) 14.9

P/E (x) 17.6 18.5 16.1

P/E (x) - consensus 17.6 17.8 15.5

EPS growth (%) (4.6) (7.5) 14.3

EPS growth (%) - consensus (4.6) (3.7) 13.8

PEG (x) 5.5 (3.8) 1.0

EV/EBITDA (x) 13.2 12.7 11.7

P/BV (x) 14.4 8.7 7.6

P/BV (x) exc. UNVR & LPPF 3.6 3.2 2.9

Div. yield (%) 2.4 2.2 2.4

Net gearing (%) 21.3 22.8 19.7

ROAE (%) 35.0 31.2 28.6

ROAA (%) 14.4 12.1 11.8

ROIC (%) 31.5 23.2 22.0

Source: Bloomberg as of 3 December 2015, Bahana estimates

2016 Compendium

90

2016 technical perspective: A year of recovery

Going into 2016, we see the JCI will perform a second correction with

2016 support at the 4,345 level and then 4,000, before rallying and

testing its 2016 initial resistance level at 5,100, before finally

proceeding to test its second resistance level of 5,600.

Note that we see similar patterns as in 2013 and 2015 with the JCI

having started the year with a rally for almost 4 months before it

began to crumble, reaching its lowest level in September 2015. This

fall marked around a 27% drop from the high, similar to that in 2013

(down 27% from its highest level).

On the currency front, we see the 2016 movements will be at around

a fibonacci retracement of 50% (IDR13,000 level) and 76.4%

(IDR13,900), before testing its 2016 resistance level in a fibonacci

retracement of 100% (IDR14,736).

JCI – historical chart

Source: Company, Bahana estimates

JCI – 2015 chart


Local currency – 2015 chart


2008: US Crisis

2013: US Tapering

2011: EU Quantitative Easing

2015: Fed Rate

Hike?

2016 Compendium

91

SECTOR

2016 Compendium

92

AUTOMOTIVE UNDERWEIGHT

2008A 2009A

2010F 2011F

We expect an unexciting 2016 performance by the auto sector with

sales volumes of 1.02m units, flat y-y, for 4W and 6.4m units, also flat

y-y, for 2W. Despite our expectation of higher commercial vehicle

demand on higher government spending, we expect the multiplier effect

on passenger-vehicle demand to occur only in 2H16.

Our UNDERWEIGHT stance on the sector is backed by margin pressures

stemming from intense competition with new product launches and

persistently large discounting. Additionally, we expect the proportion of

cheaper car sales to increase, translating to lower ASPs.

On stocks, we reiterate our REDUCE calls on ASII due to a muted

market share and margins, and IMAS as we expect a depressed market

share and weak margins on dealer expansion. On the flip side, GJTL is a

BUY on its attractive valuation and earnings recovery. Risks: Higher

margins (ASII); higher sales (IMAS); and weaker IDR (GJTL).

Relative valuations

------------------------------2016F-----------------------------

Code Rating CP TP Market

cap EBIT

margin NP

growth P/E

EV/ EBITDA

Yield ROAE Net gearing

(IDR) (IDR) (USDmn) (%) (%) (x) (x) (%) (%) (%)

ASII REDUCE 6,300 5,550 18,424 9.6 4.9 14.5 11.6 3.1 16.2 44.1

IMAS REDUCE 2,250 2,000 449 0.8 na 49.2 33.3 0.5 2.3 297.2

GJTL BUY 530 860 134 7.4 na 29.8 4.7 0.8 1.3 129.3

Sector 19,007 9.4 10.9 14.8 12.0 3.0 15.7 50.6

Source: Bloomberg, Bahana estimates note: based on 3 December 2015 closing price

Relative performance YTD to JCI

(2.0) (3.0)

(30.6)

(49.6)

(60)

(50)

(40)

(30)

(20)

(10)

0

(60)

(50)

(40)

(30)

(20)

(10)

0

ASII Sector IMAS GJTL

(%)(%)

Source: Bloomberg

Leonardo Henry Gavaza, CFA ([email protected]) +6221 2505081 ext. 3608

Domestic 2W and 4W ownership per 1,000 population, 2013-17F

Source: Gaikindo, AISI, Bahana

25

30

35

40

45

50

200

225

250

275

300

2013A 2014A 2015F 2016F 2017F

Total 2W Total 4W (RHS)

(per 1,000 population) (per 1,000 population)

2016 Compendium

93

AUTOMOTIVE

4W sales volumes, 2013-17F

1,2301,208

1,021 1,021

1,072

600

700

800

900

1,000

1,100

1,200

1,300

2013 2014 2015F 2016F 2017F

('000 Units)

Source: Gaikindo, Bahana estimates

2W sales volumes, 2013-17F

7,744 7,867

6,412 6,412 6,572

600

1,600

2,600

3,600

4,600

5,600

6,600

7,600

8,600

2013 2014 2015F 2016F 2017F

('000 Units)

Source: AISI, Bahana estimates

Top 10 passengers sales, 2012-10M15

10M15 1 2014 1 2013 1 2012

Type Units Type Units Type Units Type Units

Avanza 113,288 Avanza 162,070 Avanza 213,458 Xenia 73,418

Agya 45,058 Mobilio 79,288 Xenia 64,611 Innova 71,685

Mobilio 37,279 Agya 67,074 Innova 64,539 Livina 34,129

Innova 34,755 Innova 56,157 Ertiga 63,317 Ertiga 34,074

Xenia 31,262 Ertiga 47,015 G. Livina 35,422 Rush 34,033

Ayla 28,783 Xenia 46,710 Rush 35,004 Yaris 27,809

Ertiga 26,060 Ayla 40,775 Jazz 27,803 Terios 23,949

Brio Satya 24,917 Rush 29,609 Terios 25,764 Jazz 21,244

HR-V 24,732 Brio Satya 26,683 Agya 22,376 Freed 19,811

Rush 21,254 Jazz 22,329 CR-V 20,385 Avanza 12,146

Total 387,388 Total 577,710 Total 572,679 Total 352,298

Grandtotal 853,008 Grandtotal 1,208,019 Grandtotal 1,229,917 Grandtotal 1,116,230

Percentage 45.4% Percentage 47.8% Percentage 46.6% Percentage 31.6%

Source: Gaikindo ggrgrgrgrgrgrgrg

Domestic market share (4W and 2W), 10M15

Source: Gaikindo, AISI

Honda

(ASII)68%

Yamaha

28%

Others

4%

2W

Toyota (ASII)

32%

Daihatsu (ASII)

16%

Others

(ASII)2%

Honda

16%

Mitsubishi

11%

Suzuki (IMAS)

12%

Nissan (IMAS)

3%

Others

(Non-ASII)8%

4W

2016 Compendium

94

BANKS NEUTRAL

2008A 2009A

2010F

2011F

With expected gradual improvement in 2016F GDP growth, we foresee

an enhanced earnings outlook for the Indonesian banking sector with

sectoral loan growth picking up to 12.1% (2015F: 10.6%; 2014:

11.8%) and provisioning coming off on recovering loan quality.

Nevertheless, we still expect industry NPLs to only peak in 1Q-2Q16F at

around 3.3-3.4% (current: 3.0%), before gradually leveling thereafter.

On a more negative note, we think a deterioration in employment and

consumer spending power requires sound government policies in order

to accelerate loan growth ahead. However, looser fiscal and monetary

policies should provide banks with flexibility to boost their performance.

With possible higher near-term provisions we maintain our NEUTRAL

sector call with BBNI, BBRI and BBTN as our top sector picks, followed

by BBCA, BMRI and BJBR. Upside risk: higher GDP growth; downside

risk: weaker IDR.

Relative valuations ---------------------------- 2016F ------------------------

Code Rating CP TP Mkt Cap Loans Gross NPL

Net Profit

ROAE NP

Growth P/E P/BV

Dv. Yield

(IDR) (IDR) (USDmn) (IDRtn) (%) (IDRbn) (%) (%) (x) (x) (%)

BBCA BUY 13,300 14,700 23,688 425 1.2 19,883 20.3 9.4 16.5 3.1 1.3

BBRI BUY 11,275 13,000 20,093 619 2.7 26,815 21.2 9.8 10.4 2.0 1.9

BMRI BUY 8,800 9,700 14,833 652 3.3 20,330 16.3 1.6 10.1 1.5 2.0

BBNI BUY 4,990 5,700 6,722 358 2.8 11,022 16.4 31.7 8.4 1.3 2.4

BDMN BUY 3,005 3,400 2,081 159 2.7 2,998 8.4 14.8 9.6 0.8 2.9

BTPN REDUCE 2,500 2,350 1,055 64 1.0 1,987 13.7 9.0 7.3 1.0 2.0

BBTN BUY 1,285 1,520 982 162 3.5 2,084 14.3 25.3 6.5 0.9 2.7

BJBR BUY 735 850 515 68 3.5 1,368 17.3 11.5 5.2 0.9 9.6

BJTM REDUCE 443 420 477 33 3.8 1,023 15.6 8.6 6.5 1.0 8.9

BBKP HOLD 695 730 456 72 3.1 1,194 14.8 11.9 5.3 0.7 3.8

Sector 70,902 2,611 2.7 88,704 18.7 10.4 11.1 2.1 1.9 Source: Bloomberg, Bahana estimates note: based on 3 December 2015 closing price


Source: Bloomberg

Teguh Hartanto ([email protected]) +6221 250 5081 ext. 3610

Key ratios, 2009-9M15

2009 2010 2011 2012 2013 2014 9M15

Loan growth (% y-y) 8.7 22.1 24.1 22.6 21.5 11.4 11.0

Productive loan growth (% y-y) 7.2 25.3 23.0 20.7 26.5 11.6 11.5

Consumer loan growth (% y-y) 19.0 22.9 24.2 19.8 13.7 11.5 10.1

Mortgage growth (% y-y) 14.5 20.0 32.9 22.5 16.2 12.6 7.7

Loan to GDP (%) 26.2 28.0 30.0 33.2 36.6 35.1 35.2

Loan to earnings assets (%) 64.4 65.2 65.9 69.4 72.9 72.1 70.0

Gross NPL (%) 3.8 2.9 2.6 2.2 1.9 2.4 2.9

NPL coverage (%) 138.7 147.7 111.3 107.9 115.2 93.9 92.6

Deposit growth (% y-y) 12.5 18.5 19.1 15.8 13.6 12.3 11.7

CASA ratio (%) 54.3 54.3 55.7 57.2 56.2 52.8 53.3

LDR (%) 74.5 76.8 80.1 84.7 90.6 89.9 89.2

CAR (%) 17.4 17.2 16.1 17.4 18.1 19.6 20.6

NIM (%) 5.6 5.7 5.9 5.5 4.9 4.2 5.3

ROAA (%) 2.6 2.3 2.4 2.3 2.3 2.1 1.8

ROAE (%) 19.2 19.8 20.0 20.6 19.7 17.6 14.9

CIR (%) 121.7 86.2 81.8 77.8 78.0 79.9 84.7

Source: Central Bank of Indonesia

19.8

14.5 13.9

10.0 9.56.1 5.9 5.9

(5.0) (5.1)

(20.4)(23.5)

(25)

(20)

(15)

(10)

(5)

0

5

10

15

20

25

(30)

(25)

(20)

(15)

(10)

(5)

0

5

10

15

20

25

BBTN BBCA BJBR BBRI BJTM SECTOR BBKP JAKFIN BBNI BMRI BDMN BTPN

(%)(%)

2016 Compendium

95

BANKS

Macroprudential and monetary policies

Dec-15

BI to increase the maximum limit for electronic

moneyPlan (BI)

Nov-15BI cut the reserve requirement ratio(GWM)

from 8% to 7.5%

Signed

(BI)

Oct-15

The relaxation of a single obligor NPL policy to

provide room for banks in doing debt

restrcturing by project basis and its related

cash clows on those debtors

Signed

(OJK)

Sep-15

Lowering interet income on TD tax rates up to

10% for 1M USD TD & 7.5% for 1M IDR TD for

exporters

Signed

(Govt.)

Sep-15

One year lock period for new lenders

considered domestic systemically important

banks (DSIB) under the upcoming Financial

System Safety Net (JPSK)

Plan

(OJK)

Sep-15Simplification for foreigners to open bank

account in foreign currency

Signed

(OJK)

Aug-15

Lower the maximum limit of USD purchase

without underlying to reasons

USD25,000/month from USD100,000/month

Signed

(BI)

Aug-15

Increasing the limit of non-underlying

forex/IDR forward transaction from

USD1mn to USD5mn

Signed

(BI)

Jul-15Lowering RWA for several type of loans (e.g.,

mortgage from 45% to 35%)

Signed

(OJK)

Jul-15

Assessing asset quality by focusing on

debtor’s ability to pay for 2 years while

ignoring the industry's and financial outlook for

the respective debtors

Signed

(OJK)

Jun-15Lower KUR lenting rates to 9% in 2016 from

12.0% in 2015

Plan

(Govt)

Jun-15

Changes LDR to LFR terms with ceiling limit

of 92%, if banks fulfill MSME regulation and

NPL below 5%

Signed

(BI)

Macroprudential and Fiscal Policy Monetary Policy

6.00

7.25

7.75

7.50 7.50

4.9

7.9

6.2

7.0

6.4

6.8

3.50

4.00

4.50

5.00

5.50

6.00

6.50

7.00

7.50

8.00

8.50

Feb-

13M

ar-1

3Ap

r-13

May

-13

Jun-

13Ju

l-13

Aug-

13Se

p-13

Oct

-13

Nov

-13

Dec-

13Ja

n-14

Feb-

14M

ar-1

4Ap

r-14

May

-14

Jun-

14Ju

l-14

Aug-

14Se

p-14

Oct

-14

Nov

-14

Dec-

14Ja

n-15

Feb-

15M

ar-1

5Ap

r-15

May

-15

Jun-

15Ju

l-15

Aug-

15Se

p-15

(%)

BI rate Inflation

Source: Government, Central Bank of Indonesia, OJK

LDR, deposit and loan growth, Sept 2013 - Sept 2015

90.0

90.5

90.9

90.6

91.4

91.4

92.1

91.7

91.1

91.1

93.0

91.4

89.8

89.3

89.3

89.9

89.1

88.9

88.2

88.6

89.3

89.1

89.1

89.4

89.2

23.0

22.1

22.0

21.5

21.1

20.1

19.4

18.9

17.8

17.1

15.6

13.9

13.0

12.5

11.7

11.4

11.3 12

.0

11.1

10.3

10.2

10.2

9.5 10

.8

11.0

15.6

14.7

13.8

13.6

12.2

12.4

11.6

12.0

12.4 13

.6

11.6

12.1 13

.3 13.9

13.8

12.3

14.2

15.2

16.0

14.2

12.5 12

.7 14.3

13.2

11.7

0

20

40

60

80

100

120

140

160

180

200

0

3

7

10

14

17

20

24

27

Sep

-13

Oct

-13

No

v-13

Dec

-13

Jan

-14

Feb

-14

Mar

-14

Ap

r-14

May

-14

Jun

-14

Jul-

14

Au

g-14

Sep

-14

Oct

-14

No

v-14

Dec

-14

Jan

-15

Feb

-15

Mar

-15

Ap

r-15

May

-15

Jun

-15

Jul-

15

Au

g-15

Sep

-15

(%)(%)

LDR (RHS) Loan growth (y-y) Deposit growth (y-y)

Source: Central Bank of Indonesia, CEIC

Asset quality breakdown, Sep 2014 & Sep 2015

0.7

1.9 2.2 2.2 2.4

0.8

4.9

4.1

3.3

3.1

0.7

2.2

2.8

2.8 3.0

0.8

4.5

3.5

4.2

2.9

0

2

4

6

8

10

12

BBCA BBRI BMRI BBNI BDMN BTPN BBTN BJBR BJTM BBKP

Gross NPL, Sep-14 Gross NPL, Sep-15

1.3

5.4

4.6

3.6

5.2

2.0

12.9

2.9

1.9

5.9

1.9

5.9

5.0

3.6

6.3

1.9

13.4

2.5

2.0

4.3

(20)

(15)

(10)

(5)

0

5

10

15

BBCA BBRI BMRI BBNI BDMN BTPN BBTN BJBR BJTM BBKP

(%)(%)

Special mention, Sep-14 (RHS) Special mention, Sep-15 (RHS)

Source: Companies and Bahana

Deposit breakdown and cost of funding by bank, 9M15

76 68

62 60 54 51 50 45

31

47

14

24 32

38 40 46 49 50 55

69

53

86

2.4 3.2 3.7 3.9 4.5 5.0

5.8 5.8 7.1 7.1

8.4

(20)

(15)

(10)

(5)

0

5

10

0

20

40

60

80

100

120

140

BBCA BBNI BMRI BJTM BBRI Industry BJBR BBTN BDMN BBKP BTPN

(%)(%)

CASA Time deposit Blended cost of funding (RHS)

Source: Companies and Bahana

2016 Compendium

96

CEMENT UNDERWEIGHT

2008A 2009A

2010F

2011F

Following 2015’s expected flat y-y growth in local cement volumes, we

expect some recovery in 2016 demand, helped by increasing bulk

cement used mainly for infrastructure-related projects. Although this

development should provide a positive multiplier effect for cement

consumption, the property market slowdown may take time to revive.

On the cost front, margin pressure appears likely due to ongoing

changes in product mix leaning towards lower-margin bulk cement. In

addition, we expect cement producers to face difficulties in raising ex-

factory prices on stiff competition from new players with estimated

aggregate capacity of 12.8mt, 12.7% of total domestic capacity.

With total capacity (old and new players) likely up 20% in 2016F, we

retain our UNDERWEIGHT call on the sector, and expect market

under-performance to persist. Stock-wise, SMGR and SMBR have a

HOLD rating. Risk to our call is stronger-than-expected GDP growth.

Relative valuations

---------------------------- 2016F ------------------------

Code Rating CP TP Mkt Cap EV/ ton

EV/ EBITDA

EBITDA margin

Net Profit

ROAE NP

Growth P/E

Div. Yield

(IDR) (IDR) (USDmn) (USD) (x) (%) (IDRbn) (%) (%) (x) (%)

SMGR HOLD 11,075 10,600 4,745 121 9.4 26.6 4,503 16.6 3.5 14.6 2.1

INTP REDUCE 19,925 16,400 5,299 193 11.3 32.8 4,353 17.9 0.3 16.8 5.3

SMCB REDUCE 1,075 925 595 87 9.7 14.2 89 1.1 na 92.7 0.8

SMBR HOLD 309 300 220 98 6.1 28.6 300 9.7 (17.5) 10.1 2.5

Sector 10,859 154 10.3 29.0 9,245 16.2 4.7 16.3 3.6


Relative performance to JCI YTD

(5.7)(7.1)

(18.9) (18.4)

(37.6) (40)

(35)

(30)

(25)

(20)

(15)

(10)

(5)

0

(40)

(35)

(30)

(25)

(20)

(15)

(10)

(5)

0

SMBR INTP SECTOR SMGR SMCB

(%)(%)

Source: Bloomberg


Bob Setiadi ([email protected]) +6221 2505081 ext.3605

Domestic volume and capacity (2012-2017F)

59.8

69.472.8

83.8

100.2105.1

55.0 58.0 59.9 59.9 62.2 65.2

92.0

83.6 82.3

71.5

62.1 62.0

0

10

20

30

40

50

60

70

80

90

100

0

20

40

60

80

100

120

2012 2013 2014 2015F 2016F 2017F

(%)(mn tons)

Capacity (include Thang Long) Domestic demand Utilization rate

Source: ASI, Bahana estimates

2016 Compendium

97

CEMENT

Cement volume breakdown by region, 2010-10M15

53.8 55.2 55.3 56.4 56.3 56.2

23.8 23.0 21.8 21.0 20.9 21.3

7.0 7.0 7.4 7.6 7.6 6.8

7.5 7.3 7.5 7.4 7.6 7.7

8.0 7.4 8.0 7.7 7.7 8.0

0

10

20

30

40

50

60

70

80

90

100

2010 2011 2012 2013 2014 10M15

(%)

Java Sumatra Kalimantan Sulawesi Others (Nusa Tenggara and East Indonesia)

Source: Indonesian Cement Association

Domestic market share by company, 2010-10M15

43.3

40.8

40.9

43.9

43.7

42.8

30.9

31.5

32.0

30.4

30.4

28.1

13.6

15.5

15.6

14.5

14.6

14.3

2.8

2.6

2.2

2.2

2.1

2.6

5.5

5.8

5.6

5.4

5.8

5.2

3.9

3.7

3.7

3.7

3.5

7.1

0 10 20 30 40 50 60 70 80 90 100

2010

2011

2012

2013

2014

10M15

(%)

SMGR INTP SMCB SMBR Bosowa Other

Source: Indonesian Cement Association

Cement capacity by company, 2012-2017F

Companies 2012 2013 2014 2015F 2016F 2017F

Semen Indonesia (SMGR) 25,300 30,900 31,800 33,300 40,300 41,700

Semen Gresik 12,400 14,700 14,700 14,700 17,700 19,100

Semen Padang 5,900 6,400 7,300 7,300 10,800 10,800

Semen Tonasa 7,000 7,500 7,500 9,000 9,500 9,500

Others (Thang Long) - 2,300 2,300 2,300 2,300 2,300

Indocement (INTP) 18,600 18,600 20,500 20,500 24,900 24,900

Holcim (SMCB) 8,700 10,400 10,400 12,100 12,100 12,100

Semen Baturaja (SMBR) 1,250 2,000 2,000 2,000 2,000 3,850

Others 5,900 7,500 8,100 15,900 20,850 22,550

Semen Andalas 1,600 1,600 1,600 1,600 1,600 1,600

Semen Bosowa 3,800 5,400 6,000 6,000 6,000 6,000

Semen Kupang 500 500 500 500 500 500

Siam Cement - - - 1,800 1,800 1,800

Merah Putih - - - 2,500 4,000 4,000

Panasia - - - - 1,800 1,800

Anhui - - - 1,700 1,700 3,400

Jui Shin - - - 1,500 1,500 1,500

Ultratech - - - - 1,650 1,650

Puger - - - 300 300 300

Total production capacity 59,750 69,400 72,800 83,800 100,150 105,100

Capacity (in k tons)

Source: Companies, Bahana

Domestic competitive landscape, since 2015

Source: Semen Indonesia

2016 Compendium

98

COAL UNDERWEIGHT

2008A 2009A

2010F 2011F

At this stage, we reaffirm our negative view on the coal sector due to

the shale-gas boom and green-energy policy undermining demand for

coal. Additionally, with China’s slowdown, its coal imports have

dropped 30% y-y to 170.4bn mt as it is now purchasing local coal.

Going into 2016, we estimate the coal price to average USD55/mt,

slightly lower than our 2015 assumption of USD58/mt (YTD 2015

average: USD58/mt). We expect coal to be driven by local demand,

with about 20GW of 35GW projects being coal-fired power plants.

Margin support could come from ESDM’s policy to raise the coal

reference price by 1.8% and to set up to a 25% gross margin for

mine-mouth power plant projects.

In terms of stocks, we prefer companies with large local coal portions:

PTBA (52%) and ADRO (21%). Risks to our call on the sector are

faster construction of power plant projects and higher coal prices.

Relative valuations ---------------------------2016F--------------------------

Mkt EV/ EV/ EBIT Div. CP TP Cap reserv. EBITDA margin P/E P/B yield

Code Rating (IDR) (IDR) (USDm) (USD) (X) (%) (X) (X) (%)

UNTR HOLD 16,100 16,000 4,352 na 3.6 16.5 9.4 1.3 4.3

ADRO BUY 535 700 1,237 3.9 2.3 13.6 5.8 0.4 5.2

PTBA BUY 5,200 7,800 887 0.4 3.6 17.5 5.5 1.2 10.0

ITMG REDUCE 6,580 5,200 544 0.8 0.8 9.9 7.5 0.6 10.6

HRUM REDUCE 710 500 139 0.4 na 0.8 Na 0.5 na

Sector exc. UNTR 2,807 0.9 13.5 3.7 0.3 3.3

Sector 6,615 3.1 15.4 7.9 1.1 5.6

Source: Company, Bahana estimates note: based on 3 December 2015 closing price


6.0

(12.8)

(35.4)

(43.9) (43.6)

(50)

(40)

(30)

(20)

(10)

0

10

UNTR Sector ADRO ITMG PTBA(%)

Source: Bloomberg

Arandi Ariantara ([email protected]) +6221 250 5081 ext. 3619

Indonesia’s local coal vol. and electricity vol., 1Q14-4Q15

(mn mt) (TWh)

18

37

6

15

18

21

28

25

46.8

50.8

49.2

51.8

48.0

51.450.2

54.9

42

44

46

48

50

52

54

56

0

5

10

15

20

25

30

35

40

1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15

Domestic coal volumes (LHS) Electricity sales volume (RHS)

Source: Ministry of Energy and Mineral Resources (ESDM)

2016 Compendium

99

COAL

Indonesia’s coal production, 2002-16F

(mn mt)

103 114132

153

194217

240256

275

353

386

421435

399 400

29 39 36 41 49 61 53 56 6780 82 72 76

92 97

0

50

100

150

200

250

300

350

400

450

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016F

Production volumes Domestic coal volumes

Source: Bloomberg

Indonesia’s energy mix forecast, 2015-24F

11.4 9.3 5.3 2.7 1.8 1.6 1.5 1.4 1.4 1.4

24.824.0

24.5 28.525.8 21.8 20.1 18.8 18.6 17.2

53.5 57.1 60.7 59.3 62.965.9 67.0 67.2 67.1 65.6

5.7 5.2 4.9 4.7 5.0 4.8 4.9 5.6 6.0 6.5

4.2 4.0 4.2 4.2 4.2 5.4 6.2 6.6 6.6 9.0

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2015F 2016F 2017F 2018F 2019F 2020F 2021F 2022F 2023F 2024F

Oil Gas Coal Hydro Geothermal Others

Source: State-owned Electricity Company (PLN)

China’s coal imports vs electricity output, Jan 2014 – Oct 2015

(mn mt) (bn kWh)

35.9

22.8

25.327.1

24.025.1

23.0

18.9

21.220.1

21.0

27.2

16.815.3

17.0

20.0

14.2

16.6

21.3

17.5 17.8

14.0

290

310

330

350

370

390

410

12.0

17.0

22.0

27.0

32.0

37.0

China coal imports (LHS) China electricity (RHS)

10M15 coal imports: 170.4mn mt, fell 30% y-y

China's thermal power plants shift into domestic coal


China’s port inventory level, 2011-11M15

('000 mt)

November 2015: 19.7mn mt

17,000

19,000

21,000

23,000

25,000

27,000

Avg: 22.8mn mt


2016 Compendium

100

CONSTRUCTION & TOLL ROAD NEUTRAL

2008A 2009A

2010F

2011F

Entering the second full-year of the Jokowi administration, we expect

project acceleration on an improved state budget disbursement rate

and high total order books to result in solid growth for construction

companies’ 2016F top lines. However, main challenges would stem

from cash-flow management and securing suitable financing,

particularly due to increased investments and project sizes.

On toll roads, we see faster development prospects on improved land-

clearing process, propelling the government’s plan to build 1,000km in

toll roads by 2019. In addition, the government has also offered

viability gap funding to attract investment in unfavorable toll sections.

On added investment risks in high capital-intensive projects, we retain

our NEUTRAL stance. Our top picks are WSKT (solid earnings visibility)

and ADHI (most attractive valuation). Upside risk: lower interest

rates; downside risk: reduced state spending on tax receipt shortfall.

Relative valuations

---------------------------2016F---------------------------

CP TP Mkt EV/ EBIT NP

P/E P/BV Div.

Cap EBITDA margin growth yield

Code Rating (IDR) (IDR) (USDm) (x) (%) (%) (x) (x) (%)

JSMR BUY 4,790 6,250 2,353 11.1 38.5 13.1 22.5 2.8 1.3

WSKT BUY 1,670 1,975 1,637 13.3 9.3 17.3 20.0 2.3 1.0

PTPP BUY 3,770 4,300 1,319 8.5 11.2 30.3 19.9 4.7 1.5

WIKA BUY 2,805 3,100 1,246 9.7 11.5 40.6 21.9 3.3 1.4

WTON HOLD 895 965 563 14.9 12.1 45.0 24.7 3.2 1.2

ADHI BUY 2,210 2,550 568 8.5 7.9 (17.4) 14.7 1.5 1.4

TOTL BUY 640 940 158 5.7 10.2 16.7 9.5 2.2 5.4

Sector 7,845 10.9 18.8 25.0 20.3 3.0 1.4

Sector (construction only) 4,928 10.3 10.2 20.2 19.2 3.1 1.4



28.5

17.9

0.7

(11.8) (12.1)

(17.7)(19.7)

(29.8)

(40)

(20)

0

20

40

(40)

(20)

0

20

40

WSKT PTPP SECTOR WIKA ADHI JSMR WTON TOTL

(%)(%)

Source: Bloomberg


Indonesia’s infrastructure targets, 2015-19

Details End 2014 Target 2019 Details End 2014 Target 2019

Connectivity Basic Infrastructure

National road-worthiness rate 94% 99% Electrification rate 81.5% 100.0%

National road length 38,570 km 46,770km Electricity consumption per capita 843 kWh 1200 kWh

New road construction (in 5-yrs) 1,028km 2,650km Household gas network 102,000 (SR) 192,000 (SR)

New toll-road construction (in 5-yrs) 260km 1,000km Drink water access 70.0% 100%

Railways length 5,434km 8,692km Home ownership backlog 13.5 mn 6.8 mn

Seaports development 278 450 Water supply

Dwelling time in ports 6-7 days 3-4 days Basic water capacity 51.4 m3/sec 118.6 m3/sec

Number of airports 237 252 Storage per capita 62.3 m3 78.36 m3

Number of crossing docks 210 270 Dam construction (5-yrs) 21 dams 49 dams

Logistic costs 23.5% 19.2% Irigation from dam 11% 20%

Public transport rate 23% 32% Surface irigation network 7.145 mn ha 7.914 mn ha

Source: National Planning Agency

2016 Compendium

101

CONSTRUCTION, TOLL ROAD & INFRA RELATED

Construction sector sales breakdown & gross margin, 2010-2016F

20,793 26,923

32,548

40,127 38,867

47,142

63,337

2,700

2,589

3,631

5,187 7,070

8,178

9,570 11.2 11.211.6

12.1

13.2 13.5 13.4

-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

2010 2011 2012 2013 2014 2015F 2016F

(%)(IDRbn)

Construction Non-construction Gross margin


New contracts vs construction GDP/total GDP, 2010-16F

6,515 9,769 12,264 13,318 22,625

30,589 23,791 10,215

13,568 17,125 17,700

17,632

24,852 30,865

8,522

12,330

15,570 19,583

20,240

26,230 28,792

6,894

9,846

8,748

9,455

9,071

26,501 13,297

1,578

2,195

2,421

1,956

3,570

3,000

3,300

9.4

9.6 9.6

9.7

9.9

10.0 10.0

8.4

8.6

8.8

9.0

9.2

9.4

9.6

9.8

10.0

10.2

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

2010 2011 2012 2013 2014 2015F 2016F

(%)(IDRbn)

WSKT WIKA PTPP ADHI TOTL Construction GDP/total GDP


Mid-term infrastructure investment plan (RPJMN), 2015-19

Sector State budget Local budget SOE Private Total

Electricity 100.0 - 445.0 435.0 980.0

Sea transportation 498.0 - 238.2 163.8 900.0

Road 340.0 200.0 65.0 200.0 805.0

Housing 384.0 44.0 12.5 87.0 527.5

Energy (oil & gas) 3.6 - 151.5 351.5 506.6

Clean water and waste system 227.0 198.0 44.0 30.0 499.0

Water resources 275.5 68.0 7.0 50.0 400.5

Railroad 150.0 - 11.0 122.0 283.0

Information technology 12.5 15.3 27.0 223.0 277.8

Air transportation 85.0 5.0 50.0 25.0 165.0

City transportation 90.0 15.0 5.0 5.0 115.0

Land transportation 50.0 - 10.0 - 60.0

Total 2,215.6 545.3 1,066.2 1,692.3 5,519.4

Percentage 40.1% 9.9% 19.3% 30.7% 100.0%Source: National Planning Agency; Note: 2015 state budget infrastructure spending is expected to only reach c. IDR230tn with budgeted amount of just IDR313tn in 2016

Current and planned toll road projects, 2015-19

Source: The Ministry of Public Works and Public Housing, Bahana

2016 Compendium

102

CONSUMER DISCRETIONARY - RETAIL NEUTRAL

2008A 2009A

2010F

2011F

Despite low inflation and a possible rate cut in the near term, we

retain our NEUTRAL view on the sector due to lingering external risks

threatening a discretionary spending recovery. However, we see

mixed preferences on different industry players based on their

products and target markets as well as effects of various policy risks.

At this stage, more earnings visibility remains with retailers selling

defensive products (eg, F&B and tobacco) to mid-up target markets,

(ie, LPPF, MAPI, MPPA, ACES). That said, we still see weakness in

retailers dealing with big-ticket items/electronics (ECII), low-end

target markets (RALS) and inefficient multi-format players (HERO).

On stocks, our top sector pick is MPPA based on the biggest upside

potential, while our top sell is HERO on the biggest downside. The

sector’s upside risks are higher purchasing power and employment,

while downside risks are IDR depreciation and intense competition.

Relative valuations

--------------------------2016F------------------------

Market NP

P/E

CP TP Cap growth PEG P/S P/BV ROA

E Cod

e Rating (IDR) (IDR) (USDm

n) (%) (X) (X) (x) (x) (%)

LPPF BUY 15,950 19,800 3,359 19.3 21.0 1.1 4.3 15.8 100.

6 ACES BUY 775 875 960 8.9 21.9 2.5 2.6 4.0 19.9

MPPA BUY 1,880 2,750 731 30.3 17.2 0.6 0.6 2.9 17.8

MAPI BUY 4,195 4,750 503 326.6* 21.2* 0.1* 0.5 2.2 10.7*

RALS REDUCE 680 640 349 6.8 14.5 2.1 0.9 1.3 9.3

HERO REDUCE 1,100 650 332 na 80.1 na 0.3 0.8 1.0

ECII REDUCE 800 700 77 245.5 19.9 0.1 0.6 0.6 3.0

Sector 6,311 29.1 20.9 1.1 2.9 9.6 59.6

Sector exc. LPPF 2,952 42.1 20.8 1.2 1.2 2.5 12.9


*estimated using core EPS


19.5

11.9 6.6

(0.7)(4.1)

(13.4)

(25.2)

(40.6)

(60)

(40)

(20)

0

20

40

(60)

(40)

(20)

0

20

40

LPPF ACES Sector RALS MAPI ECII MPPA HERO

(%)(%)

Source: Bloomberg as of 3 December 2015

Bagus Adi Yoga Prawira ([email protected]) +6221 2505081 ext. 3604

Michael W. Setjoadi ([email protected]) +6221 2505081 ext. 3613

Retail sales index, January 2013 – November 2015

183

114

124

134

144

154

164

174

184

194

204

214

Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15

Average: 160

*

Source: CEIC, Bahana *Based on estimated numbers from Bank Indonesia survey

2016 Compendium

103

CONSUMER RETAIL

F&B/Tobacco, HH & Apparel sales index, Jan ’13 - Nov ’15

189

158

142

100

120

140

160

180

200

220

240

260

Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15

F&B and Tobacco Household Appliances Apparel

*

Source:CEIC, Bahana *Based on estimated numbers from Bank Indonesia survey

Population by income, 2013 and 2020F

63.3

46.9

44.0

24.5

7.1

2.6

64.2

28.3

47.9

50.5

68.2

49.2

16.5

6.9Elite

Affluent

Upper Middle

Middle

Emerging Middle

Aspirant

Poor

Indonesian population,

2013 (mn)Indonesian population,

2020 (mn)


Private consumption vs inflation y-y growth, 1Q13-4Q16F

6.5

5.0

4.4

4.6

4.8

5

5.2

5.4

5.6

3.5

4

4.5

5

5.5

6

6.5

7

7.5

8

8.5

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15F 1Q16F 2Q16F 3Q16F 4Q16F

Inflation y-y Private consumption y-y

(%) (%)

Source: CEIC, Bahana estimates

Trade Ministry Regulation No. 56/M-DAG/2014 Organization of Traditional Markets, Shopping Centers and Modern Stores Modern stores can only sell supplementary goods of no more than 10%.

Maximum 150 stores owned and managed per company. Subsequent stores must be in

cooperation with micro, small and medium enterprises (MSME).

Modern store operators can sell their own brands or labels by prioritizing MSME

products, but not exceeding 15% of total goods sold; however, exemptions are allowed

if products are not made in Indoensia, high-end and/or high-tech in nature.

Local content must reach at least 80% of total products but is exempted if the products

are produced not only in Indonesia but also overseas, such as automotive products,

premium brands that cannot be produced in Indonesia and products are targeting

particular citizens in Indonesia. Source: Ministry of Trade, Bahana

Trade Ministry Reg. No. 68/10/2012 Franchise for Modern Channel Retailers may only have 150 outlets privately. The subsequent stores are required to

have franchised cooperation with another local party.

The franchise cooperation may be in a ratio of 60:40, meaning for every 10 stores, four

must be franchised out.

Retailers shall have up to five years to comply. Source: Ministry of Trade, Bahana

2016 Compendium

104

CONSUMER STAPLES OVERWEIGHT

2008A 2009A

2010F

2011F

Indonesia, the biggest consumer market in Southeast Asia and the

fourth-largest in Asia ex-Japan, should continue to see sustainable

and long-term consumption growth due to favorable demographics: a

young (average age: 28-29 years old) and high population base

(240mn+) as well as rising middle-income earners (nearly USD3,300k

per capita expected in 2016) and growing urbanization.

Looking ahead, rapid growth in modern trades (18,038 minimarkets

and 268 hypermarkets and 168 supermarkets) and expansion in

FMCG sales should benefit from job creation on the government’s

acceleration of infrastructure-related projects.

For the sector, we expect a gradual improvement in purchasing power

to be supportive of both volume and margins in 2016. Our bigger-cap

stock picks: UNVR and ICBP; for the smaller-caps: ROTI. Risk:

Weaker IDR given the sector’s high USD-linked raw materials.

Relative valuations

--------------------------2016F------------------------

Market EPS

P/E

EV/

CP TP Cap growth PEG P/BV EBITDA ROAE

Code Rating (IDR) (IDR) (USDmn) (%) (X) (X) (x) (x) (%)

UNVR BUY 36,750 46,000 19,854 12.4 42.4 3.4 49.5 30.6 125.1

ICBP BUY 12,675 16,800 5,233 15.0 20.9 1.4 4.2 14.0 21.1

INDF BUY 5,175 6,600 3,217 65.7 13.2 0.2 1.6 5.9 12.8

MYOR BUY 26,075 31,000 1,685 (3.4) 20.8 na 3.9 11.2 20.8

ROTI BUY 1,250 1,450 457 21.6 19.7 0.9 4.5 10.8 25.2

Sector 30,404 17.7 28.5 2.2 33.5 23.8 88.2

Sector exc. UNVR 10,550 27.9 17.6 (0.2) 3.4 10.7 18.7



38.0

27.0

20.3

9.9

3.4

(10.1)

(20)

(10)

0

10

20

30

40

(20)

(10)

0

10

20

30

40

MYOR UNVR Sector ICBP ROTI INDF

(%)(%)

Source: Bloomberg

Harry Su & Michael W. Setjoadi ([email protected]) +6221 2505735

FMCG sales in Indonesia groceries, 2003-2015F

56 64

75 86

99

120 125

140

156

174

195

213

232

50

100

150

200

250

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014F 2015F

(IDRtn)

Source: Nielsen, Bahana

2016 Compendium

105

CONSUMER STAPLES

Urban versus rural residents, 1960-25F

0

20

40

60

80

100

120

140

160

180

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015F 2020F 2025F

(m people)

Urban Rural

Source: Economist Intelligence Unit

Modern trade market share, 2000, 2010, 2012 and 2013

78

34 34 36 37

22

93

65

54

4744

39

1712

6

94

66

55

48 4541

1914

7

94

67

58

49 46 43

20 15

8

0

20

40

60

80

100

Singapore China Malaysia Thailand Philippines Indonesia Sri lanka Vietnam India

(%)

2000 2010 2012 2013


Consumer confidence index, August 2008-August 2014

120.2

75

80

85

90

95

100

105

110

115

120

125

Aug-08 Aug-09 Aug-10 Aug-11 Aug-12 Aug-13 Aug-14

Consumer confidence index

Average: 107.5

Source: IMF, Bahana

Health expenditure to state budget, 2005-2012

13 23 25 24 28 32 44 48

518

699752

989937

1,057

1,230

1,418

2.5

3.2 3.3

2.5

3.0 3.0

3.6

3.4

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

0

200

400

600

800

1,000

1,200

1,400

1,600

2005 2006 2007 2008 2009 2010 2011 2012

(%)(IDRt)

Health budget Government state budget Health expenditure ratio (RHS)

Source: Nielsen Media Research, Media Index, Bahana

2016 Compendium

106

HEALTHCARE OVERWEIGHT

2008A 2009A

2010F

2011F

Indonesia, with the region’s lowest healthcare expenditure at 3.8% of

2015F GDP, should see continued long-term growth to 5% of GDP by

2019, backed by the mandatory National Healthcare Insurance (JKN)

scheme. With a 2019 GDP forecast of USD4,100 per capita, we

estimate that heathcare spending could reach USD205 per person,

reflecting a 2013-19F CAGR of 11.4%.

Rising middle-up income earners suggest rapidly increasing demand

for improved healthcare and services, particularly given WHO’s data

that indicate 67% of Indonesian adult males are smokers. This could

lead to lifestyle-related diseases (80% of mortalities), which should

result in continued higher spending on medical treatments.

Our top hospital pick is SILO, trading at a 65% discount to MIKA on

2016F EV/EBTIDA. Our top pharma pick is KAEF on its undemanding

valuation. Biggest sector risk: weak IDR due to high USD-linked costs.

Relative valuations

--------------------------2016F-----------------------

Market EPS

P/E

EV/



KLBF HOLD 1,350 1,480 4,572 11.2 29.2 2.7 5.4 17.6 19.7

MIKA REDUCE 2,295 1,900 2,365 9.3 51.6 5.5 10.3 43.3 20.9

SILO BUY 9,700 14,700 810 51.8 78.9 1.5 6.1 14.9 7.9

SIDO BUY 555 630 602 19.4 14.9 0.8 2.4 9.8 17.2

TSPC BUY 1,720 2,000 559 8.1 12.4 1.5 1.6 7.1 13.4

KAEF BUY 980 1,350 393 17.1 16.6 1.0 2.4 12.9 15.4

Sector 9,210 14.8 28.9 3.1 6.2 22.4 18.1



25.0

2.3

(4.0)

(13.0)(16.0)

(19.9)

(26.1) (30)

(20)

(10)

0

10

20

30

40

(30)

(20)

(10)

0

10

20

30

MIKA* SIDO Sector KLBF SILO KAEF TSPC

(%)(%)

Source: Bloomberg *Since IPO

Harry Su & Michael W. Setjoadi ([email protected]) +6221 2505735

Healthcare expenditure as % of GDP by region, 2013 (latest)

3.1 3.2 3.7 4.0 4.0

4.4 4.4 4.6

5.6 6.0

9.0

10.3

17.1

-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0(%)

Source: World Bank

2016 Compendium

107

HEALTHCARE

Indonesia healthcare expenditure as % of GDP, 2005-17F

2.82.9

3.1

2.8 2.82.9 2.9

3.03.1

3.5

3.84.0

4.5

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014F 2015F 2016F 2017F

(%)

Source: World Bank, Bahana

Indonesia pharmaceutical sales and market share, 2Q14 vs. 2Q15

2Q15 Sales Market share y-y growth

Company 2Q14 2Q15 (IDRbn) 2Q15 (%) (%)

KLBF IJ 1 1 4,112 6.8 1.7

Sanbe 2 2 3,263 5.4 5.7

Dexa Medica 3 3 2,447 4.0 11.8

Pharos Indonesia 5 4 2,080 3.4 8.7

Soho 4 5 1,807 3.0 -15.1

TSPC IJ 6 6 1,709 2.8 4.1

Fahrenheit 7 7 1,554 2.6 15.8

Novartis 14 8 1,416 2.3 34.5

Konimex 8 9 1,387 2.3 9.5

Hexpharm Jaya 9 10 1,282 2.1 2.9

KAEF IJ 12 11 1,271 2.1 17.2

Dankos 10 12 1,261 2.1 2.0

Sanofi-Aventis 13 13 1,154 1.9 9.0

Bayer Indonesia 11 14 1,140 1.9 2.5

Darya Varia 15 15 1,132 1.9 8.7

Novell Pharma 16 16 1,127 1.9 9.2

Lapi 17 17 1,096 1.8 9.1

Pfizer 18 18 1,019 1.7 6.1

MERK IJ 22 19 1,010 1.7 25.8

Interbat 19 20 991 1.6 13.5

Others - - 28,359 46.8 na

Total 60,617 100.0 9.2

Rank

Source: IMS Health, Bahana

No. of hospital beds per 1,000 people, 2012 (latest)

0.6 0.70.9 1.0

1.9 2.0 2.0 2.1

2.9

3.63.8 3.9

-

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

(# of beds)

Source: IMF

2016 Compendium

108

INDUSTRIAL ESTATES NEUTRAL

2008A 2009A

2010F

2011F

With the current economic slowdown, our channel checks suggest that

investors are currently adopting a wait-and-see attitude, hampering

both FDI and sales of industrial estates in 2015; however, the

government’s recent push on infrastructure development and tax

incentives should support FDI inflows going forward.

Our NEUTRAL sector call is mainly due to soft industrial land demand

which has dragged down the performances of some pure industrial

players like BEST, while others shift their focus to different segments

(eg, power plants, construction, residential/commercial projects). On

the flip side, we see the government’s infrastructure development

benefitting the sector with higher ASPs and margins ahead.

Our top sector pick is DMAS (sector’s strongest 9M15 marketing sales

of 90ha, zero USD debt). Upside risk: Higher presales; Downside risk:

Slow infrastructure development.

Relative valuations

-------------------------- 2016F -------------------------


cap NAV/ Share

Disc. To NAV

Land bank

NP growth ROAE P/E P/BV

(IDR) (IDR) (USDm) (IDR) (%) (Ha) (%) (%) (x) (x)

DMAS BUY 203 290 707 732 60 1,807 12.2 21.2 5.7 1.1

LPCK BUY 7,525 8,300 378 20,745 60 675 18.7 27.4 4.5 1.1

KIJA BUY 221 270 330 906 70 3,196 52.6 9.2 10.6 0.9

BEST REDUCE 343 300 239 1,185 75 970 (29.3) 5.1 20.8 1.0

SSIA BUY 590 720 201 722 70 136 6.8 18.1 4.5 0.8

Sector 1,855 67 6,784 13.7 17.9 6.3 1.0 Source: Company, Bahana estimates note: based on 3 December 2015 closing price


10.0

(9.6) (10.3)(14.5)

(31.7)

(39.8)

(50)

(40)

(30)

(20)

(10)

0

10

20

DMAS* SECTOR KIJA LPCK SSIA BEST

(%)


Sanni Satrio Dwi Utomo ([email protected]) +6221 2505081 ext. 3611

DDI & FDI, 2010-2015F

29.0% 30.2% 29.4%32.2% 33.7% 33.8%

71.0%69.8%

70.6%

67.8%

66.3%66.2%

0

100

200

300

400

500

600

2010 2011 2012 2013 2014 2015F

(IDRtn)

Domestic Direct Investment Foreign Direct Investment

209251

313

399

463

520

Source: BKPM, Bahana

2016 Compendium

109

INDUSTRIAL ESTATES

Marketing sales, 2013-2017F

1,69

8

1,50

3

1,61

7

597

1,12

8

1,89

1

1,63

1

1,02

1

378

831

2,70

0

2,10

0

1,00

0

317

263

2,97

0

2,20

5

1,20

0

423 57

3

3,26

7

2,49

2

1,44

0

488 68

6

0

500

1,000

1,500

2,000

2,500

3,000

3,500

LPCK DMAS KIJA SSIA BEST

(IDRbn)

2013 2014 2015F 2016F 2017F

Source: Companies, Bahana estimates; Note: Ranked based on 2015F

Operating profit, 2013-2017F

923

634

872

855

883 1,

003

914

535

887

472

1,37

5

900

845

756

411

1,71

1

1,06

3

937

851

321

1,85

9

1,28

4

1,09

5

952

449

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

DMAS LPCK SSIA KIJA BEST

(IDRbn)

2013 2014 2015F 2016F 2017F


Total industrial landbank sold, 1Q10-3Q15

41

100 113131

322

189178

268

153

186

147

109

86

5539 46

18

142

5475 81

144

87

0

50

100

150

200

250

300

350

(ha)

Average: 120

One-off 40ha sale from DMAS

One-off 60ha sale from DMAS

Source: Cushman & Wakefield, Bahana

Remaining gross industrial landbank, 9M15

3,196

1,807

970

675

136

0

500

1,000

1,500

2,000

2,500

3,000

3,500

KIJA DMAS BEST LPCK SSIA

(ha)

Source: Companies

2016 Compendium

110

LAND TRANSPORTATION UNDERWEIGHT

2008A 2009A

2010F 2011F

In 2016, we think the new online transportation companies could put

further pressure on BIRD and TAXI, as they offer drivers higher

incomes and greater flexible working time while concurrently providing

passengers with cheaper fares as well as greater convenience. Hence,

we expect taxi companies to face driver shortages and lower demand,

restricting their expansion and revenue growth.

On the rental business, ASSA should see continued lower ASPs and

margins on its disposal car segment. However, we expect demand for

corporate cars (60% of revenues) to remain strong, inline with recent

outsourcing trend in various companies to generate cost efficiency.

Our UNDERWEIGHT stance is mainly due to intense competition on

entry of new players, hence our REDUCE ratings for BIRD/ TAXI. That

said, ASSA is the only BUY in the sector as rental car demand remains

stable. Upside risk: Higher-than-expected consumer spending on taxis.

Relative valuations

-------------------------2016F------------------------

Code Rating

Market cap

CP TP NP

growth P/E

EV/ EBITDA

EBITDA margin

ROAE

(USDmn) (IDR) (IDR) (%) (x) (x) (%) (%)

BIRD REDUCE 1,206 6,675 4,500 3.6 19.2 8.9 33.9 20.2

TAXI REDUCE 21 136 120 228.6 15.2 4.0 55.3 2.2

ASSA BUY 25 100 130 24.0 4.9 3.7 39.8 7.6

Sector 1,252 6.3 18.1 8.8 34.4 19.7



(15.7) (16.9)

(21.6)

(75.2)

(90)

(80)

(70)

(60)

(50)

(40)

(30)

(20)

(10)

0

(90)

(80)

(70)

(60)

(50)

(40)

(30)

(20)

(10)

0

BIRD SECTOR ASSA TAXI(%)(%)

Source: Bloomberg

Agustinus Reza Kirana ([email protected]) +6221 2505081 ext. 3616

Regional taxi penetration and income per capita, 2014

10.2

5.3

2.5 1.4

14.3

55.2

38.1

9.9

0

10

20

30

40

50

60

0

2

4

6

8

10

12

Bangkok Singapore Hong Kong Greater Jakarta

Taxi penetration Income/Capita (RHS)

(x) (USDk/person/yr)

Source: Euromonitor,World Bank, Bahana

2016 Compendium

111

LAND TRANSPORTATION

New mobile-based transportation companies

Source: Euromonitor, Bahana estimates

Taxi fleet in Indonesia, 2014

28,545

11,100

3,200

2,000

1,350

- 5,000 10,000 15,000 20,000 25,000 30,000

BIRD*

TAXI*

Company A

Company B

Company C

(Units)

Source: Euromonitor, Bahana estimates, *based on Bahana 2016 forecast

Total fleet in operation, breakdown by geography, 2014

Source: Euromonitor, Bahana

Fleet and growth comparison BIRD and TAXI, 2010 – 2017F

2.6

2.5

2.2

2.2

2.3

2.4

2.6

2.7

-10

0

10

20

30

40

50

60

2.1

2.3

2.5

2.7

2010 2011 2012 2013 2014 2015F 2016F 2017F

BIRD vs TAXI fleet (LHS) TAXI's growth BIRD's growth

(X) (% growth)

Source: Euromonitor, Bahana

2016 Compendium

112

CONSUMER DISCRETIONARY - MEDIA NEUTRAL

2008A 2009A

2010F 2011F

Indonesia’s FTA TV industry, dominated by MNCN (36.0% audience

share) and SCMA (30.4% audience share), is facing soft ad spend on

a GDP slowdown, leading FMCG companies to cut their TV-ad budgets.

In 2016, a gradual economic recovery should help ad-spend recovery,

particularly since we still expect TVs to be the most effective ad

platform for goods targeted to mass demographics. Additionally, we

are seeing increasing ad contribution from ecommerce players.

Looking ahead, benefiting the industry would be a possible limitation

of discount rates from MNCN, as the price leader is experiencing

higher prime-time shares. On stocks, we favor MNCN as most of the

bad news looks priced in, and we remain cautious on SCMA’s valuation

despite our more positive view on the stock of late. Upside risk:

Digitalization with current FTA TV players as multiplexers. Downside

risks: Softer GDP and stricter interpretation of ruling No. 50/2005.

Relative valuations

--------------------------2016F------------------------

Market EPS

P/E

EV/



SCMA HOLD 3,070 3,250 3,243 10.2 26.8 2.6 9.9 19.5 39.7

MNCN BUY 1,690 2,000 1,743 28.7 14.6 0.5 2.2 9.1 16.8

Sector 4,986

16.0

20.8

22.5

1.9 7.2 15.9 31.7 Source: Bloomberg, Bahana estimates note: based on 3 December 2015 closing price


0.9

(6.5)

(20.3)

(40)

(20)

0

20

40

(40)

(20)

0

20

40

SCMA Sector MNCN

(%)(%)

Source: Bloomberg

Bagus Adi Yoga Prawira ([email protected]) +6221 2505081 ext. 3604

Media revenue vs real GDP, 2006 – 3Q15

04

05

05

06

06

07

07

-10

00

10

20

30

40

50

60

2006 2007 2008 2009 2010 2011 2012 2013 2014 1Q15 2Q15 3Q15

(%)(%)

SCMA MNCN Real GDP (RHS)

Source: Company, Bahana

2016 Compendium

113

CONSUMER DISCRETIONARY - MEDIA

FMCG ad spend, 2004 – 2015F

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000

6,500

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 9M15 2015F

(IDRbn)

UNVR INDF TSPC ICBP MYOR Total


All-time audience share, January 2014 – November 2015

15.314.7 14.4

14.9

14.1 14.115.5

14.8

15.6

16.315.9

15.6

16.4 15.2

15.415.9

15.6

17.218.0

15.7

15.2

16.0

18.5

15.7

16.3

14.8

15.6

17.4 17.0

18.318.7 18.5

17.4

18.217.9

16.1

14.614.2

14.1

15.5

16.7

17.617.3 17.3

16.3

15.7

8.9

12.0

16.4

14.5

13.7

11.5

10.3

12.1

12.9

10.3

10.8

9.99.7

14.4

15.9 16.0

14.3

11.3

10.3

11.3

11.9

14.1

14.7

10.7

9.69.3

9.7

9.49.0

8.2 8.5

9.09.3

10.5

12.0 11.812.0 12.2

11.411.2

10.710.9 11.010.7 10.7

11.3

6.66.4 6.3

6.5 6.6

5.95.6

6.0 6.16.3

6.0

6.5 6.56.1

6.4

7.5

8.27.8

7.3 7.2

6.7 6.7

6.2

5.0

7.0

9.0

11.0

13.0

15.0

17.0

19.0

(%)

RCTI SCTV IVM MNCTV GTV


Law No.32/2002 Article Clause Main content

18

1 Within one broadcasting region or multiple regions, ownership or control over non-government broadcasting institutions by either an individual or an entity must be limited

2 Directly or indirectly owned non-government broadcasting companies or

entities in cross ownerships within different media type must be limited

4 The terms and conditions of clauses 1 and 2 above shall be arranged by the Indonesian Broadcasting Commission (KPI) and the government

34 4 Broadcasting licenses are non-transferable Source: Indonesian Broadcasting Comission, Bahana

Government Regulation No.50/2005

Article Clause Main content

32 1

One entity may only have two TV broadcasting licenses in two different provinces

49% maximum share ownership in a second entity

20% maximum share ownership in a third entity

5% maximum share ownership in a fourth entity

33 Cross-ownership limitations with a single entity only allowed to own one media company type

Source: Ministry of Information and Communication, Bahana

Media revenue vs govt. exp & investment y-y growth, 1Q13 – 4Q16F

4.3

4.6

-3

-2

-1

0

1

2

3

4

5

6

7

8

-10

-5

0

5

10

15

20

25

30

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15F 1Q16F 2Q16F 3Q16F 4Q16F

Media Revenue growth Investment growth (RHS)

(%) (%)

Source: CEIC, Companies, Bahana estimates

2016 Compendium

114

METAL MINING NEUTRAL

2008A 2009A

2010F

2011F

In 2016, we expect gold prices to be range-bound averaging USD1,200/toz

with support from the People’s Bank of China (PboC) on gold purchases, offset

by likely Fed rate hikes. In 3Q15, (PBoC) confirmed gold reserves of 1,709mt,

up >50% since 2009, although still representing just 2% of China’s foreign

reserves, far below those of the US (73%) and Germany (67%).

While November 2015 tin stocks diminished 57% to 5,205mt from early 2015,

we retain our bearish view on the soft global cellphone demand and continued

prevalent domestic illegal mining. On nickel, we expect a price bounce to

USD12,500/mt in 2016 as high-cost producers are eliminated on 2015’s 30%

price drop to USD12,089/mt on China’s weak stainless steel production.

A downside risk to our NEUTRAL sector rating is a stronger USD due to Fed

rate hikes, while an upside risk would be faster global economic recovery. By

stock, PSAB is our top pick in the sector on sizeable production growth

(through Pani mine +45k toz, up 20%) amid a stable gold-price environment.

Relative valuations

---------------------------2016F-----------------------------

Mkt EV/ EBIT Div.

CP TP Cap EBITDA margin ROAE P/E P/BV yield

Code Rating (IDR) (IDR) (USDm) (X) (%) (%) (X) (X) (%)

INCO BUY 1,555 2,500 1,116 3.2 19.2 6.2 10.0 0.6 6.0

ANTM BUY 323 764 799 13.2 2.1 (1.0) na 0.5 -

TINS REDUCE 520 411 277 11.8 0.5 0.3 285.9 0.7 0.2

MDKA BUY 2,030 2,200 524 na na (10.2) na 4.5 -

PSAB BUY 1,355 2,000 497 4.7 37.5 13.8 10.1 1.2 -

Sector 3,213 6.8 14.3 5.4 20.6 0.7 2.7



144.8

(4.9)(18.5)

(62.8) (64.3) (70.2)(100)

(50)

0

50

100

150

200

(100)

(50)

0

50

100

150

200

PSAB MDKA SECTOR INCO TINS ANTM

(%)(%)

Source: Bloomberg

Arandi Ariantara ([email protected]) +6221 2505081 ext. 3619

Gold reserves by country, 2Q15-3Q15

(mt)

8,134

3,3812,814

2,452 2,435

1,6581,275 1,040

8,134

3,381 2,814

2,452 2,436 1,709

1,352 1,040

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

UnitedStates

Germany IMF Italy France China Russia Switzerland

2Q15 3Q15

+654mt from 1Q15 level

+114mt from 1Q15 level

Source: Bloomberg

2016 Compendium

115

METAL MINING

Gold prices, supply & demand, 3Q13-2016F (mt) (USD/toz)

1,056

1,011

1,090

1,036 1,042 1,051

1,084

905

1,1211,113 1,113

1,088 1,086 1,092

1,144

1,0701,048

1,100

1,067

1,200

900

950

1,000

1,050

1,100

1,150

1,200

1,250

1,300

1,350

800

850

900

950

1,000

1,050

1,100

1,150

1,200

3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 2016

Gold demand (LHS) Gold supply (LHS) Gold price (RHS)

Source: World Gold Council, Bloomberg

Gold demand by segment, 3Q13-3Q15

59.5% 60.9% 56.6% 57.3% 57.0%62.5%

55.7% 56.9% 56.4%

8.2% 8.3%7.5% 8.3% 8.3%

8.6%

7.5% 9.2% 7.5%

19.1% 16.0% 24.8%19.2% 17.3%

16.1%25.4% 19.7% 20.5%

13.1% 14.8% 11.0%17.3% 17.2% 12.7% 11.3% 14.1% 15.6%

3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15

Jewellery Technology Investment Central bank net purchases

1,056 mt 1,011 mt 1,090 mt 1,036 mt 1,042 mt 1,121 mt1,051 mt 1,084 mt 905 mt

Source: World Gold Council

Nickel producers cash cost, 2014 (USD/lbs)

4.1

6.7

5.3

6.4

4.6

8.9

5.56.0

6.56.2

7.6

8.3

5.6

3

4

5

6

7

8

9

10

Avg. cash cost USD6.3

Source: Bloomberg

Tin stocks & prices, July 2014 – November 2015 (mt) (USD/mt)

13,000

15,000

17,000

19,000

21,000

23,000

25,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

13,000

14,000

LME Tin stock LME tin price

Source: Bloomberg

2016 Compendium

116

OIL & GAS NEUTRAL*

2008A 2009A

2010F 2011F

The shale boom, China slowdown and global oversupply conditions

should continue to weigh on oil prices, which we expect to average

USD55/bbl in 2016 for Brent, flat y-y. These conditions may force the

government to alter its view on other commodities, including gas.

That said, the government plans to implement lower gas-selling prices

through lower portions on upstream and regulated margins for gas

distributors. Permit simplifications are expected to attract upstream

exploration, while on the downstream side, we expect refinery

renovations, foreign investment and biodiesel policy implementation.

While we have a NEUTRAL rating on the sector, we see upside risks in

the form of higher gas-selling prices and distribution volumes for

PGAS. Downside risks are lower oil prices for MEDC and AKRA,

possible foreign entry into their distribution and logistics businesses.

Relative valuations

------------------------2016F------------------------

Code Rating

Market cap

Current Price

Target Price

NP growth

P/E EV/

EBITDA ROAE

Dividend yield

(USDmn) (IDR) (IDR) (%) (x) (x) (%) (%)

PGAS REDUCE 4,924 2,875 2,500 4.0 12.3 6.5 12.5 4.5

AKRA BUY 1,768 6,200 7,000 42.8 16.3 11.4 22.3 1.7

MEDC BUY* 234 960 1,300 na 17.5 4.4 2.0 2.0

Sector 6,926

22.4 12.2 7.7 14.8 3.7



67.3

(12.8)

(39.4)

(60.7)

(80)

(60)

(40)

(20)

0

20

40

60

80

(80)

(60)

(40)

(20)

0

20

40

60

80

AKRA SECTOR PGAS MEDC

(%)(%)

Source: Bloomberg

Arandi Ariantara ([email protected]) +6221 250 5081 ext. 3619 *New, please refer to appendix II

Oil & gas policy risks in 2016

Risks Status Impact

Reduction of gas-selling prices Plan (-) PGAS

Gas aggregator establishment Permit

simplification from 104 licenses to 4 Plan (+) PGAS

Open access for gas pipelines Signed (-) PGAS

Work contracts based on PSC to royalty Plan (-) MEDC

Permit simplification from 104 licenses to 4 Plan (+) MEDC’s O&G inv.

Reduction of O&G block bids Plan (-) MEDC’s E&P

Profit-sharing scheme:

Oil: 30-35% from 15%

Gas: 35-40% from 30%

Plan (+) MEDC

Downstream permit access Plan (-) AKRA

Penalty if below standard of B15 biodiesel Plan (-) AKRA

Source: Bahana, various sources

2016 Compendium

117

OIL & GAS

Utilization rates vs PGAS’s power-plant gas volumes, 2Q12-4Q15F

(%) (mmscfd)

70.4

71.4

75.0

77.177.7 77.7

76.8

81.7

76.5

78.8

81.682.0

83.0

322

312306

310

375

345351 353

298293

309

318335

270.0

290.0

310.0

330.0

350.0

370.0

390.0

70.0

72.0

74.0

76.0

78.0

80.0

82.0

84.0

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 2016F

Utilization rates: Electricity, Gas & Water Supply (LHS) PGAS' power plants gas volumes (RHS)

Source: Central Statistics Agency (BPS), PGAS

MEDC oil & gas production, 2008-2016F (mboepd)

45

35

31 30 30

26

22 20

26

18 18

36 37 37 36

33 32

44

15

20

25

30

35

40

45

50

2008 2009 2010 2011 2012 2013 2014 2015F 2016F

Oil sales Gas sales

Source: MEDC, Bahana

Indonesia’s refinery facilities

Ren Pertami Joint

Pk Brandan

capacity: 5mbsd

BALONGAN

capacity:

125mbsd

Kasimcapacity:

10mbsd

Bunyu methanol capacity: 330mt/annum

Balikpapancapacity:

260mbsdUnit: H-

Cepucapacity: 3.8mbsd

Cilacapcapacity:

348mbsd

Musicapacity:

133.7mbsd

Dumaicapacity:

170mbsd

Arun LNG plantcapacity: 12.5mn

mt/annum

Bontang LNG plantcapacity: 18.5mn

mt/annum

Source: Downstream Oil and Gas Regulatory Agency (BPH Migas)

AKRA’s petroleum distribution and ASP, 2010 – 2016F

1,356

2,0392,149

2,031

1,830

2,190

2,461

5,512

7,315

8,048

8,699

9,681

6,356

7,715

5,000

5,500

6,000

6,500

7,000

7,500

8,000

8,500

9,000

9,500

10,000

0

500

1,000

1,500

2,000

2,500

3,000

2010 2011 2012 2013 2014 2015F 2016F

('000 kl)

Petroleum sales volumes (LHS) Average selling price (RHS)

IDR/liter

Source: U.S Energy Information Administration, International Energy Statistics

2016 Compendium

118

PLANTATIONS NEUTRAL

2008A 2009A

2010F 2011F

Having recently upgraded our sector weighting to NEUTRAL, we are

more positive on plantations, due to the El Nino phenomenon cutting

2016F production and the planned implementation of the biodiesel

program (B15, B20) creating higher demand with an estimated annual

volume of 4-6m tons, or 12-18% of total Indonesian CPO production.

On production, we expect 2016 domestic CPO volume to remain flat y-

y at 33m tons, although we expect the average 2016 CPO price to

reach USD700/ton, based on CIF Rotterdam (MPOB FOB price:

MYR2,520/ton), +6% y-y, capped by continued low Brent oil prices.

On valuation, the sector, on a 2016F PE of 14.6x, a 40% discount to

Malaysian peers (average: 15-20%) looks fairly attractive. Our top

pick is LSIP on its zero debt position, while for the smaller-cap stocks,

we like SGRO and DSNG on their still-growing mature areas. Upside

risk: Higher B20 demand; Downside risk: Low soybean prices.

Relative valuations

--------------------------------------2016F-----------------------------------

Code Rating

Market cap

Current Price

Target Price

NP growth

P/E EV/

EBITDA

EV/ nucleus

EBITDA margin

ROAE

(USDmn) (IDR) (IDR) (%) (x) (x) (USD/ha) (%) (%)

AALI BUY 2,014 17,650 22,500 110.8 16.9 9.2 10,150 23.6 13.8

LSIP BUY 636 1,285 1,870 31.3 10.6 6.2 6,387 25.8 10.6

SIMP BUY 427 372 600 125.3 9.6 3.7 5,259 22.0 4.2

DSNG BUY 467 610 740 107.0 15.8 10.7 9,871 17.8 15.9

ANJT REDUCE 395 1,610 1,000 na 129.9 9.5 8,753 29.9 0.8

SGRO BUY 203 1,475 1,970 17.9 10.7 6.5 4,461 22.7 8.2

TBLA BUY 218 565 630 41.4 9.3 6.4 10,113 19.4 11.9

Sector 4,360 80.3 14.6* 8.2 8,694 22.8 11.1


*P/E is market-cap weighted


34.7

(7.6) (10.0) (11.4)(13.8)

(17.0) (19.1)

(33.5)

(55)

(45)

(35)

(25)

(15)

(5)

5

15

25

35

(55)

(45)

(35)

(25)

(15)

(5)

5

15

25

35

ANJT DSNG TBLA Sector AALI SGRO LSIP SIMP

(%)(%)

Source: Bloomberg


Average Rotterdam CPO CIF price, 1Q13 – 4Q16F

500

550

600

650

700

750

800

850

900

950

1,000

(USD/ton)

Avg. CPO price

2Q141Q14 4Q143Q14

896 877 785 743

4Q153Q152Q151Q15

610*625677672

4Q163Q162Q161Q16

670* 710* 720* 710*

Source: Bloomberg, Bahana estimates *forecasted average

2016 Compendium

119

PLANTATIONS

CPO premium to oil prices, August 2010 – November 2015

(200)

0

200

400

600

Aug-10 Mar-11 Oct-11 May-12 Dec-12 Jul-13 Feb-14 Sep-14 Apr-15 Nov-15

(USD/ton)

Premium

Average: 176

Source: Bloomberg

Palm oil production and consumption, 2012 – 16F

2012-2013 2013-2014 2014-2015 2015-2016F

October-September (mn tons)

Opening stocks 10.67 10.34 10.99 12.08

Production 56.17 59.72 62.01 62.96

growth (%) 7.1 6.3 3.8 1.5

Consumption 56.68 59.12 60.55 63.67

growth (%) 10.6 4.3 2.4 5.2

Ending stocks 10.34 10.99 12.08 11.42

Stock/usage (%) 18.2 18.6 20.0 17.9 Source: Oil World

CPO discount to soy oil, February 2012 – November 2015

(15)

(10)

(5)

0

5

10

15

20

25

30

Feb-12 Jul-12 Dec-12 May-13 Oct-13 Mar-14 Aug-14 Jan-15 Jun-15 Nov-15

(%)

Premium/Discount Average soybean premium to CPO

Average: 9.2%

Source: Bloomberg

El-Nino forecast, August 2015 – August 2016

Source: Australian Government Bureau of Meteorology

2016 Compendium

120

POULTRY NEUTRAL

2008A 2009A

2010F 2011F

Catalysts for the poultry sector include margin support coming from

low corn and soybean prices, which should result in soft increases in

poultry-feed ASPs for the next few quarters. Additionally, an economic

recovery in 2016 could mean higher consumption of chicken broilers

as the most affordable protein-content product.

The recent 6m PS culling, despite its short-term cost surge, has

eradicated DOC oversupply conditions and allowed for a doubling of

4Q15 ASPs on a q-q basis, which should provide a margin cushion.

Downside risk to our NEUTRAL stance is possible negative impact from

Indonesia’s plan to join the Trans-Pacific Partnership, as the US could

dump its dark-meat broilers at lower prices. Upside risk: A stronger

IDR (60% imported COGS), particularly if the companies under our

coverage are able to lower their USD debt exposure. MAIN is our top

pick due to its cheapest valuation with a good corporate governance.

Relative valuations ---------------------------2016F-----------------------------

Mkt EV/ EBIT Div. CP TP Cap EBITDA margin P/E P/BV yield ROAE

Code Rating (IDR) (IDR) (USDm) (X) (%) (X) (X) (%) (%)

CPIN HOLD 3,280 3,500 3,886 12.4 11.1 19.1 3.7 1.0 20.9

JPFA BUY 458 550 353 6.3 5.0 13.0 1.0 1.4 7.6

MAIN BUY 1,340 1,850 217 9.4 6.9 13.0 2.4 1.5 15.2

Sector 4,456 11.8 10.4 18.3 3.4 1.1 19.6 Source: Bloomberg note: based on 3 December 2015 closing price

Share price performance YTD to JCI

(0.0)

(4.2)

(23.9)

(38.0)

(50)

(40)

(30)

(20)

(10)

0

(50)

(40)

(30)

(20)

(10)

0

CPIN SECTOR MAIN JPFA(%)(%)

Source: Bloomberg, based on 03 December 2015 closing prices


Regional GDP and chicken consumption per capita, 2015

47.0

38.0

16.0

9.0 8.06.0

2.0

38.8

10.6

5.82.5 3.7

1.5 0.8

Brunei Malaysia Thailand Philippines Indonesia Vietnam Cambodia

Chicken consumption per capita (kg/annum) Income per capita (USD1k)


2016 Compendium

121

POULTRY

Corn and soybean prices, 2010-2015 YTD

Source: Bloomberg Note: YTD through December 03 2015

DOC prices, 2011-2015 YTD

Source: Pinsar

Note: YTD through 30 November 2015

Chicken prices, 2011-2015 YTD

Source: Pinsar Note: YTD through 30 November 2015

Poultry market share, 2015

Feed DOC Source: Company, Bahana estimates

2016 Compendium

122

PROPERTY¹ UNDERWEIGHT

2008A 2009A

2010F

2011F

The property sector has been hard hit on weak domestic purchasing

power and the government’s aggressive taxation drive, causing most

developers to cut their full-year 2015 marketing sales targets. IDR

depreciation has raised FX losses, causing severe earnings erosion.

Our UNDERWEIGHT stance on the property sector is attributable to

weak 2015 marketing sales, which should result in low 2016 earnings.

With secondary property prices coming off, it is possible that property

developers may experience margin pressure on greater discounting in

order to stimulate demand. Hence, we remain conservative and

expect average marketing sales growth of 9% y-y in 2016.

Our top sector pick is SMRA on its Bandung success, no USD debt and

28% recurring base. Risk to our sector call: A proposed plan to not

only allow below IDR10bn property purchase prices by foreigners but

also to grant apartment and landed housing (right-to-use) ownership.

Relative valuations

-----------------------------2016F------------------------


cap NAV/ Share

Disc. to NAV

Land bank

NP growth ROAE P/E P/BV

(IDR) (IDR) (USDmn) (IDR) (%) (Ha) (%) (%) (x) (x)

BSDE BUY 1,770 2,020 2,461 5,055 60 5,170 13.0 15.2 11.8 1.7

LPKR REDUCE 1,320 1,130 2,200 2,826 60 1,274 50.7 11.0 16.1 1.7

SMRA BUY 1,570 1,820 1,636 4,558 60 2,076 9.7 19.7 16.4 2.6

PWON HOLD 468 490 1,628 1,230 60 457 14.9 22.9 11.6 2.4

CTRA BUY 1,230 1,400 1,362 3,492 60 1,553 8.2 15.2 13.6 1.9

ASRI REDUCE 363 300 515 989 70 2,388 11.8 13.8 7.1 0.9

APLN REDUCE 303 220 449 871 75 651 6.7 9.2 9.6 0.8

PPRO HOLD 185 180 188 602 70 58 5.5 13.4 8.4 1.1

CTRP REDUCE 407 365 184 1,218 70 92 (27.0) 6.3 8.5 0.5

Sector 10,623 65.0 13,719 14.6 15.7 12.5 1.9 Source: Bloomberg, Bahana estimates note: based on 3 December 2015 closing price


42.6

16.5 14.9 13.4 12.7 11.3

4.1 3.6

(22.0)

(37.8)

(50)

(40)

(30)

(20)

(10)

0

10

20

30

40

50

(50)

(40)

(30)

(20)

(10)

0

10

20

30

40

50

LPKR SMRA SECTOR PPRO* CTRA BSDE PWON APLN ASRI CTRP

(%) (%)


Sanni Satrio Dwi Utomo ([email protected]) +6221 2505081 ext. 3611 ¹This marks a transfer of analyst coverage

Mortgage vs BI rate & inflation, 2008-9M15

29.3

14.5

20.0

32.9

22.5

16.2

12.6

7.7

9.25

6.50

6.50 6.00 5.75

7.50 7.75

7.50

11.06

2.77

6.96

3.78 3.65

8.08 8.36

6.83

0

2

4

6

8

10

12

0

5

10

15

20

25

30

35

2008 2009 2010 2011 2012 2013 2014 9M15

(%)(%)

Mortgage growth (y-y) BI rate (RHS) Inflation (RHS)

Source: Bank Indonesia, Bloomberg

2016 Compendium

123

PROPERTY

Portion of revenue from recurring versus development, 2016F

56 53 53

3127

21 20

10 7

44 47 47

6973

79 80

90 93

0

10

20

30

40

50

60

70

80

90

100

PWON LPKR CTRP SMRA BSDE APLN CTRA ASRI PPRO

(%)

Recurring Development


Marketing sales, 2013-17F

0

2,000

4,000

6,000

8,000

10,000

12,000

CTRA BSDE SMRA ASRI LPKR APLN PWON CTRP PPRO

(IDRb)

2013 2014 2015F 2016F 2017F


Operating margins, 2013-2017F

0

10

20

30

40

50

60

ASRI PWON BSDE SMRA CTRA CTRP PPRO LPKR APLN

(%)

2013 2014 2015F 2016F 2017F


Operating profit, 2013-17F

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

BSDE PWON LPKR CTRA SMRA ASRI APLN CTRP PPRO

(IDRb)

2013 2014 2015F 2016F 2017F


2016 Compendium

124

SHIPPING OVERWEIGHT*

2008A 2009A

2010F 2011F

Following President Jokowi’s maritime-toll program, the Indonesian

shipping sector has seen a lower average dwelling time of 4.1

days/trip, from 6 days in 2014, allowing for reduced logistics costs to

the benefit of shipping companies like TMAS. With the government’s

dwelling-time target of just 2 days, we expect sector margin support.

To support the maritime program, we expect huge demand for

shipyards to build new vessels and provide repair and maintenance

services. This should benefit SOCI’s newly launched shipyard business,

one of the few that can receive large vessels of up to 50k DWT.

On low oil prices (c.30-40% of COGS) coupled with the government’s

successful maritime program rollout, we are OVERWEIGHT on the

shipping sector. Our top sector pick is TMAS on its fleet and route

expansion, which should result in a nearly doubling of revenues and

earnings by 2017. Risks: Slower GDP growth and intense competition.

Relative valuations

-------------------------2016F------------------------

Code Rating

Market cap

CP TP NP growth

P/E EV/ EBITDA

EBITDA margin

ROAE

(USDmn) (IDR) (IDR) (%) (x) (x) (%) (%)

SOCI BUY 223 459 630 21.6 5.0 5.7 43.9 13.6

TMAS BUY 160 1,945 3,000 28.2 5.2 4.1 39.6 45.4

WINS HOLD 52 178 190 na 15.1 3.5 42.0 1.7

Sector 435 38.8 5.4 4.8 42.1 23.9



(1.0)

(18.6)(20.4)

(65.4) (70)

(60)

(50)

(40)

(30)

(20)

(10)

0

(70)

(60)

(50)

(40)

(30)

(20)

(10)

0

TMAS SECTOR SOCI WINS(%)(%)

Source: Bloomberg

Agustinus Reza Kirana ([email protected]) +6221 2505081 ext. 3616 *New, please refer to appendix II

Dwelling time in Tanjung Priok port, Jakarta, 2015

4.5

3.7 3.7 3.5

4.1

3.33.1 3.2

2.1 2.3 2.2

0.8 0.8 0.7 0.7 0.8 0.7 0.8 0.6 0.5 0.4 0.5

1.0

1.51.3 1.4

1.11.6 1.6 1.5 1.6 1.5 1.4

6.35.9

5.6 5.6

6.1

5.65.2 5.3

4.1 4.2 4.1

3.0

0

1

2

3

4

5

6

7

Jan Feb Mar April May June July Aug Sept Oct Nov Target

Pre-Clearance Custom Clearance Post Clearance Total

(days/trip)

Source: Investor Daily, Bisnis Indonesia, Bahana

2016 Compendium

125

SHIPPING

Logistics market share by company, 2014

Meratus

23%

Tanto

22%

TMAS

17%

Spil

16%

Others

22%


Indonesia oil suppy and consumption, 2002-2014

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2002 2004 2006 2008 2010 2012 2014

(mn brl/day)

Indonesia becomes net

importer of oil Indonesia suspends

OPEC membership

Source: International Energy Statistics, Bahana

Indonesian flag vessels and SOCI vessels, 2013

5,806

753 178 618

992

59 144 4 -

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Oil tankers Chemical tankers FSO Liquid gas

Indonesia SOCI

('000 DWT)


EBITDA margin comparison by company, 2012-2017F

20

25

30

35

40

45

50

2012 2013 2014 2015F 2016F 2017F

SOCI TMAS WINS

(%)


2016 Compendium

126

TELECOMMUNICATION OVERWEIGHT

2008A 2009A

2010F 2011F

In the next few years, we expect continued improvement in

Indonesia’s smartphone proportion, from 37% currently to 50% by

2017. This should have a positive impact on data usage as well as

ARPU. Furthermore, we expect rational competition to persist due to

limited credible competitors outside the three incumbents.

Thus, we expect strong revenue growth on solid data usage and

improved pricing. Telco derivatives such as voucher distributors and

handset resellers should benefit from continued conducive operating

conditions, and expansion into 4G technology should lift BTS demand.

Our sector OVERWEIGHT is led by TLKM as our top operator, followed

by ISAT on an earnings recovery. On telco derivatives, we like TELE

on solid TLKM revenue growth and higher market share, and we like

ERAA on improved dominance in handset distribution. On towers, we

prefer TOWR on cheaper valuation. Risk: Reoccurrence of price wars.

Relative valuations

---------------------------2016F------------------------

Code Rating

Market cap

CP TP No. of subs

EV/ EBITDA

EBITDA margin

P/E P/BV

Div. yield

ROAE

(USDmn) (IDR) (IDR) (mn) (x) (%) (x) (x) (%) (%)

TLKM BUY 22,100 3,035 3,750 150.5 7.7 49.4 17.2 3.7 3.8 22.6

EXCL BUY 2,314 3,750 3,900 42.9 6.1 37.8 na 2.3 - (0.9)

ISAT BUY 2,124 5,400 6,800 70.2 3.4 43.5 22.0 2.1 1.4 10.0

Operator 26,538

264 7.2 47.9 16.1 3.4 3.3 19.6

TELE BUY 373 725 1,180 8.5 3.0 11.0 1.6 2.3 15.4

ERAA BUY 116 555 850 5.7 2.3 6.4 0.5 6.3 7.9

Retailer 489 7.8 2.8 9.9 1.3 3.2 13.6

TOWR BUY 3,096 4,200 5,000 11.7 83.8 26.9 6.0 - 25.0

TBIG HOLD 2,131 6,150 6,500 15.2 84.6 22.9 7.3 0.9 37.3

Tower 5,227 13.1 84.1 25.3 6.5 0.4 30.0

Sector 32,254 8.2 53.1 19.8 3.9 2.8 21.2

Source: Bloomberg, Bahana estimates based on 3 December 2015 closing price


46.5

19.7 15.6 14.4

(8.9) (9.7)

(23.4)

(35.9) (40)

(30)

(20)

(10)

0

10

20

30

40

50

60

(40)

(30)

(20)

(10)

0

10

20

30

40

50

60

ISAT TLKM SECTOR TOWR TELE EXCL TBIG ERAA

(%)(%)

Source: Bloomberg


Industry revenue growth, 3Q14-3Q15

3.9

6.66.7

6.2

(10)

(8)

(6)

(4)

(2)

0

2

4

6

8

3Q14 4Q14 1Q15 2Q15 3Q15

EXCL TLKM ISAT Industry

(%)

Source: Companies

2016 Compendium

127

TELECOMMUNICATION

Subscriber base, 3Q12-3Q15

41.5

68.9

148.6

120

125

130

135

140

145

150

30

35

40

45

50

55

60

65

70

3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15

EXCL ISAT TLKM (RHS)

(mn subs) (mn subs)

Source: Companies

Average revenue per subscriber, 3Q12-3Q15

32.0

28.3

42.0

35

36

37

38

39

40

41

42

43

22

23

24

25

26

27

28

29

30

31

32

3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15

EXCL ISAT TLKM (RHS)

(IDRk/mth) (IDRk/mth)

Source: Companies

BTS units by operator, 3Q12-3Q15

36,101 36,101

49,68256,300

51,005

65,653

83,346

100,382

21,642 23,207

37,38246,196

108,748

124,961

170,410

202,878

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

220,000

3Q12 3Q13 3Q14 3Q15

EXCL TLKM (RHS) ISAT Total

(units)

Source: Companies

Industry capex, 2013-17F

24,898 24,667 24,000 24,000 25,198

6,932 8,192 6,250 6,250

6,587

9,364 7,033

6,500 6,500 6,906

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2013 2014 2015F 2016F 2017F

TLKM EXCL ISAT

(IDRbn)

41,19539,892

36,750 36,750

38,691

Source: Companies

2016 Compendium

128

TOBACCO OVERWEIGHT

2008A 2009A

2010F

2011F

The severity of Indonesia’s 2015 economic downturn can be seen by

lower cigarette sales which dropped 1.3% y-y in 9M15 to 232bn

sticks. However, the 2010-14 CAGR of 4.5% in cigarette stick sales is

testimony to the tobacco industry’s overall resilience, despite an

average annual excise-tax hike of around 7.5% over the same period.

Full-flavor machine-rolled cigarettes are the fastest growing segment

with 75% market share at the expense of both hand-rolled (19%) and

white (6%) cigarettes. On the excise front, the government plans to

implement a more level playing field, although today, hand-rolled

cigarettes continue to be taxed less for fear of rising unemployment.

Although HMSP’s huge market capitalization (ie, the single biggest at

9% of the JCI) is a must for investors benchmarked either against the

MSCI or the local indices, GGRM’s much lower valuations are certainly

more attractive for absolute-return investors.

Relative valuations

--------------------------2016F------------------------

CP TP

Market

Cap

NP

growth P/E PEG P/BV

EV/

EBITDA ROAE


HMSP BUY 97,600 115,000 32,688 6.4 40.8 6.4 13.3 30.6 32.6

GGRM BUY 51,575 65,000 7,134 9.3 16.7 1.8 2.5 9.8 15.4

Sector 39,823 7.0 35.5 5.4 10.9 21.2 28.9



56.1

45.4

14.7

(2.0)

(23.1)(30)

(20)

(10)

0

10

20

30

40

50

60

(30)

(20)

(10)

0

10

20

30

40

50

60

HMSP Sector RMBA GGRM WIIM

(%)(%)

Source: Bloomberg

Harry Su ([email protected]) +6221 2505735

Cigarette industry volumes and excise tax hikes, 2010-9M15

253

280302 308 314

235232

4.9% 5.0%

9.2%8.5%

10.0%8.7%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

0

50

100

150

200

250

300

350

2010 2011 2012 2013 2014 9M14 9M15

(bn sticks)

Cigarette industry volume Average excise rate

Source: Nielsen,Companies, Bahana

2016 Compendium

129

TOBACCO

Cigarette product by category, 2005-9M15

55%63%

75%

37%29%

19%

8% 8% 6%

2005 2010 9M15

Machine-rolled Hand-rolled White

Source: Nielsen, Companies, Bahana

Market share of cigarette players, 2005-9M15

26%

31%

35%

27%

23% 23%

21% 19% 19%

16%12%

12%

6%

9%7%

4% 6%4%

2005 2010 9M15

Sampoerna

Gudang Garam

Djarum

Others

BAT

Nojorono

Source: Nielsen, Companies, Bahana

Excise tax, 2016

2015 2016 Increase (%)

V1 P1 64.3% 456.5 528.0 15.7%

V2 P1 3.2% 335.5 374.0 11.5%

V2 P2 6.4% 291.5 330.0 13.2%

V1 P1 5.5% 467.5 544.5 16.5%

V2 P1 0.3% 297.0 335.5 13.0%

V2 P2 0.8% 242.0 280.5 15.9%

V1 P1 4.7% 319.0 352.0 10.3%

V1 P2 11.7% 242.0 269.5 11.4%

V2 P1 1.0% 154.0 170.5 10.7%

V2 P2 0.0% 137.5 154.0 12.0%

V3 A 1.6% 93.5 99.0 5.9%

V3 B 0.5% 88.0 88.0 0.0%

SKT

Cigarette

typeTax tier

Share of market

(%) 9M15

Excise + Regional tax (IDR/stick)

SKM

SPM

Source: Nielsen retail audit results share of market YTD September 2015, Companies, Bahana

Regulatory changes on cigarette industry

no. Regulatory changes

1 Health warnings on packs: must be 40% of the surface area - effective 24th

June 2014

2 No misleading descriptions allowed and specific words e.g. 'ultra-light', etc. not

permitted

3 Corporate sponsorship will be more restricted (sports and education-related ads

are no longer permitted)

4 Smoking prohibition inside buildings with smoking rooms inside buildings no

longer available

Source: Company

2016 Compendium

130


2016 Compendium

131

COMPANY

2016 Compendium

132

ACE HARDWARE INDONESIA BUY* 2008A 2009A

2010F 2011F

PX: IDR775 - TP: IDR875*

ACES, the market leader in home and lifestyle products with 116

stores nationwide, is seeing a slight rise in 10M15 SSSG to -0.4%,

given less store cannibalization on resilient purchasing power of mid-

up segment. In 2016-17, we expect GDP improvements to support

ACES’ top line, despite little uptick overall discretionary spending.

On the cost front, ACES’ solid brand loyalty should allow for volume

maintenance and higher ASP on possible weaker IDR prospects.

Additionally, ACES cost pressure should be minimized by recent CNY

devaluation as 50% of COGS are imported from China.

We have a higher TP of IDR875, based on a 2016F PE of 25x, 20%

premium to the sector justified by rising earnings growth on resilient

target market. With 13% upside potential, we upgrade ACES to BUY,

from Reduce. Risks: Inventory hike (9M15: +21%) without a

proportional retail space rise (+5%) could pressure margins ahead.

Financial highlights*

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 3,895 4,541 4,698 5,086 5,647

EBIT (IDRbn) 565 647 648 704 787

Net profit (IDRbn) 509 551 559 608 674

Bahana/consensus (%) - - 98 97 94

EPS (IDR) 30 32 33 35 39

EPS growth (%) 16.4 8.3 1.4 8.9 10.9

EV/EBITDA (x) 20.6 17.8 17.4 15.5 13.4

P/E (x) 26.1 24.1 23.8 21.9 19.7

FCFPS (IDR) 5.9 20.9 24.0 32.4 32.0

FCF yield (%) 0.8 2.7 3.1 4.2 4.1

BVPS (IDR) 112 138 164 193 226

P/BV (x) 6.9 5.6 4.7 4.0 3.4

DPS (IDR) 6 6 7 7 8

Div. yield (%) 0.8 0.8 0.8 0.9 1.0 Source: Company, Bahana estimates note: based on 3 December 2015 closing price

Share price performance

0

20,000

40,000

60,000

80,000

100,000

120,000

450

550

650

750

850

950

3-Dec-14 3-Feb-15 3-Apr-15 3-Jun-15 3-Aug-15 3-Oct-15 3-Dec-15

('000)(IDR)

Volume (RHS) ACES IJ Px Last

11.9

6.8

32.4

25.5

11.7 9.0

0

5

10

15

20

25

30

35

0

5

10

15

20

25

30

35

ytd 1M 3M 6M 9M 12M

(%) (%)

ACES IJ relative to JCI Source: Bloomberg

Bagus Adi Yoga Prawira ([email protected]) +6221 2505081 ext.3604 *New, please refer to appendix II

Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Ace Hardware store (unit) 95 110 118 127 137

Toys Kingdom (unit) 20 24 27 30 35

Total store area (k sqm) 276 309 332 357 387

Blended avg. rev. /sqm growth (%) (4.0) 1.2 (5.6) 0.7 2.9 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 845/500

12M High/low consensus TP (IDR) : 980/670

Majority shareholder (%) : Kawan Lama (60.0)

Share outstanding (mn)/Free float (%) : 17,150/40.0

Mkt. cap. (IDRbn/USDmn) : 13,291/960

3-m avg.daily t.o.(IDRbn/USDmn) : 7.3/0.5

Bloomberg/Reuters code : ACES IJ/ACES.JK Source: Bloomberg, Reuters based on 3 December 2015 closing price

2016 Compendium

133

ACE HARDWARE INDONESIA

Profit & loss

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Sales 3,895 4,541 4,698 5,086 5,647

Gross profit 1,934 2,190 2,243 2,426 2,706

EBITDA 640 725 726 785 873

Depreciation 75 78 79 81 86

EBIT 565 647 648 704 787

Net interest inc./(expense)* (28) (34) (34) (27) (23)

Forex gain/(losses) 23 4 9 6 (6)

Other income/(expense) 64 61 62 62 69

Pre-tax profit 623 678 684 745 827

Taxes 120 133 132 143 159

Minority interest (6) (6) (6) (7) (7)

Extraordinary gain/(losses) - - - - -

Net profit 509 551 559 608 674 Source: Company, Bahana estimates *including bank admin. charges

Balance sheet

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Cash and equivalents 162 391 710 1,168 1,609

S-T investments - - - - -

Trade receivables 29 26 30 32 36

Inventories 446 463 475 494 526

Fixed assets 1,113 1,296 1,485 1,546 1,681

Other assets 730 771 765 779 803

Total assets 2,479 2,947 3,465 4,020 4,655

Interest bearing liabilities 35 27 23 24 26

Trade payables 246 131 186 201 222

Other liabilities 282 427 440 476 529

Total liabilities 563 584 649 702 778

Minority interest 11 5 11 18 24

Shareholders' equity 1,904 2,357 2,805 3,300 3,853 Source: Company, Bahana estimates

Cash flow

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

EBIT 565 647 648 704 787


Working capital (412) (205) (151) (55) (122)

Other operating items (50) (66) (73) (75) (84)

Operating cash flow 177 454 503 656 667

Net capital expenditure (75) (95) (91) (101) (118)

Free cash flow 102 359 412 555 549

Equity raised/(bought) (40) (6) - - -

Net borrowings (0) (9) (3) 1 2

Other financing (169) (114) (90) (98) (110)

Net cash flow (108) 230 319 458 441

Cash balances, beginning 270 162 391 710 1,168

Ending cash 162 391 710 1,168 1,609


Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 29.0 25.9 21.6 19.9 18.9

ROAA (%) 23.2 20.3 17.4 16.2 15.5

Gross margin (%) 49.6 48.2 47.7 47.7 47.9

EBITDA margin (%) 16.4 16.0 15.5 15.4 15.5

EBIT margin (%) 14.5 14.2 13.8 13.8 13.9

Net margin (%) 13.1 12.1 11.9 12.0 11.9

Payout ratio (%) 20.1 20.1 20.1 20.1 20.1

Current ratio (x) 4.0 5.2 5.6 6.2 6.7

Interest coverage (x) 15.7 16.2 15.3 15.4 15.5

Net gearing (%) nc nc nc nc nc

Debtor turnover (days) 33 28 28 28 28

Creditor turnover (days) 3 2 2 2 2

Inventory turnover (days) 161 187 221 212 209 Source: Company, Bahana estimates

2016 Compendium

134

ADARO ENERGY BUY

2008A 2009A

2010F 2011F

PX: IDR535 - TP: IDR700

To help offset sluggish global coal demand, ADRO, Indonesia’s biggest coal

producer (55.3m mt production, based on 2014 data from the energy

ministry), is entering the energy market by building power plants. Also,

ADRO’s low calorific-value (CV) coal is well-placed as 25% of its sales are

domestic-based (2nd largest after PTBA), which should allow for stronger

volume growth ahead as local power-plant projects come on stream.

On the back of 1.1bn mt coal reserves and 12.8bn mt coal resources,

located in South, East and Central Kalimantan, ADRO positions its

products as the most environmentally friendly under the brand Envirocoal.

On the cost side, we expect margin support to come from continued low

2016F cash costs of USD33/ton and a strip ratio of 5.4x, supported also

by other operational cost-cutting measures like OPCC project. Reaffirm

BUY and DCF-based 12-month TP of IDR700 (WACC: 16%). Risks:

Higher-than-expected costs and delayed/cancelled power-plant projects.

Financial highlights

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (USDmn) 3,285 3,325 2,791 2,774 2,759

EBIT (USDmn) 534 494 408 376 255

Net profit (USDmn) 231 178 213 204 140


EPS (IDR) 87 66 93 92 61

EPS growth (%) (22.9) (24.9) 40.7 (1.3) (33.7)

EV/EBITDA (x) 3.0 2.9 2.7 2.3 2.6

P/E (x) 6.1 8.1 5.8 5.8 8.8

FCFPS (IDR) 119 192 185 188 183

FCF yield (%) 22.2 36.0 34.5 35.1 34.1

BVPS (IDR) 1,027 1,029 1,291 1,402 1,389

P/BV (x) 0.5 0.5 0.4 0.4 0.4

DPS (IDR) 31 26 28 28 18

Div. yield (%) 5.8 4.9 4.3 5.4 5.0



0

50,000

100,000

150,000

200,000

250,000

450

550

650

750

850

950

1,050

1,150

1,250


('000)(IDR)

Volume (RHS) adro IJ Px Last

(35.4)

(16.7)

(10.5)

(28.9) (30.0)

(37.6) (40)

(35)

(30)

(25)

(20)

(15)

(10)

(5)

0

(40)

(35)

(30)

(25)

(20)

(15)

(10)

(5)

0

ytd 1M 3M 6M 9M 12M

(%) (%)

adro IJ relative to JCI Source: Bloomberg


Major assumptions Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Average Selling Price (USD/ton) 57 54 44 43 43

growth % (25.0) (5.2) (18.7) (1.7) (1.8)

Coal Sales Volume (m tons) 53.5 57.0 53.8 53.8 53.8

growth % 10.0 6.7 (5.6) 0.0 0.0

Prod Cash Cost (USD/ton) 35 33 35 33 33 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 1,135/474

12M High/low consensus TP (IDR) : 1,100/560

Majority shareholder (%) : PT Adaro Strategic (43.9)

Shares outstanding (mn)/Free float (%) : 31,986/41.0

Mkt. cap. (IDRbn/USDmn) : 17,112/1,237


Bloomberg/Reuters code : ADRO IJ/ADRO.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing prices

2016 Compendium

135

ADARO ENERGY

Profit & loss

Year to 31 Dec (USDmn) 2013A 2014A 2015F 2016F 2017F

Sales 3,285 3,325 2,791 2,774 2,759

Gross profit 739 720 550 523 400

EBITDA 803 811 729 691 614

Depreciation 269 317 320 315 359

EBIT 534 494 408 376 255

Net interest inc./(expense) (100) (164) (38) (33) (19)

Forex gain/(losses) - - - - -

Other income/(expense) (15) (4) (12) (2) (2)

Pre-tax profit 419 326 357 341 234

Taxes (190) (142) (143) (136) (94)

Minority interest 2 (5) (1) (1) (1)


Net profit 231 178 213 204 140 Source: Company, Bahana estimates

Balance sheet





Inventories 103 97 83 84 88

Fixed assets 3,893 3,715 3,477 3,263 3,004

Other assets 1,710 1,571 1,557 1,557 1,557

Total assets 6,696 6,414 6,211 6,150 6,016

Interest bearing liabilities 2,221 1,896 1,619 1,416 1,186

Trade payables 327 351 302 303 318


Total liabilities 3,518 3,154 2,772 2,570 2,354



Cash flow


EBIT 534 494 408 376 255

Depreciation 269 317 320 315 359

Working capital 100 55 10 2 12




Free cash flow 347 510 454 421 410

Equity raised/(bought) - - - - -

Net borrowings (225) (325) (277) (204) (230)

Other financing 59 (121) (69) (62) (58)

Net cash flow 181 64 108 155 123


Ending cash 681 745 853 1,008 1,131 Source: Company, Bahana estimates

Key ratios pls update

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 8.8 6.5 7.5 6.7 4.5

ROAA (%) 3.5 2.7 3.4 3.3 2.3

Gross margin (%) 22.5 21.7 19.7 18.9 14.5

EBITDA margin (%) 24.4 24.4 26.1 24.9 22.3

EBIT margin (%) 16.3 14.9 14.6 13.6 9.2

Net margin (%) 7.0 5.4 7.6 7.3 5.1

Payout ratio (%) 21 30 30 30 30

Current ratio (x) 1.8 1.6 2.2 2.2 2.3


Debts to assets (%) 33.2 29.6 26.1 23.0 19.7




2016 Compendium

136

ADHI KARYA BUY

2008A 2009A

2010F 2011F

PX: IDR2,210- TP: IDR2,550

Following a successful IDR2.7tn rights issue, ADHI, the fourth-largest

construction play by market cap in our coverage, is set to develop the

long-awaited IDR24tn Jakarta light rail transit (LRT) project. Solid

project implementation would positively affect not only ADHI’s

construction sales but also its property and precast businesses.

Going into 2016, its property business (9M15: 67% of net income)

should contribute less due to the current downturn in the property

market. However, ADHI’s merged property division into Adhi Persada

Properti has 19 projects in its pipeline, including Grand Dhika City

Bekasi and Grand Dhika Jatiwarna, creating ample growth potential.

Backed by rising infrastructure projects, ADHI’s recent positive share

price momentum should persist despite EPS dilution post-rights. Our

IDR2,550 TP is based on a 17x 2016F PER, a 15% discount to the

sector. BUY. Risks are lower LRT margins and project delays.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 9,800 8,654 9,817 14,680 19,059

EBIT (IDRbn) 919 655 784 1,155 1,483

Net profit (IDRbn) 406 324 395 534 690

Bahana/cons.(%) - - 97 97 94

EPS (IDR) 225 180 182 150 194

EPS growth (%) 91.1 (20.2) 0.9 (17.4) 29.2

EV/EBITDA (x) 8.2 14.8 8.8 8.5 6.1

P/E (x) 9.8 12.3 12.2 14.7 11.4

FCFPS (IDR) 150 (870) (145) (793) 228

FCF yield (%) 6.7 (39.0) (6.5) (35.6) 10.2

BVPS (IDR) 854 969 1,354 1,481 1,645

P/BV (x) 2.6 2.3 1.6 1.5 1.3

DPS (IDR) 45 54 36 30 39



0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

1,000

1,500

2,000

2,500

3,000

3,500


('000)(IDR)

Volume (RHS) ADHI IJ Px Last

(12.1)

(4.4)

22.9 19.4

(4.1)

4.2

(15)

(10)

(5)

0

5

10

15

20

25

(15)

(10)

(5)

0

5

10

15

20

25

ytd 1M 3M 6M 9M 12M

(%) (%)

ADHI IJ relative to JCI Source: Bloomberg

Bob Setiadi ([email protected]) +6221 2505081 ext.3605 *New, please refer to appendix II

Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Carried over (IDRbn) 9,218 8,745 9,900 27,236 25,795

New contracts (IDRbn) 10,854 9,218 26,501 13,297 25,928

Total order books (IDRbn) 20,072 17,963 36,401 40,533 51,724 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 3,224/1,464

12M high/low consensus TP (IDR) : 3,500/1,067

Majority shareholder (%) : Republic of Indonesia (51.0)




Bloomberg/Reuters code : ADHI IJ/ADHI.JK Source: Bloomberg, Reuters based on 3 December 2015 closing price

2016 Compendium

137

ADHI KARYA

Profit & loss

Year to 31 Dec (IDRbn) 2013A 2014A 2015F 2016F 2017F

Sales 9,800 8,654 9,817 14,680 19,059

Gross profit 1,248 1,017 1,191 1,747 2,242

EBITDA 929 632 812 1,189 1,523

Depreciation 10 (24) 28 34 40

EBIT 919 655 784 1,155 1,483




Pre-tax profit 714 595 702 992 1,284

Taxes (306) (268) (304) (456) (591)




Balance sheet


Cash and equivalents 1,940 811 3,379 1,576 1,783


Trade receivables 2,283 2,896 3,163 3,702 4,390

Inventories 162 132 149 179 210

Fixed assets 490 857 995 1,126 1,251

Other assets 4,846 5,762 6,895 11,111 11,637

Total assets 9,721 10,459 14,581 17,694 19,271


Trade payables 4,767 4,923 5,445 6,408 7,403

Other liabilities 1,696 1,515 1,636 2,231 2,730




Cash flow


EBIT 919 655 784 1,155 1,483

Depreciation 10 (24) 28 34 40

Working capital 343 (670) (36) (2,403) 913

Other operating items (500) (1,000) (588) (892) (968)

Operating cash flow 771 (1,038) 188 (2,107) 1,468


Free cash flow 270 (1,568) (515) (2,825) 814

Equity raised/(bought) 1 3 2,745 - -

Net borrowings 635 560 403 1,100 (375)

Other financing 85 (124) (64) (79) (231)

Net cash flow 991 (1,129) 2,568 (1,804) 207

Cash balances, beginning 949 1,940 811 3,379 1,576

Ending cash 1,940 811 3,379 1,576 1,783 Source: Company, Bahana estimates

Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 29.9 19.7 12.0 10.6 12.4

ROAA (%) 4.6 3.2 3.2 3.3 3.7

Gross margin (%) 12.7 11.7 12.1 11.9 11.8

EBITDA margin (%) 9.5 7.3 8.3 8.1 8.0

EBIT margin (%) 9.4 7.6 8.0 7.9 7.8

Net margin (%) 4.1 3.7 4.0 3.6 3.6

Payout ratio (%) 19.9 30.0 20.0 20.0 20.0

Current ratio (x) 1.4 1.3 1.7 1.5 1.5


Net gearing (%) nc 83.6 nc 41.6 25.4




2016 Compendium

138

ADI SARANA ARMADA BUY

2008A 2009A

2010F 2011F


Despite higher sales volumes in its car-disposal division, ASSA,

Indonesia’s second-largest corporate car rental company with a 15%

market share, has been hurt by lower second-hand car prices,

following weak auto sector demand since 2014. That said, revenue

growth has been supported by its logistics and rental businesses.

The new business segment (car auctions) called “Bid Win”, which

started in 1H14, has helped the company to sell used cars, which

could result in 2016 revenue growth of 15% y-y to IDR1.6tn, despite

flattish margins in 2016-17F due to still-weak disposal-car pricing.

At this stage, we expect ASSA’s share price performance to reverse

on continued above-market 2016-17F EPS growth. Thus, we maintain

our BUY rating and 12-month TP of IDR130, based on a 2016F PE of

7x, still at a 30% discount to regional peers. Risks would be fewer

expansion fleets and lower-than-expected second-hand car ASPs.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 1,019 1,140 1,340 1,552 1,779

EBIT (IDRbn) 213 184 224 266 308

Net profit (IDRbn) 92 43 55 69 83

Bahana/consensus (%) - - - - -

EPS (IDR) 27 13 16 20 24

EPS growth (%) 97.8 (53.3) 29.0 24.0 20.5

EV/EBITDA (x) 3.2 3.8 3.7 3.7 3.5

P/E (x) 3.7 7.9 6.1 4.9 4.1

FCFPS (IDR) (123) (116) (123) (112) (96)

FCF yield (%) (122.8) (115.6) (122.5) (112.4) (96.0)

BVPS (IDR) 243 246 260 275 293

P/BV (x) 0.4 0.4 0.4 0.4 0.3

DPS (IDR) 9 3 5 6 7



0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

90

110

130

150

170

190

210

230


('000)(IDR)

Volume (RHS) ASSA IJ Px Last

(21.6)

(9.9)(13.8)

(20.2)

(29.2)(31.3) (35)

(30)

(25)

(20)

(15)

(10)

(5)

0

(35)

(30)

(25)

(20)

(15)

(10)

(5)

0

ytd 1M 3M 6M 9M 12M

(%) (%)

ASSA IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Unit operation (Unit) 12,937 14,873 17,273 19,273 21,273

Utilization rate (%) 92.6 92.1 92.5 93.0 93.0

Unit of disposal (Unit) 1,954 1,748 2,200 2,200 2,200

ASP used car (IDRmn) 102.7 99.4 97.0 97.0 97.0 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 214/95


Majority shareholder (%) : Adi Dinamika Investindo (58%)


Mkt. cap. (IDRbn/USDmn) : 343/25


Bloomberg/Reuters code : ASSA IJ/ASSA.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

139

ADI SARANA ARMADA

Profit & loss


Sales 1,019 1,140 1,340 1,552 1,779

Gross profit 346 349 401 488 564

EBITDA 458 471 535 618 700

Depreciation 246 287 311 352 392

EBIT 213 184 224 266 308


Forex gain/(losses) (0) 0 - - -


Pre-tax profit 106 56 73 90 109

Taxes (14) (13) (17) (22) (26)

Minority interest - - - - -



Balance sheet


Cash and equivalents 26 22 25 25 23




Fixed assets 1,912 2,193 2,385 2,714 2,981

Other assets 91 132 138 144 151

Total assets 2,172 2,507 2,713 3,072 3,372


Trade payables 56 85 83 82 81




Shareholders' equity 825 837 882 934 996 Source: Company, Bahana estimates

Cash flow


EBIT 213 184 224 266 308

Depreciation 246 287 311 352 392

Working capital (26) (16) 7 (19) (20)




Free cash flow (417) (393) (416) (382) (326)


Net borrowings (47) 294 217 280 205

Other financing 177 94 203 101 119

Net cash flow (288) (4) 4 (0) (2)

Cash balances, beginning 316 26 22 25 25

Ending cash 26 22 25 25 23 Source: Company, Bahana estimates

Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 11.8 5.2 6.4 7.6 8.6

ROAA (%) 4.3 1.8 2.1 2.4 2.6

Gross margin (%) 33.9 30.6 29.9 31.4 31.7

EBITDA margin (%) 45.0 41.3 39.9 39.8 39.3

EBIT margin (%) 20.9 16.2 16.7 17.1 17.3

Net margin (%) 9.0 3.8 4.1 4.4 4.7

Payout ratio (%) 33.0 25.0 30.0 30.0 30.0

Current ratio (x) 0.5 0.4 0.4 0.3 0.3


Net gearing (%) 137.6 171.3 186.8 206.4 214.4




2016 Compendium

140

AGUNG PODOMORO LAND REDUCE

2008A 2009A

2010F 2011F


APLN, with the largest high-rise and mixed-use portfolio among the

property companies in our coverage, is under pressure from slow

marketing sales of IDR1.7tn in 9M15, translating to just 28% of its

IDR6tn full-year 2015 target (Bahana: IDR2.2tn).

Going into 2016, we expect a slight revenue improvement with 3%

growth, although the 2015 top line would also likely increase on sales

recognition (9M15 revenue: IDR3.9tn). We believe minority interests

will continue to be a drag on earnings, capping 2015-16F net profit

margin at 10.9-11.3%.

Our negative view on APLN stems from not only weak growth

prospects but also its high ongoing reclamation project costs. We

maintain our 12M TP of IDR220, based on a 75% discount to our

2016F NAV, higher than the sector average of 65%. REDUCE. Upside

risks include stronger-than-expected sales on successful projects.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 4,901 5,297 5,594 5,769 6,132

EBIT (IDRbn) 1,276 1,430 1,349 1,351 1,469

Net profit (IDRbn) 851 855 609 649 683

Bahana/cons.(%) - - 72 65 72

EPS (IDR) 42 42 30 32 33

EPS growth (%) 4.9 0.4 (28.8) 6.7 5.2

EV/EBITDA (x) 5.6 4.9 5.6 6.3 5.8

P/E (x) 7.3 7.3 10.2 9.6 9.1

FCFPS (IDR) (9) (22) (50) (80) (13)

FCF yield (%) (2.8) (7.4) (16.4) (26.3) (4.2)

BVPS (IDR) 281 314 333 359 386

P/BV (x) 1.1 1.0 0.9 0.8 0.8

DPS (IDR) 6 8 6 6 7



0

100,000

200,000

300,000

400,000

500,000

600,000

200

250

300

350

400

450

500


('000)(IDR)

Volume (RHS) APLN IJ Px Last

3.6

12.1

(9.1) (8.1)

(14.2)

(2.2)

(20)

(15)

(10)

(5)

0

5

10

15

(20)

(15)

(10)

(5)

0

5

10

15

ytd 1M 3M 6M 9M 12M

(%) (%)

APLN IJ relative to JCI Source: Bloomberg

Sanni Satrio Dwi Utomo ([email protected]) +6221 2505081 ext. 3611 *New, please refer to appendix II

NAV-derived target price calculation

9M15

Land bank (Ha) 651

Total value (IDRbn) 17,861

NAV/share (IDR) 871

Discount (%) 75

Adjusted NAV/share (IDR) 218 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 473/250

12M high/low consensus TP (IDR) : 520/220

Majority shareholder (%) : Indofica (65%)

Share outstanding (m)/Free float (%) : 20,501/27.1



Bloomberg/Reuters code : APLN IJ/APLN.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

141

AGUNG PODOMORO LAND

Profit & loss


Sales 4,901 5,297 5,594 5,769 6,132

Gross profit 2,355 2,655 2,851 2,913 3,127

EBITDA 1,505 1,699 1,679 1,742 1,922

Depreciation 229 269 330 391 454

EBIT 1,276 1,430 1,349 1,351 1,469




Pre-tax profit 1,177 1,230 1,133 1,164 1,261

Taxes (247) (246) (280) (288) (307)




Balance sheet


Cash and equivalents 3,177 4,337 3,156 3,320 3,276



Inventories 2,978 4,105 4,263 4,438 4,669

Fixed assets 8,289 8,830 12,722 16,007 19,803

Other assets 3,612 4,891 4,620 4,689 4,801

Total assets 19,680 23,687 26,648 30,410 35,051


Trade payables 2,080 1,902 2,039 2,193 2,386



Minority interest 1,457 2,020 2,222 2,444 2,689


Cash flow


EBIT 1,276 1,430 1,349 1,351 1,469

Depreciation 229 269 330 391 454

Working capital 2,775 1,821 2,097 1,181 3,126


Operating cash flow 3,798 2,839 3,371 2,230 4,272

Net capital expenditure (3,972) (3,297) (4,387) (3,866) (4,534)

Free cash flow (175) (458) (1,016) (1,636) (262)

Equity raised/(bought) 2 - - - -

Net borrowings 973 1,028 (143) 1,699 102

Other financing 152 589 (21) 101 116

Net cash flow 952 1,159 (1,181) 164 (44)

Cash balances, beginning 2,225 3,177 4,337 3,156 3,320

Ending cash 3,177 4,337 3,156 3,320 3,276 Source: Company, Bahana estimates

Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 15.8 14.0 9.2 9.2 8.9

ROAA (%) 5.4 3.9 2.4 2.3 2.1

Gross margin (%) 48.0 50.1 51.0 50.5 51.0

EBITDA margin (%) 30.7 32.1 30.0 30.2 31.4

EBIT margin (%) 26.0 27.0 24.1 23.4 23.9

Net margin (%) 17.4 16.1 10.9 11.3 11.1

Payout ratio (%) 14.4 20.0 20.0 20.0 20.0

Current ratio (x) 0.7 0.7 0.6 0.5 0.5


Net gearing (%) 39.6 33.3 46.6 64.2 61.5



Inventory turnover (days) - - - - - Source: Company, Bahana estimates

2016 Compendium

142

AKR CORPORINDO BUY

2008A 2009A

2010F 2011F

PX: IDR6,200 – TP: IDR7,000*

AKRA, Indonesia’s largest private petroleum distributor, is developing

the Java Integrated Industrial and Ports Estate (JIIPE) in Gresik, East

Java to diversify from its low-margin core chemical/oil distribution

business. Equipped with power plants, coal distribution facility and LNG

receiving terminals, JIIPE requires total investment of IDR2.7tn.

BP Migas plans to reappoint AKRA to distribute 300k kl of subsidized

gasoline in 2016, and allow for a 13% y-y volume hike with the

petroleum segment still the biggest revenue contributor. This, coupled

with our average oil-price assumption of USD55/bbl and USD/IDR at

14,500, should leave AKRA with a stable 2016F gross margin of 10%.

We have a new DCF-based 12-month TP of IDR7,000 (WACC: 11%).

BUY. Risks to our call would be a biodiesel policy adversely affecting

AKRA’s distribution volumes and a sooner-than-expected entrance by

Saudi Aramco into the downstream oil market.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 22,338 22,468 19,344 23,231 27,077

EBIT (IDRbn) 768 1,063 1,345 2,043 2,014

Net profit (IDRbn) 648 810 1,047 1,495 1,535


EPS (IDR) 167 208 266 380 390

EPS growth (%) (0.2) 25.0 28.1 42.8 2.6

EV/EBITDA (x) 24.8 18.1 16.2 11.4 11.3

P/E (x) 37.1 29.8 23.3 16.3 15.9

FCFPS (IDR) (819) 395 206 (136) 288

FCF yield (%) (13.7) 6.6 3.3 (2.2) 4.7

BVPS (IDR) 1,226 1,383 1,556 1,853 2,132

P/BV (x) 5.1 4.5 4.0 3.3 2.9

DPS (IDR) 108 104 106 152 156

Div. yield (%) 1.8 1.7 1.7 2.5 2.5



0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

4,000

4,500

5,000

5,500

6,000

6,500


('000)(IDR)

Volume (RHS) akra IJ Px Last

63.7

5.0 9.5

22.7

38.9

46.8

0

10

20

30

40

50

60

70

0

10

20

30

40

50

60

70

ytd 1M 3M 6M 9M 12M

(%) (%)

akra IJ relative to JCI Source: Bloomberg

Arandi Ariantara ([email protected]) +6221 250 5081 ext. 3619 *New, please refer to appendix III

Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Petroleum volumes (‘000 kl) 2,032 1,830 2,190 2,479 2,841

Growth (%) (5.5) (9.9) 19.7 12.1 13.2

ASP (IDR/liter) 8,699 9,681 6,700 7,566 8,543

Growth (%) 8.1 11.3 (34.6) 15.6 1.1


Company information

12M high/low (IDR) : 6,325/4,080

12M High/low consensus TP (IDR) : 7,000/6,200

Majority shareholder (%) : Arthakencana Rayatama (58.4)




Bloomberg/Reuters code : AKRA IJ/AKRA.JK

Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

143

AKR CORPORINDO

Profit & loss


Sales 22,338 22,468 19,344 23,231 27,077

Gross profit 1,368 1,732 2,054 2,780 2,803

EBITDA 1,020 1,396 1,666 2,409 2,410

Depreciation 252 333 321 366 396

EBIT 768 1,063 1,345 2,043 2,014




Pre-tax profit 733 993 1,340 1,919 1,991

Taxes (117) (203) (272) (451) (468)

Minority interest 33 20 (21) 27 12


Net profit 648 810 1,047 1,495 1,535


Balance sheet


Cash and equivalents 849 897 1,485 1,688 2,209



Inventories 1,823 935 911 1,213 1,398

Fixed assets 4,227 4,390 4,805 6,724 6,823

Other assets 3,411 4,261 3,496 3,395 3,273

Total assets 14,633 14,792 14,803 17,894 19,270


Trade payables 3,735 4,067 2,997 4,006 4,621



Minority interest 590 571 1,045 1,154 1,200

Shareholders' equity 4,784 5,398 6,125 7,296 8,398


Cash flow


EBIT 768 1,063 1,345 2,043 2,014

Depreciation 252 333 321 366 396

Working capital (1,828) 1,657 (713) (114) (301)


Operating cash flow (863) 2,808 655 1,748 1,630

Net capital expenditure (2,335) (1,245) 116 (2,285) (495)

Free cash flow (3,198) 1,564 771 (537) 1,135

Equity raised/(bought) - - 112 - -

Net borrowings 2,113 (1,019) (138) 687 (441)

Other financing 20 (468) (156) 53 (172)

Net cash flow (1,065) 76 589 203 521

Cash balances, beginning 1,885 820 896 1,485 1,688

Ending cash 820 896 1,485 1,688 2,209


Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 13.5 14.3 18.2 22.3 19.6

ROAA (%) 4.9 5.5 7.1 9.1 8.3

Gross margin (%) 6.1 7.7 10.6 12.0 10.4

EBITDA margin (%) 4.6 6.2 8.6 10.4 8.9

EBIT margin (%) 3.4 4.7 7.0 8.8 7.4

Net margin (%) 2.9 3.6 5.4 6.4 5.7

Payout ratio (%) 65 50 40 40 40

Current ratio (x) 1.2 1.1 1.5 1.5 1.5


Net gearing (%) 90.4 59.8 40.9 40.9 24.1



Inventory turnover (days) 31 16 19 21 21


2016 Compendium

144

ALAM SUTERA REALTY REDUCE*

2008A 2009A

2010F 2011F


With the second-largest landbank in our coverage (2,388ha), ASRI may

have difficulty booking 16ha in land sales estimated at IDR2.9tn in 2015,

as its 9M15 pre-sales reached only IDR1.4tn, only 30% of its IDR4.5tn

full-year target. Assuming this can be executed, ASRI should be able to

book IDR4.3tn in 2015 marketing sales.

In terms of earnings, we expect ASRI’s net margins to erode in 2015-16F

to 25.7-27.4% on large FX losses (9M15 FX loss: IDR791bn) due to large

USD bonds. However, ASRI targets to increase its recurring income to

10% in 2017, backed by expansion in its Alam Sutera mall and its Garuda

Wisnu Kencana tourism project.

As ASRI is adversely affected by a weak IDR and has suffered from a lack

of project launches, we use a 70% NAV discount (sector: 65%) to derive

our new 12-month TP of IDR300; downgrade to REDUCE. Risks would be

higher-than-expected marketing sales and a stronger IDR.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 3,684 3,631 3,491 3,667 3,952

EBIT (IDRbn) 1,533 1,908 1,782 1,790 1,938

Net profit (IDRbn) 877 1,097 899 1,004 1,206

Bahana/cons.(%) - - 75 74 82

EPS (IDR) 45 56 46 51 61

EPS growth (%) (26.5) 25.2 (18.1) 11.8 20.0

EV/EBITDA (x) 6.8 6.5 7.1 7.1 6.6

P/E (x) 8.1 6.5 7.9 7.1 5.9

FCFPS (IDR) (147) (100) (13) (5) 6

FCF yield (%) (40.4) (27.6) (3.6) (1.3) 1.6

BVPS (IDR) 263 311 350 392 443

P/BV (x) 1.4 1.2 1.0 0.9 0.8

DPS (IDR) 7 7 9 11 14



0

100,000

200,000

300,000

400,000

500,000

200

300

400

500

600

700

800


('000)(IDR)

Volume (RHS) ASRI IJ Px Last

(22.0)

(6.5)

3.2

(26.4)(22.8)

(26.3) (30)

(25)

(20)

(15)

(10)

(5)

0

5

(30)

(25)

(20)

(15)

(10)

(5)

0

5

ytd 1M 3M 6M 9M 12M

(%) (%)

ASRI IJ relative to JCI Source: Bloomberg



9M15

Land bank (Ha) 2,388


NAV/share (IDR) 989

Discount (%) 70


Company information

12M high/low (IDR) : 690/316


Majority shareholder (%) : Manunggal Prime Development (26.3)




Bloomberg/Reuters code : ASRI IJ/ASRI.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

145

ALAM SUTERA REALTY

Profit & loss


Sales 3,684 3,631 3,491 3,667 3,952

Gross profit 1,837 2,307 2,241 2,315 2,541

EBITDA 1,593 1,978 1,864 1,889 2,052


EBIT 1,533 1,908 1,782 1,790 1,938


Forex gain/(losses) (280) (138) (327) (164) 22


Pre-tax profit 1,082 1,386 1,190 1,315 1,543

Taxes (192) (209) (192) (202) (217)



Net profit 877 1,097 899 1,004 1,206 Source: Company, Bahana estimates

Balance sheet





Inventories 3,237 3,751 4,011 4,271 4,531

Fixed assets 802 958 1,006 1,065 1,139

Other assets 9,415 11,204 12,443 13,665 14,889

Total assets 14,427 16,924 18,598 20,129 21,718


Trade payables 165 161 103 111 119





Cash flow


EBIT 1,533 1,908 1,782 1,790 1,938


Working capital (123) (869) (40) 27 36

Other operating items (1,316) (1,341) (1,010) (926) (886)

Operating cash flow 154 (233) 813 990 1,203


Free cash flow (2,880) (1,972) (260) (93) 113


Net borrowings 2,406 2,020 534 230 70

Other financing (278) (57) (113) (152) (170)

Net cash flow (751) (9) 161 (15) 13


Ending cash 890 881 1,042 1,027 1,039 Source: Company, Bahana estimates

Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 18.0 19.5 13.8 13.8 14.7

ROAA (%) 6.9 7.0 5.1 5.2 5.8

Gross margin (%) 49.9 63.5 64.2 63.1 64.3

EBITDA margin (%) 43.2 54.5 53.4 51.5 51.9

EBIT margin (%) 41.6 52.5 51.0 48.8 49.0

Net margin (%) 23.8 30.2 25.7 27.4 30.5

Payout ratio (%) 15.7 12.5 20.0 20.0 20.0

Current ratio (x) 4.9 4.7 5.1 5.0 4.8


Net gearing (%) 71.7 93.6 88.6 82.3 73.5




2016 Compendium

146

ANABATIC TECHNOLOGIES BUY

2008A 2009A

2010F 2011F


With expected GDP improvement, ATIC, a leading fully-integrated IT

company, should enjoy higher revenue growth as some large banks

would be more willing to upgrade their core banking systems.

Given Indonesia’s low bank-account penetration rate (20%), ATIC should

benefit from the new branchless banking regulations, specifically aimed

at serving customers in remote areas. The government’s proactive move

in extending formal financial access to the unbanked sections of the

country is likely to benefit from the banks’ additional IT-related capex.

As ATIC’s 3-year outlook looks attractive, we have a BUY call with a TP of

IDR800, based on a simple average 10-year DCF valuation with WACC of

11.1%, and implying a 2016F PER of 16.3x, about a 20% discount to

regional peers. Risks: banks delaying their core system upgrades and

IDR depreciation.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 2,482 2,570 2,626 2,964 3,375

EBIT (IDRbn) 168 129 178 217 263



EPS (IDR) 25 41 33 51 68

EPS growth (%) (97.3) 60.4 (19.2) 55.7 32.1

EV/EBITDA (x) 10.8 13.9 7.5 6.4 6.0

P/E (x) 27.3 17.0 21.1 13.5 10.2

FCFPS (IDR) (220) (11) (93) (1) 9

FCF yield (%) (31.7) (1.6) (13.3) (0.1) 1.3

BVPS (IDR) 138 179 384 369 424

P/BV (x) 5.0 3.9 1.8 1.9 1.6

DPS (IDR) 45 - 10 8 13

Div. yield (%) 6.5 - 1.5 1.2 1.8 Source: Company, Bahana estimates note: based on 3 December 2015 closing price


0

5,000

10,000

15,000

20,000

25,000

400

450

500

550

600

650

700

750

800

8-Jul-15 29-Jul-15 19-Aug-15 9-Sep-15 30-Sep-15 21-Oct-15 11-Nov-15 2-Dec-15

('000)(IDR)

Volume (RHS) ATIC IJ Px Last

(6.2)

7.1

6.1

(8)

(6)

(4)

(2)

0

2

4

6

8

(8)

(6)

(4)

(2)

0

2

4

6

8

1M 3M Since IPO

(%) (%)

ATIC IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

IT industry growth (%) 16.5 17.3 13.8 12.8 13.0

IT spending/GDP (%) 1.3 1.4 1.5 1.7 2.0

Smartphone users (mn people) 41.6 61.2 74.8 89.8 103.6

Internet penetration rate (%) 72.7 83.6 93.4 102.8 112.6 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 750/510

12M high/low consensus TP (IDR) : na/na

Majority shareholder (%) : Artha Investama Jaya (40.2)




Bloomberg/Reuters code : ATIC IJ/ATIC.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

147

ANABATIC TECHNOLOGIES

Profit & loss


Sales 2,482 2,570 2,626 2,964 3,375

Gross profit 400 396 452 528 626

EBITDA 188 147 224 268 320


EBIT 168 129 178 217 263


Forex gain/(losses) (37) 16 (32) (3) 3

Other income/(expense) (4) 0 0 0 0

Pre-tax profit 102 112 117 186 235

Taxes (27) (31) (29) (46) (59)


Extraordinary gain/(losses) - 1 - - -


Balance sheet





Inventories 349 439 435 497 572

Fixed assets 139 251 405 424 437

Other assets 559 501 565 649 741

Total assets 1,874 1,978 2,344 2,642 2,991


Trade payables 404 286 350 394 447





Cash flow


EBIT 168 129 178 217 263


Working capital (330) 10 (74) (104) (130)


Operating cash flow (246) 123 61 86 104


Free cash flow (331) (16) (169) (1) 19

Equity raised/(bought) 133 - 390 - -

Net borrowings 398 30 (99) 85 93

Other financing (110) (2) (38) (35) (47)

Net cash flow 90 11 84 49 65



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 24.5 25.8 12.4 14.8 17.1

ROAA (%) 2.5 3.2 2.8 4.4 5.2

Gross margin (%) 16.1 15.4 17.2 17.8 18.5

EBITDA margin (%) 7.6 5.7 8.5 9.1 9.5

EBIT margin (%) 6.8 5.0 6.8 7.3 7.8

Net margin (%) 1.5 2.4 2.3 3.7 4.3

Payout ratio (%) 4.7 0.0 25.0 25.0 25.0

Current ratio (x) 1.1 1.1 1.2 1.2 1.3


Net gearing (%) 256.4 205.8 52.6 51.0 47.5




2016 Compendium

148

ANEKA TAMBANG BUY

2008A 2009A

2010F 2011F

PX: IDR323 - TP:IDR764

On the back of the government’s mineral-ore ban, ANTM, one of the

largest listed diversified metals and mining companies in the region

with 670m mt nickel reserves (6th largest) and 8m mt gold reserves

(9th largest), is going more industrial by expanding its ferronickel plants

and building bauxite value-added plants.

ANTM’s successful IDR5.3tn rights issue will be used to finance its 1st

phase (USD450m) of the East Halmahera’s ferronickel plant with 15k

TNi/annum capacity. In terms of its ferronickel volumes, we

conservatively expect 2016 production to reach 22k tonnes, despite the

completion of Pomalaa’s expansion (+50%).

We have a BUY rating and DCF-based 12-month TP of IDR764 (12.5%

WACC). Downside risks would be a longer-than expected nickel-price

recovery (currently hovering at USD10k/mt on weak demand) and

maintenance shutdown for its ferronickel plants.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 11,298 9,421 11,890 13,290 14,812

EBIT (IDRbn) 585 (137) (8) 281 826

Net profit (IDRbn) 533 (744) (449) (172) 228

Bahana/consensus (%) - - na na 22

EPS (IDR) 23 (31) (19) (7) 10

EPS growth (%) (82.3) na na na 232.4

EV/EBITDA (x) 14.7 28.1 19.5 13.2 8.2

P/E (x) 14.3 (10.3) na na 33.5

FCFPS (IDR) (112) (67) (287) (69) (39)

FCF yield (%) (34.6) (20.7) (88.9) (21.4) (12.2)

BVPS (IDR) 520 510 718 711 721

P/BV (x) 0.6 0.6 0.4 0.5 0.4

DPS (IDR) 19 4 - - 2

Div. yield (%) 5.9 1.2 - - 0.5



0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

300

400

500

600

700

800

900

1,000


('000)(IDR)

Volume (RHS) antm IJ Px Last

(50.7)

(7.6)

(23.3)

(38.1)(45.0)

(48.6)(60)

(50)

(40)

(30)

(20)

(10)

0

(60)

(50)

(40)

(30)

(20)

(10)

0

ytd 1M 3M 6M 9M 12M

(%) (%)

antm IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Ferronickel sales vol. (tons) 14,441 19,748 20,000 22,000 27,000

Ferronickel ASP (USD/mt) 6.2 7.7 5.7 5.7 6.4

Gold sales volume. (wmt) 301.9 320.8 500.0 500.0 500.0

Gold ASP (USD/toz) 1,490 1,286 1,125 1,200 1,250 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 937/313


Majority shareholder (%) : Government of Indonesia (65.0)




Bloomberg/Reuters code : ANTM IJ/ANTM.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

149

ANEKA TAMBANG

Profit & loss

Year to 31 Dec (IDRb) 2013A 2014A 2015F 2016F 2017F

Sales 11,298 9,421 11,890 13,290 14,812

Gross profit 1,686 793 924 1,240 1,842

EBITDA 1,158 606 737 1,180 2,081

Depreciation 573 743 745 899 1,255

EBIT 585 (137) (8) 281 826

Net interest inc./(expense) 25 (58) (113) (118) (147)



Pre-tax profit 31 (791) (495) (219) 304

Taxes 502 47 46 46 (76)



Net profit 533 (744) (449) (172) 228


Balance sheet





Inventories 2,446 1,762 2,193 2,410 2,594

Fixed assets 6,700 8,700 14,273 15,146 15,736

Other assets 8,904 7,825 8,066 8,005 7,945

Total assets 22,032 22,004 28,950 29,716 30,091


Trade payables 547 687 874 960 1,034






Cash flow


EBIT 585 (137) (8) 281 826

Depreciation 573 743 745 899 1,255

Working capital (600) 387 (639) (289) (278)


Operating cash flow 157 392 (291) 438 1,205


Free cash flow (2,645) (1,584) (6,791) (1,638) (934)

Equity raised/(bought) 21 0 5,390 - -

Net borrowings 2,129 1,230 1,596 847 64

Other financing (580) 180 216 365 354

Net cash flow (1,076) (174) 412 (426) (516)


Ending cash 2,793 2,619 3,031 2,605 2,089


Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 4.3 (6.1) (3.1) (1.0) 1.3

ROAA (%) 2.6 (3.4) (1.8) (0.6) 0.8

Gross margin (%) 14.9 8.4 7.8 9.3 12.4

EBITDA margin (%) 10.3 6.4 6.2 8.9 14.0

EBIT margin (%) 5.2 (1.5) (0.1) 2.1 5.6

Net margin (%) 4.7 (7.9) (3.8) (1.3) 1.5

Payout ratio (%) 15 na na na 15

Current ratio (x) 1.8 1.6 1.8 1.8 1.6

Interest coverage (x) 9.6 na na 1.7 4.4

Net gearing (%) 32.5 44.8 38.7 46.7 49.5





2016 Compendium

150

ASTRA AGRO LESTARI BUY

2008A 2009A

2010F 2011F

PX: IDR17,650 - TP: IDR22,500

AALI, the sector’s largest planter by market cap with the second

largest planted area of 290k ha behind SIMP, is likely to undergo an

operating performance turnaround in 2016 on the back of rising CPO

prices and higher utilization rates on its refinery mills, offsetting the

company’s weak FFB production.

On the cost front, we expect margin expansion across the board in

2016 given expected higher CPO prices, and lower harvesting and

maintenance costs on the back of reduced labor costs, which account

for around 40% of total COGS. We estimate 2016 sales to reach

IDR16.5tn (+12% y-y), supported by rising CPO prices.

As we expect 2016 earnings to strongly rebound by 111% y-y to

IDR1.6tn, mainly on a stronger USD and lower FX losses, we maintain

our BUY call and IDR22,500 TP, based on a 2016F PE of 21.5x, a 10%

discount to Malaysian peers. Risk: Lower-than-expected CPO prices.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 12,675 16,306 14,739 16,467 18,486

EBIT (IDRbn) 3,005 3,722 1,969 2,773 3,233

Net profit (IDRbn) 1,801 2,504 781 1,647 2,495


EPS (IDR) 1,144 1,590 496 1,046 1,585

EPS growth (%) (25.3) 39.0 (68.8) 110.8 51.5

EV/EBITDA (x) 8.3 7.1 12.0 9.2 8.0

P/E (x) 15.4 11.1 35.6 16.9 11.1

FCFPS (IDR) (237) (668) (1,419) (407) 252

FCF yield (%) (1.3) (3.8) (8.0) (2.3) 1.4

BVPS (IDR) 6,283 7,252 7,140 7,963 9,077

P/BV (x) 2.8 2.4 2.5 2.2 1.9

DPS (IDR) 514 715 223 470 713



0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

14,000

16,000

18,000

20,000

22,000

24,000

26,000

28,000


('000)(IDR)

Volume (RHS) AALI IJ Px Last

(13.8)(10.9)

6.4

(19.4)(16.1)

(14.6)

(25)

(20)

(15)

(10)

(5)

0

5

10

(25)

(20)

(15)

(10)

(5)

0

5

10

ytd 1M 3M 6M 9M 12M

(%) (%)

AALI IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

FFB nucleus production (k tons) 3,710 5,551 5,496 5,267 5,673

CPO production (k tons) 1,539 1,744 1,701 1,649 1,788

Growth (%) 4.2 13.3 (2.4) (3.1) 8.4

ASP CPO (USD/ton) 673 673 560 600 620

Average IDR/USD 10,925 12,393 13,455 14,533 14,115 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 27,400/14,800


Majority shareholder (%) : Astra International (79.7)




Bloomberg/Reuters code : AALI IJ/AALI.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

151

ASTRA AGRO LESTARI

Profit & loss


Sales 12,675 16,306 14,739 16,467 18,486

Gross profit 4,082 4,952 3,252 4,167 4,709

EBITDA 3,574 4,450 2,915 3,882 4,480

Depreciation 570 728 946 1,109 1,247

EBIT 3,005 3,722 1,969 2,773 3,233




Pre-tax profit 2,605 3,690 1,199 2,371 3,524

Taxes (702) (1,069) (300) (593) (881)



Net profit 1,801 2,504 781 1,647 2,495 Source: Company, Bahana estimates

Balance sheet





Inventories 803 1,278 1,574 1,685 1,887

Fixed assets 11,468 14,342 17,155 19,447 21,526

Other assets 1,980 2,294 2,349 2,395 2,445

Total assets 14,963 18,558 21,744 24,240 26,583


Trade payables 720 923 945 1,012 1,134





Cash flow


EBIT 3,005 3,722 1,969 2,773 3,233

Depreciation 570 728 946 1,109 1,247

Working capital 612 (746) (237) (22) (52)

Other operating items (1,913) (1,154) (1,154) (1,098) (706)



Free cash flow (373) (1,052) (2,235) (640) 397


Net borrowings 1,751 1,704 3,250 900 200

Other financing (897) (750) (1,008) (219) (593)

Net cash flow 481 (98) 7 40 4



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 19.0 23.5 6.9 13.8 18.6

ROAA (%) 13.2 14.9 3.9 7.2 9.8

Gross margin (%) 32.2 30.4 22.1 25.3 25.5

EBITDA margin (%) 28.2 27.3 19.8 23.6 24.2

EBIT margin (%) 23.7 22.8 13.4 16.8 17.5

Net margin (%) 14.2 15.4 5.3 10.0 13.5

Payout ratio (%) 45.0 45.0 45.0 45.0 45.0

Current ratio (x) 0.5 0.6 0.5 0.3 0.3


Net gearing (%) 20.4 33.4 62.8 63.2 56.8




2016 Compendium

152

ASTRA INTERNATIONAL REDUCE

2008A 2009A

2010F 2011F

PX: IDR6,300 - TP: IDR5,550

In 2016, ASII, Indonesia’s biggest auto player, will likely continue to

experience tough business conditions on the back of unsupportive

industry fundamentals on weak purchasing power and intensifying

competition. We expect ASII’s weak auto margins to persist given flat

2016F 4W (510k) and 2W (4.3m) volumes.

At this stage, we expect ASII’s financing business to experience limited

growth, hurt by unexciting 2015-16F auto-sales growth. For its

commodity-related segments, we look for continued soft coal prices to be

a drag on ASII’s heavy-equipment and mining-contracting subsidiaries.

As we foresee a limited economic recovery in 2016, we expect ASII’s

recent market outperformance to reverse. We maintain our REDUCE

rating on ASII with a SOTP-based 12-month TP of IDR5,550, reflecting

a 2016F PE of 12.8x. Risks to our call are higher-than-expected auto

sales from greater purchasing power and less intense competition.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 193,880 201,701 184,851 193,520 211,196

EBIT (IDRbn) 18,603 20,163 17,427 18,498 20,496

Net profit (IDRbn) 19,417 19,181 16,764 17,591 19,543

Bahana/consensus(%) - - 73 69 77

EPS (IDR) 480 474 414 435 483

EPS growth (%) (0.0) (1.2) (12.6) 4.9 11.1

EV/EBITDA (x) 12.2 11.0 12.1 11.6 10.6

P/E (x) 13.1 13.3 15.2 14.5 13.1

FCFPS (IDR) 242 154 116 80 164

FCF yield (%) 3.8 2.4 1.8 1.3 2.6

BVPS (IDR) 2,073 2,362 2,563 2,811 3,098

P/BV (x) 3.0 2.7 2.5 2.2 2.0

DPS (IDR) 216 213 186 196 217



Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

4W sales volume (units) 654,573 614,169 510,388 510,388 546,626

4W market share (%) 53% 51% 50% 50% 51%

2W sales volume (k units) 4,697 5,051 4,296 4,296 4,403

2W market share (%) 61% 64% 67% 67% 67% Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 8,575/5,125


Majority shareholder (%) : Jardine Cycle & Carriage L (50.1)


Mkt. cap. (IDRtn/USDbn) : 255.0/18.4


Bloomberg/Reuters code : ASII IJ/ASII.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

0

20,000

40,000

60,000

80,000

100,000

120,000

5,000

5,500

6,000

6,500

7,000

7,500

8,000

8,500

9,000


('000)(IDR)

Volume (RHS) ASII IJ Px Last

(2.0) (2.0)

0.1

2.8

(3.1)

3.5

(4)

(3)

(2)

(1)

0

1

2

3

4

(4)

(3)

(2)

(1)

0

1

2

3

4

ytd 1M 3M 6M 9M 12M

(%) (%)

ASII IJ relative to JCI

2016 Compendium

153

ASTRA INTERNATIONAL

Profit & loss


Sales 193,880 201,701 184,851 193,520 211,196

Gross profit 35,311 38,809 36,506 38,514 42,040

EBITDA 24,666 27,588 24,913 26,349 28,901

Depreciation 6,063 7,425 7,487 7,851 8,405

EBIT 18,603 20,163 17,427 18,498 20,496

Net interest inc./(expense) (166) 151 106 59 (29)


Other income/(expense) 9,837 7,164 7,841 7,791 8,569

Pre-tax profit 27,523 27,352 25,129 26,272 29,115

Taxes (5,226) (5,227) (4,849) (5,076) (5,684)

Minority interest (2,880) (2,944) (3,517) (3,606) (3,888)


Net profit 19,417 19,181 16,764 17,591 19,543 Source: Company, Bahana estimates

Balance sheet



S-T investments 262 277 299 323 349


Inventories 14,433 16,986 15,444 16,138 17,611

Fixed assets 58,844 61,336 67,218 71,942 73,030

Other assets 99,067 112,066 117,889 129,341 143,660

Total assets 213,994 236,029 243,204 261,179 278,702


Trade payables 17,275 18,839 17,070 17,836 19,464





Cash flow


EBIT 18,603 20,163 17,427 18,498 20,496

Depreciation 6,063 7,425 7,487 7,851 8,405

Working capital 745 (2,620) 1,698 (984) (2,000)

Other operating items 786 (2,928) (3,251) (3,452) (3,736)



Free cash flow 9,806 6,234 4,684 3,236 6,655


Net borrowings 7,766 5,549 (2,639) 2,548 (1,002)

Other financing (10,070) (9,438) (3,130) (5,759) (7,192)

Net cash flow 7,502 2,345 (1,085) 25 (1,538)



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 25.0 21.4 16.8 16.2 16.3

ROAA (%) 9.8 8.5 7.0 7.0 7.2

Gross margin (%) 18.2 19.2 19.7 19.9 19.9

EBITDA margin (%) 12.7 13.7 13.5 13.6 13.7

EBIT margin (%) 9.6 10.0 9.4 9.6 9.7

Net margin (%) 10.0 9.5 9.1 9.1 9.3

Payout ratio (%) 45.0 45.0 45.0 45.0 45.0

Current ratio (x) 1.2 1.3 1.4 1.2 1.3

Interest coverage (x) 112.1 na na na 698.9

Net gearing (%) 54.8 51.4 45.9 44.1 40.4




2016 Compendium

154

AUSTINDO NUSANTARA JAYA REDUCE

2008A 2009A

2010F 2011F

PX: IDR1,610 - TP: IDR1,000*

ANJT, with a planted area of 48k ha (the smallest under our coverage),

is currently experiencing a big loss of USD8mn below the line on the

delayed development of its Papua sago plantation business due to social

issues, resulting in the early termination of deals with some contractors.

In 2016, we expect ANJT’s revenue to improve to USD153m (+16% y-

y) on higher CPO prices, resulting in net profit of USD3m, on lower

forex losses, a reversal when compared to 2015’s net loss of around

USD3m due to low CPO prices, forex losses and higher costs related to

immature area transition.

Nevertheless, we remain cautious on ANJT due to its cost burden on

the continued delayed development of its Papua sago plantation. We

have a REDUCE rating with a new 12-month TP of IDR1,000, reflecting

an EV/ha of USD5,500, compared to SIMP’s current valuation of

USD5,300/ha. Risk: Higher cost efficiencies.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (USDmn) 138 158 132 153 170

EBIT (USDmn) 22 36 4 15 19

Net profit (USDmn) 22 18 (3) 3 7


EPS (IDR) 91 77 (13) 12 27

EPS growth (%) (53.7) (15.5) na na 120.2

EV/EBITDA (x) 11.1 7.7 16.1 11.8 8.8

P/E (x) 17.8 21.0 (125.6) 129.9 59.0

FCFPS (IDR) (164) (104) (187) (31) (28)

FCF yield (%) (10.2) (6.4) (11.6) (1.9) (1.7)

BVPS (IDR) 1,065 1,097 1,061 1,074 1,089

P/BV (x) 1.5 1.5 1.5 1.5 1.5

DPS (IDR) 40 38 (6) 6 14

Div. yield (%) 2.5 2.4 (0.4) 0.4 0.8 Source: Company, Bahana estimates note: based on 3 December 2015 closing price


0

1,000

2,000

3,000

4,000

5,000

900

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700


('000)(IDR)

Volume (RHS) ANJT IJ Px Last

34.7

(0.1) (1.1)

45.7

54.4

35.7

(10)

0

10

20

30

40

50

60

(10)

0

10

20

30

40

50

60

ytd 1M 3M 6M 9M 12M

(%) (%)

ANJT IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

FFB nucleus production (k tons) 609 726 751 766 810

CPO production (k tons) 159 188 194 193 197

Growth (%) (10.6) 17.8 3.3 (0.7) 2.4

ASP CPO (USD/ton) 689 697 560 600 620 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 1,620/980

12M High/low consensus TP (IDR) : na

Majority shareholder (%) : Austindo (40.3)

Shares outstanding (mn)/Free float (%) : 3,335/10



Bloomberg/Reuters code : ANJT IJ/ANJT.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

155

AUSTINDO NUSANTARA JAYA

Profit & loss


Sales 138 158 132 153 170

Gross profit 48 64 30 43 49

EBITDA 37 61 33 46 52


EBIT 22 36 4 15 19

Net interest inc./(expense) 1 0 (1) (1) (2)

Forex gain/(losses) 3 (2) (4) (1) 1

Other income/(expense) 7 0 (5) (7) (6)

Pre-tax profit 33 34 (6) 5 12

Taxes (11) (16) 3 (2) (5)

Minority interest (0) (0) 0 (0) (0)


Net profit 22 18 (3) 3 7 Source: Company, Bahana estimates

Balance sheet



S-T investments 0 0 0 - -



Fixed assets 89 125 180 198 219

Other assets 256 275 276 277 276

Total assets 397 444 497 518 532







Cash flow


EBIT 22 36 4 15 19


Working capital (60) 9 6 6 6




Free cash flow (47) (30) (54) (9) (8)

Equity raised/(bought) 49 0 - - -

Net borrowings (3) 26 60 8 8

Other financing (33) (8) (9) 2 (1)

Net cash flow (35) (11) (3) 1 (1)



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 7.0 4.8 (0.8) 0.8 1.8

ROAA (%) 6.1 4.3 (0.7) 0.6 1.3

Gross margin (%) 34.8 40.6 22.9 28.2 29.1

EBITDA margin (%) 26.6 38.6 25.3 30.1 30.8

EBIT margin (%) 15.9 22.4 3.4 9.8 10.9

Net margin (%) 15.7 11.6 (2.3) 2.0 3.9

Payout ratio (%) 44.1 50.0 50.0 50.0 50.0

Current ratio (x) 3.7 1.2 0.7 0.6 0.5

Interest coverage (x) na na 3.8 11.0 12.3

Net gearing (%) nc nc 16.8 18.6 20.9




2016 Compendium

156

BANK BUKOPIN HOLD

2008A 2009A

2010F 2011F


BBKP, under a new controlling shareholder, is continuing to reduce its

reliance on Bulog, the state-owned logistics agency, by focusing on

MSMEs to not only raise its loan portfolio but also to sustain long-term

earnings growth and prevent further margin erosion.

This aggressive penetration into the SME segment should also improve

the bank’s funding structure, boosting margins. However, the bank’s

limited track record of accomplishment in this segment remains the

main challenge for BBKP, in our opinion.

At this stage, we retain our HOLD rating on the stock with a fine-tuned

12-month target price of IDR730, based on a 2016F P/BV of 0.8x, a

70% discount to the sector. Despite its undemanding valuation, we

see downside risks to our call, including the failure to manage its loan

quality within the SME segment. Upside risk would lie in its ability to

improve margins in a potentially lower interest rate environment.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Net interest income (IDRbn) 2,444 2,473 2,864 3,350 3,892

Operating income (IDRbn) 3,494 3,560 4,247 4,832 5,423

Operating profit (IDRbn) 1,174 944 1,366 1,528 1,687

Pre-tax profit (IDRbn) 1,194 971 1,398 1,564 1,729

Net profit (IDRbn) 930 724 1,067 1,194 1,320


EPS (IDR) 115 80 117 131 145

EPS growth (%) 10.6 (30.8) 47.3 11.9 10.6

P/E (x) 6.0 8.7 5.9 5.3 4.8

Equity (IDRbn) 6,196 6,802 7,590 8,570 9,652

BVPS (IDR) 682 749 835 943 1,062

P/BV (x) 1.0 0.9 0.8 0.7 0.7

DPS (IDR) 31 31 23 26 29



0

5,000

10,000

15,000

20,000

25,000

550

600

650

700

750

800

850


('000)(IDR)

Volume (RHS) BBKP IJ Px Last

5.9

3.8

(2.0)

7.5 7.0

2.4

(4)

(2)

0

2

4

6

8

(4)

(2)

0

2

4

6

8

ytd 1M 3M 6M 9M 12M

(%) (%)

BBKP IJ relative to JCI Source: Bloomberg

Teguh Hartanto ([email protected]) +6221 250 5081 ext. 3610 *New, please refer to appendix II

Major assumptions

Year to 31 Dec (%) 2013A 2014A 2015F 2016F 2017F

Loan growth 6.4 14.0 14.1 13.6 13.3

Deposit growth 3.5 17.1 12.7 7.5 11.2

Non interest inc./operating inc. 30.1 30.5 32.6 30.7 28.2

Corporate tax rate 21.7 25.2 23.5 23.5 23.5

Payout ratio 26.9 38.5 20.0 20.0 20.0 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 800/560

12M high/low consensus TP (IDR) : 1,050/660

Majority shareholder (%) : Bosowa Corp (30.0)




Bloomberg/Reuters code : BBKP IJ/BBKP.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

157

BANK BUKOPIN

Profit & loss


Interest income 5,950 7,093 8,136 8,941 9,805

Interest expense 3,506 4,620 5,272 5,591 5,914

Net interest income 2,444 2,473 2,864 3,350 3,892

Non-interest income 1,051 1,086 1,383 1,482 1,531

Total operating income 3,494 3,560 4,247 4,832 5,423

Operating expenses 2,161 2,325 2,486 2,929 3,411

Loan loss provisions 159 291 394 376 325

Operating profit 1,174 944 1,366 1,528 1,687

Non-operating inc./(exp.) 19 27 31 36 42

Pre-tax profit 1,194 971 1,398 1,564 1,729

Corporate tax (259) (244) (328) (367) (406)

Minorities (5) (2) (2) (2) (2)

Net profit 930 724 1,067 1,194 1,320 Source: Company, Bahana estimates

Balance sheet


Loans 48,461 55,263 63,071 71,655 81,174

Cash on hand 1,020 1,023 1,330 1,729 2,248

Fixed assets 1,329 1,519 1,898 2,373 2,966

Other assets 18,648 21,247 24,351 27,039 27,367

Total assets 69,458 79,051 90,651 102,797 113,756

Customer deposits 55,822 65,391 73,686 79,203 88,060

Deposits from other banks 1,976 2,007 2,308 2,654 3,052

Borrowing and sub-debts 4,382 3,777 3,924 4,217 4,551



Minorities 17 20 20 20 20

Equity 6,196 6,802 7,590 8,570 9,652

Total liabilities and equity 69,458 79,051 90,651 102,797 113,756 Source: Company, Bahana estimates

Breakdown

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

% to earnings assets

Gross loans 72.3 72.2 72.0 72.5 72.9

Government bonds 2.6 3.0 7.3 6.5 5.7

Other earnings assets 25.1 24.8 20.6 21.0 21.4

% to loan portfolio

Loan to bulog 7.8 2.2 2.0 1.8 1.7

Commercial 38.5 45.5 46.7 47.6 48.4

MSME 39.8 38.8 37.9 37.4 37.0

Consumer 13.8 13.6 13.3 13.2 13.0

% to total deposits

Core funding 41.7 37.1 35.9 37.4 38.2

Time deposits 58.3 62.9 64.1 62.6 61.8 Source: Company, Bahana estimates

Key ratios

Year to 31 Dec (%) 2013A 2014A 2015F 2016F 2017F

ROAA 1.4 1.0 1.3 1.2 1.2

ROAE 16.6 11.1 14.8 14.8 14.5

NIM 3.8 3.7 3.9 4.0 4.1

Loan/deposit ratio 86.8 84.5 85.6 90.5 92.2

Loan/funding ratio 77.9 77.6 78.9 83.2 84.9

Cost efficiency ratio 61.8 65.3 58.5 60.6 62.9

CIR 83.2 88.5 85.6 85.3 85.1

Gross NPL 2.3 2.8 3.2 3.1 3.0

NPL coverage 72.9 59.8 59.4 65.4 67.6

LLR 1.6 1.6 1.9 2.0 2.0

CAR-total 14.5 14.5 15.1 14.3 13.3

CAR-tier I 10.8 11.4 12.0 11.1 10.0 Source: Company, Bahana estimates

2016 Compendium

158

BANK CENTRAL ASIA BUY

2008A 2009A

2010F 2011F

PX: IDR13,300 - TP: IDR14,700*

As Indonesia’s biggest transactional and private bank, BBCA is

backed by Chinese entrepreneurs, allowing it to enjoy strong core

funding, which in turn provides flexibility in maneuvering its loan

portfolio mix. Note that the bank has the lowest funding cost in our

coverage at around 2.6%, helped by a CASA ratio of over 75%.

Cautious and prudent strategic business moves have allowed BBCA to

manage its loan quality, well below the industry’s average, although

the potential increase in gross NPLs seems inevitable in the next few

quarters. However, the bank’s over-provisioning should have a

limited adverse impact on its earnings outlook.

BBCA should continue trading at a premium valuation to the industry,

justified by its very strong management. BUY with a 12-month TP of

IDR14,700, based on a 2016F P/BV of 3.4x, a 45% premium to peers.

Risk: Overly conservative approach triggering market share loss.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F



Operating profit (IDRbn) 17,079 20,509 22,474 24,585 26,964

Pre-tax profit (IDRbn) 17,816 20,746 22,758 24,897 27,307

Net profit (IDRbn) 14,254 16,490 18,176 19,883 21,806


EPS (IDR) 578 669 737 806 884

EPS growth (%) 21.6 15.7 10.3 9.4 9.7

P/E (x) 23.0 19.9 18.0 16.5 15.0

Equity (IDRbn) 63,866 75,488 90,016 106,003 123,668

BVPS (IDR) 2,590 3,062 3,651 4,299 5,016

P/BV (x) 5.1 4.3 3.6 3.1 2.7

DPS (IDR) 120 148 158 168 178



0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

11,000

12,000

13,000

14,000

15,000

16,000


('000)(IDR)

Volume (RHS) BBCA IJ Px Last

14.5

1.0

5.8

9.4 9.0

11.8

0

2

4

6

8

10

12

14

16

0

2

4

6

8

10

12

14

16

ytd 1M 3M 6M 9M 12M

(%) (%)

BBCA IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec (%) 2013A 2014A 2015F 2016F 2017F

Loan growth 21.7 11.2 10.0 10.7 11.8

Deposit growth 10.7 9.5 10.4 10.3 11.6




Company information

12M high/low (IDR) : 15,300/11,300






Bloomberg/Reuters code : BBCA IJ/BBCA.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

159

BANK CENTRAL ASIA

Profit & loss


Interest income 34,291 43,793 48,452 52,391 56,372






Loan loss provisions 3,577 5,201 4,939 3,077 2,557

Operating profit 17,079 20,509 22,474 24,585 26,964


Pre-tax profit 17,816 20,746 22,758 24,897 27,307

Corporate tax (3,559) (4,229) (4,552) (4,979) (5,461)

Minorities (2) (26) (30) (34) (39)


Balance sheet


Loans 313,712 348,694 383,734 424,783 474,791

Cash on hand 16,284 19,578 21,535 22,612 23,743

Fixed assets 7,440 8,845 10,908 13,428 16,502

Other assets 158,868 176,039 193,937 222,506 254,890

Total assets 496,305 553,156 610,114 683,328 769,925



Borrowing and sub-debts 502 3,081 3,235 3,397 3,566



Minorities 101 238 258 282 310

Equity 63,866 75,488 90,016 106,003 123,668


Breakdown

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F


Gross loans 67.4 67.6 68.5 68.2 68.4



% to loan portfolio

Corporate 32.9 34.6 33.9 32.9 32.4

Commercial & SME 39.0 38.5 39.2 40.3 41.1

Consumer 11.2 11.2 11.3 11.4 11.4

Mortgage 17.0 15.8 15.6 15.4 15.0

% to total deposits

Core funding 78.5 74.7 74.9 75.6 77.0


Key ratios

Year to 31 Dec (%) 2013A 2014A 2015F 2016F 2017F

ROAA 3.0 3.1 3.1 3.1 3.0

ROAE 24.6 23.7 22.0 20.3 19.0

NIM 6.2 6.5 6.3 6.0 5.8




CIR 62.3 63.2 63.5 63.0 63.0

Gross NPL 0.4 0.6 0.9 1.2 1.0

NPL coverage 406.5 320.4 256.0 181.9 190.4

LLR 1.8 1.9 2.4 2.3 2.0

CAR-total 16.0 17.2 17.3 17.7 18.0


2016 Compendium

160

BANK DANAMON BUY*

2008A 2009A

2010F 2011F

PX: IDR3,005 - TP: IDR3,400*

Due to BDMN’s large exposure in the 4W and 2W markets, the bank

continues to try to remix its loan portfolio towards the SME segment

due to intensifying competition in the micro-loan segment and slowing

demand for auto leasing from its subsidiary ADMF.

Its penetration into SMEs would enhance BDMN’s funding profile,

supporting its CASA ratio, which stood at 44.5% at end-3Q15. This

would subsequently improve its blended funding cost. Additionally, the

management aims to improve operating efficiencies by reducing

headcount, closing down and/or combining some overlapping outlets.

While we expect BDMN earnings to be helped by overall cost-structure

improvement, implementation and effectiveness will likely take time to

materialize. We upgrade to BUY (from HOLD) on valuation, with a new

12-month TP of IDR3,400, based on 2016F PBV of 0.9x (65% discount

to the sector). Downside risk: failure to improve funding costs.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F





Net profit (IDRbn) 4,042 2,604 2,613 2,998 3,475


EPS (IDR) 422 272 273 313 363

EPS growth (%) 0.7 (35.6) 0.3 14.8 15.9

P/E (x) 7.1 11.1 11.0 9.6 8.3

Equity (IDRbn) 31,251 32,780 34,611 36,825 39,476

BVPS (IDR) 3,260 3,420 3,611 3,842 4,119

P/BV (x) 0.9 0.9 0.8 0.8 0.7

DPS (IDR) 126 82 82 86 91

Div. yield (%) 4.2 2.7 2.7 2.9 3.0 Source: Company, Bahana estimates note: based on 3 Decemberr 2015 closing price


0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2,500

3,000

3,500

4,000

4,500

5,000


('000)(IDR)

Volume (RHS) BDMN IJ Px Last

(20.4)

(3.0)

(19.8)(17.5)

(20.2)

(16.3)

(25)

(20)

(15)

(10)

(5)

0

(25)

(20)

(15)

(10)

(5)

0

ytd 1M 3M 6M 9M 12M

(%) (%)

BDMN IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec (%) 2013A 2014A 2015F 2016F 2017F

Loan growth 15.1 2.6 3.9 11.1 11.7

Deposit growth 21.4 6.7 12.0 11.1 11.2




Company information

12M high/low (IDR) : 5,150/2,695


Majority shareholder (%) : Asia Financial (67.4)




Bloomberg/Reuters code : BDMN IJ/BDMN.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

161

BANK DANAMON

Profit & loss


Interest income 19,958 22,750 23,179 24,579 26,816








Non-operating inc./(exp.) (75) (510) (561) (503) (604)

Pre-tax profit 5,530 3,554 3,063 3,514 4,077

Corporate tax (1,371) (871) (360) (411) (482)

Minorities (118) (79) (90) (104) (120)


Balance sheet


Loans 133,991 137,478 142,872 158,769 177,401

Cash on hand 2,944 2,856 3,285 3,777 4,344

Fixed assets 4,587 5,137 5,908 6,794 7,813

Other assets 42,716 50,237 61,275 88,244 143,207

Total assets 184,237 195,709 213,340 257,584 332,765






Minorities 302 238 301 374 458

Equity 31,251 32,780 34,611 36,825 39,476


Breakdown

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F


Gross loans 77.8 73.6 70.5 64.7 55.7



% to loan portfolio

Corporate 14.1 12.8 12.5 12.2 11.9

Commercial 28.1 27.0 27.3 27.5 28.1

Retail 5.7 9.3 9.1 9.5 9.7

Mass market 52.2 50.9 51.0 50.8 50.3

% to total deposits

Core funding 45.2 48.7 47.8 47.4 47.0


Key ratios

Year to 31 Dec (%) 2013A 2014A 2015F 2016F 2017F

ROAA 2.3 1.3 1.3 1.3 1.2

ROAE 13.5 8.1 7.8 8.4 9.1

NIM 9.6 8.4 7.8 7.0 6.1




CIR 81.0 85.7 87.6 86.9 86.1

Gross NPL 1.9 2.4 2.8 2.7 2.6

NPL coverage 91.3 86.7 107.5 113.7 111.6

LLR 1.7 2.0 3.0 3.1 2.9

CAR-total 17.9 17.9 19.0 17.6 15.5


2016 Compendium

162

BANK PEMB. DAERAH JAWA BARAT DAN BANTEN BUY

2008A 2009A

2010F 2011F


The largest regional bank by assets, BJBR is back on track to focus on

expanding its loans to civil servants and pensioners, which accounted

for 68.3% of end-September 2015 total loans. Its ability to secure this

market segment through the regional payroll system with a high credit

ceiling should provide sustained and increased customer loyalty.

Additionally, we like BJBR’s less-risky participation in syndicated loans

for infrastructure-related project financing and linkage credit lines with

other banks. This, combined with loans to civil servants, should ensure

future loan quality, following the unfavorable experience of having

massive NPLs in its micro financing in the past few years.

As we like BJBR’s ability to benefit from growing regional funding to

allow for some flexibility in off-loading expensive time deposits, we

retain our BUY rating and IDR850 TP based on a 2016F PBV of 1.0x, a

60% discount to the sector. Risk: plan to come back into micro loans.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F





Net profit (IDRbn) 1,376 1,120 1,227 1,368 1,529


EPS (IDR) 142 116 127 141 158

EPS growth (%) 15.4 (18.6) 9.5 11.5 11.7

P/E (x) 5.2 6.4 5.8 5.2 4.7

Equity (IDRbn) 6,684 7,043 7,575 8,269 9,114

BVPS (IDR) 689 726 781 853 940

P/BV (x) 1.1 1.0 0.9 0.9 0.8

DPS (IDR) 78 72 70 71 71



0

50,000

100,000

150,000

200,000

550

650

750

850

950

1,050


('000)(IDR)

Volume (RHS) BJBR IJ Px Last

13.9

(4.7)

5.3

(6.5) (7.5)

3.4

(10)

(5)

0

5

10

15

(10)

(5)

0

5

10

15

ytd 1M 3M 6M 9M 12M

(%) (%)

BJBR IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec (%) 2013A 2014A 2015F 2016F 2017F

Loan growth 27.6 10.5 11.8 13.1 13.3

Deposit growth (1.2) 15.5 16.0 15.3 15.4




Company information

12M high/low (IDR) : 1,010/585


Majority shareholder (%) : West Java Provincial Govt. (38.3)




Bloomberg/Reuters code : BJBR IJ/BJBR.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

163

BANK PEMB. DAERAH JAWA BARAT DAN BANTEN

Profit & loss


Interest income 8,133 8,792 9,993 10,986 12,181









Pre-tax profit 1,753 1,438 1,586 1,769 1,977

Corporate tax (376) (318) (360) (401) (448)

Minorities - - - - -


Balance sheet


Loans 48,902 54,017 60,407 68,320 77,383

Cash on hand 2,595 2,768 3,183 3,660 4,209

Fixed assets 1,355 1,799 2,068 2,379 2,735

Other assets 18,106 17,253 19,710 22,726 27,391

Total assets 70,958 75,837 85,368 97,084 111,719






Minorities 34 41 41 41 41

Equity 6,684 7,043 7,575 8,269 9,114


Breakdown

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F


Gross loans 73.6 75.2 74.7 74.4 73.3

Government bonds - - - - -


% to loan portfolio

Consumer 64.0 68.0 68.7 69.2 69.6

Commercial 15.5 13.9 13.8 13.6 13.5

Micro 11.9 9.1 8.6 8.4 8.3

Mortgage 8.7 9.0 8.9 8.8 8.7

% to total deposits

Core funding 57.9 60.4 59.7 58.9 58.2


Key ratios

Year to 31 Dec (%) 2013A 2014A 2015F 2016F 2017F

ROAA 1.9 1.5 1.5 1.5 1.5

ROAE 21.7 16.3 16.8 17.3 17.6

NIM 8.0 6.8 6.9 6.7 6.4




CIR 82.6 87.5 87.4 87.1 86.9

Gross NPL 2.8 4.2 3.6 3.5 3.4

NPL coverage 78.2 75.3 97.8 104.2 105.6

LLR 2.2 3.1 3.5 3.7 3.6

CAR-total 16.4 16.1 17.0 15.5 14.5


2016 Compendium

164

BANK PEMBANGUNAN DAERAH JAWA TIMUR REDUCE*

2008A 2009A

2010F 2011F


BJTM, the second-largest regional bank by assets, has been

struggling to improve its loan quality since its IPO back in July 2012.

At end-Sep 2015, BJBR, mainly caused by commercial and mortgage

loans, booked gross NPL of 4.2%, up from 3.3% a year earlier.

On a more positive note, BJTM is now more vigilant, implementing

tight credit-risk monitoring and shifting its focus to less-risky civil-

servant loans (54% of total loans). Additionally, with continued

regional funding support, BJTM should see higher margins.

Following BJTM’s substantial 12M market outperformance, we

downgrade our rating to REDUCE (from HOLD) with a TP of IDR420

on a 2016F P/BV of 0.9x, a 60% discount to the sector. A high

dividend-payout ratio is likely to lend some support to valuation.

Upside risk: BJTM’s ability to accelerate loan growth to civil servants.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F





Net profit (IDRbn) 824 939 942 1,023 1,153


EPS (IDR) 55 63 63 69 77

EPS growth (%) 2.4 13.9 0.3 8.6 12.7

P/E (x) 8.0 7.0 7.0 6.5 5.7

Equity (IDRbn) 5,719 6,044 6,361 6,791 7,355

BVPS (IDR) 383 405 426 455 493

P/BV (x) 1.2 1.1 1.0 1.0 0.9

DPS (IDR) 41 42 40 39 41



0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

300

350

400

450

500

550

600


('000)(IDR)

Volume (RHS) BJTM IJ Px Last

9.5

(1.6)

13.5

(1.3) (1.2)

8.7

(5)

0

5

10

15

(5)

0

5

10

15

ytd 1M 3M 6M 9M 12M

(%) (%)

BJTM IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec (%) 2013A 2014A 2015F 2016F 2017F

Loan growth 19.0 18.6 12.2 12.6 12.6

Deposit growth 17.0 16.5 17.4 14.8 14.8




Company information

12M high/low (IDR) : 570/354


Majority shareholder (%) : East Java Provincial Govt. (51.5)




Bloomberg/Reuters code : BJTM IJ/BJTM.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

165

BANK PEMBANGUNAN DAERAH JAWA TIMUR

Profit & loss


Interest income 3,386 4,084 4,678 5,202 5,794

Interest expense 913 1,203 1,548 1,709 1,899


Non-interest income 367 373 504 558 622






Pre-tax profit 1,154 1,376 1,327 1,441 1,624

Corporate tax (329) (437) (385) (418) (471)


Net profit 824 939 942 1,023 1,153 Source: Company, Bahana estimates

Balance sheet


Loans 22,084 26,195 29,381 33,074 37,233

Cash on hand 2,320 1,889 2,030 2,335 2,685

Fixed assets 523 622 839 885 885

Other assets 8,119 9,293 11,339 13,278 15,484

Total assets 33,047 37,998 43,589 49,572 56,287


Deposits from other banks 314 612 624 637 650

Borrowing and sub-debts 316 317 318 309 309

Other liabilities 710 755 756 1,061 1,150



Equity 5,719 6,044 6,361 6,791 7,355


Breakdown

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F


Gross loans 72.6 73.2 71.6 70.9 70.1



% to loan portfolio

Consumer 63.5 63.8 64.0 64.2 64.4

SME 17.3 16.4 16.3 16.2 16.1

Commercial 19.1 19.8 19.7 19.6 19.5

Others - - - - -

% to total deposits

Core funding 76.7 74.8 75.1 75.1 75.1


Key ratios

Year to 31 Dec (%) 2013A 2014A 2015F 2016F 2017F

ROAA 2.7 2.6 2.3 2.2 2.2

ROAE 14.7 16.0 15.2 15.6 16.3

NIM 7.1 6.9 6.5 6.2 6.1




CIR 70.3 69.7 75.1 75.7 75.5

Gross NPL 3.4 3.3 3.8 3.8 3.7

NPL coverage 69.2 75.0 83.9 88.7 89.8

LLR 2.4 2.5 3.2 3.3 3.3

CAR-total 23.7 22.2 22.0 19.7 18.2


2016 Compendium

166

BANK MANDIRI BUY*

2008A 2009A

2010F 2011F

PX: IDR8,800- TP: IDR9,700*

Aiming to be one of ASEAN’s largest banks, BMRI is preparing to

enhance its capital base by revaluing its assets, allowing for continued

aggressive expansion across all segments. However, in 3Q15, the bank

conservatively expanded its loans while focusing on improving loan

quality through debt restructuring.

Hurt mainly by its commodity-based lending and subsidiary company,

Bank Syariah Mandiri, BMRI faced greater gross NPLs of 2.8% at end-

September 2015, vis-à-vis 2.2% a year earlier. This has resulted in

market underperformance throughout 2015 for the bank.

At this stage, we fine tune our 12-month TP to IDR9,700 based on a

2016F implied P/BV of 1.7x, at around 30% discount to the sector. We

upgrade BMRI to BUY on valuation. Key risks: worse-than-expected

NPLs and increased low-margin infra-related project financing.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F





Net profit (IDRbn) 18,204 19,872 20,004 20,330 22,958


EPS (IDR) 780 852 857 871 984

EPS growth (%) 17.4 9.2 0.7 1.6 12.9

P/E (x) 11.3 10.3 10.3 10.1 8.9

Equity (IDRbn) 87,419 102,658 117,019 132,914 151,812

BVPS (IDR) 3,747 4,400 5,015 5,696 6,506

P/BV (x) 2.3 2.0 1.8 1.5 1.4

DPS (IDR) 234 213 193 174 172



0

20,000

40,000

60,000

80,000

100,000

7,000

8,000

9,000

10,000

11,000

12,000

13,000


('000)(IDR)

Volume (RHS) BMRI IJ Px Last

(5.1)

(1.7)(3.0)

(5.4)

(8.8)

(4.5)

(10)

(8)

(6)

(4)

(2)

0

(10)

(8)

(6)

(4)

(2)

0

ytd 1M 3M 6M 9M 12M

(%) (%)

BMRI IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec (%) 2013A 2014A 2015F 2016F 2017F

Loan growth 21.4 12.2 10.3 11.6 12.1

Deposit growth 15.2 14.4 7.1 8.9 9.3




Company information

12M high/low (IDR) : 12,475/7,525






Bloomberg/Reuters code : BMRI IJ/BMRI.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

167

BANK MANDIRI

Profit & loss


Interest income 50,209 62,638 68,800 74,294 81,022









Pre-tax profit 24,062 26,008 26,101 26,701 30,210

Corporate tax (5,232) (5,353) (5,220) (5,340) (6,042)

Minorities (626) (783) (877) (1,030) (1,211)


Balance sheet


Loans 471,815 529,190 583,887 651,800 730,711

Cash on hand 19,052 20,705 23,810 27,382 31,489

Fixed assets 13,258 15,487 17,810 20,482 23,554

Other assets 228,974 289,658 307,675 323,963 345,577

Total assets 733,100 855,040 933,183 1,023,627 1,131,331






Minorities 1,371 2,187 2,713 3,331 4,057

Equity 87,419 102,658 117,019 132,914 151,812

Total liabilities and equity 733,100 855,040 933,183 1,023,627 1,131,331 Source: Company, Bahana estimates

Breakdown

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F


Gross loans 68.1 66.7 66.6 68.1 69.6



% to loan portfolio

Corporate 39.9 36.9 36.1 35.6 34.9

Commercial 28.5 29.5 29.7 29.6 29.5

Micro and small 17.9 19.8 20.5 21.1 21.7

Consumer 13.8 13.8 13.7 13.7 13.8

% to total deposits

Core funding 61.0 56.5 56.8 57.8 58.9


Key ratios

Year to 31 Dec (%) 2013A 2014A 2015F 2016F 2017F

ROAA 2.7 2.5 2.2 2.1 2.1

ROAE 22.5 20.9 18.2 16.3 16.1

NIM 5.7 5.9 5.5 5.5 5.7




CIR 65.2 67.7 70.8 72.5 71.6

Gross NPL 1.9 2.2 3.0 3.3 3.2

NPL coverage 184.5 155.6 129.5 130.7 135.9

LLR 3.5 3.3 3.8 4.2 4.3

CAR-total 14.8 16.1 16.9 15.5 15.0


2016 Compendium

168

BANK NEGARA INDONESIA BUY

2008A 2009A

2010F 2011F

PX: IDR4,990 - TP: IDR5,700*

Following higher gross NPLs, BBNI, the third-largest state-owned bank

in our coverage, has progressed well to improve its loan quality

ahead. Under the current new management, the bank plans to focus

on infrastructure-related projects and their derivatives while

minimizing its exposure to risky commodity-based industries.

Efforts to maintain its NIM should be attained by off-loading excess

funding from time deposits and raising the CASA ratio from 60.9% at

end-September 2015 to 65.0% at end-September 2016. This would

lower the cost of funding to <3.0%, the second lowest after BBCA.

On the back of both fee-based and interest incomes (eg, BNI Life),

BBNI’s earnings outlook should remain attractive. Hence, we reiterate

our BUY rating with a new 12-month TP of IDR5,700, based on a

2016F implied P/BV of 1.5x, still a 40% discount to the industry. Risks

to our call include higher provisioning on an increased coverage ratio.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F





Net profit (IDRbn) 9,054 10,783 8,372 11,022 12,153


EPS (IDR) 486 578 449 591 652

EPS growth (%) 28.5 19.1 (22.4) 31.7 10.3

P/E (x) 10.3 8.6 11.1 8.4 7.7

Equity (IDRbn) 47,663 56,889 62,565 71,704 81,652

BVPS (IDR) 2,556 3,051 3,355 3,845 4,378

P/BV (x) 2.0 1.6 1.5 1.3 1.1

DPS (IDR) 146 145 101 118 114



0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

3,500

4,000

4,500

5,000

5,500

6,000

6,500

7,000


('000)(IDR)

Volume (RHS) BBNI IJ Px Last

(5.0)

1.4

5.7

(8.6) (8.5) (7.7) (10)

(8)

(6)

(4)

(2)

0

2

4

6

8

(10)

(8)

(6)

(4)

(2)

0

2

4

6

8

ytd 1M 3M 6M 9M 12M

(%) (%)

BBNI IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec (%) 2013A 2014A 2015F 2016F 2017F

Loan growth 24.8 10.7 13.0 14.0 14.0

Deposit growth 13.3 7.5 10.2 14.4 14.0




Company information

12M high/low (IDR) : 7,275/3,940






Bloomberg/Reuters code : BBNI IJ/BBNI.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

169

BANK NEGARA INDONESIA

Profit & loss


Interest income 26,451 33,365 37,592 41,865 45,524









Pre-tax profit 11,278 13,524 10,532 13,855 15,280

Corporate tax (2,220) (2,695) (2,106) (2,771) (3,056)

Minorities (4) (47) (54) (62) (71)


Balance sheet


Loans 250,450 277,360 313,485 357,516 407,475

Cash on hand 10,090 11,436 12,007 12,608 13,238

Fixed assets 11,181 12,510 14,386 16,544 19,026

Other assets 114,934 115,268 132,759 155,389 134,137

Total assets 386,655 416,574 472,637 542,057 573,876






Minorities 20 4,207 4,207 4,207 4,207

Equity 47,663 56,889 62,565 71,704 81,652


Breakdown

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F


Gross loans 67.4 69.9 66.8 66.4 71.4



% to loan portfolio

Corporate 44.8 43.2 43.6 43.9 44.2

Commercial & SME 28.9 29.1 29.2 29.1 29.1

Consumer 19.0 18.8 18.3 18.2 18.2

Others 7.3 9.0 8.9 8.7 8.6

% to total deposits

Core funding 69.2 65.8 66.1 66.9 68.7


Key ratios

Year to 31 Dec (%) 2013A 2014A 2015F 2016F 2017F

ROAA 2.5 2.7 1.9 2.2 2.2

ROAE 19.9 20.6 14.0 16.4 15.8

NIM 6.1 6.2 6.4 6.1 6.1




CIR 69.0 72.0 79.6 75.4 75.6

Gross NPL 2.2 2.0 3.0 2.8 2.7

NPL coverage 123.4 123.4 139.5 140.8 140.4

LLR 2.7 2.4 4.1 3.9 3.7

CAR-total 14.9 16.3 17.6 16.5 16.2


2016 Compendium

170

BANK RAKYAT INDONESIA BUY

2008A 2009A

2010F 2011F

PX: IDR11,275 - TP: IDR13,000*

Capitalizing on its extensive network, BBRI, the second-largest bank

by market cap, continues to enjoy its strength in micro lending

despite the recently lowered KUR lending rate to 12%, which should

minimally affect margins given the government’s 7% interest rate

subsidy and 70% loan loss coverage with a lower RWA.

BBRI’s sustainable growth should be backed by superior micro loans

quality (company payroll support) of 1.4% at end-September 2015

(industry average: >5.0%). Possible setbacks: SME commercial loan

quality, where BBRI has been reluctant to aggressively expand.

As we remain in favor of the bank’s business concept, we reaffirm our

BUY call on BBRI. We also fine tune our TP to IDR13,000, based on a

2016F implied PBV of 2.3x, at par with the sector. Key risks to our

call: concerns on government interventions on micro lending rates

through KUR, which could cannibalize BBRI’s ‘Kupedes’ micro lending.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F





Net profit (IDRbn) 21,344 24,242 24,426 26,815 29,624


EPS (IDR) 865 983 990 1,087 1,201

EPS growth (%) 14.3 13.6 0.8 9.8 10.5

P/E (x) 13.0 11.5 11.4 10.4 9.4

Equity (IDRbn) 79,164 97,560 115,311 137,121 161,427

BVPS (IDR) 3,209 3,955 4,674 5,558 6,544

P/BV (x) 3.5 2.9 2.4 2.0 1.7

DPS (IDR) 257 295 198 217 210



0

20,000

40,000

60,000

80,000

100,000

120,000

8,000

9,000

10,000

11,000

12,000

13,000

14,000


('000)(IDR)

Volume (RHS) BBRI IJ Px Last

10.0

3.7

9.1

12.3

4.5

9.1

0

2

4

6

8

10

12

14

0

2

4

6

8

10

12

14

ytd 1M 3M 6M 9M 12M

(%) (%)

BBRI IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec (%) 2013A 2014A 2015F 2016F 2017F

Loan growth 23.9 13.9 9.2 11.1 11.4

Deposit growth 12.0 23.4 12.8 12.2 12.3




Company information

12M high/low (IDR) : 13,275/8,300






Bloomberg/Reuters code : BBRI IJ/BBRI.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

171

BANK RAKYAT INDONESIA

Profit & loss


Interest income 59,508 75,170 85,429 93,579 102,722








Non-operating inc./(exp.) 1,789 2,495 2,621 2,753 2,893

Pre-tax profit 27,910 30,859 30,935 33,958 37,514

Corporate tax (6,556) (6,605) (6,496) (7,131) (7,878)

Minorities (10) (12) (12) (12) (12)


Balance sheet


Loans 448,102 510,428 557,299 618,923 689,483

Cash on hand 19,172 22,469 20,222 21,233 22,295

Fixed assets 8,818 11,583 15,637 21,111 28,499

Other assets 150,091 257,475 277,111 317,755 368,529

Total assets 626,183 801,955 870,270 979,022 1,108,806






Minorities 164 177 186 194 203

Equity 79,164 97,560 115,311 137,121 161,427

Total liabilities and equity 626,183 801,955 870,270 979,022 1,108,806 Source: Company, Bahana estimates

Breakdown

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F


Gross loans 73.6 67.3 65.9 65.0 64.1



% to loan portfolio

Corporate 25.6 25.6 25.8 25.7 25.6

SME 26.5 26.5 25.7 25.5 25.4

Consumer 17.2 17.2 16.5 16.4 16.5

Micro 30.7 30.7 32.0 32.4 32.6

% to total deposits

Core funding 58.9 53.2 53.4 54.3 55.1


Key ratios

Year to 31 Dec (%) 2013A 2014A 2015F 2016F 2017F

ROAA 3.6 3.4 2.9 2.9 2.8

ROAE 29.7 27.4 22.9 21.2 19.8

NIM 8.6 8.5 8.0 7.6 7.4




CIR 61.6 66.4 70.6 70.5 70.4

Gross NPL 1.6 1.7 2.6 2.7 2.6

NPL coverage 218.4 184.2 140.3 145.2 150.9

LLR 3.4 3.1 3.7 4.0 4.0

CAR-total 17.0 18.1 19.4 18.2 17.0


2016 Compendium

172

BANK TABUNGAN NEGARA BUY

2008A 2009A

2010F 2011F

PX: IDR1,285 - TP: IDR1,520*

As one of the largest mortgage providers focusing on the low-end

segment, BBTN should be the main beneficiary of the government’s

One Million Houses Program, with budgeted 2016 liquidity and interest

subsidies amounting to IDR12.4tn, up from just IDR5.1tn in 2015.

This, coupled with the government’s proposed Tapera funding to

support low-end housing availability, should enable sustainable loan

growth for BBTN as the main lender for subsidized mortgages.

Additionally, while enjoying lower RWA for mortgages, BBTN can

enhance capital through FLPP liquidity conversion to sub-debt and

lower dividend payouts to support loan growth.

Given the current huge backlog of low-end housing, we remain

positive on BBTN’s outlook, and raise our TP to IDR1,520, on a 2016F

PBV of 1.0x, a 55% sector discount. BUY. Risks: special-mention loan

downgrades and delays of government funding disbursements.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F





Net profit (IDRbn) 1,562 1,116 1,663 2,084 2,419


EPS (IDR) 148 105 157 197 229

EPS growth (%) 14.5 (28.6) 49.1 25.3 16.1

P/E (x) 8.7 12.2 8.2 6.5 5.6

Equity (IDRbn) 11,557 12,206 13,646 15,397 17,451

BVPS (IDR) 1,092 1,153 1,289 1,455 1,649

P/BV (x) 1.2 1.1 1.0 0.9 0.8

DPS (IDR) 44 21 31 34 34



0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

900

950

1,000

1,050

1,100

1,150

1,200

1,250

1,300


('000)(IDR)

Volume (RHS) BBTN IJ Px Last

19.8

8.7

22.0

25.2 28.0

24.9

0

5

10

15

20

25

30

0

5

10

15

20

25

30

ytd 1M 3M 6M 9M 12M

(%) (%)

BBTN IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec (%) 2013A 2014A 2015F 2016F 2017F

Loan growth 23.4 15.4 18.2 17.9 16.2

Deposit growth 19.2 10.7 16.2 16.3 15.0




Company information

12M high/low (IDR) : 1,285/945

12M high/low consensus TP (IDR) : 1,550 /1,185





Bloomberg/Reuters code : BBTN IJ/BBTN.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

173

BANK TABUNGAN NEGARA

Profit & loss


Interest income 11,197 13,373 15,400 17,653 20,282



Non-interest income 798 926 1,056 1,376 1,551



Loan loss provisions 441 777 663 854 1,078



Pre-tax profit 2,141 1,548 2,217 2,689 3,042

Corporate tax (579) (433) (554) (605) (624)



Balance sheet


Loans 100,467 115,916 137,034 161,510 187,646

Cash on hand 924 920 1,151 1,438 1,798

Fixed assets 2,834 3,001 4,051 5,267 6,847

Other assets 26,944 24,739 34,857 45,559 68,626

Total assets 131,170 144,576 177,092 213,774 264,916


Deposits from other banks 285 1,188 1,356 1,560 1,794





Equity 11,557 12,206 13,646 15,397 17,451


Breakdown

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F


Gross loans 88.5 88.7 89.0 87.8 82.9



% to loan portfolio

Subsidized mortgage 28.3 29.6 30.4 32.8 34.7

Non-subsidized mortgage 39.4 39.3 40.6 39.4 38.0

Housing related loans 18.9 19.6 18.4 17.8 17.4

Non-housing related loans 13.4 11.5 10.5 10.0 9.8

% to total deposits

Core funding 45.1 46.6 46.0 46.6 47.8


Key ratios

Year to 31 Dec (%) 2013A 2014A 2015F 2016F 2017F

ROAA 1.3 0.8 1.0 1.1 1.0

ROAE 14.3 9.4 12.9 14.3 14.7

NIM 5.4 4.5 4.6 4.5 4.4




CIR 82.2 89.2 86.5 85.9 86.1

Gross NPL 4.1 4.0 3.8 3.5 3.4

NPL coverage 27.9 33.9 35.7 37.8 40.7

LLR 1.1 1.4 1.2 1.2 1.3

CAR-total 15.6 14.6 15.6 15.4 13.6


2016 Compendium

174

BANK TABUNGAN PENSIUNAN NASIONAL REDUCE*

2008A 2009A

2010F 2011F

PX: IDR2,500 - TP: IDR2,350*

Given its reliance on time deposits, BTPN, a mid-cap bank, looks well

placed to benefit from the central bank’s possible looser monetary

policy. Meanwhile, in an effort to lower its blended funding cost, BTPN

is committed to raising its CASA ratio (3Q15: 14.4%) via its ‘Wow’

phone banking and branchless-network expansion.

However, BTPN faces tight competition as a lender since growth in this

segment is dominated by big banks utilizing their competitive funding

costs and joint ventures with related institutions like Taspen to gain

advantage. Competition also stems from regional banks.

Given this scenario and share illiquidity, BTPN looks less attractive,

leading us to downgrade to REDUCE with a new TP of IDR2,350, based

on a 2016F P/BV of 0.9x, a 60% sector discount. Upside risk: founder’s

further divestment, allowing for a 5% tax saving on 40% free float.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F





Net profit (IDRbn) 2,131 1,853 1,822 1,987 2,099


EPS (IDR) 365 317 312 340 359

EPS growth (%) 6.9 (13.0) (1.7) 9.0 5.7

P/E (x) 6.9 7.9 8.0 7.3 7.0

Equity (IDRbn) 9,908 11,811 13,634 15,347 17,148

BVPS (IDR) 1,696 2,022 2,334 2,628 2,936

P/BV (x) 1.5 1.2 1.1 1.0 0.9

DPS (IDR) - - 47 51 54

Div. yield (%) - - 1.9 2.0 2.2 Source: Company, Bahana estimates note: based on 3 December 2015 closing price


0

200

400

600

800

1,000

1,200

2,300

2,800

3,300

3,800

4,300


('000)(IDR)

Volume (RHS) BTPN IJ Px Last

(23.5)

(10.7)

(18.0)

(24.2) (24.0)(26.1) (30)

(25)

(20)

(15)

(10)

(5)

0

(30)

(25)

(20)

(15)

(10)

(5)

0

ytd 1M 3M 6M 9M 12M

(%) (%)

BTPN IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Loan growth 18.7 12.8 10.9 11.6 11.7

Deposit growth 15.8 2.2 10.1 12.1 12.4




Company information

12M high/low (IDR) : 4,315/2,500


Majority shareholder (%) : GSI Sumitomo (40.0)




Bloomberg/Reuters code : BTPN IJ/BTPN.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

175

BANK TABUNGAN PENSIUNAN NASIONAL

Profit & loss


Interest income 10,943 12,293 12,866 14,134 15,521



Non-interest income 400 764 852 980 1,096





Non-operating inc./(exp.) (9) (13) (15) (17) (19)

Pre-tax profit 2,869 2,523 2,430 2,649 2,799

Corporate tax (738) (653) (607) (662) (700)

Minorities - (16) - - -


Balance sheet


Loans 46,105 51,994 57,676 64,370 71,934

Cash on hand 1,103 1,130 1,356 1,627 1,952

Fixed assets 1,429 1,507 1,884 2,355 2,944

Other assets 21,028 20,384 23,310 26,852 30,934

Total assets 69,665 75,015 84,226 95,204 107,763


Deposits from other banks 16 - 4 2 1




Minorities - 249 249 249 249

Equity 9,908 11,811 13,634 15,347 17,148


Breakdown



Gross loans 70.1 73.7 71.9 71.4 70.8

Government bonds - - - - -


% to loan portfolio

Loans to pensioners 68.6 66.8 65.7 64.1 62.5

Micro loans 22.3 24.5 24.3 24.1 24.0

Others 6.2 3.9 4.0 4.1 4.3

Syariah 2.9 4.8 6.1 7.6 9.2

% to total deposits

Core funding 13.6 14.8 14.9 15.0 15.3


Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAA 3.3 2.6 2.3 2.2 2.1

ROAE 24.2 17.1 14.3 13.7 12.9

NIM 12.7 11.4 11.3 11.4 11.4




CIR 74.6 80.6 82.2 82.4 83.0

Gross NPL 0.7 0.7 1.0 1.0 0.9

NPL coverage 157.5 140.3 125.9 129.1 131.9

LLR 1.1 1.0 1.3 1.2 1.2

CAR-total 23.1 23.4 18.7 16.9 15.7


2016 Compendium

176

BEKASI FAJAR INDUSTRIAL ESTATE REDUCE

2008A 2009A

2010F 2011F


As a pure industrial estate player (ie, other than DMAS), BEST may

struggle to sell its 970ha landbank due to soft demand, despite its

estate location, which is closest to Jakarta, allowing for the highest

ASP. Nevertheless, BEST, having booked the sector’s worst 9M15

marketing sales of just 7.9ha, has cut its 2015 target from 40ha to

15ha. We assume 2016 marketing sales of 20ha.

On the 2015-16F top line, we expect revenue declines due to weak

marketing sales and continued slow marketing-sales recognition. On

the bottom line, we expect 2016 net earnings to be eroded by interest

charges and FX losses due to high USD-denominated debt levels.

Weak growth, coupled with a low portion of recurring income, has us

deriving our 12M TP of IDR300, based on a 75% discount to 2016F NAV

(sector average discount to NAV: 67%). REDUCE on expensive 2016F PE

of 20.8x. Risks: higher-than-expected marketing sales and FDI.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 1,324 840 681 563 743

EBIT (IDRbn) 883 472 411 321 444

Net profit (IDRbn) 744 391 225 159 326


EPS (IDR) 77 41 23 16 34

EPS growth (%) 58.1 (47.4) (42.5) (29.3) 104.9

EV/EBITDA (x) 3.7 7.2 9.6 13.8 10.3

P/E (x) 4.4 8.5 14.7 20.8 10.2

FCFPS (IDR) (32) (14) (58) (53) (25)

FCF yield (%) (9.4) (4.1) (16.9) (15.4) (7.3)

BVPS (IDR) 257 295 316 331 363

P/BV (x) 1.3 1.2 1.1 1.0 0.9

DPS (IDR) 2 2 3 2 4



0

50,000

100,000

150,000

200,000

200

300

400

500

600

700

800


('000)(IDR)

Volume (RHS) BEST IJ Px Last

(39.8)

(13.3)

20.6

(16.2)

(32.6)(41.2) (50)

(40)

(30)

(20)

(10)

0

10

20

30

(50)

(40)

(30)

(20)

(10)

0

10

20

30

ytd 1M 3M 6M 9M 12M

(%) (%)

BEST IJ relative to JCI Source: Bloomberg



9M15

Land bank (Ha) 970


NAV/share (IDR) 1,185

Discount (%) 75


Company information

12M High/low (IDR) : 765/274


Majority shareholder (%) : PT Argo Manunggal Land (48.1)




Bloomberg/Reuters code : BEST IJ/BEST.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

177

BEKASI FAJAR INDUSTRIAL ESTATE

Profit & loss


Sales 1,324 840 681 563 743

Gross profit 946 580 494 409 542

EBITDA 888 478 419 331 470


EBIT 883 472 411 321 444




Pre-tax profit 812 433 259 187 363

Taxes (67) (42) (34) (28) (37)




Balance sheet





Inventories 2,400 2,493 3,080 3,637 4,039

Fixed assets 77 77 95 120 180

Other assets 256 729 821 932 1,057

Total assets 3,360 3,653 4,638 5,192 5,760

Interest bearing liabilities 542 466 1,323 1,723 1,948



Total liabilities 883 803 1,585 2,001 2,258



Cash flow


EBIT 883 472 411 321 444


Working capital 13 (2) (42) 10 (4)




Free cash flow (312) (136) (559) (510) (242)


Net borrowings 314 (75) 857 400 225

Other financing (91) (22) (22) (20) (14)

Net cash flow (35) (230) 276 (131) (31)



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 35.0 14.7 7.6 5.1 9.7

ROAA (%) 26.3 11.1 5.4 3.2 5.9

Gross margin (%) 71.4 69.1 72.5 72.7 73.0

EBITDA margin (%) 67.0 56.9 61.5 58.8 63.3

EBIT margin (%) 66.7 56.2 60.3 57.0 59.8

Net margin (%) 56.2 46.6 33.0 28.2 43.9

Payout ratio (%) 3.0 5.6 9.0 9.0 9.0

Current ratio (x) 3.4 2.7 5.3 4.0 3.6


Net gearing (%) nc 5.2 23.9 39.5 43.3




2016 Compendium

178

BLUE BIRD REDUCE

2008A 2009A

2010F 2011F

PX: IDR6,675 - TP: IDR4,700*

Despite its strong brand, BIRD, the largest land transportation

company with around a 40% market share in Indonesia, is facing

extremely tough competition on the ground due to new entrants such

as Uber, GrabCar, Go-Jek and GrabBike, resulting in a lower 3Q15

EBITDA margin of 29%, down from 30% in 2Q15 and 31% in 1Q15.

In 2016, we expect continued margin pressure causing a flat

utilization rate at best as drivers migrate to higher-income jobs with

mobile-based-application competitors. We thus see risk due to

limitations on BIRD’s expansion plan, leading to low top-line growth.

Given intense competition, a lack of drivers and a negative earnings

impact from potentially higher fuel prices, we expect BIRD’s market

underperformance to persist. Reiterate REDUCE. Our 12-month TP of

IDR4,700 reflects a 2016F PE of 13.6x, a 20% discount to regional

peers. Risk: higher-than-expected consumer purchasing power.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 3,921 4,759 5,552 6,250 6,988

EBIT (IDRbn) 990 1,053 1,197 1,298 1,354

Net profit (IDRbn) 708 735 840 870 877

Bahana/consensus.(%) - - 95 75 62

EPS (IDR) 666 336 336 348 350

EPS growth (%) 278.6 (49.5) (0.0) 3.6 0.7

EV/EBITDA (x) 12.6 10.5 9.7 8.9 8.5

P/E (x) 10.0 19.9 19.9 19.2 19.0

FCFPS (IDR) (907) (365.7) (264) (80) (118)

FCF yield (%) (13.6) (5.5) (4.0) (1.2) (1.8)

BVPS (IDR) 1,071 1,615.5 1,615 1,823 2,034

P/BV (x) 6.2 4.1 4.1 3.7 3.3

DPS (IDR) 237 295.0 134 139 140



0

500

1,000

1,500

2,000

2,500

3,000

3,500

5,000

7,000

9,000

11,000

13,000


('000)(IDR)

Volume (RHS) BIRD IJ Px Last

(15.7)

11.2

(3.5)(6.5)

(19.7)

0.9

(30)

(20)

(10)

0

10

20

(30)

(20)

(10)

0

10

20

ytd 1M 3M 6M 9M 12M

(%) (%)

BIRD IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Total regular taxi (units) 21,756 25,545 27,045 28,545 31,045

Utilization rates (%) 79.0 75.0 75.0 75.0 75.0

Average daily income (kIDR/unit) 558 594 638 690 731

Average fuel price (IDR/lt) 5,700 6,800 7,480 8,000 8,400 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 12,100/5,200


Majority shareholder (%) : Pusaka Citra Djokosoetono (37)




Bloomberg/Reuters code : BIRD IJ/BIRD.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

179

BLUE BIRD

Profit & loss


Sales 3,921 4,759 5,552 6,250 6,988

Gross profit 1,332 1,453 1,678 1,854 1,988

EBITDA 1,492 1,699 1,909 2,118 2,290

Depreciation 502 646 712 819 936

EBIT 990 1,053 1,197 1,298 1,354




Pre-tax profit 956 987 1,128 1,168 1,177

Taxes (243) (247) (282) (292) (294)




Balance sheet






Fixed assets 4,342 5,563 6,293 7,352 8,508

Other assets 139 418 154 167 181

Total assets 5,012 7,172 7,155 8,305 9,701


Trade payables 178 258 106 120 137

Other liabilities 1,216 1,261 886 971 1,058




Cash flow


EBIT 990 1,053 1,197 1,298 1,354

Depreciation 502 646 712 819 936

Working capital (106) (55) 0 (64) (69)

Other operating items (508) (359) (1,146) (723) (845)

Operating cash flow 877 1,285 764 1,331 1,376


Free cash flow (964) (800) (661) (200) (294)

Equity raised/(bought) 242 2,308 - - -

Net borrowings 780 (588) (0) 577 817

Other financing (382) (236) 26 (347) (350)

Net cash flow (323) 684 (635) 30 173



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 62.2 20.8 20.8 19.1 17.2

ROAA (%) 14.1 10.3 11.7 10.5 9.0

Gross margin (%) 34.0 30.5 30.2 29.7 28.5

EBITDA margin (%) 38.0 35.7 34.4 33.9 32.8

EBIT margin (%) 25.2 22.1 21.6 20.8 19.4

Net margin (%) 18.0 15.4 15.1 13.9 12.5

Payout ratio (%) 35.6 87.8 40.0 40.0 40.0

Current ratio (x) 0.8 0.8 0.7 0.8 0.9


Net gearing (%) 188.6 31.1 43.0 48.9 55.4




2016 Compendium

180

BUMI SERPONG DAMAI BUY*

2008A 2009A

2010F 2011F

PX: IDR1,770 - TP: IDR2,020

One of the largest landbank owners and also the largest property

developer by market cap in our coverage, BSDE is currently

developing the second phase of its township mega project, BSD City,

with a 70% marketing sales contribution in 9M15. This 2,000ha

project should continue as BSDE’s earnings growth driver until 2020.

In 2016, we expect marketing sales to be flat y-y, compared to

management’s 2015 target of IDR6.7tn (9M15: IDR4.6tn), backed by

residential projects. Furthermore, we expect BSDE’s commercial

developments at Rasuna Said and BSD City Green Office Park to boost

its recurring income to around 20% (9M15: 18%).

BSDE’s highest net margin in the sector and secured projects have us

applying a 60% discount to our 2016F NAV to derive our IDR2,020

TP. We upgrade to BUY on valuation. Risks: lower-than-expected

marketing sales and slower-than-expected project developments.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 5,741 5,572 6,609 7,856 8,978

EBIT (IDRbn) 2,910 2,632 3,226 3,701 4,248

Net profit (IDRbn) 2,691 3,821 2,545 2,876 3,386

Bahana/cons.(%) - - 99 100 106

EPS (IDR) 154 208 132 149 176

EPS growth (%) 109.3 35.2 (36.4) 13.0 17.7

EV/EBITDA (x) 11.1 12.8 10.9 9.7 8.4

P/E (x) 11.5 8.5 13.4 11.8 10.1

FCFPS (IDR) (159) (153) (139) (58) 10

FCF yield (%) (9.0) (8.7) (7.8) (3.3) 0.6

BVPS (IDR) 584 837 916 1,053 1,214

P/BV (x) 3.0 2.1 1.9 1.7 1.5

DPS (IDR) 16 16 13 15 18



0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400


('000)(IDR)

Volume (RHS) BSDE IJ Px Last

11.3

4.0

9.3

5.5

2.4

9.4

0

2

4

6

8

10

12

0

2

4

6

8

10

12

ytd 1M 3M 6M 9M 12M

(%) (%)

BSDE IJ relative to JCI Source: Bloomberg



9M15




Discount (%) 60

Adjusted NAV/share (IDR) 2,022 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 1,315/2,220


Majority shareholder (%) : Paraga Artamida (26.7)




Bloomberg/Reuters code : BSDE IJ/BSDE.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

181

BUMI SERPONG DAMAI

Profit & loss


Sales 5,741 5,572 6,609 7,856 8,978

Gross profit 4,166 4,132 4,985 5,753 6,593

EBITDA 3,036 2,763 3,480 4,034 4,652

Depreciation 127 132 254 333 403

EBIT 2,910 2,632 3,226 3,701 4,248


Forex gain/(losses) 166 30 (90) (19) 18

Other income/(expense) 196 1,745 307 165 170

Pre-tax profit 3,279 4,306 3,135 3,537 4,132

Taxes (373) (310) (397) (448) (512)




Balance sheet



S-T investments 1,907 5,499 5,499 5,499 5,499


Inventories 3,797 5,239 6,497 8,412 9,538

Fixed assets 3,947 4,461 7,761 10,261 12,361

Other assets 5,509 9,831 11,091 12,022 12,987

Total assets 22,572 28,135 34,655 39,044 43,209


Trade payables 96 158 187 223 255





Cash flow


EBIT 2,910 2,632 3,226 3,701 4,248

Depreciation 127 132 254 333 403

Working capital (1,884) (1,589) (840) (891) (569)

Other operating items (104) 1,378 (760) (759) (816)



Free cash flow (2,790) (2,681) (2,426) (1,020) 172

Equity raised/(bought) (121) 1,613 - - -

Net borrowings 2,968 79 3,208 120 (113)

Other financing 313 (375) (134) (92) (117)

Net cash flow 370 (1,364) 649 (993) (58)



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 29.7 29.8 15.4 15.2 15.5

ROAA (%) 13.7 15.1 8.1 7.8 8.2

Gross margin (%) 72.6 74.1 75.4 73.2 73.4

EBITDA margin (%) 52.9 49.6 52.6 51.3 51.8

EBIT margin (%) 50.7 47.2 48.8 47.1 47.3

Net margin (%) 46.9 68.6 38.5 36.6 37.7

Payout ratio (%) 10.2 7.6 10.0 10.0 10.0

Current ratio (x) 2.7 3.4 3.3 2.8 2.7

Interest coverage (x) na 26.5 10.5 12.0 13.9

Net gearing (%) nc 7.8 21.3 24.1 20.6




2016 Compendium

182

CARDIG AERO SERVICES HOLD

2008A 2009A

2010F 2011F

PX: IDR1,200 - TP: IDR1,250*

To support growth, CASS, one of the leaders in airport services,

providing integrated solutions for ground & cargo handling (72% of

9M15 revenues), from cleaning and catering to aviation support, plans

to expand into other business lines, including aircraft simulators.

On the cost side, CASS plans to improve operating efficiency by

maximizing resources (ie, cleaning services and laundry) to improve

earnings growth. Additional margin support could come from plans to

shift its catering market segmentation from lower-margin remote

areas to urban areas.

On valuation, CASS, having substantially outperformed the market, is

currently fairly valued. At our fine-tuned TP of IDR1,250, CASS would

trade at nearly a 30% peer discount, which we believe would be

sufficient to take into account its small-cap status. Downside risk: a

weaker-than-expected IDR, as around 40% of earnings are in USD.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 1,319 1,520 1,680 1,905 2,146

EBIT (IDRbn) 326 345 418 496 571

Net profit (IDRbn) 110 110 124 142 160

Bahana/consensus (%) - - na na na

EPS (IDR) 53 53 59 68 76

EPS growth (%) 25.3 0.6 12.2 14.6 12.5

EV/EBITDA (x) 7.0 6.7 5.4 4.6 4.1

P/E (x) 22.8 22.7 20.2 17.7 15.7

FCFPS (IDR) 2 (2) 54 8 (3)

FCF yield (%) 0.2 (0.2) 4.5 0.7 (0.3)

BVPS (IDR) 145 177 222 273 330

P/BV (x) 8.3 6.8 5.4 4.4 3.6

DPS (IDR) 14 21 15 17 19



0

1,000

2,000

3,000

4,000

5,000

1,050

1,100

1,150

1,200

1,250

1,300

1,350

1,400


('000)(IDR)

Volume (RHS) CASS IJ Px Last

9.2

(0.1)(2.4)

11.6

16.8

12.2

(5)

0

5

10

15

20

(5)

0

5

10

15

20

ytd 1M 3M 6M 9M 12M

(%) (%)

CASS IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Ground handling rev. growth (%) 27 12 16 15 13

Maintenance rev. growth (%) 55 13 5 7 9

Catering rev. growth (%) 31 21 (9) 8 10 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 1,350/1,100


Majority shareholder (%) : SATS LTD (41.7)




Bloomberg/Reuters code : CASS IJ/CASS.JK Source: Bloomberg, Reuters based on 3 December 2015

2016 Compendium

183

CARDIG AERO SERVICES

Profit & loss


Sales 1,319 1,520 1,680 1,905 2,146

Gross profit - - - - -

EBITDA 365 390 464 548 630


EBIT 326 345 418 496 571


Forex gain/(losses) 24 (2) 33 18 -

Other income/(expense) (5) 34 (6) (6) 5

Pre-tax profit 343 375 435 496 561

Taxes 93 105 130 148 168




Balance sheet






Fixed assets 177 236 244 248 247

Other assets 365 407 428 543 639

Total assets 917 1,085 1,224 1,376 1,474







Cash flow


EBIT 326 345 418 496 571


Working capital (56) (54) (8) (56) (138)

Other operating items 9 (0) 42 (20) 25



Free cash flow 4 (5) 113 17 (7)

Equity raised/(bought) (48) (42) (31) (36) (40)

Net borrowings (20) 35 36 2 1

Other financing 9 43 (52) 11 3

Net cash flow (56) 31 66 (6) (43)



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 40.4 32.8 29.7 27.5 25.4

ROAA (%) 12.8 11.0 10.7 10.9 11.2

EBITDA margin (%) 27.7 25.7 27.6 28.8 29.4

EBIT margin (%) 24.7 22.7 24.9 26.0 26.6

Net margin (%) 8.3 7.3 7.4 7.4 7.4

Payout ratio (%) 27.3 39.5 25.2 25.2 25.2

Current ratio (x) 1.5 1.7 1.9 2.0 2.4


Net gearing (%) 21.1 27.1 3.6 5.9 11.3

Debts to assets (%) 20.2 23.3 19.1 17.8 16.7




2016 Compendium

184

CHAROEN POKPHAND INDONESIA HOLD*

2008A 2009A

2010F 2011F

PX: IDR3,280- TP: IDR3,500*

CPIN, Indonesia’s largest poultry-related company with a 36% market

share in poultry feed (75% of revenues), has culled 3m parent stocks

(PS) to help eliminate the nation’s DOC oversupply condition,

resulting in a DOC price in 4Q15 of IDR6,000/chick from a low 3Q15

level of IDR3,000.

On the balance sheet side, we are concerned over CPIN’s FX exposure

despite plans to lower its USD-denominated net debt to USD100m.

Another concern that we have would be 2016 margins as prices of

soybean meal and corn have bottomed out.

Our new 12-month TP of IDR3,500 is based on a 2016F PE of 20.4x, a

10% premium to the sector’s market-cap weighted PE. Given limited

upside potential to our TP and recent market outperformance, we

downgrade our rating on CPIN to HOLD from Buy. Downside risk: IDR

depreciation. Upside risk: Higher-than-expected DOC prices.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 25,663 29,150 32,909 38,526 44,678

EBIT (IDRbn) 3,904 2,628 3,416 4,268 5,341

Net profit (IDRbn) 2,531 1,747 1,885 2,810 3,746


EPS (IDR) 154 107 115 171 228

EPS growth (%) (5.7) (31.0) 7.9 49.1 33.3

EV/EBITDA (x) 13.2 19.4 15.4 12.4 10.1

P/E (x) 21.3 30.8 28.5 19.1 14.4

FCFPS (IDR) (34) (14) 60 7 64

FCF yield (%) (1.0) (0.4) 1.8 0.2 2.0

BVPS (IDR) 606 666 751 891 1,071

P/BV (x) 5.4 4.9 4.4 3.7 3.1

DPS (IDR) 46 43 30 32 48



0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

1,400

1,900

2,400

2,900

3,400

3,900

4,400


('000)(IDR)

Volume (RHS) CPIN IJ Px Last

(0.0)

22.1

65.9

18.9

3.2

(8.3) (20)

0

20

40

60

80

(20)

0

20

40

60

80

ytd 1M 3M 6M 9M 12M

(%) (%)

CPIN IJ relative to JCI Source: Bloomberg

Michael W. Setjoadi ([email protected]) +6221 2505081 ext. 3613 *New, please refer to appendix II

Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Indo’s chicken production (k tons) 1,874 2,035 2,150 2,300 2,500

Animal feed ASP (IDR/kg) 5,738 6,097 6,327 6,456 6,715 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 4,195/1,400


Majority shareholder (%) : Central Agromina (55.5)




Bloomberg/Reuters code : CPIN IJ/CPIN.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

185

CHAROEN POKPHAND INDONESIA

Profit & loss


Sales 25,663 29,150 32,909 38,526 44,678

Gross profit 5,150 4,134 5,216 6,336 7,739

EBITDA 4,203 3,064 3,869 4,739 5,883

Depreciation 299 437 453 470 543

EBIT 3,904 2,628 3,416 4,268 5,341




Pre-tax profit 3,451 2,107 2,514 3,747 4,994

Taxes (923) (360) (628) (937) (1,249)




Balance sheet





Inventories 4,045 4,333 4,797 5,640 6,472

Fixed assets 6,390 9,058 9,409 10,850 12,265

Other assets 1,638 3,427 3,375 3,246 3,467

Total assets 15,722 20,862 22,069 24,968 28,067


Trade payables 1,439 1,591 2,038 2,047 2,349





Cash flow


EBIT 3,904 2,628 3,416 4,268 5,341

Depreciation 299 437 453 470 543

Working capital (1,292) (1,054) 441 (1,068) (738)

Other operating items (1,373) (881) (1,531) (1,458) (1,595)



Free cash flow (558) (1,976) 979 113 1,051


Net borrowings 1,469 3,707 (697) 300 (500)

Other financing 1,437 1,644 1,643 1,749 1,906

Net cash flow 192 (211) 151 86 (18)



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 28.0 16.7 16.2 20.9 23.3

ROAA (%) 18.0 9.5 8.8 11.9 14.1

Gross margin (%) 20.1 14.2 15.8 16.4 17.3

EBITDA margin (%) 16.4 10.5 11.8 12.3 13.2

EBIT margin (%) 15.2 9.0 10.4 11.1 12.0

Net margin (%) 9.9 6.0 5.7 7.3 8.4

Payout ratio (%) 28.1 28.0 28.0 28.0 28.0

Current ratio (x) 3.8 2.2 2.6 2.6 3.0


Net gearing (%) 17.5 52.3 39.1 34.4 25.9




2016 Compendium

186

CIPUTRA DEVELOPMENT BUY

2008A 2009A

2010F 2011F

PX: IDR1,230 - TP: IDR1,400*

Despite being the most geographically and demographically diverse

developer in our coverage, with projects spanning from high-end

condos to low-end landed houses, CTRA, parent company of the

Ciputra Group, has also been hit by the property slowdown causing it

to lower its 2015 pre-sales target to IDR9.5tn, from IDR11tn.

Despite this, we expect CTRA’s backlog to support decent 12.6% y-y

revenue growth in 2016, although net profit should see slower at

8.2% y-y growth on lower-grossing projects coming into the revenue

mix, which is backed by its diversified portfolio.

On valuation, we maintain our 12-month TP of IDR1,400, based on a

60% discount to our 2016F NAV (sector: 65%). Our positive view on

CTRA is based on its favorable rank relative to other developers in our

coverage in terms of net gearing and interest coverage. Reaffirm BUY.

The risk to our call is a slower-than-expected project take-up.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenue (IDRbn) 5,077 6,344 7,232 8,141 9,403

EBIT (IDRbn) 1,553 2,204 2,119 2,301 2,523

Net profit (IDRbn) 977 1,325 1,285 1,390 1,523

Bahana/cons.(%) - - 97 93 93

EPS (IDR) 64 86 84 91 99

EPS growth (%) 65.8 34.2 (3.0) 8.2 9.6

EV/EBITDA (x) 10.5 8.3 8.7 8.1 7.6

P/E (x) 19.1 14.2 14.7 13.6 12.4

FCFPS (IDR) (55) (144) (73) (80) (111)

FCF yield (%) (4.5) (11.7) (5.9) (6.5) (9.1)

BVPS (IDR) 421 484 559 637 722

P/BV (x) 2.9 2.5 2.2 1.9 1.7

DPS (IDR) 19 8 13 15 16



0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

500

700

900

1,100

1,300

1,500

1,700


('000)(IDR)

Volume (RHS) CTRA IJ Px Last

12.7 4.1

49.3

(1.5)

7.2 4.0

(10)

0

10

20

30

40

50

60

(10)

0

10

20

30

40

50

60

ytd 1M 3M 6M 9M 12M

(%) (%)

CTRA IJ relative to JCI Source: Bloomberg



9M15




Discount (%) 60


Company information

12M high/low (IDR) : 1,543/772


Majority shareholder (%) : Sang Pelopor (30.3)




Bloomberg/Reuters code : CTRA IJ/CTRA.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

187

CIPUTRA DEVELOPMENT

Profit & loss


Sales 5,077 6,344 7,232 8,141 9,403

Gross profit 2,546 3,334 3,507 3,990 4,600

EBITDA 1,698 2,403 2,357 2,583 2,857

Depreciation 146 199 238 282 333

EBIT 1,553 2,204 2,119 2,301 2,523


Forex gain/(losses) 48 (37) 22 6 (6)


Pre-tax profit 1,709 2,147 2,142 2,335 2,585

Taxes (296) (353) (405) (456) (527)



Net profit 977 1,325 1,285 1,390 1,523 Source: Company, Bahana estimates

Balance sheet



S-T investments 11 1 5 6 6

Trade receivables 541 765 793 892 1,030

Inventories 4,879 6,429 7,715 9,258 11,572

Fixed assets 1,804 2,352 2,617 2,468 1,907

Other assets 9,415 10,849 12,439 14,401 16,708

Total assets 20,115 23,283 26,487 29,680 33,046


Trade payables 663 773 868 967 1,118





Cash flow


EBIT 1,553 2,204 2,119 2,301 2,523

Depreciation 146 199 238 282 333

Working capital 1,144 (2,158) (779) (1,081) (1,817)

Other operating items (1,447) (806) (1,066) (1,178) (1,308)

Operating cash flow 1,396 (561) 513 324 (268)


Free cash flow (838) (2,209) (1,112) (1,223) (1,707)


Net borrowings 1,257 804 468 205 (57)


Net cash flow 756 (576) 30 (263) (833)



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 16.3 19.2 16.1 15.2 14.6

ROAA (%) 5.6 6.1 5.2 5.0 4.9

Gross margin (%) 50.2 52.5 48.5 49.0 48.9

EBITDA margin (%) 33.5 37.9 32.6 31.7 30.4

EBIT margin (%) 30.6 34.7 29.3 28.3 26.8

Net margin (%) 19.2 20.9 17.8 17.1 16.2

Payout ratio (%) 29.5 9.3 16.0 16.0 16.0

Current ratio (x) 0.9 1.0 1.1 1.2 1.3


Net gearing (%) nc 15.3 18.3 20.9 25.4




2016 Compendium

188

CIPUTRA PROPERTY REDUCE*

2008A 2009A

2010F 2011F


Focusing on premium high-rise and mixed-use developments, CTRP,

owned by the Ciputra Group through CTRA, currently is facing

difficulties selling high-end office buildings due to oversupply

conditions. In 2015, CTRP has relied heavily on Ciputra World 1 and 2

office sales, causing lower-than-expected 9M15 marketing sales of

IDR1tn, just 50% of management’s initial full-year target of IDR2tn.

CTRP’s strategy to remain targeted on the premium-class segment

could continue to be a drag on earnings. In 2016, we expect an 18%

y-y top-line decline, following a 9M15 revenue increase of 67% y-y to

IDR1.8tn on a one-off Ascott Residence project.

CTRP’s high-end concentration and small landbank (92ha) are likely to

result in continued market underperformance. On valuation, we derive

our new TP of IDR365 using a 70% discount to 2016F NAV. Downgrade

to REDUCE. Risk: tax reform raising premium-class property demand.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 1,448 1,662 2,360 1,934 2,205

EBIT (IDRbn) 516 667 643 519 592

Net profit (IDRbn) 422 394 412 301 353

Bahana/cons.(%) - - 149 64 76

EPS (IDR) 69 64 66 48 56

EPS growth (%) 40.5 (6.6) 2.8 (27.0) 17.4

EV/EBITDA (x) 6.2 5.9 7.6 9.9 9.2

P/E (x) 5.9 6.4 6.2 8.5 7.2

FCFPS (IDR) (208) (143) (196) (89) (39)

FCF yield (%) (51.1) (35.1) (48.2) (21.8) (9.7)

BVPS (IDR) 659 702 747 775 817

P/BV (x) 0.6 0.6 0.5 0.5 0.5

DPS (IDR) 21 10 20 14 17



0

10,000

20,000

30,000

40,000

50,000

200

300

400

500

600

700

800

900


('000)(IDR)

Volume (RHS) CTRP IJ Px Last

(37.8)

(14.0)

9.3

(24.7) (24.0)

(39.4)(50)

(40)

(30)

(20)

(10)

0

10

20

(50)

(40)

(30)

(20)

(10)

0

10

20

ytd 1M 3M 6M 9M 12M

(%) (%)

CTRP IJ relative to JCI Source: Bloomberg



9M15

Land bank (Ha) 92



Discount (%) 70


Company information

12M high/low (IDR) : 865/331


Majority shareholder (%) : Ciputra Development (55%)




Bloomberg/Reuters code : CTRP IJ/CTRP.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

189

CIPUTRA PROPERTY

Profit & loss


Sales 1,448 1,662 2,360 1,934 2,205

Gross profit 771 957 1,038 907 1,074

EBITDA 581 766 770 650 730


EBIT 516 667 643 519 592




Pre-tax profit 534 508 418 305 358

Taxes (92) (109) (1) (1) (1)




Balance sheet





Inventories 440 1,067 1,601 1,358 1,217

Fixed assets 4,050 4,908 6,031 7,147 7,958

Other assets 2,090 2,030 2,223 2,435 2,667

Total assets 7,654 8,861 10,647 11,716 12,594


Trade payables 121 203 160 123 135

Other liabilities 900 1,160 1,348 1,569 1,881




Cash flow


EBIT 516 667 643 519 592


Working capital 17 (499) (370) 421 387

Other operating items 65 (398) (248) (237) (260)

Operating cash flow 664 (130) 152 835 857

Net capital expenditure (1,942) (748) (1,378) (1,390) (1,103)

Free cash flow (1,279) (878) (1,226) (555) (246)


Net borrowings 1,129 550 1,234 645 223

Other financing 148 (81) (9) (66) (27)

Net cash flow (1) (409) (2) 24 (50)



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 10.8 9.4 9.2 6.3 7.1

ROAA (%) 6.2 4.8 4.2 2.7 2.9

Gross margin (%) 53.2 57.5 44.0 46.9 48.7

EBITDA margin (%) 40.1 46.1 32.6 33.6 33.1

EBIT margin (%) 35.7 40.1 27.3 26.8 26.9

Net margin (%) 29.1 23.7 17.5 15.6 16.0

Payout ratio (%) 30.6 15.6 30.0 30.0 30.0

Current ratio (x) 1.4 1.4 2.0 1.6 1.3


Net gearing (%) 26.7 47.3 70.2 80.4 81.7




2016 Compendium

190

DHARMA SATYA NUSANTARA BUY

2008A 2009A

2010F 2011F


DSNG, having the highest production yield under our coverage with a

total planted area of 87k ha (78% mature area) and an average age

of only 6.9 years, should experience improved performance on a more

positive CPO-price outlook in 2016 despite lower FFB nucleus output.

In 2016, despite lower FFB production of 1.3m tons (-4% y-y), we

expect revenue to rebound to IDR5.1tn (+16% y-y), on stronger

USD/CPO prices. Looking ahead, we also expect increased operating

efficiencies from some additional mills in East Kalimantan (120ton/ha,

30% of total capacity), which are due to start operations in 2016.

Following share dilution from its IPO in 2014, DSNG looks set to book

strong earnings growth in 2016-17F, driven by a growing plantation

with young average age. We reaffirm our BUY call with a new 12-

month TP of IDR740, based on a 2016F PE of 19.1x, a 25% discount

to its Malaysian peers. Risk: Lower-than-expected CPO prices.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 3,842 4,898 4,409 5,121 5,998

EBIT (IDRbn) 695 1,135 503 785 1,155

Net profit (IDRbn) 203 650 197 409 687


EPS (IDR) 96 61 19 39 65

EPS growth (%) (91.7) (36.1) (69.6) 107.0 68.1

EV/EBITDA (x) 9.8 6.7 14.6 10.7 7.6

P/E (x) 6.4 10.0 32.8 15.8 9.4

FCFPS (IDR) (422) 8 (56) (20) 1

FCF yield (%) (69.2) 1.2 (9.1) (3.3) 0.2

BVPS (IDR) 1,541 213 225 259 314

P/BV (x) 0.4 2.9 2.7 2.4 1.9

DPS (IDR) 4 15 5 10 16



0

10,000

20,000

30,000

40,000

400

550

700

850

1,000


('000)(IDR)

Volume (RHS) DSNG IJ Px Last

(7.6)

(1.7)

18.2

(14.0) (14.3)

(9.8)

(20)

(10)

0

10

20

(20)

(10)

0

10

20

ytd 1M 3M 6M 9M 12M

(%) (%)

DSNG IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F



Growth (%) 30.6 16.4 3.8 6.6 22.9

ASP CPO (USD/ton) 652 672 560 600 620 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 960/431


Majority shareholder (%) : Triputra Investindo Arya (25.1)




Bloomberg/Reuters code : DSNG IJ/DSNG.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

191

DHARMA SATYA NUSANTARA

Profit & loss


Sales 3,842 4,898 4,409 5,121 5,998

Gross profit 1,190 1,709 1,076 1,421 1,884

EBITDA 910 1,329 654 912 1,296

Depreciation 215 193 150 127 142

EBIT 695 1,135 503 785 1,155



Other income/(expense) 15 (55) 94 59 14

Pre-tax profit 306 873 279 558 931

Taxes (91) (223) (72) (140) (233)




Balance sheet


Cash and equivalents 487 1,124 1,061 1,096 1,208



Inventories 677 713 822 912 1,014

Fixed assets 3,467 3,964 4,598 5,106 5,597

Other assets 957 1,047 1,061 1,059 1,157

Total assets 5,921 7,174 7,964 8,664 9,551


Trade payables 494 421 482 535 595





Cash flow


EBIT 695 1,135 503 785 1,155

Depreciation 215 193 150 127 142

Working capital (207) (61) (149) (86) (150)




Free cash flow (449) 80 (591) (212) 14


Net borrowings 228 571 600 300 200

Other financing (298) (15) (72) (53) (102)

Net cash flow (51) 637 (63) 35 111

Cash balances, beginning 538 487 1,124 1,061 1,096

Ending cash 487 1,124 1,061 1,096 1,208 Source: Company, Bahana estimates

Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 12.4 28.8 8.3 14.9 20.6

ROAA (%) 3.4 9.1 2.5 4.7 7.2

Gross margin (%) 31.0 34.9 24.4 27.8 31.4

EBITDA margin (%) 23.7 27.1 14.8 17.8 21.6

EBIT margin (%) 18.1 23.2 11.4 15.3 19.2

Net margin (%) 5.3 13.3 4.5 8.0 11.4

Payout ratio (%) 38.8 20.9 25.0 25.0 25.0

Current ratio (x) 1.4 1.5 1.4 1.5 1.5


Net gearing (%) 151.0 106.9 128.7 121.5 102.8




2016 Compendium

192

ELECTRONIC CITY REDUCE 2008A 2009A

2010F 2011F


ECII, Indonesia’s largest electronic retailer by market share (c.

44.6%) and 69 stores across 24 cities, is seeing declining sales on low

customer loyalty and weak purchasing power adversely affecting

discretionary spending for big-ticket items like electronics.

In 2016, we expect a slow revival for ECII’s products on a soft consumer

appetite and management’s cautious expansion plans. At this stage,

ECII plans to focus on productivity, store refurbishments, product mix

enhancement, e-commerce utilization and operating efficiencies through

SAP migration and an integrated distribution channel to reverse its

negative EBIT margin.

On valuation, however, ECII is still expensive, in our view. Hence,

we maintain our REDUCE rating with IDR700 TP, reflecting a 17.5x

2016F PE, a 15% discount to the sector, given its small-cap status

and illiquidity. Risks: Better industry outlook and cost efficiencies.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 2,013 2,227 1,776 1,917 2,121

EBIT (IDRbn) 184 99 (17) 31 67



EPS (IDR) 155 97 12 40 61

EPS growth (%) 24.0 (37.4) (88.0) 245.5 52.6

EV/EBITDA (x) 1.8 4.7 na 15.5 7.9

P/E (x) 5.2 8.2 68.9 19.9 13.1

FCFPS (IDR) (63) (29) 20 (1) 5.3

FCF yield (%) (7.9) (3.6) 2.5 (0.1) 0.7

BVPS (IDR) 1,263 1,332 1,334 1,373 1,430

P/BV (x) 0.6 0.6 0.6 0.6 0.6

DPS (IDR) 28 10 1 4 6

Div. yield (%) 0.0 1.2 0.1 0.5 0.8 Source: Company, Bahana estimates note: based on 3 December closing price


0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

500

750

1,000

1,250

1,500

1,750


('000)(IDR)

Volume (RHS) ECII IJ Px Last

(13.4)

(21.7)

(15.4)

(19.5)

(29.1)

(21.2)

(35)

(30)

(25)

(20)

(15)

(10)

(5)

0

(35)

(30)

(25)

(20)

(15)

(10)

(5)

0

ytd 1M 3M 6M 9M 12M

(%) (%)

ECII IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Total store opening (unit) 33 11 2 4 5

Selling area (sqm) 56,648 69,539 71,939 75,339 79,939

Sales (mn)/avg. sqm 45.3 34.3 24.5 25.5 27.0 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 1,665/685


Majority shareholder (%) : Graha Surya Kirana (25.6)




Bloomberg/Reuters code : ECII IJ/ECII.JK Source: Bloomberg, Reuters based on 3 December closing price

2016 Compendium

193

ELECTRONIC CITY

Profit & loss


Sales 2,013 2,227 1,776 1,917 2,121

Gross profit 406 429 325 355 397

EBITDA 204 141 (7) 41 80


EBIT 184 99 (17) 31 67

Net interest inc./(expense) 11 20 16 18 17



Pre-tax profit 239 156 24 82 126

Taxes (32) (27) (8) (29) (44)




Balance sheet



S-T investments 215 277 277 277 277


Inventories 445 489 374 415 431

Fixed assets 448 542 591 632 693

Other assets 164 234 201 214 235

Total assets 2,023 2,004 1,970 2,031 2,123


Trade payables 227 130 116 125 138





Cash flow


EBIT 184 99 (17) 31 67


Working capital (191) (137) 102 (33) (3)

Other operating items (263) (126) 72 9 (4)

Operating cash flow (249) (122) 168 17 73


Free cash flow (600) (259) 109 (34) (1)

Equity raised/(bought) 1,253 (0) - - -

Net borrowings (12) (9) 6 0 (4)

Other financing 15 (31) (45) (3) (2)

Net cash flow 656 (299) 70 (36) (7)



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 21.6 7.5 0.9 3.0 4.4

ROAA (%) 16.6 6.4 0.8 2.7 3.9

Gross margin (%) 20.2 19.2 18.3 18.5 18.7

EBITDA margin (%) 10.2 6.3 (0.4) 2.1 3.8

EBIT margin (%) 9.1 4.4 (1.0) 1.6 3.1

Net margin (%) 10.3 5.8 0.9 2.8 3.9

Payout ratio (%) 18.0 10.0 10.0 10.0 10.0

Current ratio (x) 5.6 8.6 9.9 9.3 8.6

Interest coverage (x) 21.6 21.5 na 22.8 45.8





2016 Compendium

194

ERAJAYA SWASEMBADA BUY

2008A 2009A

2010F 2011F


0 ERAA, the country’s largest mobile-phone distributor having 519 retail

outlets, with licenses to distribute well-known brands including

Samsung and Nokia, should continue to dominate in the current

consolidating handset distribution business.

We expect margin improvement for ERAA on business expansion and

working capital efficiencies. ERAA plans to continue to increase its

retail presence (519 owned retail outlets), targetting a 45% retail

revenue proportion (37% currently). ERAA is also continuing its

Malaysia retail expansion and e-commerce penetration.

On continued higher smartphone penetration, we expect ERAA’s net

profit to continue to recover. We reiterate our BUY call with a new

DCF-based 12-month TP of IDR850, reflecting a 2016F PE of 9.8x, in

line with the sector. Risks to our call are slower purchasing power and

weak operating margins on high working capital requirements.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 12,727 14,451 18,569 19,777 21,403

EBIT (IDRbn) 490 409 375 412 466

Net profit (IDRbn) 349 212 210 252 299


EPS (IDR) 120 73 72 87 103

EPS growth (%) (19.5) (39.3) (0.6) 19.8 18.7

EV/EBITDA (x) 5.2 6.4 6.3 5.7 4.8

P/E (x) 4.6 7.6 7.7 6.4 5.4

FCFPS (IDR) (193) (125) 146 29 60

FCF yield (%) (34.8) (22.5) 26.2 5.1 10.7

BVPS (IDR) 947 1,021 1,064 1,122 1,190

P/BV (x) 0.6 0.5 0.5 0.5 0.5

DPS (IDR) - 29 29 35 41

Div. yield (%) - 5.3 5.2 6.3 7.4 Source: Company, Bahana estimates note: based on 3 December 2015 closing price


(35.9)

(12.0)

19.6

(21.9)

(39.1)(43.8) (50)

(40)

(30)

(20)

(10)

0

10

20

30

(50)

(40)

(30)

(20)

(10)

0

10

20

30

ytd 1M 3M 6M 9M 12M

(%) (%)

ERAA IJ relative to JCI Source: Bloomberg

Leonardo Henry Gavaza, CFA ([email protected]) +6221 2505081 ext. 3608 *New, please refer to appendix II

Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ASP (IDR’000) 1,168 1,250 1,287 1,339 1,392

Sales volume (mn units) 10,308 10,528 12,528 12,904 13,420 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 1,260/396


Majority shareholder (%) : PT Eralink International (60.0)




Bloomberg/Reuters code : ERAA IJ/ERAA.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

350

550

750

950

1,150

1,350


('000)(IDR)

Volume (RHS) ERAA IJ Px Last

2016 Compendium

195

ERAJAYA SWASEMBADA

Profit & loss


Sales 12,727 14,451 18,569 19,777 21,403

Gross profit 1,169 1,289 1,448 1,582 1,734

EBITDA 522 449 422 464 524


EBIT 490 409 375 412 466




Pre-tax profit 457 296 284 339 402

Taxes (108) (82) (71) (85) (101)




Balance sheet




Trade receivables 901 1,255 1,613 1,681 1,782

Inventories 1,842 2,000 1,883 1,956 2,065

Fixed assets 216 402 456 509 560

Other assets 1,963 2,293 2,424 2,533 2,581

Total assets 5,002 6,120 6,446 6,763 7,087


Trade payables 826 1,183 1,802 1,915 2,070





Cash flow


EBIT 490 409 375 412 466


Working capital (48) (147) 381 (26) (52)




Free cash flow (560) (362) 422 83 173


Net borrowings 543 390 (463) - (75)

Other financing (162) 76 (60) (68) (83)

Net cash flow (171) 89 (101) 15 15



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 13.1 7.4 7.0 7.9 8.9

ROAA (%) 7.8 3.8 3.3 3.8 4.3

Gross margin (%) 9.2 8.9 7.8 8.0 8.1

EBITDA margin (%) 4.1 3.1 2.3 2.3 2.4

EBIT margin (%) 3.9 2.8 2.0 2.1 2.2

Net margin (%) 2.7 1.5 1.1 1.3 1.4

Payout ratio (%) - 40.0 40.0 40.0 40.0

Current ratio (x) 1.7 1.5 1.4 1.4 1.4


Net gearing (%) 39.8 41.9 33.4 31.2 26.8




2016 Compendium

196

EXPRESS TRANSINDO UTAMA REDUCE

2008A 2009A

2010F 2011F


TAXI, the second-largest land transportation company with around a

15% market share in Indonesia, is suffering as a result of its

aggressive expansion in the past few years. Currently, the company is

confronting severe earnings pressure due to two factors: (1) a lack of

drivers and (2) large interest payments on its IDR1tn bond.

Over 2015-17F, we expect debt levels to remain high for TAXI,

leaving net earnings of just IDR6-22bn, translating into depressed net

margins of around 1-2%. On the top line, we expect soft growth as

utilization rates remain weak due to massive driver resignations,

leaving TAXI to deal with high accounts receivable.

Due to its expensive valuation, we expect TAXI to continue its market

underperformance. Our 12M TP of IDR120 is based on a 2016F PE of

13x, a 30% discount to the region. The risk remains with possible

third-party acquisition given TAXI’s cheap 2016F P/BV of 0.3x.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 687 890 953 1,009 1,074

EBIT (IDRbn) 221 283 200 238 255



EPS (IDR) 62 55 3 9 10

EPS growth (%) 65.1 (10.8) (95.0) 228.6 14.9

EV/EBITDA (x) 2.2 3.5 4.3 4.0 3.9

P/E (x) 2.2 2.5 49.9 15.2 13.2

FCFPS (IDR) 37 (444) (97) (102) (147)

FCF yield (%) 27.1 (326.7) (71.0) (74.8) (108.3)

BVPS (IDR) 372 416 409 417 426

P/BV (x) 0.4 0.3 0.3 0.3 0.3

DPS (IDR) 10.0 10.0 0.5 1.6 1.9



0

50,000

100,000

150,000

200,000

250,000

0

300

600

900

1,200

1,500


('000)(IDR)

Volume (RHS) TAXI IJ Px Last

(75.2)

(39.1)

(84.9)(75.0)

(67.0)(75.3)

(90)

(80)

(70)

(60)

(50)

(40)

(30)

(20)

(10)

0

(90)

(60)

(30)

0

ytd 1M 3M 6M 9M 12M

(%) (%)

TAXI IJ relative to JCI Source: Bloomberg *based on 12 November 2015 closing price before suspension


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Fleet (Unit) 10,255 11,452 11,452 11,382 11,882

Net daily fixed fee (IDR) 190 218 240 252 276

Utilization rate (%) 92.6 88.3 80.0 82.0 84.0 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 1,280/136


Majority shareholder (%) : Rajawali Group (51)




Bloomberg/Reuters code : TAXI IJ/TAXI.JK


2016 Compendium

197

EXPRESS TRANSINDO UTAMA

Profit & loss


Sales 687 890 953 1,009 1,074

Gross profit 310 398 302 329 354

EBITDA 409 521 474 558 633

Depreciation 188 239 274 320 378

EBIT 221 283 200 238 255




Pre-tax profit 174 153 8 25 29

Taxes (41) (34) (2) (6) (7)




Balance sheet






Fixed assets 1,393 2,124 2,291 2,515 2,802

Other assets 271 376 333 359 392

Total assets 2,137 3,011 2,988 3,230 3,572

Interest bearing liabilities 911 1,747 1,760 1,945 2,222






Cash flow


EBIT 221 283 200 238 255

Depreciation 188 239 274 320 378

Working capital 247 (273) (101) (13) (50)




Free cash flow 79 (953) (207) (218) (316)

Equity raised/(bought) 5 (1) 0 0 0

Net borrowings 61 836 13 185 277


Net cash flow 166 (100) (186) 2 2



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 17.9 14.0 0.7 2.2 2.4

ROAA (%) 6.8 4.6 0.2 0.6 0.6

Gross margin (%) 45.1 44.7 31.7 32.6 32.9

EBITDA margin (%) 59.5 58.6 49.7 55.3 59.0

EBIT margin (%) 32.2 31.8 21.0 23.5 23.8

Net margin (%) 19.3 13.3 0.6 1.9 2.1

Payout ratio (%) 16.2 18.2 18.0 18.0 18.0

Current ratio (x) 1.0 1.3 1.1 1.0 0.9


Net gearing (%) 74.7 171.7 197.5 214.0 239.7




2016 Compendium

198

GAJAH TUNGGAL BUY

2008A 2009A

2010F 2011F


The operating performance of GJTL, Indonesia’s leading tire maker

with lower-segment brand GT Radial, should have bottomed and we

expect margin protection from its efforts to expand into the higher-

margin retail business (2016F: 135 outlets, +10% y-y). We look for

minimal pressure from a strong USD and high commodity prices.

On the demand side, we expect GJTL’s 2016F revenue to grow 9% y-y

on stronger demand from overseas markets (42% of revenues) like

the US. Closer to home, economic recovery and a stronger retail

presence would also benefit its local performance. Thus, we expect

GJTL to book a 2016 earnings reversal, from a net loss, to a net profit

of IDR62bn, before strongly rising to IDR436bn, up 7x y-y, in 2017.

On valuation, we view as attractive GJTL’s 2016F P/B of 0.4x, a 65%

discount to its regional peers. We reaffirm our BUY call and DCF-based

12-month TP of IDR860. Risk: a weaker-than-expected IDR.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 12,353 13,071 12,833 13,932 15,091

EBIT (IDRbn) 1,365 1,154 950 1,031 1,117

Net profit (IDRbn) 120 270 (422) 62 436

Bahana/consensus (%) - - (84) 7 51

EPS (IDR) 35 77 (121) 18 125

EPS growth (%) (89.4) 124.2 na na 603.6

EV/EBITDA (x) 4.4 4.8 5.1 4.7 5.3

P/E (x) 15.3 6.8 na 29.8 4.2

FCFPS (IDR) 242.1 (224.5) 153.2 100.2 204.9

FCF yield (%) 45.7 (42.4) 28.9 18.9 38.7

BVPS (IDR) 1,643 1,717 1,410 1,433 1,560

P/BV (x) 0.3 0.3 0.4 0.4 0.3

DPS (IDR) 10 19 - 4 31

Div. yield (%) 1.9 3.7 - 0.8 5.9 Source: Company, Bahana estimates note: based on 3 December 2015 closing price


0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

400

600

800

1,000

1,200

1,400

1,600


('000)(IDR)

Volume (RHS) GJTL IJ Px Last

(49.6)

(13.9)

10.4

(38.0)(43.7)

(47.5)(60)

(50)

(40)

(30)

(20)

(10)

0

10

20

(60)

(50)

(40)

(30)

(20)

(10)

0

10

20

ytd 1M 3M 6M 9M 12M

(%) (%)

GJTL IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Domestic 4W Volume (mn) 6.4 6.3 5.4 5.5 6.0

Growth (%) 17.9 (1.6) (15.0) 2.6 10.0

Domestic 2W Volume (mn) 8.4 10.0 10.8 11.9 13.0

Growth (%) (14.3) 19.0 8.4 9.3 9.4

Export volumes (mn) 23.8 24.1 23.0 23.7 24.4

Growth (%) 11.7 1.3 (4.6) 3.0 3.0 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 1,530/445


Majority shareholder (%) : Denham (49.5)




Bloomberg/Reuters code : GJTL IJ/GJTL.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

199

GAJAH TUNGGAL

Profit & loss


Sales 12,353 13,071 12,833 13,932 15,091

Gross profit 2,488 2,445 2,438 2,647 2,867

EBITDA 1,862 1,722 1,614 1,782 1,936

Depreciation 497 569 664 750 819

EBIT 1,365 1,154 950 1,031 1,117



Other income/(expense) 211 (9) 1 (2) (4)

Pre-tax profit 166 394 (563) 83 582

Taxes (46) (124) 141 (21) (145)




Balance sheet


Cash and equivalents 1,999 957 863 817 603



Inventories 1,820 2,247 2,065 2,242 2,428

Fixed assets 6,416 7,611 8,663 9,266 9,445

Other assets 2,801 3,066 3,027 3,062 3,218

Total assets 15,351 16,043 17,031 17,998 18,516


Trade payables 1,324 1,205 1,310 1,422 1,541





Cash flow


EBIT 1,365 1,154 950 1,031 1,117

Depreciation 497 569 664 750 819

Working capital (174) (608) 495 (58) (79)

Other operating items 216 (9) 244 78 (54)


Net capital expenditure (1,465) (1,671) (1,580) (1,318) (996)

Free cash flow 439 (566) 772 484 807


Net borrowings 1,990 410 1,400 500 (400)

Other financing (1,335) (886) (2,266) (1,030) (620)

Net cash flow 1,094 (1,041) (94) (46) (214)

Cash balances, beginning 905 1,999 957 863 817

Ending cash 1,999 957 863 817 603 Source: Company, Bahana estimates

Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 2.1 4.6 (7.7) 1.3 8.4

ROAA (%) 0.9 1.7 (2.6) 0.4 2.4

Gross margin (%) 20.1 18.7 19.0 19.0 19.0

EBITDA margin (%) 15.1 13.2 12.6 12.8 12.8

EBIT margin (%) 11.1 8.8 7.4 7.4 7.4

Net margin (%) 1.0 2.1 (3.3) 0.4 2.9

Payout ratio (%) 29.0 25.0 - 25.0 25.0

Current ratio (x) 2.3 2.0 1.9 1.7 1.8


Net gearing (%) 69.2 86.3 130.5 129.3 122.7




2016 Compendium

200

GARUDA INDONESIA BUY

2008A 2009A

2010F 2011F


With 190 aircraft, GIAA’s seat-load factor increased to 77.3% in 9M15

vis-à-vis 70.7% a year earlier, as it surpassed Lion Air’s 41% market

share with market share gains for both Garuda (9M15: 29%, 2014:

26%) and its low-cost carrier Citilink (9M15: 15%, 2014: 11%),

making it Indonesia’s largest domestic carrier.

On a more negative note, the volatilility in jet-fuel prices and foreign-

exchange rates has caused severe earnings fluctuations for GIAA. IDR

depreciation disadvantaged GIAA due to mismatches in costs and

revenues, while Pertamina’s premium jet-fuel pricing resulted in less

competitive operating costs relative to other foreign carriers.

However, GIAA’s recent lower valuation reinforces our BUY rating and

TP of IDR400, based on 2016E EV/EBITDAR of 5.9x, at par with the

regional average on Indonesia’s improving GDP growth. Risk: Slower

GDP growth since most GIAA passengers are business travellers.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Operating revenues (USDmn) 3,759 3,934 4,098 4,622 5,292

EBITDAR (USDmn) 781 584 1,189 1,380 1,556

EBIT (USDmn) 13 (361) 75 105 124

Net profit (USDmn) 11 (373) 69 113 143

EPS (IDR) 7 (202) 37 61 77

EPS growth (%) na na na 63.8 26.7

Adjusted EV/EBITDAR (x) 6.0 10.2 6.1 5.8 5.7

P/E (x) 45.0 na 8.1 4.9 3.9

FCFPS (IDR) (11) (16) (11) (8) (12)

FCF yield (%) (3.7) (5.4) (3.5) (2.6) (3.8)

BVPS (IDR) 686 489 488 609 763

P/BV (x) 0.4 0.6 0.6 0.5 0.4

DPS (IDR) - - - - -

Div yield (%) - - - - - Source: Company, Bahana estimates note: based on 3 December 2015 closing price


0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

290

340

390

440

490

540

590

640


('000)(IDR)

Volume (RHS) GIAA IJ Px Last

(32.2)

(4.8)(7.4)

(24.5)(26.6)

(33.3)(35)

(30)

(25)

(20)

(15)

(10)

(5)

0

(35)

(30)

(25)

(20)

(15)

(10)

(5)

0

ytd 1M 3M 6M 9M 12M

(%) (%)

GIAA IJ relative to JCI Source: Bloomberg


*New, please refer to appendix II

Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ASK (mn) 43,133 50,155 63,178 69,529 76,158

RPK (mn) 31,950 35,997 46,555 52,446 59,582

Total aircraft (Unit) 140 169 190 204 218 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 635/297






Bloomberg/Reuters code : GIAA IJ/GIAA.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

201

GARUDA INDONESIA

Profit & loss


Sales 3,759 3,934 4,098 4,622 5,292

EBITDA 168 (182) 258 340 407

EBITDAR (excl. Wet lease) 781 584 1,189 1,380 1,556

Depreciation 769 945 1,114 1,275 1,432

EBIT 13 (361) 75 105 124




Pre-tax profit 14 (461) 92 151 191

Taxes (0) 89 (23) (38) (48)

Minority interest (3) (1) - - -


Net profit 11 (373) 69 113 143 Source: Company, Bahana estimates

Balance sheet






Fixed assets 895 135 1,027 1,125 1,207

Other assets 1,380 2,326 1,667 1,921 2,342

Total assets 2,993 3,101 3,305 3,627 4,281


Trade payables 207 216 198 222 254




Shareholders' equity 1,109 904 909 1,135 1,421 Source: Company, Bahana estimates

Cash flow


EBIT 13 (361) 75 105 124

Depreciation 74 130 112 129 156

Working capital 8 54 (29) (11) (40)




Free cash flow (250) (415) (277) (203) (301)

Equity raised/(bought) (12) 43 (64) 113 143

Net borrowings 409 205 295 32 272


Net cash flow 146 (46) (46) (57) 115



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2016F

ROAE (%) 1.0 (37.1) 7.6 11.1 11.2

ROAA (%) 0.4 (12.2) 2.2 3.3 3.6

EBITDA margin (%) 4.5 (4.6) 6.3 7.4 7.7

EBIT margin (%) 0.3 (9.2) 1.8 2.3 2.3

Net margin (%) 0.3 (9.5) 1.7 2.4 2.7

Payout ratio (%) - - - - -

Current ratio (x) 0.8 0.7 0.7 0.8 0.9

Interest coverage (x) 0.3 na 0.9 1.2 1.3

Net gearing (%) 47.6 88.0 125.2 108.0 97.2

Debts to assets (%) 33.7 39.6 46.1 42.9 42.7




2016 Compendium

202

GUDANG GARAM BUY

2008A 2009A

2010F 2011F

PX: IDR51,575 - TP: IDR65,000

Due to lower farmer incomes in general, GGRM, Indonesia’s second-

largest cigarette player, experienced a 3.5% y-y volume decline to

58.1bn sticks in 9M15, but has retained a relatively stable market

share of around 23% since 2010.

Looking ahead, with gradually improving GDP growth, we expect

GGRM’s EBIT margin to remain relatively stable in 2016, as the

company should be able to pass on the government’s 15% excise tax

hike, equivalent to around a 7-8% price hike, to customers in order to

maintain its gross margin.

Our 12-month TP of IDR65,000, based on a 2016F PE of 21x (5-year

mean), should be supported by the improving purchasing power of

smokers, sustainable margins and lower capex to improve free cash

flow. Risks include weaker-than-expected purchasing power and the

government’s negative health campaign causing lower stick sales.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 55,437 65,186 69,029 73,916 81,379

EBIT (IDRbn) 6,650 8,525 8,963 9,718 10,751

Net profit (IDRbn) 4,329 5,369 5,445 5,950 6,674


EPS (IDR) 2,250 2,790 2,830 3,092 3,469

EPS growth (%) 7.8 24.0 1.4 9.3 12.2

EV/EBITDA (x) 14.3 11.6 10.6 9.8 9.0

P/E (x) 22.9 18.5 18.2 16.7 14.9

FCFPS (IDR) (2,076) (2,273) 43 175 (7)

FCF yield (%) (4.0) (4.4) 0.1 0.3 (0.0)

BVPS (IDR) 15,216 17,206 19,187 20,965 22,960

P/BV (x) 3.4 3.0 2.7 2.5 2.2

DPS (IDR) 800 800 849 1,314 1,474



0

1,000

2,000

3,000

4,000

5,000

40,000

45,000

50,000

55,000

60,000

65,000


('000)(IDR)

Volume (RHS) GGRM IJ Px Last

(2.0)

8.6

18.3

25.5

11.8

(2.9) (5)

0

5

10

15

20

25

30

(5)

0

5

10

15

20

25

30

ytd 1M 3M 6M 9M 12M

(%) (%)

GGRM IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Sales growth (%) 13.1 17.6 5.9 7.1 10.1

Gross profit margin (%) 19.6 20.5 21.0 21.2 21.4

EBIT margin (%) 12.0 13.1 13.0 13.1 13.2 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 64,000/39,500


Majority shareholder (%) : Suryaduta Investama (69.3)




Bloomberg/Reuters code : GGRM IJ/GGRM.JK Source: Bloomberg, Reuters; based on 23 November 2015 closing price

2016 Compendium

203

GUDANG GARAM

Profit & loss


Sales 55,437 65,186 69,029 73,916 81,379

Gross profit 10,874 13,380 14,485 15,669 17,424

EBITDA 7,758 10,018 10,904 11,854 13,100

Depreciation 1,108 1,493 1,941 2,135 2,349

EBIT 6,650 8,525 8,963 9,718 10,751

Net interest inc./(expense) (693) (1,304) (1,637) (1,704) (1,759)

Forex gain/(losses) (13) 17 6 3 8


Pre-tax profit 5,936 7,206 7,294 7,976 8,954

Taxes (1,552) (1,811) (1,823) (2,002) (2,256)




Balance sheet





Inventories 30,241 34,739 38,910 42,836 48,994

Fixed assets 14,789 18,973 20,633 21,627 21,778

Other assets 2,140 1,388 1,457 1,636 1,846

Total assets 50,770 58,221 64,885 71,159 77,712


Trade payables 798 989 795 611 435





Cash flow


EBIT 6,650 8,525 8,963 9,718 10,751

Depreciation 1,108 1,493 1,941 2,135 2,349

Working capital (4,064) (5,669) (4,366) (5,315) (6,608)

Other operating items (2,259) (3,098) (3,454) (3,702) (4,005)



Free cash flow (3,994) (4,373) 84 337 (14)


Net borrowings 4,814 5,169 907 476 586

Other financing (702) (642) (198) (842) (814)

Net cash flow 118 154 793 (29) (242)



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 15.5 17.2 15.6 15.4 15.8

ROAA (%) 9.4 9.9 8.8 8.7 9.0

Gross margin (%) 19.6 20.5 21.0 21.2 21.4

EBITDA margin (%) 14.0 15.4 15.8 16.0 16.1

EBIT margin (%) 12.0 13.1 13.0 13.1 13.2

Net margin (%) 7.8 8.2 7.9 8.0 8.2

Payout ratio (%) 35.6 28.7 30.0 42.5 42.5

Current ratio (x) 1.7 1.6 1.6 1.7 1.7


Net gearing (%) 39.5 50.0 45.2 42.7 40.8




2016 Compendium

204

HARUM ENERGY REDUCE

2008A 2009A

2010F 2011F

PX: IDR710 – TP: IDR500*

HRUM, with combined coal reserves of around 86m tons, the lowest in

our coverage, has been adversely affected by the global economic

slowdown as 99% of its coal revenues are exported to South Korea

(49%), Malaysia (18%), Taiwan (17%), China (8%) and others (8%).

As a result, its 9M15 earnings plunged 95% y-y, and it is attempting to

reverse this poor performance by reducing its coal production and

implementing cost efficiencies (2015E stripping ratio: 8x).

Cost efficiencies through the operation of a single mine is HRUM’s

strategy going into 2016 on weak coal prices. We expect HRUM to book

5.5m tons in sales, flat y-y, helped by third-party coal purchases.

With the market’s preference for low coal calorific value, HRUM is likely

to face another tough year in 2016. We lower our DCF-based TP to

IDR500 (16% WACC), which reflects 30% potential downside. REDUCE.

Risks to our call are higher coal prices and lower stripping ratios.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (USDmn) 837 478 265 251 251

EBIT (USDmn) 66 21 3 2 (3)

Net profit (USDmn) 40 0 0 (2) (7)

Bahana/consensus (%) - - 8 na na

EPS (IDR) 15 2 1 (9) (35)

EPS growth (%) na (85.6) (51.4) na na

EV/EBITDA (x) na na na na na

P/E (x) 48.2 333.8 687.5 na na

FCFPS (IDR) 46 352 45 62 10

FCF yield (%) 6.5 49.6 6.4 8.7 1.5

BVPS (IDR) 1,500 1,385 1,384 1,375 1,348

P/BV (x) 0.5 0.5 0.5 0.5 0.5

DPS (IDR) 285 131 1 0 0

Div. yield (%) 40.1 18.4 0.2 0 0



0

2,000

4,000

6,000

8,000

10,000

12,000

600

800

1,000

1,200

1,400

1,600

1,800

2,000


('000)(IDR)

Volume (RHS) hrum IJ Px Last

(44.0)

(15.8)

(25.2)

(29.9)

(39.4)

(45.6) (50)

(40)

(30)

(20)

(10)

0

(50)

(40)

(30)

(20)

(10)

0

ytd 1M 3M 6M 9M 12M

(%) (%)

hrum IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Avg. coal price (USD/ton) 68.3 61.2 48.2 45.7 45.7

growth (%) (13.4) (10.4) (21.3) (5.2) -

Total sales vol. (m tons) 11.9 7.6 5.5 5.5 5.5

growth % (7.8) (36.1) (27.6) - -


Company information

12M high/low (IDR) : 1,760/690


Majority shareholder (%) : Karunia Bara Perkasa (70.6)




Bloomberg/Reuters code : HRUM IJ/HRUM.JK


2016 Compendium

205

HARUM ENERGY

Profit & loss


Sales 837 478 265 251 251

Gross profit 173 87 48 45 39

EBITDA 96 51 10 9 5


EBIT 66 21 3 2 (3)


Forex gain/(losses) (1) - - - -


Pre-tax profit 60 7 0 (2) (10)

Taxes (13) (5) (0) 0 2

Minority interest (7) (2) (0) 0 1


Net profit 40 0 0 (2) (7)


Balance sheet





Investment in associates 16 13 10 7 6

Fixed assets 116 107 103 101 98

Other assets 81 75 40 36 35

Total assets 475 444 377 376 373

Interest bearing liabilities - - - - -





Shareholders' equity 311 288 288 286 280


Cash flow


EBIT 66 21 3 2 (3)


Working capital 65 28 (35) 0 0

Other operating items (20) (8) 24 0 -

Operating cash flow 142 71 (1) 10 5

Net capital expenditure (17) (3) 10 1 (3)

Free cash flow 125 68 9 11 2


Net borrowings - - - - -

Other financing (246) (49) (6) (2) (1)

Net cash flow (121) 19 2 9 1


Ending cash 41 200 204 213 214


Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 12.8 0.1 0.1 (0.6) (2.4)

ROAA (%) 14.5 0.1 0.0 (0.5) (1.8)

Gross margin (%) 20.7 18.2 18.0 17.7 15.6

EBITDA margin (%) 11.5 10.7 3.8 3.8 2.0

EBIT margin (%) 7.9 4.4 1.2 0.8 (1.2)

Net margin (%) 4.8 0.1 0.1 (0.7) (2.7)

Payout ratio (%) 34 63 63 - -

Current ratio (x) 3.5 3.6 15.6 17.0 16.8

Interest coverage (x) na na na na na






2016 Compendium

206

HM SAMPOERNA BUY

2008A 2009A

2010F 2011F

PX: ID97,600 - TP: IDR115,000*

Armed with its strong brand equity and extensive distribution

network, Indonesia’s largest market cap company and cigarette

maker with an estimated 35% market share, HMSP, must deal with

the current tough operating environment, beset by weak purchasing

power and declining margins (although still the highest in the sector).

Nevertheless, we expect the stock to remain on investors’ radar

screens on the back of 3 factors: (1) index-inclusion play in the JCI,

LQ-45 and MSCI EM; (2) much higher liquidity post rights issue; and

(3) 100% dividend payout ratio given strong cash flows.

On valuation, our IDR115,000 TP, based on a 2016F PE of 48x, c.10%

discount to our target PER for UNVR, is warranted in our view, due to

the following: intense competition amid the current weak purchasing

power environment, government policy risk on health awareness and

higher excise tax to curb both stick sales and margins.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 75,025 80,690 88,712 97,119 107,376

EBIT (IDRbn) 14,600 13,805 14,004 14,253 16,717

Net profit (IDRbn) 10,818 10,181 10,393 11,156 12,806


EPS* (IDR) 2,445 2,301 2,250 2,393 2,741

EPS growth (%) 8.8 (5.9) (2.2) 6.4 14.5

EV/EBITDA (x) 28.5 29.9 29.6 29.4 25.2

P/E (x) 39.9 42.4 43.4 40.8 35.6

FCFPS (IDR) 2,249 2,259 2,097 1,926 2,285

FCF yield (%) 2.3 2.3 2.1 2.0 2.3

BVPS (IDR) 3,230 3,080 7,403 7,349 7,349

P/BV (x) 30.2 31.7 13.2 13.3 13.3

DPS (IDR) 2,271 2,468 2,250 2,393 2,741

Div. yield (%) 2.3 2.5 2.3 2.5 2.8 Source: Company, Bahana estimates note: based on 3 December 2015 closing price *effect of rights issue


0

5,000

10,000

15,000

20,000

25,000

60,000

70,000

80,000

90,000

100,000

110,000


('000)(IDR)

Volume (RHS) HMSP IJ Px Last

56.1

4.1

27.8

46.5

66.4

53.1

0

10

20

30

40

50

60

70

0

10

20

30

40

50

60

70

ytd 1M 3M 6M 9M 12M

(%) (%)

HMSP IJ relative to JCI Source: Bloomberg

Harry Su ([email protected]) +6221 2505735 *New, please refer to appendix II

Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Sales growth (%) 12.6 7.6 9.9 9.5 10.6


EBIT margin (%) 19.5 17.1 15.8 14.7 15.6 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 98,100/64,529


Majority shareholder (%) : Philip Morris Indonesia (92.5)




Bloomberg/Reuters code : HMSP IJ/HMSP.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

207

HM SAMPOERNA

Profit & loss


Sales 75,025 80,690 88,712 97,119 107,376

Gross profit 20,071 20,500 21,521 22,374 25,182

EBITDA 15,095 14,384 14,629 14,937 17,481

Depreciation 495 578 625 684 764

EBIT 14,600 13,805 14,004 14,253 16,717

Net interest inc./(expense) (20) 10 117 862 579

Share of net results of associates 9 14 10 6 11


Pre-tax profit 14,510 13,718 14,002 15,006 17,187

Taxes (3,691) (3,537) (3,609) (3,850) (4,381)




Balance sheet



S-T investments 4.00 5.00 5.00 5.00 5.00


Inventories 17,333 17,432 18,408 20,763 22,832

Fixed assets 4,709 5,920 6,251 6,775 7,476

Other assets 3,163 3,955 4,140 4,492 4,900

Total assets 27,405 28,381 49,541 49,632 50,146

Interest bearing liabilities 2,442 2,835 2,268 1,248 624

Trade payables 2,194 2,761 2,800 2,875 2,834





Cash flow


EBIT 14,600 13,805 14,004 14,253 16,717

Depreciation 207 430 522 578 650

Working capital (237) 833 (693) (1,817) (1,530)



Net capital expenditure (800) (1,641) (853) (1,103) (1,351)

Free cash flow 9,855 9,902 9,685 8,963 10,633

Equity raised/(bought) (16) (21) 20,696 - -

Net borrowings 136 393 (567) (1,021) (624)

Other financing (10,101) (10,866) (10,396) (11,167) (12,779)

Net cash flow (126) (592) 19,418 (3,224) (2,770)

Cash balances, beginning 784 657 65 19,484 16,259


Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 78.8 73.6 43.6 32.6 37.4

ROAA (%) 40.3 36.5 26.7 22.5 25.7

Gross margin (%) 26.8 25.4 24.3 23.0 23.5

EBITDA margin (%) 20.1 17.8 16.5 15.4 16.3

EBIT margin (%) 19.5 17.1 15.8 14.7 15.6

Net margin (%) 14.4 12.6 11.7 11.5 11.9

Payout ratio (%) 92.0 106.2 100.0 100.0 100.0

Current ratio (x) 1.8 1.5 3.0 3.0 2.9


Net gearing (%) 0.1 0.2 nc nc nc




2016 Compendium

208

HERO SUPERMARKET REDUCE

2008A 2009A

2010F 2011F

PX: IDR1,100 - TP: IDR650*

HERO, Indonesia’s largest supermarket operator, continues to

struggle with its multi-format stores [53 Hypermarkets, 155

Supermarkets, 337 Health & Beauty (Guardian), 95 Convenience

Stores (Starmart) and 1 IKEA] and is currently undergoing store

rationalization and cost efficiencies to improve its operating earnings.

Looking ahead, HERO plans to establish a price-leader image in its

expanded fresh products and also to enhance SKU layouts across

product lines. However, these strategies are not a game changer for

HERO, in our view, as other competitors like Carrefour and Hypermart

have already implemented similar moves.

On valuation, as we still expect soft top-line and weak earnings, we

lower our 12-month TP from IDR700 to IDR650, based on unchanged

2016F P/S of nearly 0.2x, justified by HERO’s lack of transparency.

Retain REDUCE. Risk: faster implementation of new store formats.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 11,900 13,564 15,118 16,906 19,439

EBIT (IDRbn) 246 (196) (215) (113) 72

Net profit (IDRbn) 671 44 (29) 57 191


EPS (IDR) 171 10 (7) 14 46

EPS growth (%) 93.1 (93.9) na na 231.7

EV/EBITDA (x) 7.5 29.1 61.4 26.9 14.3

P/E (x) 6.4 105.2 na 80.1 24.2

FCFPS (IDR) (322) (323) (57) (9) (80)

FCF yield (%) (29.3) (29.4) (5.2) (0.8) (7.3)

BVPS (IDR) 1,367 1,304 1,314 1,346 1,409

P/BV (x) 0.8 0.8 0.8 0.8 0.8

DPS (IDR) - - - - -

Div. yield (%) - - - - - Source: Company, Bahana estimates note: based on 3 December 2015 closing price


0

500

1,000

1,500

2,000

2,500

1,000

1,250

1,500

1,750

2,000

2,250

2,500

2,750


('000)(IDR)

Volume (RHS) HERO IJ Px Last

(40.6)

(24.2)(29.0)

(33.4)

(22.8)

(43.7) (50)

(40)

(30)

(20)

(10)

0

(50)

(40)

(30)

(20)

(10)

0

ytd 1M 3M 6M 9M 12M

(%) (%)

HERO IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Hypermarket stores (unit) 51 55 59 63 68

Supermarket stores (unit) 158 165 155 157 167

Speciality stores (unit) 473 483 433 433 453

IKEA (unit) - 1 1 1 1

Selling exp. as % of Rev (%) 2.6 2.8 3.0 2.9 2.9 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 2,500/1,100


Majority shareholder (%) : Jardine Matheson Holdings (83.9)

Shares outstanding (m)/Free float (%) : 4,184/13.4



Bloomberg/Reuters code : HERO IJ/HERO.JK Source: Bloomberg, Reuters based on 3 December 2015 closing price

2016 Compendium

209

HERO SUPERMARKET

Profit & loss


Sales 11,900 13,564 15,118 16,906 19,439

Gross profit 2,847 3,116 3,415 3,839 4,460

EBITDA 550 192 95 219 434

Depreciation 304 388 310 331 362

EBIT 246 (196) (215) (113) 72


Forex gain/(losses) (1) 2 2 1 (1)

Other income/ (expense) 538 206 198 218 227

Pre-tax profit 790 42 (39) 76 252

Taxes (119) 2 9 (19) (62)




Balance sheet





Inventories 1,829 2,271 2,410 2,714 3,047

Fixed assets 3,726 4,610 4,640 4,884 5,253

Other assets 583 818 852 880 911

Total assets 7,758 8,296 8,699 9,474 10,023

Interest bearing liabilities - 340 816 939 1,092

Trade payables 1,928 2,046 1,921 2,434 2,558





Cash flow


EBIT 246 (196) (215) (113) 72

Depreciation 211 275 310 331 362

Working capital (263) (431) (236) 90 (244)

Other operating items (109) 157 242 232 205


Net capital expenditure (1,345) (1,159) (339) (576) (730)

Free cash flow (1,261) (1,353) (238) (36) (336)


Net borrowings (530) 340 477 123 153

Other financing (91) (116) (9) (9) (10)

Net cash flow 1,080 (1,131) 229 78 (192)



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 19.1 0.8 (0.5) 1.0 3.3

ROAA (%) 10.3 0.5 (0.3) 0.6 2.0

Gross margin (%) 23.9 23.0 22.6 22.7 22.9

EBITDA margin (%) 4.6 1.4 0.6 1.3 2.2

EBIT margin (%) 2.1 (1.4) (1.4) (0.7) 0.4

Net margin (%) 5.6 0.3 (0.2) 0.3 1.0


Current ratio (x) 1.6 1.2 1.3 1.2 1.2

Interest coverage (x) 5.3 na na na 1.1

Net gearing (%) nc 2.6 7.1 7.7 13.2




2016 Compendium

210

HOLCIM INDONESIA REDUCE

2008A 2009A

2010F 2011F

PX: IDR1,075 - TP: IDR925

Hit by lower-than-expected demand in 2015 coupled with its looming

merger with Lafarge Indonesia, SMCB, the third largest cement

producer, has decided to cut production at its older plants and reduce

the number of its workforce. Furthermore, SMCB plans to offload its

Malaysian plant as part of its parent company’s global restructuring.

Going forward, we expect SMCB to try to maintain its 14% market

share through aggressive marketing to ensure ample volumes for its

three plants during current capacity glut. This strategy, combined with

high debt level (6M15: IDR6.9tn) needed for the 1.7m ton Tuban plant

completion, would be a drag on margins.

At this stage, we still see unattractive growth prospect for SMCB on

weak property market and potential shareholders’ dilution to purchase

Lafarge Indonesia’s assets. Retain REDUCE with IDR925 DCF-based TP

(WACC: 12.0%). Risk: Lower interest costs from debt restructuring.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 9,686 10,529 9,352 9,619 9,904

EBIT (IDRbn) 2,033 1,316 287 566 538

Net profit (IDRbn) 952 668 (225) 89 129

Bahana/consensus (%) - - (120) 25 25

EPS (IDR) 124 87 (29) 12 17

EPS growth (%) (29.5) (29.8) (133.6) (139.5) 45.0

EV/EBITDA (x) 4.3 6.7 13.3 9.7 9.1

P/E (x) 8.7 12.3 na 92.7 64.0

FCFPS (IDR) (206) (131) 6 53 119

FCF yield (%) (19.2) (12.2) 0.6 5.0 11.1

BVPS (IDR) 1,144 1,119 1,054 1,060 1,063

P/BV (x) 0.9 1.0 1.0 1.0 1.0

DPS (IDR) 90 65 - 9 13



0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

900

1,100

1,300

1,500

1,700

1,900

2,100

2,300


('000)(IDR)

Volume (RHS) SMCB IJ Px Last

(37.6)

1.3

(0.9)

(19.1)(25.6)

(40.4)(50)

(40)

(30)

(20)

(10)

0

10

(50)

(40)

(30)

(20)

(10)

0

10

ytd 1M 3M 6M 9M 12M

(%) (%)

SMCB IJ relative to JCI Source: Bloomberg

Bob Setiadi ([email protected]) +6221 250 5081 ext. 3605 *New, please refer to appendix II

Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Volume capacity ('000 tons) 8,700 10,400 12,100 12,100 12,100

Export volumes ('000 tons) - - 450 450 450

Domestic volumes ('000 tons) 8,431 8,756 8,799 9,195 9,655

Total volumes ('000 tons) 8,431 8,756 9,249 9,645 10,105


Company information

12M high/low (IDR) : 2,305/945


Majority shareholder (%) : Holderfin BV (80.6)




Bloomberg/Reuters code : SMCB IJ/SMCB.JK Source: Bloomberg, Reuters based on 3 December 2015 closing price

2016 Compendium

211

HOLCIM INDONESIA

Profit & loss


Sales 9,686 10,529 9,352 9,619 9,904

Gross profit 3,355 3,026 1,986 2,196 2,221

EBITDA 2,668 2,000 1,025 1,362 1,363

Depreciation 636 684 738 796 825

EBIT 2,033 1,316 287 566 538



Other income/(expense) (200) (37) 77 (40) (41)

Pre-tax profit 1,337 1,007 (321) 127 184

Taxes (384) (339) 96 (38) (55)




Balance sheet


Cash and equivalents 376 215 1,072 227 337


Trade receivables 958 1,035 1,102 1,051 1,082

Inventories 591 629 706 710 737

Fixed assets 12,367 14,498 14,495 14,489 13,956

Other assets 603 822 748 801 858

Total assets 14,895 17,199 18,124 17,279 16,970


Trade payables 886 1,067 1,153 1,183 1,221





Cash flow


EBIT 2,033 1,316 287 566 538

Depreciation 636 684 738 796 825

Working capital 363 366 50 196 112

Other operating items (1,199) (557) (291) (360) (271)

Operating cash flow 1,832 1,810 784 1,199 1,204


Free cash flow (1,582) (1,005) 49 409 913


Net borrowings 1,972 1,749 1,078 (1,213) (709)

Other financing (570) (905) (269) (41) (94)

Net cash flow (180) (161) 858 (845) 110

Cash balances, beginning 556 376 215 1,072 227

Ending cash 376 215 1,072 227 337 Source: Company, Bahana estimates

Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 11.1 7.7 (2.7) 1.1 1.6

ROAA (%) 7.0 4.2 (1.3) 0.5 0.8

Gross margin (%) 34.6 28.7 21.2 22.8 22.4

EBITDA margin (%) 27.5 19.0 11.0 14.2 13.8

EBIT margin (%) 21.0 12.5 3.1 5.9 5.4

Net margin (%) 9.8 6.3 (2.4) 0.9 1.3

Payout ratio (%) 72.4 75.0 - 75.0 75.0

Current ratio (x) 0.6 0.6 1.0 0.7 0.7


Net gearing (%) 37.1 60.2 66.6 61.7 51.5




2016 Compendium

212

INDO TAMBANGRAYA MEGAH REDUCE

2008A 2009A

2010F 2011F

PX: IDR6,580 - TP: IDR5,200*

Slower global economic growth especially in China is hurting high-

quality coal producers in Indonesia like ITMG (CV 5,500kcal-6,900kcal

GAR). While ITMG’s mine sites are close to each other (except

Jorong), we expect its current SR of 9.0x to rise in 2016 as the

company’s selective mining method can no longer be applied.

With lower overseas coal demand from steel manufacturers and power

plants, ITMG has lowered its 2015 production target to 27m mt

(2014: 29m mt), down 6% from its previous estimate. Note that

ITMG’s major sales destinations are China (17%) and India (20%).

As China gradually shifts towards renewable energy, we revise down

our DCF-based TP to IDR5,200 (from IDR8,000) based on an 18.6%

WACC. Thus, despite its debt-free status allowing it to have a 60-80%

dividend payout ratio with 6-10% yields in 2016-17, we retain our

REDUCE call. Risk: Delay in China’s renewable energy projects.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenue (USDmn) 2,179 1,943 1,650 1,380 1,559

EBIT (USDmn) 312 236 189 97 45

Net profit (USDmn) 205 200 110 71 39


EPS (IDR) 2,540 2,481 1,368 878 483

EPS growth (%) (52.6) (2.3) (44.8) (35.9) (44.9)

EV/EBITDA (x) 0.7 0.8 1.0 1.1 1.5

PER (x) 2.6 2.7 4.8 7.5 13.7

FCFPS (IDR) 904 1,388 1,962 1,164 972

FCF yield (%) 13.7 21.0 29.7 17.6 14.7

BVPS (IDR) 8,707 9,446 10,762 10,545 10,371

PBV (x) 0.8 0.7 0.6 0.6 0.6

DPS (IDR) 2,607 2,136 1,094 678 386

Dividend Yield (%) 27.3 22.4 16.6 10.6 5.9



0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000


('000)(IDR)

Volume (RHS) itmg IJ Px Last

(43.9)

(23.4) (26.2)

(37.6)(44.2)

(52.0) (60)

(50)

(40)

(30)

(20)

(10)

0

(60)

(50)

(40)

(30)

(20)

(10)

0

ytd 1M 3M 6M 9M 12M

(%) (%)

itmg IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Avg. coal price (USD/ton) 74.9 67.1 57.5 50.6 51.3

growth % (16.8) (10.4) (14.3) (12.1) 1.5

Coal sales vol. (m tons) 29.1 29.1 28.7 27.3 30.4

growth % 7.4 (0.0) (1.4) (4.9) 11.4


Company information

12M high/low (IDR) : 18,425/6,475


Majority shareholder (%) : Banpu Minerals (65.0)




Bloomberg/Reuters code : ITMG IJ/ITMG.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

213

INDO TAMBANGRAYA MEGAH

Profit & loss


Sales 2,179 1,943 1,650 1,380 1,559

Gross profit 484 408 373 265 209

EBITDA 373 297 238 175 129


EBIT 312 236 189 97 45


Forex gain/(losses) (22) (1) - - -

Other income/(expense) (2) 21 (21) 8 10

Pre-tax profit 295 262 172 110 61

Taxes (90) (62) (61) (39) (22)



Net profit 205 200 110 71 39


Balance sheet





Inventories 118 150 160 139 169

Fixed assets 317 286 262 242 220

Other assets 410 463 417 416 413

Total assets 1,327 1,310 1,279 1,221 1,264


Trade payables 166 165 170 149 180






Cash flow


EBIT 312 236 189 97 45


Working capital 45 (39) 44 3 13




Free cash flow 93 130 158 94 78



Other financing (266) (193) (80) (88) (53)

Net cash flow (173) (63) 78 6 25


Ending cash 289 226 304 310 335


Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 22.0 22.5 12.6 8.2 4.6

ROAA (%) 14.8 15.2 8.5 5.7 3.1

Gross margin (%) 22.2 21.0 22.6 19.2 13.4

EBITDA margin (%) 17.1 15.3 14.4 12.7 8.3

EBIT margin (%) 14.3 12.1 11.4 7.0 2.9

Net margin (%) 9.4 10.3 6.7 5.1 2.5

Payout ratio (%) 62 98 80 80 80

Current ratio (x) 1.6 1.6 1.7 1.8 1.7







2016 Compendium

214

INDOCEMENT TUNGGAL PRAKASA REDUCE

2008A 2009A

2010F 2011F

PX: IDR19,925 - TP: IDR16,400

Unlike SMGR, INTP, Indonesia’s second-largest cement player by

volume, is focused on maintaining its strong market presence in West

Java and Jakarta, to prevent margin deterioration. Ironically, INTP’s

relatively high margins have led to competition from new companies,

which could lead to continued margin pressure in the medium term.

In 4Q16, we expect additional capacity of 4.4mt (+21%) for INTP,

resulting in additional overhead costs. Additionally, we look for total

capacity in Java (56% of total domestic volumes) to rise 9% during

the period; Java cement demand grew flat in 10M15.

Although INTP has a strong balance sheet with a net cash position, the

company is likely to continue facing not only market-share contraction

but also margin pressure on intense competition. Thus, INTP remains a

REDUCE with an IDR16,400 TP based on a 2016F P/E of 13.9x. Risks

include a major turnaround in Java property demand.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 18,691 19,996 17,473 18,073 18,951

EBIT (IDRbn) 5,975 5,854 4,768 4,834 5,084

Net profit (IDRbn) 5,019 5,271 4,340 4,353 4,558


EPS (IDR) 1,363 1,432 1,179 1,183 1,238

EPS growth (%) 5.2 5.0 (17.7) 0.3 4.7

EV/EBITDA (x) 9.0 9.4 11.7 11.3 10.9

P/E (x) 14.6 13.9 16.9 16.8 16.1

FCFPS (IDR) 927 529 251 790 899

FCF yield (%) 4.7 2.7 1.3 4.0 4.5

BVPS (IDR) 6,234 6,733 6,563 6,685 6,861

P/BV (x) 3.2 3.0 3.0 3.0 2.9

DPS (IDR) 900 1,350 1,061 1,064 1,114



0

5,000

10,000

15,000

20,000

16,000

18,000

20,000

22,000

24,000

26,000


('000)(IDR)

Volume (RHS) INTP IJ Px Last

(7.1)

3.7 5.9

3.2

0.1

(8.8) (10)

(5)

0

5

10

(10)

(5)

0

5

10

ytd 1M 3M 6M 9M 12M

(%) (%)

INTP IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F


Export volumes ('000 tons) 152 68 102 114 154



Utilization rate (%) 96 89 86 73 77 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 25,200/16,300


Majority shareholder (%) : Birchwood Omnia Limited (51.0)




Bloomberg/Reuters code : INTP IJ/INTP.JK Source: Bloomberg, Reuters based on 3 December 2015 closing price

2016 Compendium

215

INDOCEMENT TUNGGAL PRAKASA

Profit & loss


Sales 18,691 19,996 17,473 18,073 18,951

Gross profit 8,655 9,087 7,691 7,777 8,133

EBITDA 6,746 6,614 5,682 5,930 6,259

Depreciation 771 760 913 1,096 1,175

EBIT 5,975 5,854 4,768 4,834 5,084




Pre-tax profit 6,603 6,790 5,569 5,494 5,738

Taxes (1,583) (1,516) (1,225) (1,136) (1,175)




Balance sheet





Inventories 1,474 1,666 1,407 1,481 1,630

Fixed assets 9,305 12,144 16,041 18,464 19,448

Other assets 699 1,180 1,925 2,251 4,519

Total assets 26,577 28,885 28,794 30,623 33,091


Trade payables 1,008 1,175 972 1,027 741





Cash flow


EBIT 5,975 5,854 4,768 4,834 5,084

Depreciation 771 760 913 1,096 1,175

Working capital (22) (160) 413 (80) (169)




Free cash flow 3,414 1,949 922 2,909 3,311


Net borrowings (16) (17) (25) (12) (6)

Other financing (1,277) (3,271) (5,015) (3,950) (3,972)

Net cash flow 2,121 (1,339) (4,118) (1,053) (668)



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 23.7 22.1 17.7 17.9 18.3

ROAA (%) 20.3 19.0 15.0 14.7 14.3

Gross margin (%) 46.3 45.4 44.0 43.0 42.9

EBITDA margin (%) 36.1 33.1 32.5 32.8 33.0

EBIT margin (%) 32.0 29.3 27.3 26.7 26.8

Net margin (%) 26.8 26.4 24.8 24.1 24.1

Payout ratio (%) 66.0 94.3 90.0 90.0 90.0

Current ratio (x) 6.1 4.9 3.1 2.2 1.7






2016 Compendium

216

INDOFOOD CONSUMER BRANDED PRODUCTS BUY

2008A 2009A

2010F 2011F

PX: 12,675 - TP: IDR16,800

With rising competition in FMCG and soft purchasing power in 2015,

ICBP, Indonesia’s largest consumer-packaged food company (70%+

market share in instant noodles), is still able to maintain its margins.

We attribute this to its strong brand equity in the market, enabling for

price increases with minimal damage on sales volumes.

Going into 2016, we continue to like ICBP’s defensive nature as its

noodles continue to remain as one of the most affordable staples in

the market, priced at below USD0.20/pack. On the cost side, we

expect input costs like flour prices to remain under pressure due to

intense local competition, given a 33-player market.

On valuation, our 12-month TP of IDR16,800 is based on a 2016F PE

of 28x. Reaffirm BUY. Downside risks include continued losses at its

beverages division on rising A&P to gain market share, severe IDR

weakness and higher raw material prices.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 25,095 30,022 32,115 35,481 39,775

EBIT (IDRbn) 2,734 3,063 3,936 4,507 5,071

Net profit (IDRbn) 2,225 2,604 3,082 3,543 4,039


EPS (IDR) 382 447 529 608 693

EPS growth (%) 2.1 17.0 18.4 15.0 14.0

EV/EBITDA (x) 23.2 20.6 15.9 14.0 12.3

P/E (x) 33.2 28.4 24.0 20.9 18.3

FCFPS (IDR) (5) 7 3 (6) (0)

FCF yield (%) (0.0) 0.1 0.0 (0.0) (0.0)

BVPS (IDR) 2,158 2,414 2,707 3,048 3,435

P/BV (x) 5.9 5.2 4.7 4.2 3.7

DPS (IDR) 186 197 233 267 305



0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

10,000

11,000

12,000

13,000

14,000

15,000

16,000


('000)(IDR)

Volume (RHS) ICBP IJ Px Last

10.2

(2.5)

1.9 4.0 4.9

23.3

(5)

0

5

10

15

20

25

(5)

0

5

10

15

20

25

ytd 1M 3M 6M 9M 12M

(%) (%)

ICBP IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Noodles sales volume (bn packs) 12.7 12.6 12.7 13.1 13.8

Avg. price per pack (IDR) 1,369 1,582 1,661 1,761 1,884

Dairy solid prod. sales vol. ('000tons) 201 201 209 224 240

Dairy sales price (IDR/kg) 18,269 21,009 21,009 22,164 23,494 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 16,050/10,900


Majority shareholder (%) : Indofood Sukses Makmur (80.5)




Bloomberg/Reuters code : ICBP IJ/ICBP.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

217

INDOFOOD CONSUMER BRANDED PRODUCTS

Profit & loss


Sales 25,095 30,022 32,115 35,481 39,775

Gross profit 6,426 8,060 9,656 11,012 12,351

EBITDA 3,057 3,400 4,376 5,004 5,678

Depreciation 323 337 388 498 607

EBIT 2,734 3,063 3,936 4,507 5,071




Pre-tax profit 2,967 3,389 3,993 4,601 5,249

Taxes (734) (857) (988) (1,138) (1,298)

Minority interest (10) 73 76 80 88

Extraordinary gain/(losses) 2 - - - -


Balance sheet





Inventories 2,869 2,822 3,208 3,496 3,562

Fixed assets 4,844 5,839 6,851 9,353 11,746

Other assets 5,407 5,945 5,951 6,078 6,286

Total assets 21,267 24,910 27,682 30,837 34,500


Trade payables 2,531 2,813 3,208 3,496 3,918





Cash flow


EBIT 2,734 3,063 3,936 4,507 5,071

Depreciation 323 337 388 498 607

Working capital (731) 461 (355) (268) 42


Operating cash flow 633 2,217 1,786 2,264 2,967


Free cash flow (664) 886 386 (736) (33)


Net borrowings 1,257 886 429 523 530


Net cash flow 39 1,817 894 (110) 547



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 18.5 19.5 20.6 21.1 21.4

ROAA (%) 11.4 11.3 11.7 12.1 12.4

EBITDA margin (%) 25.6 26.8 30.1 31.0 31.1

EBIT margin (%) 12.2 11.3 13.6 14.1 14.3

Net margin (%) 10.9 10.2 12.3 12.7 12.7

Payout ratio (%) 8.9 8.7 9.6 10.0 10.2

Current ratio (x) 43.7 44.0 44.0 44.0 44.0


Net gearing (%) na na na na na

Gross margin (%) nc nc nc nc nc




2016 Compendium

218

INDOFOOD SUKSES MAKMUR BUY

2008A 2009A

2010F 2011F

PX: IDR5,175- TP: IDR6,600

Amid intense flour (24% of 9M15 revenues) competition and weak

commodity prices adversely impacting its agribusiness division (18%),

earnings of INDF, the holding company of the Salim Group, have been

largely supported by success of its subsidiary ICBP (50% of revenues)

with the remaining 8% coming from its distribution business.

On the cost side, we expect to see margin support in 2016, helped by

continued strong pricing power at ICBP, and rising CPO prices as well

as cost efficiencies, which are likely to positively impact SIMP, INDF’s

agribusiness.

Our 12-month TP of IDR6,600 is based on a 2016F PE of 17x, and set

at a 40% discount to our target PE for ICBP (28x), as we take into

account INDF’s holding-company status and higher portion of volatile,

commodity-based earnings. Reaffirm BUY. Downside risks include

intensifying flour competition and lower-than-expected CPO prices.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 55,624 63,594 64,352 70,849 78,078

EBIT (IDRbn) 5,557 6,874 6,801 7,610 8,547

Net profit (IDRbn) 2,504 3,885 2,084 3,454 4,196


EPS (IDR) 285 443 237 393 478

EPS growth (%) (23.2) 55.2 (46.4) 65.7 21.5

EV/EBITDA (x) 8.0 6.3 6.5 5.9 4.9

P/E (x) 18.1 11.7 21.8 13.2 10.8

FCFPS (IDR) (41) 36 44 57 47

FCF yield (%) (0.8) 0.7 0.9 1.1 0.9

BVPS (IDR) 2,668 2,927 2,920 3,204 3,499

P/BV (x) 1.9 1.8 1.8 1.6 1.5

DPS (IDR) 147 220 115 190 231



0

10,000

20,000

30,000

40,000

50,000

60,000

4,500

5,000

5,500

6,000

6,500

7,000

7,500

8,000


('000)(IDR)

Volume (RHS) INDF IJ Px Last

(10.1)(11.3)

0.2

(16.3)(13.8)

(11.2)

(20)

(15)

(10)

(5)

0

5

(20)

(15)

(10)

(5)

0

5

ytd 1M 3M 6M 9M 12M

(%) (%)

INDF IJ relative to JCI Source: Bloomberg

Harry Su ([email protected]) +6221 250 5735

Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Flour sales volume ('000 tons) 2,815 2,880 2,909 3,085 3,266

Average flour price per kg (IDR) 6,636 6,918 6,352 6,491 6,590

Wheat price (USD/tons) 312 285 273 279 286 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 7,725/4,560


Majority shareholder (%) : CAB Holding Ltd (50.1)




Bloomberg/Reuters code : INDF IJ/INDF.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

219

INDOFOOD SUKSES MAKMUR

Profit & loss


Sales 55,624 63,594 64,352 70,849 78,078

Gross profit 13,606 17,050 17,459 19,418 21,450

EBITDA 7,418 9,232 9,336 10,305 11,389

Depreciation 1,860 2,358 2,535 2,695 2,842

EBIT 5,557 6,874 6,801 7,610 8,547


Forex gain/(losses) (976) 29 (2,181) (591) 136


Pre-tax profit 4,001 6,229 4,053 6,450 7,943

Taxes (1,176) (1,828) (1,110) (1,548) (1,986)

Minority interest (913) (1,261) (1,765) (2,118) (2,330)

Income from discontinued op. 591 745 907 670 570


Balance sheet



S-T investments 693 665 748 823 906


Inventories 8,161 8,455 8,351 8,454 9,309

Fixed assets 30,097 30,604 35,770 37,324 38,095

Other assets 16,329 27,718 23,030 23,415 25,186

Total assets 77,611 85,940 87,859 92,081 97,908


Trade payables 4,851 5,151 5,682 6,232 6,861





Cash flow


EBIT 5,557 6,874 6,801 7,610 8,547

Depreciation 1,860 2,358 2,535 2,695 2,842

Working capital (975) 1,506 1,358 1,167 (835)




Free cash flow (3,573) 3,157 3,895 5,000 4,151


Net borrowings 12,034 3,764 (1,168) (2,031) (1,192)

Other financing (8,141) (6,429) (1,873) (979) (1,623)

Net cash flow 320 491 855 1,990 1,335



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 11.2 15.8 8.1 12.8 14.3

ROAA (%) 3.7 4.8 2.4 3.8 4.4

EBITDA margin (%) 13.3 14.5 14.5 14.5 14.6

EBIT margin (%) 10.0 10.8 10.6 10.7 10.9

Net margin (%) 4.5 6.1 3.2 4.9 5.4

Payout ratio (%) 49.8 49.9 48.2 47.0 47.0

Current ratio (x) 1.7 1.8 2.1 2.1 1.6


Net gearing (%) 58.3 49.6 58.1 38.7 27.2

Gross margin (%) 35.2 31.3 34.1 30.3 27.3




2016 Compendium

220

INDOMOBIL SUKSES INTERNATIONAL REDUCE

2008A 2009A

2010F 2011F

PX: IDR2,250 - TP: IDR2,000

Going into 2016, IMAS, the second-largest listed auto player, will

likely continue to experience weak performance despite introduction of

the company’s new Datsun brand and new Nissan X-trail (SUV) model,

as we expect lower sales volumes for Nissan’s two most popular

models, Livina (low MPV) and March (city car), on intense competition.

On the margin side, we expect IMAS to experience continued pressure

from low utilization rates in several of its new distribution outlets,

discount offers, increased promotional activities in the sector and

weak contribution from its production subsidiaries.

Despite improved rental and financing performance, we expect its

severe market underperformance to persist, and maintain our REDUCE

rating on IMAS on weak auto segment and low operating margins. Our

DCF-based 12-month TP of IDR2,000 reflects a 2016F PE of 44x

(140% premium to the region). Risks: Higher auto sales and margins.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 20,095 19,458 18,176 19,770 21,414

EBIT (IDRbn) 369 224 96 149 229

Net profit (IDRbn) 532 (147) (312) 126 292

Bahana/consensus (%) - - na 19 45

EPS (IDR) 193 (53) (113) 46 105

EPS growth (%) (33.5) na na na 130.7

EV/EBITDA (x) 21.5 26.7 33.9 33.3 31.5

P/E (x) 11.7 na na 49.2 21.3

FCFPS (IDR) (265) 250 (120) 78 152

FCF yield (%) (11.8) 11.1 (5.3) 3.5 6.8

BVPS (IDR) 2,117 2,065 1,952 1,998 2,092

P/BV (x) 1.1 1.1 1.2 1.1 1.1

DPS (IDR) 19 - - 11 26

Div. yield (%) 0.8 - - 0.5 1.2 Source: Company, Bahana estimates note: based on 3 December 2015 closing price


Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Automotive Market Sales (‘000) 1,230 1,208 1,021 1,021 1,072

Nissan Market Share (%) 5.0 4.4 5.4 5.5 5.5

IMAS retail sales (unit) 61,119 52,736 55,500 56,300 58,847

EBIT Margin (%) 1.8 1.2 0.5 0.8 1.1 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 4,200/2,250


Majority shareholder (%) : Gallant Venture (71.5)




Bloomberg/Reuters code : IMAS IJ/IMAS.JK Source: Bloomberg, Reuters; note: based on 3 December 2015 closing price

(30.6)

(17.4)(22.1)

(31.8)

(26.9)

(22.3)

(35)

(30)

(25)

(20)

(15)

(10)

(5)

0

(35)

(30)

(25)

(20)

(15)

(10)

(5)

0

ytd 1M 3M 6M 9M 12M

(%) (%)

IMAS IJ relative to JCI

0

500

1,000

1,500

2,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500


('000)(IDR)

Volume (RHS) IMAS IJ Px Last

2016 Compendium

221

INDOMOBIL SUKSES INTERNATIONAL

Profit & loss


Sales 20,095 19,458 18,176 19,770 21,414

Gross profit 2,490 2,636 2,673 2,916 3,195

EBITDA 821 695 612 680 779

Depreciation 452 471 517 531 550

EBIT 369 224 96 149 229


Forex gain/(losses) 2 53 20 (18) 21

Other income/(expense) 703 445 472 924 1,083

Pre-tax profit 596 19 (105) 226 438

Taxes 26 (105) (157) (45) (88)



Net profit 532 (147) (312) 126 292 Source: Company, Bahana estimates

Balance sheet


Cash and equivalents 1,122 1,134 1,823 793 521



Inventories 4,499 3,366 3,564 3,874 4,188

Fixed assets 3,774 4,629 5,113 5,581 6,031

Other assets 10,464 11,311 12,461 13,742 15,165

Total assets 22,315 23,452 25,686 26,956 29,117


Trade payables 2,392 2,320 2,385 2,593 2,803





Cash flow


EBIT 369 224 96 149 229

Depreciation 452 471 517 531 550

Working capital (1,122) 796 (138) (344) (353)

Other operating items 729 340 315 879 995

Operating cash flow 427 1,831 789 1,215 1,421


Free cash flow (734) 690 (332) 215 421


Net borrowings 3,894 957 2,870 850 1,600

Other financing (3,390) (1,691) (1,850) (2,095) (2,294)

Net cash flow (13) 13 688 (1,029) (272)

Cash balances, beginning 1,135 1,122 1,134 1,823 793

Ending cash 1,122 1,134 1,823 793 521 Source: Company, Bahana estimates

Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 9.6 (2.6) (5.6) 2.3 5.2

ROAA (%) 2.7 (0.6) (1.3) 0.5 1.0

Gross margin (%) 12.4 13.5 14.7 14.8 14.9

EBITDA margin (%) 4.1 3.6 3.4 3.4 3.6

EBIT margin (%) 1.8 1.2 0.5 0.8 1.1

Net margin (%) 2.6 (0.8) (1.7) 0.6 1.4

Payout ratio (%) 9.9 - - 25.0 25.0

Current ratio (x) 1.1 1.0 0.9 0.9 0.9


Net gearing (%) 195.0 216.5 269.4 297.2 316.2




2016 Compendium

222

INDOSAT BUY

2008A 2009A

2010F 2011F

PX: IDR5,400 - TP: IDR6,800

On the back of its successful network modernization program, ISAT

has managed to surpass EXCL as Indonesia’s second-largest cellular

operator in terms of number of subscribers in 2015.

Going into 2016, we expect ISAT to continue its strong momentum,

booking solid y-y revenue growth of 8% supported by solid ARPU

growth, higher data usage and improved pricing policy. Thus,

increasing top lines, coupled with well-maintained operating costs,

should allow for EBITDA margin expansion and an earnings reversal

from a net loss to a net profit of IDR1.3tn in 2016, and a further 91%

y-y jump to IDR2.6tn in 2017.

With data migration and rational competition positively impacting

ISAT’s performance ahead, we reaffirm our BUY call with a DCF-based

TP of IDR6,800, reflecting 2016F EV/EBITDA of 4.0x, still an attractive

54% discount to its regional peers. Main risk: Weak IDR on USD debt.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 23,855 24,085 26,249 28,395 30,758

EBIT (IDRbn) 1,373 1,833 2,953 3,879 4,839

Net profit (IDRbn) (2,826) (1,987) (1,187) 1,334 2,545


EPS (IDR) (520) (366) (218) 245 468

EPS growth (%) na na na na 90.8

EV/EBITDA (x) 4.9 4.9 4.1 3.4 2.8

P/E (x) na na na 22.0 11.5

FCFPS (IDR) (738) 424 388 705 780

FCF yield (%) (13.7) 7.8 7.2 13.1 14.4

BVPS (IDR) 2,976 2,506 2,288 2,607 3,214

P/BV (x) 1.8 2.2 2.4 2.1 1.7

DPS (IDR) 35 - - 74 139

Div. yield (%) 0.6 - - 1.4 2.6 Source: Company, Bahana estimates note: based on 3 December 2015 closing price


Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Subscribers (‘000) 59,712 63,200 69,520 70,215 70,917

Net additional (‘000) 1,200 3,600 6,320 695 702

ARPU (IDR’000/month) 28 27 25 27 30 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 5,600/3,500


Majority shareholder (%) : Ooredoo Asia Pte Ltd (65.0)




Bloomberg/Reuters code : ISAT IJ/ISAT.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

46.5

30.0 38.6

61.1

48.5

66.6

0

10

20

30

40

50

60

70

0

10

20

30

40

50

60

70

ytd 1M 3M 6M 9M 12M

(%) (%)

ISAT IJ relative to JCI

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

3,000

3,500

4,000

4,500

5,000

5,500

6,000


('000)(IDR)

Volume (RHS) ISAT IJ Px Last

2016 Compendium

223

INDOSAT

Profit & loss


Sales 23,855 24,085 26,249 28,395 30,758


EBITDA 10,332 10,059 11,340 12,352 13,472

Depreciation 8,958 8,226 8,386 8,473 8,633

EBIT 1,373 1,833 2,953 3,879 4,839

Net interest inc./(expense) (2,105) (2,264) (2,672) (2,018) (1,433)

Forex gain/(losses) (3,011) (243) (1,989) (74) 34

Other income/(expense) 365 (1,262) 400 70 (52)

Pre-tax profit (3,378) (1,936) (1,307) 1,857 3,387

Taxes 667 78 261 (371) (677)



Net profit (2,826) (1,987) (1,187) 1,334 2,545 Source: Company, Bahana estimates

Balance sheet






Fixed assets 42,190 40,776 38,687 36,512 34,582

Other assets 7,822 6,858 5,936 6,391 6,893

Total assets 54,566 53,270 52,378 52,905 52,014


Trade payables 339 691 863 908 960





Cashflow


EBIT 1,373 1,833 2,953 3,879 4,839

Depreciation 8,958 8,226 8,386 8,473 8,633

Working capital (99) 521 (557) (189) (206)




Free cash flow (4,009) 2,302 2,110 3,826 4,232


Net borrowings 2,644 4,878 (2,378) (1,500) (4,000)

Other financing (319) (5,928) 1,657 (314) 46

Net cash flow (1,684) 1,252 1,389 2,013 278



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) (16.1) (13.3) (9.1) 10.0 16.1

ROAA (%) (5.1) (3.7) (2.2) 2.5 4.9

EBITDA margin (%) 43.3 41.8 43.2 43.5 43.8

EBIT margin (%) 5.8 7.6 11.3 13.7 15.7

Net margin (%) (11.8) (8.3) (4.5) 4.7 8.3

Payout ratio (%) 101.3 - - 30.0 30.0

Current ratio (x) 0.5 0.4 0.7 0.8 1.0


Net gearing (%) 134.2 144.4 138.9 90.1 42.8

Debts to assets (%) 43.9 43.5 42.3 37.1 28.2




2016 Compendium

224

J RESOURCES ASIA PASIFIK BUY

2008A 2009A

2010F 2011F

PX: IDR1,355 - TP: IDR2,000

PSAB, Indonesia’s largest listed pure gold producer, is benefiting from

not only relatively stable gold prices in 2015 (USD1,050/toz –

USD1,300/toz) but also 6.6% y-y production growth helped by 4

producing assets in Penjom, Seruyung, North Lanut and Bakan. In

9M15, net profit rose 139% y-y to USD29mn on low oil prices, which

helped to raise PSAB’s gross margin to 55.6% (9M14: 44.3%).

Going into 2016, we expect 20% y-y production growth to 285k toz

due to the commencement of 45k toz of production at the Pani mine

site in North Sulawesi, before escalating to 335k toz in 2017.

Furthermore, PSAB has allocated 2016 capex of USD50mn to build 2

smelters with 50mn toz/annum capacity at the Doup and Pani mines.

At our DCF-based TP of IDR2,000, PSAB still looks attractive at a

2016F PE of 15x, still below the sector average of 36.5x. BUY on 48%

potential upside. Risks include project delays and higher oil prices.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (USDmn) 78 280 278 342 402

EBIT (USDmn) (29) 69 91 128 194

Net profit (USDmn) (24) 23 32 58 114


EPS (IDR) (56) 53 73 134 263

EPS growth (%) na na 38.0 83.0 95.8

EV/EBITDA (x) (314.0) 9.7 6.5 4.7 4.3

P/E (x) (25.4) 26.6 18.6 10.1 5.2

FCFPS (IDR) (536) (47) 157 89 220

FCF yield (%) (37.9) (3.4) 11.6 6.5 16.2

BVPS (IDR) 516 569 870 1,093 1,110

P/BV (x) 2.7 2.5 1.6 1.2 1.2

DPS (IDR) - - - - -

Div. yield (%) - - - - -



0

5,000

10,000

15,000

20,000

25,000

30,000

500

700

900

1,100

1,300

1,500

1,700


('000)(IDR)

Volume (RHS) psab IJ Px Last

164.7

(8.9)

114.7 110.8

152.4

122.2

(50)

0

50

100

150

200

(50)

0

50

100

150

200

ytd 1M 3M 6M 9M 12M

(%) (%)

psab IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Gold production volume (oz) 66,957 223,310 240,000 285,000 335,000

Volume growth (%) (33.9) 233.5 7.5 18.8 17.5

ASP (USD/oz) 1,417 1,255 1,160 1,200 1,200


Company information

12M high/low (IDR) : 1,600/525


Majority shareholder (%) : J&Partners Asia Limited (94.6)




Bloomberg/Reuters code : PSAB IJ/PSAB.JK Source: Bloomberg, Reuters; based on3 December 2015 closing price

2016 Compendium

225

J RESOURCES ASIA PASIFIK

Profit & loss


Sales 78 280 278 342 402

Gross profit 3 129 130 174 212

EBITDA (3) 105 126 163 230


EBIT (29) 69 91 128 194



Other income/(expense) 14 4 (14) (14) (15)

Pre-tax profit (39) 46 51 89 164

Taxes 13 (20) (16) (26) (41)



Net profit (24) 23 32 58 114


Balance sheet






Fixed assets 580 641 662 697 635

Other assets 156 156 181 199 167

Total assets 805 857 911 972 890








Cash flow


EBIT (29) 69 91 128 194


Working capital 9 8 (25) (5) (5)

Other operating items (25) (43) 7 (70) (80)



Free cash flow (232) (21) 68 38 95


Net borrowings 251 (8) (78) (39) (95)

Other financing 0 13 8 - -

Net cash flow 18 (15) (2) (1) 1


Ending cash 27 11 9 9 10


Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) (10.3) 9.8 10.2 13.7 23.9

ROAA (%) (3.5) 2.8 3.6 6.2 12.3

Gross margin (%) 4.2 46.2 46.7 50.8 52.7

EBITDA margin (%) (4.2) 37.6 45.3 47.7 57.3

EBIT margin (%) (36.7) 24.7 32.5 37.5 48.3

Net margin (%) (31.1) 8.2 11.4 17.0 28.4


Current ratio (x) 0.9 0.4 0.5 0.6 0.7


Net gearing (%) 169.2 156.7 82.3 57.4 36.7





2016 Compendium

226

JAPFA COMFEED INDONESIA BUY

2008A 2009A

2010F 2011F

PX: IDR458- TP: IDR550*

JPFA, Indonesia’s second largest and most integrated poultry player

with exposure in aquaculture (7% of sales) and cattle (5%), is likely

to enjoy the recovery in purchasing power going forward, which

should translate into higher broiler chicken demand.

The current DOC oversupply condition has also started to ease due to

the aggressive culling of Parent Stock, which should boost margins in

2016. Furthermore, JPFA is in the process of lowering its USD net

debt exposure by lowering capex and holding more USD cash ahead.

We believe that JPFA’s 38% YTD market underperformance should

reverse, following its outstanding 3Q15 results. On valuation, JPFA is

currently trading at 13.0x 2016F PE and well below its replacement

cost of IDR780/share. Thus, we retain our positive view with a higher

TP of IDR550, based on 16x 2016F PE (20% disc. to CPIN’s target

PER, to account for JPFA’s high leverage). Risk: IDR depreciation.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 21,412 24,459 25,300 27,502 30,210

EBIT (IDRbn) 1,803 1,276 925 1,368 1,546

Net profit (IDRbn) 595 332 (68) 376 588


EPS (IDR) 56 31 (6) 35 55

EPS growth (%) (40.0) (44.2) na na 56.4

EV/EBITDA (x) 5.0 6.5 8.1 6.3 5.9

P/E (x) 8.2 14.7 na 13.0 8.3

FCFPS (IDR) (132) (50) (50) (38) (24)

FCF yield (%) (28.8) (11.0) (11.0) (8.4) (5.3)

BVPS (IDR) 446 456 450 479 524

P/BV (x) 1.0 1.0 1.0 1.0 0.9

DPS (IDR) 10 6 - 6 10



0

5,000

10,000

15,000

20,000

25,000

30,000

250

450

650

850

1,050


('000)(IDR)

Volume (RHS) JPFA IJ Px Last

(38.0)

(4.1)

22.1

(19.0)

(30.6)

(48.1) (60)

(50)

(40)

(30)

(20)

(10)

0

10

20

30

(60)

(50)

(40)

(30)

(20)

(10)

0

10

20

30

ytd 1M 3M 6M 9M 12M

(%) (%)

JPFA IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F



Company information

12M high/low (IDR) : 1,110/297


Majority shareholder (%) : Japfa Holding (57.5)




Bloomberg/Reuters code : JPFA IJ/JPFA.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

227

JAPFA COMFEED INDONESIA

Profit & loss


Sales 21,412 24,459 25,300 27,502 30,210

Gross profit 3,618 3,426 3,149 3,785 4,232

EBITDA 2,151 1,715 1,460 1,923 2,136

Depreciation 349 439 535 555 590

EBIT 1,803 1,276 925 1,368 1,546



Other income/(expense) (96) 22 (7) 25 28

Pre-tax profit 896 543 (52) 591 904

Taxes (255) (158) (5) (166) (254)




Balance sheet





Inventories 4,727 5,134 5,407 5,789 6,185

Fixed assets 5,272 6,362 6,427 6,671 7,081

Other assets 1,975 2,224 2,220 2,381 2,647

Total assets 14,918 15,730 15,422 16,391 17,514


Trade payables 995 2,004 1,820 1,841 2,022





Cash flow


EBIT 1,803 1,276 925 1,368 1,546

Depreciation 349 439 535 555 590

Working capital (795) 219 (403) (540) (435)



Net capital expenditure (1,556) (1,528) (600) (800) (1,000)

Free cash flow (1,407) (538) (536) (409) (257)


Net borrowings 2,879 (654) 130 500 289

Other financing 632 1,803 554 797 943

Net cash flow 873 (978) (559) 81 (74)



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 13.1 6.9 (1.4) 7.6 11.0

ROAA (%) 4.6 2.2 (0.4) 2.4 3.5

Gross margin (%) 16.9 14.0 12.4 13.8 14.0

EBITDA margin (%) 10.0 7.0 5.8 7.0 7.1

EBIT margin (%) 8.4 5.2 3.7 5.0 5.1

Net margin (%) 2.8 1.4 (0.3) 1.4 1.9

Payout ratio (%) 17.9 17.9 - 17.9 17.9

Current ratio (x) 2.1 1.8 1.7 1.6 1.6


Net gearing (%) 123.5 127.3 143.4 142.9 137.1




2016 Compendium

228

JASA MARGA BUY

2008A 2009A

2010F 2011F

PX: IDR4,790 - TP: IDR6,250

JSMR, the leading toll road operator, with 608km of roads and around

80% of total traffic volume in Indonesia, is set to benefit from the

government’s decision to raise tariffs by 9-15% in November 2015.

With 3 newly acquired toll roads in 2015, JSMR currently owns 26

concessions, which are due to expire in 2044-58.

Future growth would be backed by the government’s infrastructure

push, allowing JSMR to embark on a major expansion phase with

380km of new toll roads expected to be built in 2015-18. This includes

the operation of two new toll-road sections (Gempol-Pasuruan and

Surabaya-Mojokerto) expected in 2016.

Despite rising capex, JSMR’s performance should improve in 2016 on

tariff hikes and a continued poor public transportation network. Retain

BUY and DCF-based TP of IDR6,250 (9.1% WACC). Main risk: higher-

than-expected construction costs on project delays.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 6,357 7,254 7,592 8,703 9,630

EBIT (IDRbn) 2,039 2,777 2,870 3,351 3,669

Net profit (IDRbn) 1,029 1,403 1,278 1,445 1,481

Bahana/cons.(%) - - 83 79 75

EPS (IDR) 151 206 188 213 218

EPS growth (%) (35.9) 36.7 (9.0) 13.1 2.5

EV/EBITDA (x) 17.1 11.8 11.9 11.1 10.7

P/E (x) 31.7 23.2 25.5 22.5 22.0

FCFPS (IDR) (433) (299) (435) (680) (553)

FCF yield (%) (8.9) (6.2) (9.0) (14.0) (11.4)

BVPS (IDR) 1,323 1,451 1,556 1,712 1,866

P/BV (x) 3.6 3.3 3.1 2.8 2.6

DPS (IDR) 60 83 56 64 65



0

10,000

20,000

30,000

40,000

50,000

4,000

4,500

5,000

5,500

6,000

6,500

7,000

7,500


('000)(IDR)

Volume (RHS) JSMR IJ Px Last

(17.7)

(5.2) (6.3)

(12.2)

(15.3)(17.4) (20)

(15)

(10)

(5)

0

(20)

(15)

(10)

(5)

0

ytd 1M 3M 6M 9M 12M

(%) (%)

JSMR IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Traffic volumes ('000,000) 1,259 1,314 1,378 1,452 1,546

Volumes growth (%) 5.1% 4.3% 4.9% 5.3% 6.5%

Avg. tariff (%) (1.1%) 9.8% 1.3% 9.2% 3.6% Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 7,200/4,750






Bloomberg/Reuters code : JSMR IJ/JSMR.JK Source: Bloomberg, Reuters based on 3 December 2015 closing price

2016 Compendium

229

JASA MARGA

Profit & loss


Sales 6,357 7,254 7,592 8,703 9,630


EBITDA 2,409 3,594 3,812 4,476 4,972

Depreciation 371 817 942 1,125 1,302

EBIT 2,039 2,777 2,870 3,351 3,669

Net interest inc./(expense) (715) (950) (1,280) (1,558) (1,859)



Pre-tax profit 1,311 1,822 1,585 1,787 1,805

Taxes (382) (607) (507) (572) (578)




Balance sheet





Inventories - - - - -

Fixed assets 22,553 24,637 28,012 33,660 38,706

Other assets 1,807 3,774 4,818 5,721 6,324

Total assets 28,059 31,858 36,414 42,688 47,925


Trade payables 1,310 1,256 1,304 1,495 1,654





Cash flow


EBIT 2,039 2,777 2,870 3,351 3,669

Depreciation 371 817 942 1,125 1,302

Working capital (351) (24) 96 252 208

Other operating items (746) (1,162) (1,676) (1,966) (2,224)



Free cash flow (2,944) (2,035) (2,958) (4,623) (3,760)


Net borrowings 1,908 1,167 2,893 4,081 3,261


Net cash flow (788) (223) 140 (299) (430)



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 11.7 14.9 12.5 13.0 12.2

ROAA (%) 3.9 4.7 3.7 3.7 3.3

EBITDA margin (%) 37.9 49.5 50.2 51.4 51.6

EBIT margin (%) 32.1 38.3 37.8 38.5 38.1

Net margin (%) 16.2 19.3 16.8 16.6 15.4

Payout ratio (%) 40.0 40.0 30.0 30.0 30.0

Current ratio (x) 0.8 0.8 0.9 0.7 0.6


Net gearing (%) 95.6 101.3 120.4 147.1 164.0

Debts to assets (%) 43.2 41.7 44.4 47.5 49.1



Inventory turnover (days) na na na na na Source: Company, Bahana estimates

2016 Compendium

230

KALBE FARMA HOLD

2008A 2009A

2010F 2011F

PX: IDR 1,350 - TP: IDR1,480

Despite relatively defensive business segments in nutritionals (28% of

total sales), pharmaceuticals (24%), consumer health (18%) and

distribution (30%), KLBF, one of Indonesia’s leading consumer

companies, has had to revise down its earnings guidance three times

in 2015 on economic softness and troubled branded generic products

due to the National Health Insurance program.

Going into 2016, we see margin support stemming from greater IDR

stability, coupled with planned price increases in its nutritionals and

consumer health divisions. Another positive catalyst could come from

BPOM’s (FDA) allowance to restart its injection products (liquid) line.

At this stage, we have a HOLD rating with an IDR1,480 TP, reflecting

a 2016F PE of 32x, around a 20% discount to UNVR’s target

valuation. Upside risk: faster-than-expected purchasing power

recovery; downside risks: IDR weakness and intensifying competition.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 16,002 17,369 17,786 19,300 20,943

EBIT (IDRbn) 2,549 2,761 2,549 2,812 3,080

Net profit (IDRbn) 1,920 2,065 1,949 2,167 2,400

Bahana/cons. (%) - - 91 89 86

EPS (IDR) 41 44 42 46 51

EPS growth (%) 10.7 7.6 (5.6) 11.2 10.7

EV/EBITDA (x) 22.1 19.9 20.2 17.6 16.0

P/E (x) 33.0 30.6 32.5 29.2 26.4

FCFPS (IDR) (1) 32 26 28 32

FCF yield (%) (0.1) 2.4 2.0 2.1 2.4

BVPS (IDR) 173 200 222 248 276

P/BV (x) 7.8 6.7 6.1 5.4 4.9

DPS (IDR) 17 19 21 23 26



0

50,000

100,000

150,000

200,000

1,000

1,200

1,400

1,600

1,800

2,000


('000)(IDR)

Volume (RHS) KLBF IJ Px Last

(13.0)

(4.4)

(22.5)

(15.8)

(8.4)

(14.1)

(25)

(20)

(15)

(10)

(5)

0

(25)

(20)

(15)

(10)

(5)

0

ytd 1M 3M 6M 9M 12M

(%) (%)

KLBF IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Sales growth (%) 17.3 8.5 2.4 8.5 8.5

Gross margin (%) 48.0 48.8 48.5 49.0 49.2 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 1,915/1,250


Majority shareholder (%) : The Kalbe Family (56.7)


Mkt. cap. (IDRbn/USDmn) : 63,281 /4,572


Bloomberg/Reuters code : KLBF IJ/KLBF.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

231

KALBE FARMA

Profit & loss


Sales 16,002 17,369 17,786 19,300 20,943

Gross profit 7,679 8,476 8,626 9,457 10,297

EBITDA 2,824 3,102 3,030 3,460 3,764

Depreciation 275 341 481 648 684

EBIT 2,549 2,761 2,549 2,812 3,080


Forex gain/(losses) 1 14 2 1 17


Pre-tax profit 2,573 2,764 2,604 2,902 3,215

Taxes (602) (643) (601) (676) (749)




Balance sheet



S-T investments 188 199 178 193 209


Inventories 3,053 3,091 3,262 3,438 3,755

Fixed assets 2,926 3,404 4,019 4,569 5,016

Other assets 1,577 1,489 1,412 1,456 1,493

Total assets 11,315 12,425 13,607 15,060 16,672


Trade payables 1,152 1,133 1,147 1,222 1,327





Cash flow


EBIT 2,549 2,761 2,549 2,812 3,080

Depreciation 275 341 481 648 684

Working capital (842) (204) (235) (307) (421)



Net capital expenditure (855) (724) (960) (1,023) (1,152)

Free cash flow (36) 1,490 1,237 1,332 1,504


Net borrowings 374 (288) 15 19 31

Other financing (771) (734) (847) (912) (1,001)

Net cash flow (433) 468 405 439 534



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 25.3 23.6 19.7 19.7 19.6

ROAA (%) 18.5 17.4 15.0 15.1 15.1

EBITDA margin (%) 17.6 17.9 17.0 17.9 18.0

EBIT margin (%) 15.9 15.9 14.3 14.6 14.7

Net margin (%) 12.0 11.9 11.0 11.2 11.5

Payout ratio (%) 44.3 51.4 46.0 38.0 45.5

Current ratio (x) 2.8 3.4 3.5 3.6 3.7



Debts to assets (%) 5.2 2.4 2.3 2.2 2.1




2016 Compendium

232

KAWASAN INDUSTRI JABABEKA BUY

2008A 2009A

2010F 2011F


Being the largest industrial estate player by total landbank and having the

most diversified businesses (power plant, infrastructure, dryport) among

its peers, KIJA is enjoying greater income stability with less FDI

dependence ahead due to its 130MW power plant, allowing for the highest

recurring income in the sector (9M15: 50% of revenue).

In 2016, KIJA, attempting to enhance its margins, plans to start the first

phase of its JV project in Kendal, Central Java, on 860ha industrial land

with Singapore-based land-management company, SembCorp

Development.

Valuation wise, we maintain our 12-month target price of IDR270 based

on a 70% discount to 2016F NAV, slightly above the sector’s average of

67% given KIJA’s large 9M15 USD-debt amounting to USD252mn, which

could result in further high FX losses. Risks: Worse-than-expected IDR

depreciation and lower-than-expected marketing sales.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 2,740 2,799 2,810 3,031 3,291

EBIT (IDRbn) 855 887 756 851 952

Net profit (IDRbn) 101 401 283 431 600


EPS (IDR) 5 20 14 21 29

EPS growth (%) (73.5) 290.7 (31.1) 52.6 39.1

EV/EBITDA (x) 6.9 6.7 8.2 7.3 6.4

P/E (x) 43.5 11.1 16.2 10.6 7.6

FCFPS (IDR) (7) (14) (16) 11 18

FCF yield (%) (3.0) (6.4) (7.2) 4.8 8.2

BVPS (IDR) 197 211 219 236 259

P/BV (x) 1.1 1.0 1.0 0.9 0.9

DPS (IDR) 0 6 4 6 9



0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

100

150

200

250

300

350

400


('000)(IDR)

Volume (RHS) KIJA IJ Px Last

(10.3)

2.7

11.0

(5.2)

(17.7)(14.9)

(20)

(15)

(10)

(5)

0

5

10

15

(20)

(15)

(10)

(5)

0

5

10

15

ytd 1M 3M 6M 9M 12M

(%) (%)

KIJA IJ relative to JCI Source: Bloomberg



NAV Table 9M15



NAV/share (IDR) 906

Discount (%) 70


Company information

12M high/low (IDR) : 355/160


Majority shareholder (%) : Meadowood Capital (12.6)




Bloomberg/Reuters code : KIJA IJ/KIJA.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

233

KAWASAN INDUSTRI JABABEKA

Profit & loss


Sales 2,740 2,799 2,810 3,031 3,291

Gross profit 1,171 1,252 1,118 1,229 1,353

EBITDA 951 1,001 895 1,000 1,110

Depreciation 96 113 140 148 158

EBIT 855 887 756 851 952



Other income/(expense) 30 46 249 84 (22)

Pre-tax profit 204 560 390 564 762

Taxes (100) (166) (114) (140) (169)




Balance sheet





Inventories 703 660 726 799 879

Fixed assets 2,168 2,228 2,236 2,244 2,252

Other assets 1,149 967 1,080 1,203 1,345

Total assets 8,255 8,505 9,600 10,652 11,636


Trade payables 187 164 106 113 121

Other liabilities 1,310 975 1,124 1,699 2,313




Cash flow


EBIT 855 887 756 851 952

Depreciation 96 113 140 148 158

Working capital (56) (35) (71) (60) (67)

Other operating items (392) (725) (387) 86 179

Operating cash flow 503 241 438 1,025 1,222


Free cash flow (133) (286) (329) 219 376


Net borrowings 526 132 1,027 115 (120)

Other financing (145) 125 (379) (156) (206)

Net cash flow 354 (1) 319 177 50



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 2.6 9.6 6.4 9.2 11.7

ROAA (%) 1.3 4.8 3.1 4.3 5.4

Gross margin (%) 42.8 44.7 39.8 40.5 41.1

EBITDA margin (%) 34.7 35.7 31.9 33.0 33.7

EBIT margin (%) 31.2 31.7 26.9 28.1 28.9

Net margin (%) 3.7 14.3 10.1 14.2 18.2

Payout ratio (%) - 30.0 30.0 30.0 30.0

Current ratio (x) 4.9 5.1 7.3 7.7 7.6


Net gearing (%) 49.9 48.3 62.2 56.5 48.4




2016 Compendium

234

KIMIA FARMA BUY

2008A 2009A

2010F 2011F

PX: IDR980- TP: IDR1,350*

The largest state-owned pharmaceutical company, KAEF, should have

several growth catalysts through adding 100 pharmacies p.a. (current:

670), 50 clinics p.a. (current: 215) and several hospitals and hotels

under the BOT agreement. KAEF is also benefitting from higher demand

for drugs under the National Health Insurance (JKN).

The company plans to build a IDR110bn factory in Bekasi to produce six

pharmaceutical raw materials and eight high functional chemicals.

Furthermore, KAEF plans to start building a second pharmaceutical salt

factory in 2016 with a capacity of 4,000tons p.a.; construction is

expected to be completed in 18-24 months.

In order to fund expansion, KAEF plans to have a rights issue or an MTN

issuance in 2016. On valuation, we lower our TP to IDR1,350 on 23x

2016F PER (from 18x), justified by its solid 9M15 operating performance.

BUY. Risk: continued JKN deficit that curbs growth.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 4,348 4,521 5,070 5,754 6,599

EBIT (IDRbn) 250 286 342 422 524

Net profit (IDRbn) 215 235 279 327 396


EPS (IDR) 39 42 50 59 71

EPS growth (%) 4.6 9.4 19.1 17.1 21.0

EV/EBITDA (x) 19.1 17.0 15.3 12.9 10.5

P/E (x) 25.4 23.2 19.5 16.6 13.7

FCFPS (IDR) 25 37 (63) (12) 21

FCF yield (%) 0.0 0.0 (0.1) (0.0) 0.0

BVPS (IDR) 290 322 360 404 458

P/BV (x) 3.4 3.0 2.7 2.4 2.1

DPS (IDR) 10 11 13 15 18



0

5,000

10,000

15,000

20,000

25,000

30,000

500

700

900

1,100

1,300

1,500


('000)(IDR)

Volume (RHS) KAEF IJ Px Last

(19.9)

13.2

30.7

3.9

(12.0)

(21.0) (30)

(20)

(10)

0

10

20

30

40

(30)

(20)

(10)

0

10

20

30

40

ytd 1M 3M 6M 9M 12M

(%) (%)

KAEF IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Generic to sales proportion (%) 12.6 15.5 17.1 18.3 18.6

BPJS members (mn) 116 135 150 170 195 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 1,465/615






Bloomberg/Reuters code : KAEF IJ/KAEF.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

235

KIMIA FARMA

Profit & loss


Sales 4,348 4,521 5,070 5,754 6,599

Gross profit 1,292 1,385 1,546 1,784 2,079

EBITDA 267 306 365 449 554


EBIT 250 286 342 422 524




Pre-tax profit 284 316 376 440 532

Taxes (68) (79) (94) (110) (133)




Balance sheet





Inventories 641 687 753 870 991

Fixed assets 499 558 1,093 1,373 1,539

Other assets 384 624 631 701 795

Total assets 2,472 2,968 3,232 3,740 4,172


Trade payables 478 505 552 622 709


Total liabilities 848 1,157 1,210 1,469 1,602



Cash flow


EBIT 250 286 342 422 524


Working capital (84) (27) (133) (166) (187)

Other operating items 26 18 6 2 2



Free cash flow 137 204 (352) (65) 119


Net borrowings 23 285 (31) 150 0

Other financing (83) (310) (41) (127) (167)

Net cash flow 78 179 (424) (42) (48)



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 14.1 13.8 14.8 15.4 16.5

ROAA (%) 9.4 8.6 9.0 9.4 10.0

Gross margin (%) 29.7 30.6 30.5 31.0 31.5

EBITDA margin (%) 6.1 6.8 7.2 7.8 8.4

EBIT margin (%) 5.7 6.3 6.7 7.3 7.9

Net margin (%) 4.9 5.2 5.5 5.7 6.0

Payout ratio (%) 25.0 25.0 25.0 25.0 25.0

Current ratio (x) 2.8 2.4 2.4 2.0 2.0


Net gearing (%) nc nc 7.7 15.4 15.5




2016 Compendium

236

KRAKATAU STEEL REDUCE

2008A 2009A

2010F 2011F


Despite rising steel demand for infra-related projects, KRAS, the

largest steel maker in Indonesia, should remain negatively affected by

the weak steel price amid China’s economic slowdown. These

conditions likely warrant continued sub-par performance of KRAS’s

main affiliated company, Krakatau Posco (9M15 net loss: USD85mn).

Delays in the planned IDR1.5tn state capital injection might force

KRAS to further raise its debt level (9M15: USD1.4bn) to complete a

blast furnace construction and develop a new 1.5mnt hot strip mill

plant. Greater government support through a tighter set of rules is

also required to curb steel imports, which have flooded the local

market and cut KRAS’s HRC market share to 34% (2014: 45%).

We retain our DCF-based TP of IDR275 (WACC 10.2%) and REDUCE

rating on sluggish earnings prospects despite an improved gearing

level post its USD1.1bn land revaluation. Risk: Gas price cuts.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (USDmn) 2,084 1,869 1,382 1,496 1,659

EBIT (USDmn) (40) (108) (183) (117) (104)

Net profit (USDmn) (14) (150) (218) (188) (179)

Bahana/cons.(%) - - na na na

EPS (IDR) (9) (113) (186) (173) (161)

EPS growth (%) na na na na na

EV/EBITDA (x) 52.5 na na na na

P/E (x) na na na na na

FCFPS (IDR) (36) (215) (268) (262) (260)

FCF yield (%) (11.4) (68.2) (85.1) (83.2) (82.5)

BVPS (IDR) 694 664 1,446 1,388 1,188

P/BV (x) 0.4 0.5 0.2 0.2 0.3

DPS (IDR) - - - - -



0

20,000

40,000

60,000

80,000

100,000

120,000

250

300

350

400

450

500

550


('000)(IDR)

Volume (RHS) KRAS IJ Px Last

(24.3)

(1.7)(6.0)

(10.2)

(17.9)

(21.2)

(30)

(25)

(20)

(15)

(10)

(5)

0

(30)

(25)

(20)

(15)

(10)

(5)

0

ytd 1M 3M 6M 9M 12M

(%) (%)

KRAS IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

HRC price (USD per ton) 666 645 484 435 457

CRC price (USD per ton) 799 756 605 556 584 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 505/302

12M high/low consensus TP (IDR) : na / na





Bloomberg/Reuters code : KRAS IJ/KRAS.JK Source: Bloomberg, Reuters based on 3 December 2015 closing price

2016 Compendium

237

KRAKATAU STEEL

Profit & loss


Sales 2,084 1,869 1,382 1,496 1,659

Gross profit 96 41 (37) 32 51

EBITDA 22 (39) (113) (47) (32)


EBIT (40) (108) (183) (117) (104)



Other income/(expense) 27 (33) (88) (56) (14)

Pre-tax profit (15) (183) (265) (230) (220)

Taxes 1 26 40 35 33



Net profit (14) (150) (218) (188) (179) Source: Company, Bahana estimates

Balance sheet



S-T investments 8 - - - -


Inventories 519 481 389 401 440

Fixed assets 858 1,097 2,362 2,443 2,521

Other assets 528 535 541 563 585

Total assets 2,380 2,598 3,613 3,761 3,935


Trade payables 180 203 175 181 198




Shareholders' equity 1,032 879 1,695 1,507 1,327 Source: Company, Bahana estimates

Cash flow


EBIT (40) (108) (183) (117) (104)


Working capital 82 139 131 (4) (21)


Operating cash flow 117 24 (14) (134) (141)


Free cash flow (53) (284) (314) (284) (291)

Equity raised/(bought) 0 (1) - - -

Net borrowings 23 334 200 300 300

Other financing (50) (2) 1 1 2

Net cash flow (80) 47 (113) 17 11



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) (1.3) (15.7) (16.9) (11.8) (12.7)

ROAA (%) (0.6) (6.0) (7.0) (5.1) (4.7)

Gross margin (%) 4.6 2.2 (2.7) 2.1 3.1

EBITDA margin (%) 1.1 (2.1) (8.2) (3.1) (2.0)

EBIT margin (%) (1.9) (5.8) (13.2) (7.8) (6.3)

Net margin (%) (0.7) (8.0) (15.8) (12.6) (10.8)


Current ratio (x) 1.1 1.0 0.7 0.6 0.5


Net gearing (%) 79.1 125.6 83.6 112.8 149.8




2016 Compendium

238

LIPPO CIKARANG BUY

2008A 2009A

2010F 2011F

PX: IDR7,525 - TP: IDR8,300*

With the largest residential and commercial portfolio (9M15: 57% of

total revenue) among its peers, LPCK continues to shift its focus from

industrial estates to residential and commercial sales, allowing for the

generation of IDR1.8tn (+11.4% y-y) in 9M15 revenue. On industrial

land, LPCK only expects 2015 marketing sales of IDR300bn, 12% of

the management’s initial full-year target of IDR2.5tn.

Despite strong 9M15 marketing sales of IDR2tn, up 36% y-y and in

line with the company’s full-year 2015 target, LPCK has raised its

target from the Orange County (OC) mega project by 50% to

IDR1.5tn resulting in a IDR3tn pre-sales target. In 2016, we expect

LPCK’s revenue to jump 19% y-y on solid 2015 OC marketing sales.

We apply a 60% discount to our 2016F NAV to derive our higher

IDR8,300 TP backed by its sustainable projects. BUY. Risk: Lower-

than-expected marketing sales on unsuccessful projects.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 1,328 1,792 1,828 2,183 2,589

EBIT (IDRbn) 634 914 900 1,063 1,284

Net profit (IDRbn) 591 844 970 1,152 1,334


EPS (IDR) 849 1,212 1,394 1,655 1,917

EPS growth (%) 45.1 42.9 15.0 18.7 15.8

EV/EBITDA (x) 7.7 5.4 5.4 4.6 3.7

P/E (x) 8.9 6.2 5.4 4.5 3.9

FCFPS (IDR) (844) (616) (396) (638) (372)

FCF yield (%) (11.2) (8.2) (5.3) (8.5) (4.9)

BVPS (IDR) 2,613 3,838 5,221 6,878 8,796

P/BV (x) 2.9 2.0 1.4 1.1 0.9

DPS (IDR) - - - - -



0

1,000

2,000

3,000

4,000

5,000

6,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

13,000

14,000


('000)(IDR)

Volume (RHS) LPCK IJ Px Last

(14.5)

(7.8)

9.5

(18.3) (19.7)

(15.1)

(25)

(20)

(15)

(10)

(5)

0

5

10

(25)

(20)

(15)

(10)

(5)

0

5

10

ytd 1M 3M 6M 9M 12M

(%) (%)

LPCK IJ relative to JCI Source: Bloomberg



NAV Table 9M15

Land bank (Ha) 675



Discount (%) 60


Company information

12M high/low (IDR) : 12,250/6,250


Majority shareholder (%) : Kemuning Satiatama (42.2)

Shares outstanding (mn)/Free float (%) : 696/57.8



Bloomberg/Reuters code : LPCK IJ/LPCK.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

239

LIPPO CIKARANG

Profit & loss


Sales 1,328 1,792 1,828 2,183 2,589

Gross profit 743 1,057 1,044 1,233 1,483

EBITDA 641 925 908 1,072 1,294


EBIT 634 914 900 1,063 1,284




Pre-tax profit 666 942 1,080 1,283 1,477

Taxes (75) (98) (110) (131) (142)




Balance sheet





Inventories 2,510 2,882 3,257 3,680 4,048

Fixed assets 53 54 61 67 73

Other assets 923 1,062 2,302 3,489 4,664

Total assets 3,854 4,310 6,057 7,672 9,352


Trade payables - 40 - - -





Cash flow


EBIT 634 914 900 1,063 1,284


Working capital (556) (377) (447) (440) (387)

Other operating items 98 (663) 839 479 302

Operating cash flow 183 (115) 1,300 1,111 1,209

Net capital expenditure (770) (314) (1,575) (1,555) (1,468)

Free cash flow (587) (429) (276) (444) (259)

Equity raised/(bought) - 8 (8) - -



Net cash flow (2) (63) 91 (21) 109



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 38.8 37.6 30.8 27.4 24.5

ROAA (%) 17.7 20.7 18.7 16.8 15.7

Gross margin (%) 55.9 59.0 57.1 56.5 57.3

EBITDA margin (%) 48.3 51.6 49.7 49.1 50.0

EBIT margin (%) 47.7 51.0 49.2 48.7 49.6

Net margin (%) 44.5 47.1 53.1 52.8 51.5


Current ratio (x) 36.0 25.0 38.5 39.4 40.6




Creditor turnover (days) - - - - -


2016 Compendium

240

LIPPO KARAWACI REDUCE

2008A 2009A

2010F 2011F

PX: IDR1,320 - TP: IDR1,130

LPKR, the largest property developer by total assets in our coverage,

is facing soft demand causing a recent severe 33% cut in its 2015

marketing-sales target to IDR4tn (Bahana: IDR3.6tn).

However, we see some operating support for LPKR on the back of its

REIT asset-sales target, which was recently raised by 150% to

IDR1.5tn. Going into 2016, LPKR’s REITs, in the form of Lippo Mall

Jogja, on top of the originally-planned Lippo Mall Kuta, should boost

revenue growth by 21% y-y to over IDR11tn. However, we note that

REITs are a lower-margin business for LPKR.

On valuation, our TP at IDR1,130 is based on 60% discount to our

2016F NAV. 14% downside to our TP and 43% YTD market

outperformance have us retaining our REDUCE call as most good

news related to SILO and LPCK are priced in. Risks: Stronger IDR due

to large USD803mn debt and sentiment from government policies.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 6,666 11,655 9,156 11,116 10,785

EBIT (IDRbn) 1,512 3,277 2,237 2,841 2,900

Net profit (IDRbn) 1,228 2,547 1,257 1,894 2,081

Bahana/cons.(%) - - 78 113 110

EPS (IDR) 53 110 54 82 90

EPS growth (%) 15.8 107.4 (50.7) 50.7 9.9

EV/EBITDA (x) 20.2 10.1 14.6 12.1 11.7

P/E (x) 24.8 12.0 24.2 16.1 14.6

FCFPS (IDR) (107) 4 (39) (27) 37

FCF yield (%) (8.1) 0.3 (3.0) (2.0) 2.8

BVPS (IDR) 555 676 714 783 852

P/BV (x) 2.4 2.0 1.8 1.7 1.5

DPS (IDR) 14 16 14 21 23

Div. yield (%) 1.1 1.2 1.0 1.6 1.7 Source: Company, Bahana estimates note: based on on 3 December 2015 closing price


0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

800

900

1,000

1,100

1,200

1,300

1,400

1,500

1,600


('000)(IDR)

Volume (RHS) LPKR IJ Px Last

42.6

5.1

22.8 18.9

31.5 27.5

0

10

20

30

40

50

0

10

20

30

40

50

ytd 1M 3M 6M 9M 12M

(%) (%)

LPKR IJ relative to JCI Source: Bloomberg



9M15




Discount (%) 60


Company information

12M high/low (IDR) : 1,460/975


Majority shareholder (%) : Pacific Asia Holding (17.9)

9) Share outstanding (m)/Free float (%) : 23,078/94.7



Bloomberg/Reuters code : LPKR IJ/LPKR.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

241

LIPPO KARAWACI

Profit & loss


Sales 6,666 11,655 9,156 11,116 10,785

Gross profit 3,047 5,397 4,197 5,026 4,979

EBITDA 1,807 3,666 2,645 3,284 3,380

Depreciation 295 389 409 442 480

EBIT 1,512 3,277 2,237 2,841 2,900




Pre-tax profit 1,925 3,695 1,966 2,853 3,143

Taxes (332) (560) (375) (456) (448)




Balance sheet



S-T investments 6,778 8,111 8,354 8,605 8,863

Trade receivables 772 951 1,204 1,458 1,414

Inventories 13,894 16,553 18,313 20,563 22,814

Fixed assets 2,811 3,209 4,790 5,735 5,953

Other assets 5,190 5,408 6,183 7,588 8,943

Total assets 31,300 37,761 41,923 46,557 50,329


Trade payables 398 395 753 911 884





Cash flow


EBIT 1,512 3,277 2,237 2,841 2,900

Depreciation 295 389 409 442 480

Working capital (390) 788 294 (5) 112


Operating cash flow (893) 402 1,581 1,651 2,906

Net capital expenditure (1,570) (315) (2,485) (2,263) (2,046)

Free cash flow (2,462) 86 (904) (612) 859


Net borrowings 1,793 2,190 1,299 552 (552)

Other financing (813) (602) (846) (410) (574)

Net cash flow (1,482) 1,674 (450) (471) (266)



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 10.5 17.9 7.8 11.0 11.0

ROAA (%) 4.4 7.4 3.2 4.3 4.3

Gross margin (%) 45.7 46.3 45.8 45.2 46.2

EBITDA margin (%) 27.1 31.5 28.9 29.5 31.3

EBIT margin (%) 22.7 28.1 24.4 25.6 26.9

Net margin (%) 18.4 21.9 13.7 17.0 19.3

Payout ratio (%) 26.1 14.9 25.0 25.0 25.0

Current ratio (x) 5.3 5.4 4.8 4.9 5.2


Net gearing (%) 46.5 41.4 49.9 51.2 45.5




2016 Compendium

242

LONDON SUMATRA INDONESIA BUY*

2008A 2009A

2010F 2011F

PX: IDR1,285 - TP: IDR1,870

LSIP, the sector’s third-largest CPO player in terms of planted areas

with 115k ha (82% palm oil, 15% rubber, 3% others ), plans to slow

down new planting to 2k ha/ annum (from 5k ha) in the years ahead

due to current unattractive CPO prices. This will allow for lower 2015-

16F capex of around IDR1tn, a strong cash position and zero debt.

Note that LSIP’s strong balance sheet allows for the greatest leverage

in the sector from higher CPO prices and a stronger USD providing

immunity from forex losses. We forecast a 2016 revenue of IDR4.7tn,

+12% y-y, on a stronger USD and rising CPO prices.

As we expect 2016 earnings to recover to IDR822bn, +31% y-y, LSIP

is our second most preferred stock in the sector with around 46%

upside potential to our TP of IDR1,870, based on a 2016F PE of 15.5x,

at a 35% discount to its Malaysian peers. We upgrade our rating to

BUY from Hold. Risks: Lower-than-expected prices and production.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRb) 4,134 4,727 4,223 4,748 5,121

EBIT (IDRb) 818 1,192 723 974 1,081

Net profit (IDRb) 769 917 628 825 904


EPS (IDR) 113 134 92 121 133

EPS growth (%) (31.1) 19.3 (31.5) 31.3 9.7

EV/EBITDA (x) 7.4 5.4 8.1 6.2 5.5

P/E (x) 11.4 9.6 14.0 10.6 9.7

FCFPS (IDR) (6) 20 (6) 37 50

FCF yield (%) (0.5) 1.6 (0.4) 2.9 3.9

BVPS (IDR) 969 1,058 1,094 1,178 1,262

P/BV (x) 1.3 1.2 1.2 1.1 1.0

DPS (IDR) 46 54 37 48 53



0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

900

1,100

1,300

1,500

1,700

1,900

2,100


('000)(IDR)

Volume (RHS) LSIP IJ Px Last

(19.1)

(9.6)

18.2

(15.1) (16.0)

(23.4) (30)

(20)

(10)

0

10

20

30

(30)

(20)

(10)

0

10

20

30

ytd 1M 3M 6M 9M 12M

(%) (%)

LSIP IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F



Growth (%) (11.5) 11.8 2.1 (3.1) 8.2

ASP CPO (USD/ton) 686 696 560 600 620


Company information

12M high/low (IDR) : 2,025/935


Majority shareholder (%) : Salim Ivomas Pratama (59.5)

Shares outstanding (m)/Free float (%) : 6,823/40.5

Mkt. cap. (IDRb/USDm) : 8,801/636

3-m avg.daily t.o.(IDRb/USDm) : 32.2/2.3

Bloomberg/Reuters code : LSIP IJ/LSIP.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

243

LONDON SUMATRA INDONESIA

Profit & loss


Sales 4,134 4,727 4,223 4,748 5,121

Gross profit 1,253 1,636 1,215 1,503 1,647

EBITDA 993 1,372 946 1,224 1,348

Depreciation 175 181 223 251 267

EBIT 818 1,192 723 974 1,081




Pre-tax profit 997 1,189 815 1,070 1,173

Taxes (228) (272) (187) (245) (269)




Balance sheet





Inventories 374 380 463 541 579

Fixed assets 5,270 6,018 6,732 7,224 7,732

Other assets 837 815 707 795 860

Total assets 7,975 8,655 9,075 9,824 10,523


Trade payables 311 283 422 475 512





Cash flow


EBIT 818 1,192 723 974 1,081

Depreciation 175 181 223 251 267

Working capital 214 (25) (20) (7) (7)


Operating cash flow 1,157 1,076 829 1,070 1,166

Net capital expenditure (1,198) (937) (867) (815) (826)

Free cash flow (41) 140 (38) 255 339



Other financing (358) (184) (216) (146) (256)

Net cash flow (399) (45) (254) 109 84



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 11.9 13.3 8.6 10.6 10.9

ROAA (%) 9.9 11.0 7.1 8.7 8.9

Gross margin (%) 30.3 34.6 28.8 31.7 32.2

EBITDA margin (%) 24.0 29.0 22.4 25.8 26.3

EBIT margin (%) 19.8 25.2 17.1 20.5 21.1

Net margin (%) 18.6 19.4 14.9 17.4 17.7

Payout ratio (%) 40.8 40.0 40.0 40.0 40.0

Current ratio (x) 2.5 2.6 2.2 2.3 2.3






2016 Compendium

244

MALINDO FEED-MILL BUY

2008A 2009A

2010F 2011F

PX: IDR1,340 - TP: IDR1,850*

MAIN, the third-largest listed poultry player, is set to enjoy a DOC

price recovery amid the current 6mn parent stock (PS) culling. Out of

its 4 segments, including poultry feed (9M15: 69% of revenues) and

day-old chicks (DOC) (19%), the fastest-growing segments are broiler

chickens (11%) and processed foods (1%).

MAIN guides for 15-20% y-y revenue growth in 2015-18, with 2016F

capex of IDR635bn for the following expansion: 19% rise in feed-mill

production capacity to 1.5mn tons; DOC: 6% to 260mn chicks;

broilers: 13% to 45k tons; and processed foods: 167% to 24k tons.

MAIN expects margins to improve in 2016 on poultry price support

backed by higher purchasing power. Our new IDR1,850 TP (from

IDR1,500) reflects a 2016F PE of 18x, a 10% discount to CPIN's

target PE, sufficient to account for MAIN’s much smaller market cap

despite good corporate governance execution. Risk: IDR volatility.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 4,193 4,502 4,878 5,143 5,765

EBIT (IDRbn) 483 15 195 354 453

Net profit (IDRbn) 242 (85) 9 182 287


EPS (IDR) 143 (48) 5 103 163

EPS growth (%) (20.2) (133.7) (110.7) 1,916.1 57.6

EV/EBITDA (x) 27.6 13.5 9.1 9.4 7.9

P/E (x) 9.4 (27.9) 261.1 13.0 8.2

FCFPS (IDR) (64) (566) (128) (82) (70)

FCF yield (%) (4.8) (42.2) (9.5) (6.1) (5.2)

BVPS (IDR) 483 505 505 570 673

P/BV (x) 2.8 2.7 2.7 2.4 2.0

DPS (IDR) 21 - 1 21 33



0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400

2,600


('000)(IDR)

Volume (RHS) MAIN IJ Px Last

(23.9)

17.6 14.3

(16.6) (18.3)

(34.4) (40)

(30)

(20)

(10)

0

10

20

30

(40)

(30)

(20)

(10)

0

10

20

30

ytd 1M 3M 6M 9M 12M

(%) (%)

MAIN IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

GDP growth (%) 6.7 5.8 5.2 4.8 5.2

Inflation (%) 5.5 8.4 5.9 10.3 6.3



Company information

12M high/low (IDR) : 2,475/1,100


Majority shareholder (%) : Dragon Amity Ltd. (55.9)




Bloomberg/Reuters code : MAIN IJ/MAIN.JK Source: Bloomberg, Reuters based on 3 December 2015 closing price

2016 Compendium

245

MALINDO FEED-MILL

Profit & loss


Sales 4,193 4,502 4,878 5,143 5,765

Gross profit 718 322 514 700 841

EBITDA 572 141 340 522 642

Depreciation 90 126 146 168 189

EBIT 483 15 195 354 453




Pre-tax profit 311 (108) 12 233 369

Taxes (69) 24 (3) (51) (81)

Minority interest (0) 0 (0) (0) (0)


Net profit 242 (85) 9 182 287 Source: Company, Bahana estimates

Balance sheet





Inventories 392 610 493 502 557

Fixed assets 1,128 1,577 1,831 2,103 2,376

Other assets 309 570 581 611 678

Total assets 2,214 3,531 3,511 3,997 4,384


Trade payables 241 418 336 342 379




Shareholders' equity 865 1,081 1,130 1,276 1,506 Source: Company, Bahana estimates

Cash flow


EBIT 483 15 195 354 453

Depreciation 90 126 146 168 189

Working capital (175) (258) (17) (41) (106)




Free cash flow (109) (998) (226) (145) (123)

Equity raised/(bought) - 336 - - -

Net borrowings 153 914 (28) 320 99

Other financing (51) 311 48 (28) (48)

Net cash flow (8) 227 (206) 147 (72)



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 31.2 (8.7) 0.8 15.2 20.7

ROAA (%) 12.0 (3.0) 0.3 4.9 6.9

Gross margin (%) 17.1 7.2 10.5 13.6 14.6

EBITDA margin (%) 13.7 3.1 7.0 10.1 11.1

EBIT margin (%) 11.5 0.3 4.0 6.9 7.9

Net margin (%) 5.8 (1.9) 0.2 3.5 5.0

Payout ratio (%) 14.8 - 20.0 20.0 20.0

Current ratio (x) 1.0 1.1 1.0 0.9 0.9


Net gearing (%) 103.1 146.1 155.5 151.3 139.5




2016 Compendium

246

MATAHARI DEPARTMENT STORE BUY 2008A 2009A

2010F 2011F

PX: IDR15,950 - TP: IDR19,800*

LPPF, the sole listed retail player focusing on the mid-income segment,

has opened 11 stores in 2015 despite economic slowdown, while

retaining the sector’s highest 9M15 SSSG of 6.6%. In 2016, on a

gradual improvement in the economy, SSSG should return to double-

digit levels, backed by the most extensive network of 141 outlets.

Going forward, we look for top-line growth to be supported by

expansion in underpenetrated and vast areas ex-Java, while on the

cost front, LPPF’s leased stores, low capex and planned IDR700bn debt

repayment should help maintain 2016 profit margins.

Purchasing-power resilience of the mid-income segment would allow

sustained growth for LPPF. Hence, we retain our positive view with a

IDR19,800 TP (from IDR18,200), reflecting a 2016F PER of 26x, 25%

premium to the sector, justified on its large cap and low competition.

Risk: More competition in outlying areas with above-average growth.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 6,754 7,926 9,340 10,872 12,699

EBIT (IDRbn) 1,781 2,111 2,474 2,868 3,346

Net profit (IDRbn) 1,150 1,419 1,859 2,219 2,620


EPS (IDR) 394 486 637 760 898

EPS growth (%) 49.2 23.4 31.0 19.3 18.1

EV/EBITDA (x) 23.8 19.9 16.5 13.7 11.2

P/E (x) 40.5 32.8 25.0 21.0 17.8

P/Sales 6.9 5.9 5.0 4.3 3.7

FCFPS (IDR) 373 477 627 755 962

FCF yield (%) 2.3 3.0 3.9 4.7 6.0

BVPS (IDR) (268) 61 504 1,009 1,603

P/BV (x) - 262.1 31.7 15.8 10.0

DPS (IDR) 460 195 255 304 359



0

5,000

10,000

15,000

20,000

14,000

15,000

16,000

17,000

18,000

19,000

20,000


('000)(IDR)

Volume (RHS) LPPF IJ Px Last

19.5

(0.2)

(6.1)

2.9 5.6

17.1

(10)

(5)

0

5

10

15

20

25

(10)

(5)

0

5

10

15

20

25

ytd 1M 3M 6M 9M 12M

(%) (%)

LPPF IJ relative to JCI Source: Bloomberg

Michael W. Setjoadi ([email protected]) +6221 2505081 ext.3613 *New, please refer to appendix II

Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Net revenue growth (%) 20.2 17.3 17.9 16.4 16.8

Same-store sales growth (%) 12.1 10.1 5.4 6.8 7.7

Number of outlets (stores) 125 131 142 152 162 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 19,950/14,200


Majority shareholder (%) : Multipolar Tbk (20.5)




Bloomberg/Reuters code : LPPF IJ/LPPF.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

247

MATAHARI DEPARTMENT STORE

Profit & loss


Sales 6,754 7,926 9,340 10,872 12,699

Gross profit 4,363 5,048 5,933 6,869 7,981

EBITDA 1,988 2,339 2,743 3,190 3,727

Depreciation 207 228 269 322 381

EBIT 1,781 2,111 2,474 2,868 3,346

Net interest inc./(expense) (291) (233) (50) 25 70


Other income/(expense) 34 (27) - - -

Pre-tax profit 1,524 1,851 2,425 2,893 3,416

Taxes (373) (431) (565) (675) (796)




Balance sheet





Inventories 724 955 1,131 1,430 1,627

Fixed assets 727 726 796 842 874

Other assets 655 896 935 998 1,075

Total assets 2,937 3,408 4,558 6,243 8,521

Interest bearing liabilities 1,596 689 250 - -

Trade payables 1,266 1,411 1,671 1,962 2,313

Other liabilities 857 1,131 1,168 1,337 1,532



Shareholders' equity (781) 178 1,469 2,944 4,676 Source: Company, Bahana estimates

Cash flow


EBIT 1,781 2,111 2,474 2,868 3,346

Depreciation 207 228 269 322 381

Working capital 25 (77) 91 (9) 177




Free cash flow 1,089 1,392 1,828 2,202 2,806


Net borrowings (1,363) (907) (439) (250) -

Other financing 47 (472) (533) (696) (832)

Net cash flow (228) 14 856 1,256 1,974



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) - - 225.8 100.6 56.0

ROAA (%) 39.2 44.7 46.7 41.1 35.5

Gross margin (%) 34.2 34.8 35.7 36.1 36.4

EBITDA margin (%) 15.6 16.1 16.3 16.6 16.8

EBIT margin (%) 13.9 14.6 14.7 14.9 15.1

Net margin (%) 9.0 9.8 11.1 11.5 11.8

Payout ratio (%) 40.0 40.0 40.0 40.0 40.0

Current ratio (x) 0.9 0.8 1.3 1.7 2.1

Interest coverage (x) 6.1 9.0 50.0 na na

Net gearing (%) na nc nc nc nc



Inventory turnover (days) 94.9 106 112 117 118 Source: Company, Bahana estimates

2016 Compendium

248

MATAHARI PUTRA PRIMA BUY

2008A 2009A

2010F 2011F

PX: IDR1,880 - TP: IDR2,750

We believe that MPPA, Indonesia’s second largest hypermarket player,

has the edge over Transmart (prev: Carrefour) on its poor inventory

system and HERO (Giant) on its labor issue, given MPPA has recently

improved its organizational structure by separating the management

of its divisions (i.e. Wholesale, Hypermarket, Supermarket/

Minimarket, Health & Beauty).

Going forward, 60% of MPPA’s expansions would be ex-Java to

leverage on its logistics infrastructure and distribution network. Aside

from SSSG of 5-6% in 2016 onwards, we also expect higher margins

on minimal wage and rent increases.

On valuation, we derive our TP of IDR2,750 from an unchanged 25x

2016F PER. BUY on 46% upside to our TP and Temasek’s possible

divestment. Risk: Intensifying competition as two large overseas

retailers, Lulu and Aeon Group, enter the market.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 11,913 13,590 14,286 16,331 18,267

EBIT (IDRbn) 389 647 567 738 839

Net profit (IDRbn) 445 554 451 587 666


EPS (IDR) 83 103 84 109 124

EPS growth (%) 101.7 24.5 (18.6) 30.3 13.4

EV/EBITDA (x) 15.3 10.3 10.7 8.4 7.0

P/E (x) 22.7 18.2 22.4 17.2 15.2

FCFPS (IDR) 426.2 126.5 53.8 58.8 76.4

FCF yield (%) 22.7 6.7 2.9 3.1 4.1

BVPS (IDR) 613 530 580 646 720

P/BV (x) 3.1 3.5 3.2 2.9 2.6

DPS (IDR) 186 36 34 44 50



0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000


('000)(IDR)

Volume (RHS) MPPA IJ Px Last

(25.2)

(9.1)

(22.0)

(37.1) (37.0)

(30.5)

(40)

(35)

(30)

(25)

(20)

(15)

(10)

(5)

0

(40)

(35)

(30)

(25)

(20)

(15)

(10)

(5)

0

ytd 1M 3M 6M 9M 12M

(%) (%)

MPPA IJ relative to JCI Source: Bloomberg

Michael W. Setjoadi ([email protected]) +6221 2505081 ext.3613

Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Total store opening (unit) 35 45 42 33 33

Average selling area (sqm) 599,278 670,877 732,809 800,034 864,259

Ave. Hypermart area / store (sqm) 6,107 6,080 5,000 5,500 5,500

Sales (in mn) / sqm 18.4 19.6 17.8 18.8 19.5

Marketing income (IDRbn)

299 525 587 720 842 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 4,470/1,875


Majority shareholder (%) : Multipolar Tbk (50.2)




Bloomberg/Reuters code : MPPA IJ/MPPA.JK Source: Bloomberg, Reuters based on 3 December 2015 closing price

2016 Compendium

249

MATAHARI PUTRA PRIMA

Profit & loss


Sales 11,913 13,590 14,286 16,331 18,267

Gross profit 1,889 2,354 2,502 2,893 3,275

EBITDA 589 909 865 1,093 1,303

Depreciation 200 262 298 355 420

EBIT 389 647 567 738 839



Other income/(expense) 200 65 - - -

Pre-tax profit 585 731 593 772 876

Taxes (140) (177) (142) (185) (210)




Balance sheet





Inventories 2,274 2,655 2,648 3,019 3,368

Fixed assets 1,087 1,273 1,475 1,680 1,900

Other assets 1,820 1,121 1,306 1,400 1,472

Total assets 6,580 5,827 6,507 7,279 8,036

Interest bearing liabilities 188 - 200 200 200

Trade payables 1,989 1,893 2,002 2,283 2,546





Cash flow


EBIT 389 647 567 738 839

Depreciation 200 262 298 355 420

Working capital 1,338 (283) (25) (129) (128)

Other operating items 841 507 (51) (87) (80)

Operating cash flow 2,768 1,133 789 876 1,051


Free cash flow 2,292 680 289 316 411


Net borrowings (1,815) (188) 200 - -

Other financing (977) (1,047) (192) (220) (300)

Net cash flow (59) (555) 297 96 111

Cash balances, beginning 1,362 1,303 748 1,044 1,141


Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 12.5 18.0 15.1 17.8 18.1

ROAA (%) 6.0 8.9 7.3 8.5 8.7

Gross margin (%) 15.9 17.3 17.5 17.7 17.9

EBITDA margin (%) 4.9 6.7 6.1 6.7 7.1

EBIT margin (%) 3.3 4.8 4.0 4.5 4.6

Net margin (%) 3.7 4.1 3.2 3.6 3.6

Payout ratio (%) 224.8 40.0 40.0 40.0 40.0

Current ratio (x) 1.1 1.1 1.1 1.1 1.1

Interest coverage (x) 112.5 nc nc nc nc





2016 Compendium

250

MAYORA INDAH BUY

2008A 2009A

2010F 2011F

PX: IDR26,075 - TP: IDR31,000*

With several household brands targeting low- to middle-income

earners, MYOR, Indonesia’s largest confectionery manufacturer, should

face normalized margins, as benefits from low commodity prices have

likely run their course. Robusta’s coffee price (in IDR) seems to have

bottomed out (+4%) from its lowest 3Q15 level, similar to sugar

(+34%) and flour (+7%), while we think MYOR will only raise ASPs

when its GPM has reached the 23% level (3Q15 GPM: 29%).

A possible catalyst would be the possibility for Indonesia to join the

TPP, allowing for the growth of MYOR’s exports (46% of 9M15 top line)

to other Asian countries (9M15 overseas sales: +29% y-y).

Going into 2016, we like MYOR’s discretionary status, which should

benefit from higher GDP growth. Our IDR31,000 TP (from IDR28,800),

based on an unchanged 25x 2016F PER, reflects 19% upside potential.

Risks: higher raw materials prices and a stronger IDR on the USD.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 12,018 14,169 14,886 16,395 18,557

EBIT (IDRbn) 1,305 891 1,697 1,773 1,917

Net profit (IDRbn) 997 404 1,161 1,122 1,218


EPS (IDR) 1,115 451 1,298 1,254 1,362

EPS growth (%) 36.6 (59.5) 187.6 (3.4) 8.6

EV/EBITDA (x) 15.1 20.9 11.9 11.2 9.8

P/E (x) 23.4 57.8 20.1 20.8 19.1

FCFPS (IDR) 734 (1,370) 1,941 1,361 1,352

FCF yield (%) 2.6 (4.8) 6.9 4.8 4.8

BVPS (IDR) 4,353 4,585 5,646 6,672 7,784

P/BV (x) 6.5 6.2 4.6 3.9 3.6

DPS (IDR) 197 230 260 251 272



0

100

200

300

400

500

600

700

18,000

20,000

22,000

24,000

26,000

28,000

30,000

32,000


('000)(IDR)

Volume (RHS) MYOR IJ Px Last

38.0

(4.6) (5.1)

11.8

23.1

15.4

(10)

0

10

20

30

40

50

(10)

0

10

20

30

40

50

ytd 1M 3M 6M 9M 12M

(%) (%)

MYOR IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Confectionaries price growth (%) 10.0 7.0 5.0 - 3.0

Coffee price growth (%) 10.0 0.0 10.0 - 4.0

A&P to sales (%) 8.6 6.8 11.6 8.5 8.0 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 31,000/20,550


Majority shareholder (%) : Unita Branindo (32.9)

Shares outstanding (mn)/Free float (%) : 894.3/66.9

Mkt. cap. (IDRb/USDmn) : 23,320/1,685


Bloomberg/Reuters code : MYOR IJ/MYOR.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

251

MAYORA INDAH

Profit & loss


Sales 12,018 14,169 14,886 16,395 18,557

Gross profit 2,922 2,535 4,193 4,068 4,460

EBITDA 1,663 1,291 2,160 2,279 2,467

Depreciation 358 399 463 506 549

EBIT 1,305 891 1,697 1,773 1,917




Pre-tax profit 1,356 530 1,523 1,472 1,598

Taxes (343) (120) (345) (333) (362)




Balance sheet





Inventories 1,456 1,967 1,758 2,026 2,317

Fixed assets 3,114 3,585 3,722 3,816 3,867

Other assets 465 946 1,038 1,137 1,288

Total assets 9,710 10,291 11,350 11,789 12,873


Trade payables 1,179 955 1,277 1,472 1,684

Other liabilities 1,015 883 1,175 1,100 1,179




Cash flow


EBIT 1,305 891 1,697 1,773 1,917

Depreciation 358 399 463 506 549

Working capital (449) (1,531) 175 (464) (658)

Other operating items 57 (115) 1 1 1

Operating cash flow 1,271 (355) 2,336 1,817 1,809


Free cash flow 657 (1,225) 1,736 1,217 1,209


Net borrowings 286 730 (505) (599) (200)

Other financing (485) (653) (503) (984) (910)

Net cash flow 521 (1,148) 729 (367) 99

Cash balances, beginning 1,340 1,860 713 1,441 1,075


Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 29.3 10.3 25.9 20.8 19.2

ROAA (%) 11.1 4.0 10.7 9.7 9.9

Gross margin (%) 24.3 17.9 28.2 24.8 24.0

EBITDA margin (%) 13.8 9.1 14.5 13.9 13.3

EBIT margin (%) 10.9 6.3 11.4 10.8 10.3

Net margin (%) 8.3 2.8 7.8 6.8 6.6

Payout ratio (%) 17.7 51.0 20.0 20.0 20.0

Current ratio (x) 2.4 2.1 2.5 3.0 3.3


Net gearing (%) 46.3 90.8 48.7 37.2 27.5




2016 Compendium

252

MEDCO ENERGI INTERNASIONAL BUY*

2008A 2009A

2010F 2011F

PX: IDR960 – TP: IDR1,300*

On the back of the 50% y-y oil price slump, MEDC, Indonesia’s largest

listed upstream oil company, has seen depressed earnings, eroded in

part by impairment costs on each one of MEDC’s O&G fields.

However, given the severe price underperformance, we are now more

positive on MEDC, particularly as its growth helped by its LNG

processing plant in Donggi-Senoro, Sulawesi; it had shipped its first

cargo to Pertamina Arun’s LNG receiving terminal in August 2015.

Hence, in 2016, we expect MEDC’s gas business to contribute 36mn

boe, around 68% of our revenue forecast. Other gas projects include

Aceh’s Block A to distribute up to 60mmscfd of gas in 2018.

At this stage, we believe the low oil price has been reflected in MEDC’s

share price, and our DCF-based IDR1,300 TP (from IDR2,300)

translates to 35% potential upside. Upgrade to BUY from Reduce.

Risk: Recurring shale oil boom.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (USDmn) 887 751 468 666 811

EBIT (USDmn) 248 161 18 163 234



EPS (IDR) 41 37 (108) 55 88

EPS growth (%) 1.7 (10.3) na na 61.2

EV/EBITDA (x) 4.2 4.8 5.0 4.4 4.0

P/E (x) 23.5 26.2 na 17.5 10.8

FCFPS (IDR) 342 (299) (79) (34) (448)

FCF yield (%) 35.6 (31.2) (8.2) (3.6) (46.7)

BVPS (IDR) 2,874 3,297 3,884 4,061 3,988

P/BV (x) 0.4 0.3 0.2 0.2 0.2

DPS (IDR) 16 15 na 22 21

Div. yield (%) 1.7 1.5 na 2.3 2.2



0

5,000

10,000

15,000

20,000

25,000

30,000

800

1,300

1,800

2,300

2,800

3,300

3,800

4,300


('000)(IDR)

Volume (RHS) medc IJ Px Last

(60.7)

(11.5)

(30.0)

(53.2)(49.7)

(61.9) (70)

(60)

(50)

(40)

(30)

(20)

(10)

0

(70)

(60)

(50)

(40)

(30)

(20)

(10)

0

ytd 1M 3M 6M 9M 12M

(%) (%)

medc IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ASP oil (USD/barrel) 108 97.8 54.1 54.5 57.4

ASP gas (USD/mmbtu) 5.1 5.6 5.6 5.7 5.8

Production per day (MBOED) 54 46 43 61 73


Company information

12M high/low (IDR) : 3,800/960


Majority shareholder (%) : Encore Energy Pte Ltd. (50.7)




Bloomberg/Reuters code : MEDC IJ/MEDC.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

253

MEDCO ENERGI INTERNASIONAL

Profit & loss


Sales 887 751 468 666 811

Gross profit 365 271 117 272 351

EBITDA 346 254 137 312 411


EBIT 248 161 18 163 234




Pre-tax profit 192 111 (23) 107 179

Taxes (154) (98) 18 (91) (152)


Extraordinary gain/(losses) (22) 1 (22) - -

Net profit 13 10 (26) 13 21


Balance sheet



S-T investments 253 269 267 266 265




Other assets 1,742 1,998 2,052 2,203 2,531

Total assets 2,532 2,702 2,716 2,898 3,241








Cash flow


EBIT 248 161 18 163 234


Working capital (30) 35 17 (21) (12)




Free cash flow 105 (83) (19) (8) (107)


Net borrowings (302) 194 37 162 310

Other financing (59) (174) (5) (151) (213)

Net cash flow (255) (63) 13 3 (9)


Ending cash 270 207 219 223 214


Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 1.5 1.1 (2.8) 1.4 2.2

ROAA (%) 0.5 0.4 (1.0) 0.4 0.7

Gross margin (%) 41.1 36.1 25.0 40.9 43.3

EBITDA margin (%) 39.0 33.8 29.3 46.8 50.7

EBIT margin (%) 27.9 21.4 3.8 24.6 28.9

Net margin (%) 1.4 1.3 (5.5) 1.9 2.6

Payout ratio (%) 40 40 40 40 40

Current ratio (x) 2.0 1.6 1.1 1.4 1.4


Net gearing (%) 86.1 107.5 108.5 124.5 156.0





2016 Compendium

254

MEDIA NUSANTARA CITRA BUY

2008A 2009A

2010F 2011F

PX: IDR1,690 - TP: IDR2,000*

MNCN, Indonesia’s biggest media firm by audience share (c. 36%), is

facing weak industry-wide TV ad spend this year due to some FMCG

companies opting for direct marketing amid the economic slowdown.

To raise its market share, MNCN is offering rate card discounts, which

should reduce accounts receivable days ahead.

As we expect a gradual economic recovery in 2016, we look for

MNCN’s top line to grow 5.0% y-y (2015F: +0.1% y-y), with earnings

support from lower programming costs due to completed TV studio

integration and a focus on talent search content commanding higher

power ratios (particularly RCTI shows).

Following its massive share price de-rating, we currently have a BUY

on MNCN and a 12M TP of IDR2,000, based on a 2016F PE of 17.4x,

around a 30% sector discount, we think sufficient to account for

ongoing litigation risk. Risks: Lower GDP growth and USD250mn debt.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 6,522 6,666 6,675 7,006 7,519

EBIT (IDRbn) 2,560 2,604 2,580 2,724 2,936

Net profit (IDRbn) 1,691 1,762 1,280 1,648 1,990


EPS (IDR) 120 123 90 115 139

EPS growth (%) 2.1 2.9 (27.3) 28.7 20.7

EV/EBITDA (x) 8.7 9.4 9.8 9.1 7.1

P/E (x) 14.1 13.7 18.8 14.6 12.1

FCFPS (IDR) 105 (140) 3 62 99

FCF yield (%) 6.2 (8.3) 0.2 3.7 5.8

BVPS (IDR) 549 658 689 764 849

P/BV (x) 3.1 2.6 2.5 2.2 2.0

DPS (IDR) 35 62 45 58 70



0

10,000

20,000

30,000

40,000

50,000

60,000

1,250

1,500

1,750

2,000

2,250

2,500

2,750

3,000

3,250


('000)(IDR)

Volume (RHS) MNCN IJ Px Last

(20.3)

(3.0)(6.6) (5.0)

(27.0)

(17.7)

(30)

(25)

(20)

(15)

(10)

(5)

0

(30)

(25)

(20)

(15)

(10)

(5)

0

ytd 1M 3M 6M 9M 12M

(%) (%)

MNCN IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Advertising rate growth (%) 6.8 3.6 0.1 4.7 6.7

Programming cost rate growth (%) 7.0 9.0 1.6 4.5 7.1

G&A costs to revenue (%) 17.0 18.7 18.9 18.8 18.6 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 3,150/1,500


Majority shareholder (%) : Global Mediacom (63.5)




Bloomberg/Reuters code : MNCN IJ/MNCN.JK Source: Bloomberg, Reuters based on 3 December 2015 closing price

2016 Compendium

255

MEDIA NUSANTARA CITRA

Profit & loss


Sales 6,522 6,666 6,675 7,006 7,519

Gross profit 3,672 3,853 3,838 4,039 4,336

EBITDA 2,721 2,779 2,759 2,920 3,153

Depreciation 161 176 179 196 217

EBIT 2,560 2,604 2,580 2,724 2,936

Net interest inc./(expense) (10) 28 (123) (120) (106)



Pre-tax profit 2,394 2,544 1,963 2,381 2,892

Taxes (584) (660) (589) (619) (763)




Balance sheet


Cash and equivalents 575 1,132 1,112 1,348 1,879



Inventories 1,333 1,635 1,576 1,604 1,675

Fixed assets 1,543 2,659 3,766 4,195 4,643

Other assets 3,104 4,968 5,154 5,389 5,560

Total assets 9,615 13,609 14,890 15,941 17,178


Trade payables 631 403 567 593 636





Cash flow


EBIT 2,560 2,604 2,580 2,724 2,936

Depreciation 161 176 179 196 217

Working capital (286) (812) 156 (125) (43)


Operating cash flow 1,339 275 1,577 1,784 2,261

Net capital expenditure (706) (1,287) (1,335) (701) (752)

Free cash flow 633 (1,012) 242 1,084 1,509

Equity raised/(bought) (249) 256 - - -

Net borrowings (193) 2,665 772 (61) (112)

Other financing (145) (1,351) (1,034) (787) (865)

Net cash flow 46 557 (20) 236 531

Cash balances, beginning 528 575 1,132 1,112 1,348

Ending cash 575 1,132 1,112 1,348 1,879 Source: Company, Bahana estimates

Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 23.4 21.6 14.1 16.8 18.3

ROAA (%) 18.2 15.2 9.0 10.7 12.0

Gross margin (%) 56.3 57.8 57.5 57.6 57.7

EBITDA margin (%) 41.7 41.7 41.3 41.7 41.9

EBIT margin (%) 39.3 39.1 38.6 38.9 39.1

Net margin (%) 25.9 26.4 19.2 23.5 26.5

Payout ratio (%) 29.4 50.1 50.0 50.0 50.0

Current ratio (x) 4.2 9.7 8.4 8.2 7.5


Net gearing (%) nc 23.2 30.7 24.8 16.7




2016 Compendium

256

MERDEKA COPPER GOLD BUY

2008A 2009A

2010F 2011F

PX: IDR2,030 – TP: IDR2,200

With the second biggest copper resources in Indonesia of 19.3bn lbs

and 898k toz in gold proven reserves, MDKA became the 1st mining

company to take advantage of the new IDX regulation allowing

greenfield mines to list on the stock exchange.

Using the heap leach method for efficient cash costs, MDKA projects

start-up production by 2017, with a gold production capacity of 90k

oz/annum and an estimated production cost of USD451/oz. Having

allocated 2015 capex of USD51mn, MDKA’s 10M15 engineering design

had reached 75% and 70% on road construction.

In 2016, with capex likely to rise to USD76mn, we expect MDKA to

generate a net profit of USD16.7mn in 2017 and USD46.5mn in 2018.

Our TP of IDR2,200 is 35% DCF-based (10% WACC) and 65% based

on our valuation of its copper resources. BUY. Risk: Mining

infrastructure construction delays.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (USDmn) - - - - 62

EBIT (USDmn) (3) (5) (6) (10) 33

Net profit (USDmn) (3) (5) (7) (15) 17

Bahana/consensus (%) - - na na na

EPS (IDR) (3) (16) (21) (48) 53

EPS growth (%) na na na na na

EV/EBITDA (x) na na na na 4.1

P/E (x) na na na na 35.8

FCFPS (IDR) (48) (69) (183) (295) 65

FCF yield (%) (4.9) (7.1) (18.7) (30.2) 6.7

BVPS (IDR) 61 64 495 447 500

P/BV (x) 16.1 15.2 2.0 2.2 2.0

DPS (IDR) - - - - -

Div. yield (%) - - - - -



0

2,000

4,000

6,000

8,000

10,000

12,000

1,860

1,960

2,060

2,160

2,260

2,360

19-Jun-15 19-Jul-15 19-Aug-15 19-Sep-15 19-Oct-15 19-Nov-15

('000)(IDR)

Volume (RHS) mdka IJ Px Last

4.8

(0.8)

1.0

(2)

(1)

0

1

2

3

4

5

6

(2)

(1)

0

1

2

3

4

5

6

1M 3M Since IPO

(%) (%)

MDKA IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Avg. gold price (USD/oz) - - - - 1,200.0

growth (%) na na na na na

Total sales vol. (oz) - - - - 43,569

growth % na na na na na


Company information

12M high/low (IDR) : 2,270/1,900

12M High/low consensus TP (IDR) : na/na

Majority shareholder (%) : Trimitra Karya Jaya (25.6)




Bloomberg/Reuters code : MDKA IJ/MDKA.JK


2016 Compendium

257

MERDEKA COPPER GOLD

Profit & loss


Sales - - - - 62

Gross profit - - - - 40

EBITDA (3) (5) (5) (5) 45


EBIT (3) (5) (6) (10) 33


Forex gain/(losses) 2 0 - - -

Other income/(expense) (0) (0) - - -

Pre-tax profit (1) (6) (9) (20) 21

Taxes 0 1 2 5 (5)



Net profit (1) (5) (7) (15) 17


Balance sheet



Trade receivables - - - - 2

Inventories - - - - 6

Exploration and evaluation 16 89 89 89 89



Total assets 22 127 179 257 263

Interest bearing liabilities - 80 17 109 98







Cash flow


EBIT (3) (5) (6) (10) 33


Working capital 1 (1) 3 1 (8)


Operating cash flow (1) (7) (2) (8) 21


Free cash flow (15) (22) (57) (93) 21

Equity raised/(bought) 14 7 142 - -

Net borrowings - 80 (84) 92 (11)

Other financing 3 (62) 1 (0) -

Net cash flow 1 3 1 (1) 10


Ending cash 1 4 5 4 14


Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) (5.3) (26.2) (7.6) (10.2) 11.2

ROAA (%) (4.5) (6.8) (4.3) (6.9) 6.4

Gross margin (%) na na na na 64.6

EBITDA margin (%) na na na na 73.0

EBIT margin (%) na na na na 52.9

Net margin (%) na na na na 26.8


Current ratio (x) na na na na na

Interest coverage (x) na na na na 0.3

Net gearing (%) nc 379.6 7.4 74.5 53.4

Debtor turnover (days) na na na na 37

Creditor turnover (days) na na na na 10

Inventory turnover (days) na na na na 44


2016 Compendium

258

MITRA ADIPERKASA BUY

2008A 2009A

2010F 2011F

PX: IDR4,195 - TP: IDR4,750*

Indonesia’s largest lifestyle retailer, with more than 150 brands and

1,870 stores, MAPI has guided for higher margins in 2016-17 through

improved inventory management and productivity. Margin support

could also stem from specialty and F&B expansion, particularly post

the restructuring of its Active Division, Burger King and DOM.

In 2016, we think the main challenges for MAPI will be a soft top line

on competition from H&M and Uniqlo as well as mid-upper segment

shoppers downtrading to mid-low retailers like LPPF and RALS.

After taking out the effect of non-tax deductible zero-interest coupon

bond amort. expense, we set our TP at IDR4,750 based on a 2016F

P/E of 24x (using core EPS), 15% premium to the sector on its

sustained long-term growth coming from its well-known brands like

Inditex and Starbucks catering to the growing mid-up segment. Risks:

weaker IDR and softer demand causing inventory issues to resurface.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 9,734 11,822 12,760 14,054 16,027

EBIT (IDRbn) 751 525 399 608 778

Net profit (IDRbn) 328 74 34 242 380


EPS (IDR) 197 45 21 146 229

EPS growth (%) (24.3) (77.4) (53.7) 605.4 57.4

EV/EBITDA (x) 8.0 10.2 10.6 8.1 6.7

P/E** (x) 21.2 94.0 90.5 21.2 14.9

FCFPS (IDR) (406) (327) 161 177 123

FCF yield (%) (9.7) (7.8) 3.8 4.2 2.9

BVPS (IDR) 1,463 1,470 1,777 1,904 2,101

P/BV (x) 2.9 2.9 2.4 2.2 2.0

DPS (IDR) 20 - - 22 34

Div. yield (%) 0.5 - - 0.5 0.8 Source: Company, Bahana estimates note: based on 3 December 2015 closing price **estimated using core EPS


0

5,000

10,000

15,000

20,000

25,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000

6,500


('000)(IDR)

Volume (RHS) MAPI IJ Px Last

(4.1)

19.6

14.2

(12.9)

(3.9)

(14.6) (20)

(15)

(10)

(5)

0

5

10

15

20

(20)

(15)

(10)

(5)

0

5

10

15

20

ytd 1M 3M 6M 9M 12M

(%) (%)

MAPI IJ relative to JCI Source: Bloomberg

Bagus Adi Yoga Prawira ([email protected]) +6221 2505081 ext. 3604 *New, please refer to appendix II

Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Sales growth (%) 28.3 21.4 7.9 10.1 14.0


Core net profit* (IDR) 328 74 77 328 467

Core EPS** (IDR) 197 45 46 198 281

Core EPS** growth (%) (24.3) (77.4) 3.9 326.6 42.2

ROAE** (%) 14.3 3.0 2.9 10.7 14.1 Source: Company, Bahana estimates **excluding the effect from zero-interest bond amortization expense

Company information

12M high/low (IDR) : 6,100/2,750


Majority shareholder (%) : Satya Mulia Gema/ Gajah Tunggal (56.0)




Bloomberg/Reuters code : MAPI IJ/MAPI.JK Source: Bloomberg, Reuters; based on 3 December closing price

2016 Compendium

259

MITRA ADIPERKASA

Profit & loss


Sales 9,734 11,822 12,760 14,054 16,027

Gross profit 4,849 5,470 5,716 6,388 7,397

EBITDA 1,168 972 880 1,124 1,344

Depreciation 417 447 481 516 566

EBIT 751 525 399 608 778




Pre-tax profit 485 192 72 381 574

Taxes (157) (119) (38) (140) (194)




Balance sheet





Inventories 2,942 3,203 3,339 3,465 3,807

Fixed assets 2,509 2,548 2,372 2,346 2,370

Other assets 1,574 1,926 2,146 2,327 2,525

Total assets 7,808 8,686 9,198 9,882 10,917


Trade payables 1,205 1,154 1,158 1,323 1,490



Minority interest - 69 69 69 69


Cash flow


EBIT 751 525 399 608 778

Depreciation 417 447 481 516 566

Working capital (751) (394) (89) 31 (240)




Free cash flow (674) (542) 266 294 204

Equity raised/(bought) (54) 136 474 - -

Net borrowings 639 681 (263) 187 315

Other financing (70) (130) (103) (87) (113)

Net cash flow (158) 144 375 395 406



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 14.3 3.0 1.3 7.9 11.4

ROAA (%) 4.8 0.9 0.4 2.5 3.7

Gross margin (%) 49.8 46.3 44.8 45.5 46.2

EBITDA margin (%) 12.0 8.2 6.9 8.0 8.4

EBIT margin (%) 7.7 4.4 3.1 4.3 4.9

Net margin (%) 3.4 0.6 0.3 1.7 2.4

Payout ratio (%) 10.1 - - 15.0 15.0

Current ratio (x) 1.1 1.3 1.9 1.7 1.7


Net gearing (%) 99.1 119.4 80.7 67.2 59.3




2016 Compendium

260

MITRA KELUARGA KARYASEHAT REDUCE

2008A 2009A

2010F 2011F

PX: IDR2,295 - TP: IDR1,900

As one of Indonesia's leading community hospitals, MIKA is currently

undergoing a decelerating growth phase, especially in terms of its

inpatient volumes due to the National Health Insurance (JKN)

program. In 2014, inpatient volumes barely grew 0.4% y-y, while

management expects flat growth in 2015F (Bahana: -1.6%).

Going forward, MIKA plans to open 6 new greenfield hospitals with

200-bed capacity each in major cities, reflecting a conservative

expansion strategy, vs. SILO’s 4 new hospitals p.a. Also, MIKA does

not see itself participating in the JKN scheme over the long run which

is likely to lead to higher migrating patient flows to JKN providers.

On valuation, MIKA’s 2016F EV/EBITDA of 43x (a 190% premium to

SILO), bakes in positive earnings surprises, in our view. We have a

DCF-based 12-month TP of IDR1,900. REDUCE. Upside risk: Higher

demand for better-quality services from private insurance companies.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 1,742 1,946 2,114 2,387 2,743

EBIT (IDRbn) 470 545 580 645 730

Net profit (IDRbn) 404 524 576 657 725


EPS (IDR) 29 37 41 44 49

EPS growth (%) 38.3 29.7 8.8 9.3 10.2

EV/EBITDA (x) 56.5 50.0 45.7 43.3 38.2

P/E (x) 79.6 61.4 56.4 51.6 46.9

FCFPS (IDR) 24 32 30 32 32

FCF yield (%) 1.0 1.4 1.3 1.4 1.4

BVPS (IDR) 122 126 219 223 241

P/BV (x) 18.8 18.2 10.5 10.3 9.5

DPS (IDR) 1 34 34 32 32



0

100,000

200,000

300,000

400,000

500,000

2,000

2,200

2,400

2,600

2,800

3,000

24-Mar-15 24-Apr-15 24-May-15 24-Jun-15 24-Jul-15 24-Aug-15 24-Sep-15 24-Oct-15

('000)(IDR)

Volume (RHS) MIKA IJ Px Last

(8.9)

(16.7)

4.9

25.0

(20)

(10)

0

10

20

30

(20)

(10)

0

10

20

30

1M 3M 6M Since IPO

(%) (%)

MIKA IJ relative to JCI Source: Bloomberg

Renaldy Effendy ([email protected]) +6221 2505081 ext. 3606

Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Beds occupancy rate (%) 72 64 62 61 60

Ave. IPD length of stay (days) 3.7 3.6 3.6 3.7 3.7

No. of beds in operation 1,484 1,647 1,732 1,895 2,088

No. of hospitals 10 11 12 13 14 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 3,230/1,700


Majority shareholder (%) : Lion Investments Partners BV (49.7)


Mkt. cap. (IDRbn/USDmn) : 33,394 /2,365


Bloomberg/Reuters code : MIKA IJ/MIKA.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

261

MITRA KELUARGA KARYASEHAT

Profit & loss


Sales 1,742 1,946 2,114 2,387 2,743

Gross profit 737 865 924 1,032 1,175

EBITDA 543 615 654 722 818


EBIT 470 545 580 645 730




Pre-tax profit 530 667 730 834 918

Taxes (118) (133) (145) (166) (182)


Extraordinary gain/(losses) 5 7 9 11 13

Net profit 404 524 576 657 725 Source: Company, Bahana forecasts

Balance sheet






Fixed assets 598 771 954 1,161 1,429

Other assets 273 245 299 323 351

Total assets 2,134 2,157 3,543 3,787 4,107

Interest bearing liabilities 50 - - - -





Shareholders' equity 1,689 1,743 3,058 3,248 3,506 Source: Company, Bahana forecasts

Cash flow


EBIT 470 545 580 645 730


Working capital (17) 58 (2) (13) (17)




Free cash flow 327 436 413 463 469

Equity raised/(bought) (4) (3) 1,208 - -

Net borrowings (5) (50) - - -

Other financing (11) (520) (473) (476) (475)

Net cash flow 306 (138) 1,148 (13) (6)


Ending cash 1,108 970 2,118 2,106 2,100 Source: Company, Bahana forecasts

Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 27.0 30.5 24.0 20.9 21.5

ROAA (%) 21.2 24.4 20.2 17.9 18.4

Gross margin (%) 42.3 44.4 43.7 43.2 42.8

EBITDA margin (%) 31.2 31.6 30.9 30.2 29.8

EBIT margin (%) 27.0 28.0 27.5 27.0 26.6

Net margin (%) 23.2 26.9 27.2 27.5 26.4

Payout ratio (%) 3.7 89.7 81.5 71.2 64.4

Current ratio (x) 5.0 5.8 9.5 8.7 8.0





Inventory turnover (days) 15 13 12 12 12 Source: Company, Bahana forecasts

2016 Compendium

262

MULTIPOLAR BUY

2008A 2009A

2010F 2011F


Going into 2016, MLPL, the holding company of the Lippo Group in

retail, multimedia, telecommunication, technology and banking, should

benefit from growth recovery backed by its 50.2% ownership in MPPA

(Hypermart), which contributes about 80% to MLPL’s revenue.

Looking ahead, we expect MPPA’s performance to be backed by soft

increases in minimum wages and rentals. Furthermore, future store

expansions will focus on outer islands (60%), which have higher

profitability and less competition.

We believe MLPL is undervalued, particularly given LINK’s subsidiary’s

IPO plan. By applying a 70% holding company discount factor to the

market caps of uncovered listed companies and using the same discount

to our TPs of IDR2,750 for MPPA and IDR19,800 for LPPF, we arrive at

MLPL’s SOTP-based TP of IDR550. Risks: Higher FX losses on huge USD

debt and continued poor performance of its Chinese retail subsidiary.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 14,675 17,074 19,134 22,097 25,298

EBIT (IDRbn) 67 (268) (280) (324) (373)

Net profit (IDRbn) 1,415 1,895 (75) (43) (7)


EPS (IDR) 150 188 (7) (4) (1)

EPS growth (%) 3,957.4 25.2 na na na

EV/EBITDA (x) 1.8 31.1 8.3 10.2 10.5

P/E (x) 1.9 1.5 na na na

FCFPS (IDR) (178) 97 (72) (59) (53)

FCF yield (%) (1.9) 1.0 (0.7) (0.6) (0.5)

BVPS (IDR) 749 840 804 800 799

P/BV (x) 0.4 0.3 0.3 0.4 0.4

DPS (IDR) 1 21 28 - -

Div. yield (%) 0.4 7.6 10.1 - - Source: Company, Bahana estimates note: based on on 3 December 2015 closing price


0

20,000

40,000

60,000

80,000

100,000

120,000

250

350

450

550

650

750

850

950


('000)(IDR)

Volume (RHS) MLPL IJ Px Last

(53.2)

(14.7)

(33.5)

(49.9)(53.6)

(57.7)(70)

(60)

(50)

(40)

(30)

(20)

(10)

0

(70)

(60)

(50)

(40)

(30)

(20)

(10)

0

ytd 1M 3M 6M 9M 12M

(%) (%)

MLPL IJ relative to JCI Source: Bloomberg

Michael W. Setjoadi ([email protected]) +6221 2505081 ext.3613

Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

MPPA’s revenue (IDR bn) 11,913 13,590 14,286 16,331 18,267

Big TV subscribers (‘000) - - 500 1,000 1,500 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 1,000/274

12M High/low consensus TP (IDR) : na/na

Majority shareholder (%) : Cyport Limited (26.9)




Bloomberg/Reuters code : MLPL IJ/MLPL.JK Source: Bloomberg, Reuters based on 3 December 2015 closing price

2016 Compendium

263

MULTIPOLAR

Profit & loss


Sales 14,675 17,074 19,134 22,097 25,298

Gross profit 2,604 3,031 3,417 3,946 4,516

EBITDA 655 110 259 284 316

Depreciation 588 379 539 608 688

EBIT 67 (268) (280) (324) (373)


Forex gain/(losses) 143 - (25) (5) 5

Other income/(expense) 1,778 2,783 498 570 671

Pre-tax profit 1,800 2,248 (120) (69) (11)

Taxes (154) (139) 36 21 3

Minority interest (231) (214) 8 5 1


Net profit 1,415 1,895 (75) (43) (7) Source: Company, Bahana estimates

Balance sheet





Inventories 2,925 3,407 3,660 4,227 4,840

Fixed assets 3,019 3,451 3,773 4,159 4,610

Other assets 9,661 12,669 11,145 11,828 12,214

Total assets 20,255 22,798 23,339 24,155 25,147


Trade payables 2,677 2,679 2,997 3,462 3,964





Cash flow


EBIT 67 (268) (280) (324) (373)

Depreciation 588 379 539 608 688

Working capital (2,915) (700) (462) (359) (286)

Other operating items 1,602 2,378 340 478 579

Operating cash flow (658) 1,787 137 403 608

Net capital expenditure (1,014) (810) (861) (994) (1,138)

Free cash flow (1,673) 977 (724) (591) (530)


Net borrowings 28 481 262 (146) (141)

Other financing 2,399 (2,773) 2,003 (161) 128

Net cash flow 1,426 (1,594) 1,541 (898) (543)



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 23.5 24.4 (0.9) (0.5) (0.1)

ROAA (%) 8.2 8.8 (0.3) (0.2) (0.0)

Gross margin (%) 17.7 17.8 17.9 17.9 17.9

EBITDA margin (%) 4.5 0.6 1.4 1.3 1.2

EBIT margin (%) 0.5 (1.6) (1.5) (1.5) (1.5)

Net margin (%) 11.2 12.3 (0.4) (0.2) (0.0)

Payout ratio (%) 35.1 15.1 15.0 15.0 15.0

Current ratio (x) 1.5 1.3 1.5 1.4 1.3

Interest coverage (x) 0.4 na na na na

Net gearing (%) nc 7.2 nc 1.1 6.1




2016 Compendium

264

NIPPON INDOSARI CORPINDO BUY

2008A 2009A

2010F 2011F

PX: IDR1,250 - TP: IDR1,450

Indonesia’s largest packaged bread producer (90% market share),

ROTI’s supply chain improvements have resulted in a much lower

sales-return rate of 9.5% in 3Q15 from 13.7% in 2Q15, providing

margin support (3Q15 GPM: 52%). We expect the return rate to

stabilize at the 11% level, with a normalized margin of 51%.

On expansion, ROTI is adding capacity only to existing plants, such

as its Bekasi factory, shut down in 2015 to undertake 10% increased

capacity, with operations expected to resume in early 2016. With

much lower expected 2015-16 capex, ROTI should book positive free

cash flow for debt repayment, allowing for higher net margins.

On valuation, our IDR1,450 TP implies a 2016F PE of 23x, a 30%

discount to the consumer staples sector. BUY on 16% upside

potential. Risk: intensifying competition from other bread producers,

although Yamazaki’s 2015 return rate was more than 50%.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 1,506 1,880 2,189 2,693 3,343

EBIT (IDRbn) 210 263 389 458 575

Net profit (IDRbn) 158 189 265 322 416


EPS (IDR) 31 37 52 64 82

EPS growth (%) 5.9 19.3 40.3 21.6 29.2

EV/EBITDA (x) 25.1 19.4 12.9 10.8 8.9

P/E (x) 39.9 33.4 23.9 19.7 15.2

FCFPS (IDR) (7) (58) 73 75 26

FCF yield (%) (0.7) (5.5) 6.9 7.1 2.5

BVPS (IDR) 156 190 229 277 338

P/BV (x) 6.8 5.6 5.5 4.5 3.1

DPS (IDR) 7 3 13 16 21



0

10,000

20,000

30,000

40,000

50,000

1,000

1,100

1,200

1,300

1,400

1,500


('000)(IDR)

Volume (RHS) ROTI IJ Px Last

3.4

0.7

12.4 10.0

17.2 15.2

0

5

10

15

20

0

5

10

15

20

ytd 1M 3M 6M 9M 12M

(%) (%)

ROTI IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Net volume (packs mn) 367 381 486 584 697

Sales return to net revenue (%) 13.5 13.0 12.4 11.1 11.1

Blended ASP (IDR’000) 4.3 5.0 4.5 4.6 4.8

HRW wheat price (USD/ton) 247 222 189 217 222 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 1,480/920


Majority shareholder (%) : Indoritel Makmur Intl. (31.5)




Bloomberg/Reuters code : ROTI IJ/ROTI.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

265

NIPPON INDOSARI CORPINDO

Profit & loss


Sales 1,506 1,880 2,189 2,693 3,343

Gross profit 699 901 1,134 1,377 1,707

EBITDA 273 359 527 608 742


EBIT 210 263 389 458 575




Pre-tax profit 211 253 353 429 555

Taxes (53) (64) (88) (107) (139)




Balance sheet






Fixed assets 1,175 1,680 1,722 1,823 2,287

Other assets 327 46 102 114 133

Total assets 1,823 2,143 2,642 3,026 3,524


Trade payables 159 126 154 192 238




Shareholders' equity 787 960 1,159 1,400 1,712 Source: Company, Bahana estimates

Cash flow


EBIT 210 263 389 458 575


Working capital 57 (54) 61 51 62

Other operating items (22) 1 (40) (30) (45)



Free cash flow (35) (293) 371 381 131


Net borrowings 354 179 164 - -

Other financing (254) 178 (149) (170) (194)

Net cash flow 64 65 386 211 (62)



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 21.7 21.6 25.0 25.2 26.7

ROAA (%) 10.4 9.5 11.1 11.4 12.7

Gross margin (%) 46.4 47.9 51.8 51.1 51.1

EBITDA margin (%) 18.1 19.1 24.1 22.6 22.2

EBIT margin (%) 13.9 14.0 17.8 17.0 17.2

Net margin (%) 10.5 10.0 12.1 11.9 12.4

Payout ratio (%) 23.6 8.4 25.0 25.0 25.0

Current ratio (x) 1.1 1.4 2.4 2.5 2.1


Net gearing (%) 70.6 70.1 39.2 17.6 18.2




2016 Compendium

266

PAKUWON JATI HOLD

2008A 2009A

2010F 2011F


Within our property coverage (ex those with hospitals), PWON has the

largest recurring base (48% of total top line) supported by continued

high occupancy rates in its malls, allowing for solid earnings. The

current mall moratorium, coupled with the strategically-located, high-

foot-traffic nature of its malls, should lead to tenant stickiness.

With plenty of uncertainties for the property sector as we head into

2016, PWON’s earnings should remain relatively stable versus its

peers. At this stage, we expect its strong 2015 marketing sales to

allow PWON to book double-digit EPS growth of 14.9% y-y in 2016.

On valuation, we raise our 12M TP to IDR490 (from IDR450) on a

60% discount (vs. 65% sector avg.) to 2016F NAV, driven by strong

recurring income and successful Tunjungan and Gandaria launches.

HOLD. Downside risks: Worse-than-expected macro slowdown and

weak IDR; Upside risk: Positive sentiment from government policies.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 3,030 3,872 4,909 5,535 6,483

EBIT (IDRbn) 1,512 1,890 2,499 2,820 3,283

Net profit (IDRbn) 1,133 2,516 1,693 1,946 2,360

Bahana/cons.(%) - - 90 82 85

EPS (IDR) 24 52 35 40 49

EPS growth (%) 51.4 122.1 (32.7) 14.9 21.3

EV/EBITDA (x) 13.4 9.8 8.8 7.9 6.8

P/E (x) 19.9 9.0 13.3 11.6 9.5

FCFPS (IDR) 20 (66) (15) (8) 3

FCF yield (%) 4.4 (14.0) (3.3) (1.7) 0.7

BVPS (IDR) 80 128 159 194 237

P/BV (x) 5.8 3.7 2.9 2.4 2.0

DPS (IDR) 4 4 4 5 6



0

100,000

200,000

300,000

400,000

500,000

600,000

300

350

400

450

500

550

600


('000)(IDR)

Volume (RHS) PWON IJ Px Last

4.1 3.7

25.9 23.0

9.5

3.0

0

5

10

15

20

25

30

0

5

10

15

20

25

30

ytd 1M 3M 6M 9M 12M

(%) (%)

PWON IJ relative to JCI Source: Bloomberg



9M15

Land bank (Ha) 457



Discount (%) 60


Company information

12M high/low (IDR) : 555/331


Majority shareholder (%) : Burgami Investments (21%)




Bloomberg/Reuters code : PWON IJ/PWON.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

267

PAKUWON JATI

Profit & loss


Sales 3,030 3,872 4,909 5,535 6,483

Gross profit 1,765 2,158 2,802 3,177 3,748

EBITDA 1,700 2,471 2,837 3,207 3,707

Depreciation 188 581 338 387 423

EBIT 1,512 1,890 2,499 2,820 3,283



Other income/(expense) (6) 1,097 (10) (25) (12)

Pre-tax profit 1,331 2,859 2,179 2,497 3,013

Taxes (195) (260) (319) (360) (421)




Balance sheet





Inventories 1,490 3,133 3,760 4,511 5,414

Fixed assets 4,376 9,120 11,495 13,761 15,804

Other assets 1,157 1,445 1,649 1,886 2,162

Total assets 9,298 16,771 19,447 22,778 26,062





Minority interest 226 2,110 2,321 2,553 2,808


Cash flow


EBIT 1,512 1,890 2,499 2,820 3,283

Depreciation 188 581 338 387 423

Working capital 459 (914) 28 32 (56)

Other operating items (550) 357 (887) (967) (1,028)


Net capital expenditure (622) (5,078) (2,713) (2,653) (2,467)

Free cash flow 986 (3,164) (735) (380) 156


Net borrowings (11) 2,182 149 432 (128)

Other financing (164) 1,665 (3) (16) (45)

Net cash flow 811 683 (589) 36 (17)



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 33.4 50.1 24.5 22.9 22.7

ROAA (%) 13.4 19.3 9.3 9.2 9.7

Gross margin (%) 58.3 55.7 57.1 57.4 57.8

EBITDA margin (%) 56.1 63.8 57.8 57.9 57.2

EBIT margin (%) 49.9 48.8 50.9 51.0 50.6

Net margin (%) 37.4 65.0 34.5 35.2 36.4

Payout ratio (%) 14.9 8.6 12.8 12.8 12.8

Current ratio (x) 1.3 0.9 0.8 0.8 0.8


Net gearing (%) 7.4 29.0 33.0 31.2 24.6




2016 Compendium

268

PELAYARAN TEMPURAN EMAS BUY

2008A 2009A

2010F 2011F

PX: IDR1,945 - TP: IDR3,000

As the largest listed cargo shipper, TMAS, with little exposure to

commodities, is enjoying the benefit of government policy on logistics

in the form of lower dwelling times at ports. Hence, we expect TMAS

to experience continued margin expansions in the next two years.

With new larger ships being built, the management believes that its

earnings could more than double by 2018. In 2016, we forecast

higher revenue growth of 6.5% (2015F: 1% y-y) on improving

economy and six additional new vessels for new routes to Papua. On

the bottom line, we expect 2016 earnings of IDR425bn, +28% y-y, on

continued lower stevedoring and fuel costs (60% of total COGS).

Given robust bottom line growth ahead, we expect continued market

outperformance, and retain our BUY call with IDR3,000 TP, reflecting

an undemanding 2016F PE of 8.1x, some 55% discount its regional

peers. Risks: Slower GDP growth and increased competition.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 1,384 1,687 1,700 1,810 2,056

EBIT (IDRbn) 126 316 378 520 659

Net profit (IDRbn) 70 203 332 425 571

Bahana/consensus.(%) - - na na na

EPS (IDR) 62 178 291 372 498

EPS growth (%) (41.2) 187.7 63.7 28.2 34.0

EV/EBITDA (x) 10.8 6.4 5.5 4.1 3.1

P/E (x) 31.5 10.9 6.7 5.2 3.9

FCFPS (IDR) (10) 83.7 47 146 260

FCF yield (%) (0.5) 4.3 2.4 7.5 13.3

BVPS (IDR) 316 270.5 681 961 1,332

P/BV (x) 6.2 7.2 2.9 2.0 1.5

DPS (IDR) 11 - 73 93 124



0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

1,000

1,300

1,600

1,900

2,200


('000)(IDR)

Volume (RHS) TMAS IJ Px Last

(1.0)

9.2

33.7

22.4 19.1

6.4

(10)

0

10

20

30

40

(10)

0

10

20

30

40

ytd 1M 3M 6M 9M 12M

(%) (%)

TMAS IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Total vessels (units) 22 22 25 29 33

Total capacity (k DWT) 181 202 233 270 307

Total TEUs Delivery (k unit) 237 270 278 301 348

Total calls 1,229 1,481 1,777 2,133 2,559 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 2,225/1,300


Majority shareholder (%) : Temas Lestari (80)

Shares outstanding (mn)/Free float (%) : 1.141/20



Bloomberg/Reuters code : TMAS IJ/TMAS.JK


2016 Compendium

269

PELAYARAN TEMPURAN EMAS

Profit & loss


Sales 1,384 1,687 1,700 1,810 2,056

Gross profit 200 388 477 629 785

EBITDA 291 462 548 716 883

Depreciation 165 146 170 196 224

EBIT 126 316 378 520 659




Pre-tax profit 92 236 366 462 613

Taxes (21) (33) (33) (35) (40)




Balance sheet






Fixed assets 1,353 1,295 1,570 1,812 2,064


Total assets 1,671 1,627 1,899 2,158 2,445


Trade payables 299 190 201 194 209


Total liabilities 1,334 1,095 1,121 1,060 920


Shareholders' equity 336 531 777 1,096 1,524 Source: Company, Bahana estimates

Cash flow


EBIT 126 316 378 520 659

Depreciation 165 146 170 196 224

Working capital (80) 3 (78) (11) (25)




Free cash flow (11) 164 54 167 301


Net borrowings 98 (171) 26 (60) (170)

Other financing (77) (3) (74) (102) (133)

Net cash flow 10 (10) 6 5 (2)



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 20.6 46.8 50.7 45.4 43.6

ROAA (%) 4.4 12.3 18.8 21.0 24.8

Gross margin (%) 14.5 23.0 28.1 34.8 38.2

EBITDA margin (%) 21.0 27.4 32.3 39.6 42.9

EBIT margin (%) 9.1 18.7 22.3 28.7 32.0

Net margin (%) 5.1 12.0 19.5 23.5 27.8

Payout ratio (%) 17.0 - 25.0 25.0 25.0

Current ratio (x) 0.5 0.5 0.5 0.6 0.8


Net gearing (%) 272.4 141.1 99.5 64.6 35.5




2016 Compendium

270

PEMBANGUNAN PERUMAHAN BUY*

2008A 2009A

2010F 2011F

PX: IDR3,770 - TP: IDR4,300*

PTPP, the second largest construction play by market cap, is gearing

up for infra-related projects, supported by IPO proceeds of subsidiary

PP Properti (PPRO) in May 2015. Potential IDR2.25tn state capital

injection should assist plan to raise investment portfolio, creating

added construction projects while providing sound recurring income.

Capitalizing on the government’s sea-toll program, we expect PTPP to

realize increased port-related construction contracts given its standing

as one of the best domestic port contractor with notable experience in

both the Kalibaru and Kuala Tanjung projects. Solid execution in gas-

powered (PLTMG) Gorontalo project should also bode well for its

ability to secure future contracts in power plant construction.

Our SOTP-based TP of IDR4,300 reflects 23x of 2016E PE, slightly less

than WSKT and WIKA given PTPP’s high earnings contribution from its

property business. BUY. Risk: Payment delays from private projects.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 11,656 12,427 15,842 20,154 23,905

EBIT (IDRbn) 1,168 1,328 1,794 2,253 2,660

Net profit (IDRbn) 421 532 706 920 1,063

Bahana/cons.(%) - - 100 96 86

EPS (IDR) 87 110 146 190 220

EPS growth (%) 15.7 13.1 32.7 30.3 15.6

EV/EBITDA (x) 15.4 12.8 10.3 8.5 7.4

P/E (x) 43.4 34.3 25.9 19.9 17.2

FCFPS (IDR) (29) (153) (302) (239) (188)

FCF yield (%) (0.8) (4.0) (7.8) (6.2) (4.9)

BVPS (IDR) 402 485 649 794 956

P/BV (x) 9.4 7.8 5.8 4.7 3.9

DPS (IDR) 26 33 44 57 66



0

10,000

20,000

30,000

40,000

50,000

2,500

3,000

3,500

4,000

4,500


('000)(IDR)

Volume (RHS) PTPP IJ Px Last

17.9

1.7 4.1 5.8

11.5

28.7

0

5

10

15

20

25

30

35

0

5

10

15

20

25

30

35

ytd 1M 3M 6M 9M 12M

(%) (%)

PTPP IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F




Company information

12M high/low (IDR) : 4,175/3,095






Bloomberg/Reuters code : PTPP IJ/PTPP.JK Source: Bloomberg, Reuters based on 3 December 2015 closing price

2016 Compendium

271

PEMBANGUNAN PERUMAHAN

Profit & loss


Sales 11,656 12,427 15,842 20,154 23,905

Gross profit 1,367 1,604 2,150 2,692 3,171

EBITDA 1,180 1,473 1,856 2,339 2,770


EBIT 1,168 1,328 1,794 2,253 2,660




Pre-tax profit 767 919 1,318 1,690 1,980

Taxes (346) (387) (507) (645) (765)

Minority interest - - (105) (125) (152)


Net profit 421 532 706 920 1,063 Source: Company, Bahana estimates

Balance sheet



S-T investments 176 203 203 203 203


Inventories 1,605 2,502 2,910 3,414 3,914

Fixed assets 377 713 1,510 2,234 2,933

Other assets 6,128 6,453 7,869 9,371 10,780

Total assets 12,393 14,579 18,214 21,471 25,241


Trade payables 6,300 7,022 7,912 9,142 10,276





Cash flow


EBIT 1,168 1,328 1,794 2,253 2,660


Working capital (15) (1,005) (670) (939) (864)

Other operating items (952) (600) (1,239) (1,439) (1,682)

Operating cash flow 213 (132) (53) (38) 224

Net capital expenditure (355) (610) (1,407) (1,121) (1,135)

Free cash flow (143) (742) (1,461) (1,159) (911)

Equity raised/(bought) 0 (0) 260 - -

Net borrowings 871 792 931 771 1,353

Other financing 365 (39) 763 147 52

Net cash flow 1,094 11 493 (241) 494



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 23.4 24.8 25.7 26.3 25.1

ROAA (%) 4.0 3.9 4.3 4.6 4.6

Gross margin (%) 11.7 12.9 13.6 13.4 13.3

EBITDA margin (%) 10.1 11.9 11.7 11.6 11.6

EBIT margin (%) 10.0 10.7 11.3 11.2 11.1

Net margin (%) 3.6 4.3 4.5 4.6 4.4

Payout ratio (%) 29.7 30.0 30.0 30.0 30.0

Current ratio (x) 1.3 1.4 1.4 1.3 1.3


Net gearing (%) nc 26.6 28.8 44.2 51.3




2016 Compendium

272

PERUSAHAAN GAS NEGARA REDUCE

2008A 2009A

2010F 2011F

PX: IDR2,875 – TP: IDR2,500

PGAS, the biggest gas distributor with 81% market share by volume

and owner of 95% of Indonesian pipelines, is suffering from low

distribution volumes on weak GDP growth and also impairment costs

from both its local and overseas investments due to weak oil prices.

Through the 3rd economic stimulus package, the government, starting

1 January 2016, plans to cut gas-selling prices, especially in labor-

intensive industries (i.e. petrochemicals, fertilizers) to allow

manufacturers to have improved cost efficiencies. At this stage, we

assume the 2016 gas ASP to fall 5% to USD8.8/mmbtu while we

expect distribution volumes to rise 5% on higher GDP growth.

On valuation, we derive our 12M DCF-based TP of IDR2,500 using a

13% WACC. Thus, we retain our REDUCE rating, particularly given

PGAS’ industrial support function, which could lead to continued

government policy risks ahead. Risk: Faster local economic recovery.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (USDmn) 3,002 3,409 2,869 2,967 3,313

EBIT (USDmn) 934 982 593 581 686

Net profit (USDmn) 805 723 416 433 530


EPS (IDR) 433 389 224 233 285

EPS growth (%) 21.9 (10.2) (42.5) 4.1 22.4

EV/EBITDA (x) 4.1 4.5 5.8 5.3 4.6

P/E (x) 6.6 7.4 12.8 12.3 10.1

FCFPS (IDR) 458 (493) (179) 59 302

FCF yield (%) 15.9 (17.1) (6.2) 1.9 10.0

BVPS (IDR) 1,404 1,547 1,808 1,916 2,072

P/BV (x) 2.0 1.9 1.6 1.5 1.4

DPS (IDR) 219 214 123 128 157

Div. yield (%) 7.6 7.4 4.3 4.5 5.5



0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

2,300

2,800

3,300

3,800

4,300

4,800

5,300

5,800

6,300


('000)(IDR)

Volume (RHS) pgas IJ Px Last

(39.4)

(4.1)(1.7)

(22.4)

(28.7)

(39.5)

(50)

(40)

(30)

(20)

(10)

0

(50)

(40)

(30)

(20)

(10)

0

ytd 1M 3M 6M 9M 12M

(%) (%)

pgas IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Distribution Vol. (mmscfd) 824 865 787 828 884

Tariff (USD/mmbtu) 9.2 9.2 9.0 8.8 8.8


Company information

12M high/low (IDR) : 6,000/2,455


Majority shareholder (%) : Republic of Indonesia (57)




Bloomberg/Reuters code : PGAS IJ/PGAS.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

273

PERUSAHAAN GAS NEGARA

Profit & loss


Sales 3,002 3,409 2,869 2,967 3,313

Gross profit 1,418 1,465 943 921 1,097

EBITDA 1,209 1,102 871 942 1,093

Depreciation 275 120 278 360 407

EBIT 934 982 593 581 686


Forex gain/(losses) 84 47 (15) (15) (15)


Pre-tax profit 1,066 979 530 577 706

Taxes (228) (231) (114) (144) (177)

Minority interest (33) (25) 0 0 0


Net profit 805 723 416 433 530


Balance sheet






Fixed assets 1,920 3,621 3,872 4,237 4,183

Other assets 636 866 1,168 1,163 1,157

Total assets 4,140 6,068 6,626 6,824 7,072


Trade payables 158 138 158 168 182

Other liabilities 438 1,202 686 726 722





Cash flow


EBIT 934 982 593 581 686

Depreciation 275 120 278 360 407

Working capital 36 405 (426) 37 (28)



Net capital expenditure 22 (1,813) (524) (721) (348)

Free cash flow 851 (916) (332) 109 562


Net borrowings (4) 919 569 (53) (53)

Other financing (1,307) (106) (177) (232) (240)

Net cash flow (333) (103) 60 (176) 269


Ending cash 1,234 1,131 1,191 1,015 1,284


Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 33.5 26.4 13.8 12.5 14.3

ROAA (%) 20.0 14.2 6.8 6.4 7.6

Gross margin (%) 47.2 43.0 32.9 31.0 33.1

EBITDA margin (%) 42.1 37.2 30.3 31.7 33.0

EBIT margin (%) 31.1 28.8 20.7 19.6 20.7

Net margin (%) 26.8 21.2 14.5 14.6 16.0

Payout ratio (%) 57 55 55 55 55

Current ratio (x) 2.1 1.7 2.8 2.5 3.0


Net gearing (%) nc 25.1 36.7 38.0 26.8





2016 Compendium

274

PP PROPERTI HOLD*

2008A 2009A

2010F 2011F


Following a successful IDR909bn IPO in May 2015, PPRO, a subsidiary

of SOE construction player (PTPP), has ample cash to fund its high-

rise developments projects (some 96% of its portfolio) to maximize its

limited 58ha landbank. We note the company has added a small land

acquisition of 4ha in 9M15 with another 4ha to be added by end-2015.

Going into 2016, we expect PPRO’s revenue to rise 10% y-y backed

by our 2015 marketing-sales target of IDR1.8tn (10M15: IDR1.4tn),

up 51% y-y, which is more conservative than management guidance

of IDR2tn. Further earnings-growth catalysts should come from plans

to build 3 malls, 2 hotels and 1 office in the next 3 years.

On valuation, we apply a 70% discount to our 2016F NAV to derive

our IDR180 TP (from IDR152) due to limited landbank and low

recurring income portion. Hold. Upside risk: Faster project realization;

Downside risk: Lower-than-expected presales.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 192 555 1,545 1,707 1,913

EBIT (IDRbn) 46 128 419 460 532

Net profit (IDRbn) 49 106 293 309 383

Bahana/cons.(%) - - 111 112 107

EPS (IDR) 5 12 21 22 27

EPS growth (%) 45 115.4 79.7 5.5 23.8

EV/EBITDA (x) 27.4 13.1 7.3 7.4 6.1

P/E (x) 34.3 15.9 8.9 8.4 6.8

FCFPS (IDR) 23 (19) (51) (39) 24

FCF yield (%) 0.2 (0.2) (0.4) (0.3) 0.2

BVPS (IDR) 101 113 157 173 193

P/BV (x) 1.8 1.6 1.2 1.1 1.0

DPS (IDR) - 2 6 7 8



0

500,000

1,000,000

1,500,000

2,000,000

120

140

160

180

200

220

19-May-15 19-Jun-15 19-Jul-15 19-Aug-15 19-Sep-15 19-Oct-15 19-Nov-15

('000)(IDR)

Volume (RHS) PPRO IJ Px Last

3-Dec-15

13.4

20.2

10.5

13.4

0

5

10

15

20

25

0

5

10

15

20

25

1M 3M 6M Since IPO

(%) (%)

PPRO IJ relative to JCI Source: Bloomberg



9M15

Land bank (Ha) 58


NAV/share (IDR) 602

Discount (%) 70


Company information

12M high/low (IDR) : 208/127


Majority shareholder (%) : PP Persero (65.0)




Bloomberg/Reuters code : PPRO IJ/PPRO.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

275

PP PROPERTI

Profit & loss


Sales 192 555 1,545 1,707 1,913

Gross profit 49 143 459 504 582

EBITDA 60 135 448 492 572


EBIT 46 128 419 460 532




Pre-tax profit 51 131 370 395 479

Taxes (2) (25) (77) (85) (96)




Balance sheet




Trade receivables 199 439 1,270 1,403 1,572

Inventories 817 1,529 1,772 2,068 2,430

Fixed assets 207 218 450 757 1,012

Other assets 181 315 648 1,022 1,376

Total assets 1,437 2,730 4,632 5,690 6,793


Trade payables 21 752 892 989 912

Other liabilities 491 640 380 800 1,891




Cash flow


EBIT 46 128 419 460 532


Working capital 481 (176) (469) (191) 545


Operating cash flow 533 (62) (147) 151 968


Free cash flow 207 (172) (730) (553) 337

Equity raised/(bought) 913 - 909 - -

Net borrowings 0 296 268 590 (280)

Other financing (1,104) 72 (183) (88) (94)

Net cash flow 16 196 263 (51) (37)



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 5.3 10.8 18.1 13.4 14.9

ROAA (%) 3.2 5.1 8.0 6.0 6.1

Gross margin (%) 25.3 25.7 29.7 29.5 30.4

EBITDA margin (%) 31.4 24.3 29.0 28.8 29.9

EBIT margin (%) 24.1 23.1 27.1 26.9 27.8

Net margin (%) 25.6 19.1 19.0 18.1 20.0

Payout ratio (%) - 30.0 30.0 30.0 30.0

Current ratio (x) 8.0 2.1 2.3 2.2 1.6

Interest coverage (x) na na 8.2 6.9 9.7

Net gearing (%) nc 7.6 30.3 42.8 32.2




2016 Compendium

276

PURADELTA LESTARI BUY

2008A 2009A

2010F

2011F


Following a successful IDR1tn IPO in May 2015, DMAS, the purest

industrial estate player and the largest by market cap in our

coverage, has booked by far the sector’s strongest 9M15 marketing

sales amounting to 90ha, of which 60ha was from SAIC-GM-Wuling,

its new auto-related anchor tenant.

DMAS’s competitive advantage is its well-located 1,807ha gross

landbank, which has managed to attract many auto manufacturers,

and we expect future support from entries by GM-Wuling’s suppliers.

Hence, for sustained growth, DMAS plans to expand its industrial

landbank by adding 140ha with potential expansion of up to 600ha.

Due to its zero USD debt level, DMAS is our top sector pick of the

industrial estate players, particularly given its strong client base and

strategic location, allowing for positive ASP growth ahead. Our 12M

IDR290 TP is based on a 60% discount to 2016F NAV. Risk: Slow FDI.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 1,826 1,538 2,175 2,698 2,929

EBIT (IDRbn) 923 1,003 1,375 1,711 1,859

Net profit (IDRbn) 941 964 1,520 1,705 1,799


EPS (IDR) 20 20 32 35 37

EPS growth (%) 161.8 2.4 57.7 12.2 5.5

EV/EBITDA (x) 10.6 8.9 6.1 4.9 4.3

P/E (x) 10.4 10.1 6.4 5.7 5.4

FCFPS (IDR) 25 17 21 12 20

FCF yield (%) 12.1 8.2 10.4 6.0 9.9

BVPS (IDR) 113 133 155 179 206

P/BV (x) 1.8 1.5 1.3 1.1 1.0

DPS (IDR) - - 9 11 11



0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

120

140

160

180

200

220

240

260

29-May-15 29-Jun-15 29-Jul-15 29-Aug-15 29-Sep-15 29-Oct-15 29-Nov-15

('000)(IDR)

Volume (RHS) DMAS IJ Px Last

3-Dec-15

(13.7)

10.4

2.6

10.0

(15)

(10)

(5)

0

5

10

15

(15)

(10)

(5)

0

5

10

15

1M 3M 6M Since IPO

(%) (%)

DMAS IJ relative to JCI Source: Bloomberg



9M15



NAV/share (IDR) 732

Discount (%) 60


Company information

12M High/low (IDR) : 235/146


Majority shareholder (%) : AFP International Cap. (41.4)




Bloomberg/Reuters code : DMAS IJ/DMAS.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

277

PURADELTA LESTARI

Profit & loss


Sales 1,826 1,538 2,175 2,698 2,929

Gross profit 998 1,076 1,515 1,885 2,048

EBITDA 924 1,006 1,377 1,714 1,862


EBIT 923 1,003 1,375 1,711 1,859




Pre-tax profit 1,037 1,047 1,638 1,851 1,958

Taxes (95) (83) (117) (145) (158)




Balance sheet




Trade receivables - - - - -

Inventories 6,224 6,029 6,629 7,279 7,979

Fixed assets 52 134 188 271 395

Other assets 112 60 66 73 81

Total assets 7,673 7,603 8,501 9,185 10,312

Interest bearing liabilities 1,299 593 267 134 -

Trade payables - - - - -


Total liabilities 2,242 1,208 1,041 531 398



Cash flow


EBIT 923 1,003 1,375 1,711 1,859


Working capital (11) (13) (1) (1) (1)


Operating cash flow 750 700 1,677 1,325 1,796

Net capital expenditure 432 101 (659) (737) (828)

Free cash flow 1,183 801 1,018 589 968


Net borrowings (1,130) (706) (326) (134) (134)

Other financing 0 0 (455) (511) (539)

Net cash flow 53 96 237 (55) 295



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 19.0 16.3 22.0 21.2 19.4

ROAA (%) 11.9 12.6 18.9 19.3 18.5

Gross margin (%) 54.6 70.0 69.7 69.9 69.9

EBITDA margin (%) 50.6 65.4 63.3 63.5 63.6

EBIT margin (%) 50.5 65.2 63.2 63.4 63.5

Net margin (%) 51.5 62.7 69.9 63.2 61.4

Payout ratio (%) - - 30.0 30.0 30.0

Current ratio (x) 2.5 4.0 4.2 8.8 11.6


Net gearing (%) 0.3 nc nc nc nc

Debtor turnover (days) - - - - -

Creditor turnover (days) - - - - -


2016 Compendium

278

RAMAYANA LESTARI SENTOSA REDUCE

2008A 2009A

2010F 2011F


RALS, Indonesia’s largest low-end department store chain with 116

outlets, is combatting low SSSG and intense competition, by raising

its consignment sales proportion to 38-40% (2014: 35.4%; 3Q14:

39.8%; 3Q15: 44.9%), carrying lower operating costs. This strategy

is employed to offset weak sales at the low end by capturing mid-end

shopper tendencies to down-trade during soft economic conditions.

At this stage, RALS’s performance would be adversely affected by

cheap Chinese imports and low inflation (weak purchasing power),

given job security issues on rising unemployment rates due to

sluggish commodities and other exporting sectors.

On valuation, our IDR640 TP reflects a 2016F PE of 13.6x, a 35%

discount to the sector, warranted by the stock’s low EPS growth. Risks

include higher job creation on faster-than-expected realizations of

infrastructure projects and price support from its share buyback plan.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 6,001 5,861 5,560 5,675 6,012

EBIT (IDRbn) 399 294 218 246 282

Net profit (IDRbn) 391 355 311 333 369


EPS (IDR) 55 50 44 47 52

EPS growth (%) (7.8) (9.1) (12.3) 6.8 11.1

EV/EBITDA (x) 6.2 6.5 6.3 5.6 4.9

P/E (x) 12.4 13.6 15.5 14.5 13.1

FCFPS (IDR) 18 79 57 33 30

FCF yield (%) 2.6 11.7 8.4 4.9 4.4

BVPS (IDR) 453 473 490 515 544

P/BV (x) 1.5 1.4 1.4 1.3 1.3

DPS (IDR) 30 27 22 23 26



0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

450

550

650

750

850

950


('000)(IDR)

Volume (RHS) RALS IJ Px Last

(0.7)

7.0

12.9

4.7

7.8

(2.3) (5)

0

5

10

15

(5)

0

5

10

15

ytd 1M 3M 6M 9M 12M

(%) (%)

RALS IJ relative to JCI Source: Bloomberg

Bagus Adi Yoga Prawira ([email protected]) +6221 250 5081 ext. 3604 *New, please refer to appendix III

Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Number of stores (unit) 118 116 116 119 124

Same store growth (%) 2.2 0.6 (4.0) (0.5) 3.0

Net sales growth (%) 5.3 (2.3) (5.1) 2.1 5.9

Opt. Margin to gross sales (%) 5.0 3.7 2.8 3.1 3.3

Gross sales 7,968 7,942 7,774 8,038 8,534 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 865/510


Majority shareholder (%) : Ramayana Makmur Sentosa (55.9)




Bloomberg/Reuters code : RALS IJ/RALS.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

279

RAMAYANA LESTARI SENTOSA

Profit & loss


Sales 6,001 5,861 5,560 5,675 6,012

Gross profit 2,140 2,048 1,977 2,022 2,148

EBITDA 572 490 465 505 566

Depreciation 173 197 248 260 284

EBIT 399 294 218 246 282




Pre-tax profit 458 388 366 369 410

Taxes (67) (33) (55) (37) (41)




Balance sheet





Inventories 872 809 766 761 868

Fixed assets 1,445 1,375 1,278 1,318 1,384

Other assets 768 660 693 724 762

Total assets 4,379 4,555 4,682 4,853 5,139


Trade payables 895 889 870 856 905





Cash flow


EBIT 399 294 218 246 282

Depreciation 173 197 248 260 284

Working capital 2 55 28 (10) (59)




Free cash flow 128 563 406 235 211



Other financing (175) (183) (169) (131) (139)

Net cash flow (50) 379 237 105 73



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 12.5 10.8 9.1 9.3 9.8

ROAA (%) 9.2 7.9 6.7 7.0 7.4

Gross margin (%) 35.7 34.9 35.6 35.6 35.7

EBITDA margin (%) 9.5 8.4 8.4 8.9 9.4

EBIT margin (%) 6.6 5.0 3.9 4.3 4.7

Net margin (%) 6.5 6.1 5.6 5.9 6.1

Payout ratio (%) 54.5 54.0 50.0 50.0 50.0

Current ratio (x) 1.6 1.9 2.2 2.4 2.4






2016 Compendium

280

SALIM IVOMAS PRATAMA BUY

2008A 2009A

2010F 2011F


Owning the largest planted area of 300k ha in the sector and an

integrated palm oil business model from upstream to downstream,

SIMP is currently suffering from its inefficient refinery business, but a

stronger CPO price outlook should help improve the company’s

performance as we head into 2016.

We expect solid growth with a 2016F net profit of IDR612bn, +125%

y-y, mainly helped by some new mills which should increase its

efficiency rates. On a more negative note, we expect a 7% y-y volume

decline in the FFB output, due to El Nino effect hurting SIMP’s

production yield.

On the back of a low EV/ha of USD5,278 (50% discount to AALI) and

2016F earnings recovery expectation, SIMP is still a BUY with our TP

at IDR600, based on a 2016F PE of 15.5x, at a 35% discount to

Malaysian peers. Risks to our call include lower refinery margins.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 13,280 14,963 14,007 15,699 16,530

EBIT (IDRbn) 1,586 2,563 1,582 2,145 2,468

Net profit (IDRbn) 524 842 272 612 1,045


EPS (IDR) 33 53 17 39 66

EPS growth (%) (54.7) 60.8 (67.7) 125.3 70.7

EV/EBITDA (x) 4.7 3.4 4.5 3.7 3.3

P/E (x) 11.2 7.0 21.6 9.6 5.6

FCFPS (IDR) (134) (69) 5 (34) 4

FCF yield (%) (18.0) (9.2) 0.7 (4.5) 0.6

BVPS (IDR) 864 897 898 931 986

P/BV (x) 0.4 0.4 0.4 0.4 0.4

DPS (IDR) 10 16 5 12 20

Div. yield (%) 2.6 4.3 1.4 3.1 5.3 Source: Company, Bahana estimates note: based on 3 December2015 closing price


0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

350

450

550

650

750

850


('000)(IDR)

Volume (RHS) SIMP IJ Px Last

(33.5)

(18.8)(21.9)

(31.3) (32.6)

(38.5)

(50)

(40)

(30)

(20)

(10)

0

(50)

(40)

(30)

(20)

(10)

0

ytd 1M 3M 6M 9M 12M

(%) (%)

SIMP IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F


CPO production (k tons) 810 957 1,002 938 976

Growth (%) (8.0) 18.1 4.7 (6.3) 4.1

ASP CPO (USD/ton) 659 664 560 600 620


Company information

12M high/low (IDR) : 760/372


Majority shareholder (%) : First Pacific Company Limited (78.4)




Bloomberg/Reuters code : SIMP IJ/SIMP.JK Source: Bloomberg, Reuters; based on 3 December2015 closing price

2016 Compendium

281

SALIM IVOMAS PRATAMA

Profit & loss


Sales 13,280 14,963 14,007 15,699 16,530

Gross profit 2,947 4,097 3,175 3,772 4,348

EBITDA 2,504 3,536 2,719 3,447 3,913

Depreciation 918 973 1,137 1,302 1,445

EBIT 1,586 2,563 1,582 2,145 2,468




Pre-tax profit 934 1,647 570 1,096 1,748

Taxes (299) (537) (186) (357) (570)



Net profit 524 842 272 612 1,045 Source: Company, Bahana estimates

Balance sheet




Trade receivables 1,130 989 875 951 972

Inventories 1,568 1,773 1,556 1,744 1,837

Fixed assets 16,664 18,644 20,128 21,269 22,224

Other assets 6,590 6,894 6,005 6,060 6,103

Total assets 28,065 30,996 31,427 32,614 33,956


Trade payables 664 862 722 795 812





Cash flow


EBIT 1,586 2,563 1,582 2,145 2,468

Depreciation 918 973 1,137 1,302 1,445

Working capital 152 56 241 (77) (56)

Other operating items (1,859) (1,724) (260) (1,462) (1,388)



Free cash flow (2,120) (1,086) 79 (534) 68


Net borrowings 1,106 1,002 300 300 300

Other financing (237) 842 (213) (38) (137)

Net cash flow (1,336) 583 165 (272) 231



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 3.8 6.0 1.9 4.2 6.9

ROAA (%) 1.9 2.9 0.9 1.9 3.1

Gross margin (%) 22.2 27.4 22.7 24.0 26.3

EBITDA margin (%) 18.9 23.6 19.4 22.0 23.7

EBIT margin (%) 11.9 17.1 11.3 13.7 14.9

Net margin (%) 3.9 5.6 1.9 3.9 6.3

Payout ratio (%) 29.6 30.0 30.0 30.0 30.0

Current ratio (x) 0.8 0.9 0.8 0.8 6.9


Net gearing (%) 42.2 43.7 44.5 46.8 44.7




2016 Compendium

282

SAMPOERNA AGRO BUY

2008A 2009A

2010F 2011F

PX: IDR1,475 - TP: IDR1,970

With a planted area of 118k ha and the highest proportion of plasma

estates (40%) among the planters within our coverage, SGRO has

initiated a share buy-back program from Nov 2015 to early 2016; this

has so far resulted in a boost to its share price performance.

Despite strong growth from its Kalimantan estates and several

productivity improvement initiatives, SGRO’s 2016 FFB production

should fall to 893k tons, -2% y-y, due to a lower production yield on

the El Nino effect. We expect a 2016F revenue of IDR3.5tn, +13% y-

y, mainly stemming from rising CPO prices and a stronger USD.

As we expect 2016F earnings to reach IDR260bn, +18% y-y, with

slight margin expansions, we reiterate our BUY rating on SGRO with a

TP of IDR1,970, based on a 2016F PE of 14.3x, at a 40% discount to

Malaysian peers due to its small-cap status. Risks: Volatile production

on plasma proportion and lower-than-expected CPO prices.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 2,561 3,242 3,118 3,512 3,758

EBIT (IDRbn) 201 542 411 487 604

Net profit (IDRbn) 119 340 220 260 328


EPS (IDR) 63 180 117 137 174

EPS growth (%) (63.8) 185.7 (35.3) 17.9 26.3

EV/EBITDA (x) 9.7 5.6 7.1 6.5 5.8

P/E (x) 23.4 8.2 12.7 10.7 8.5

FCFPS (IDR) (177) (181) (242) (123) (57)

FCF yield (%) (12.0) (12.3) (16.4) (8.4) (3.9)

BVPS (IDR) 1,410 1,575 1,634 1,702 1,789

P/BV (x) 1.0 0.9 0.9 0.9 0.8

DPS (IDR) 45 15 58 69 87



0

5,000

10,000

15,000

20,000

25,000

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400


('000)(IDR)

Volume (RHS) SGRO IJ Px Last

(17.0)

24.2

10.1

(5.9)(11.5)

(23.3) (30)

(20)

(10)

0

10

20

30

(30)

(20)

(10)

0

10

20

30

ytd 1M 3M 6M 9M 12M

(%) (%)

SGRO IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F



Growth (%) (22.8) 18.5 9.5 (2.8) 8.9

ASP CPO (USD/ton) 685 707 560 600 620


Company information

12M high/low (IDR) : 2,245/1,050


Majority shareholder (%) : Sampoerna Agri Resources (79.7)




Bloomberg/Reuters code : SGRO IJ/SGRO.JK Source: Bloomberg, Reuter; based on 3 December 2015 closing price

2016 Compendium

283

SAMPOERNA AGRO

Profit & loss


Sales 2,561 3,242 3,118 3,512 3,758

Gross profit 498 869 787 917 1,069

EBITDA 405 765 678 798 951

Depreciation 204 223 267 311 348

EBIT 201 542 411 487 604




Pre-tax profit 174 510 343 395 495

Taxes (53) (160) (113) (124) (156)




Balance sheet





Inventories 272 298 280 311 322

Fixed assets 2,997 3,675 4,036 4,393 4,712

Other assets 942 1,210 1,265 1,404 1,522

Total assets 4,513 5,467 5,934 6,525 6,985


Trade payables 257 332 289 322 334





Cash flow


EBIT 201 542 411 487 604

Depreciation 204 223 267 311 348

Working capital (3) 239 (255) (44) (28)



Net capital expenditure (620) (1,119) (703) (753) (751)

Free cash flow (335) (342) (458) (233) (108)


Net borrowings 356 393 507 401 264

Other financing (86) (19) (97) (131) (160)

Net cash flow (65) 32 (48) 37 (4)



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 4.5 12.1 7.3 8.2 9.9

ROAA (%) 2.8 6.8 3.9 4.2 4.9

Gross margin (%) 19.5 26.8 25.2 26.1 28.5

EBITDA margin (%) 15.8 23.6 21.8 22.7 25.3

EBIT margin (%) 7.8 16.7 13.2 13.9 16.1

Net margin (%) 4.7 10.5 7.1 7.4 8.7

Payout ratio (%) 71.4 8.3 50.0 50.0 50.0

Current ratio (x) 2.2 1.8 2.2 2.3 2.3


Net gearing (%) 42.6 50.2 66.4 75.1 79.4




2016 Compendium

284

SARANA MENARA NUSANTARA BUY

2008A 2009A

2010F 2011F

PX: IDR4,200 - TP: IDR5,000*

TOWR, Indonesia’s largest independent tower provider with 12,211

towers and 20,956 tower tenants (as of 9M15), looks set to have its

2016F number of tenants increase to 22,234 (+6% y-y) as the

company’s number of towers reach 12,906 (+6% y-y), reflecting

collocation rate of 1.7x.

The re-arrangement of 1800MHz frequency will support operators to

expand their 4G network, building more 4G infrastructure, including

BTSs and towers, allowing sustainable strong growth for TOWR in the

next few years. On the balance sheet side, TOWR also has solid cash

position to support both organic and inorganic future expansions.

Our TP of IDR5,000 (from IDR 5,100) translates to 2016F EV/EBITDA

of 13.7x, 13% discount to its local peer’s TP. BUY. Risks to our call

include greater-than-expected competition and lower-than-expected

Hutch expansion.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 3,197 4,106 4,415 4,845 5,315

EBIT (IDRbn) 1,724 2,335 2,493 2,866 3,274

Net profit (IDRbn) 169 841 986 1,591 2,133


EPS (IDR) 17 82 97 156 209

EPS growth (%) (51.3) 398.9 17.3 61.3 34.1

EV/EBITDA (x) 19.1 14.6 13.3 11.7 10.1

P/E (x) 254.3 51.0 43.5 26.9 20.1

FCFPS (IDR) (83) 45 152 177 226

FCF yield (%) (2.0) 1.1 3.6 4.2 5.4

BVPS (IDR) 358 458 548 698 900

P/BV (x) 11.7 9.2 7.7 6.0 4.7

DPS (IDR) - - - - -



0

2,000

4,000

6,000

8,000

10,000

3,700

3,800

3,900

4,000

4,100

4,200

4,300

4,400


('000)(IDR)

Volume (RHS) TOWR IJ Px Last

14.4

(0.1)

1.4

16.8

22.0

13.0

(5)

0

5

10

15

20

25

(5)

0

5

10

15

20

25

ytd 1M 3M 6M 9M 12M

(%) (%)

TOWR IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ASP (IDR mn) 174 204 210 218 227

Tower sites (units) 9,746 11,595 12,233 12,906 13,615

Collocation (x) 8,576 8,543 8,842 9,328 9,841 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 4,400/3,720


Majority shareholder (%) : Sapta Adhikari Investama (32.7)




Bloomberg/Reuters code : TOWR IJ/TOWR.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

285

SARANA MENARA NUSANTARA

Profit & loss


Sales 3,197 4,106 4,415 4,845 5,315

Gross profit 2,062 2,784 3,020 3,444 3,908

EBITDA 2,651 3,418 3,701 4,061 4,455

Depreciation 928 1,084 1,208 1,194 1,181

EBIT 1,724 2,335 2,493 2,866 3,274




Pre-tax profit 228 1,211 1,374 2,217 2,854

Taxes (63) (371) (385) (621) (713)

Minority interest 4 1 (4) (6) (7)



Balance sheet





Inventories 1 - 0 1 1

Fixed assets 11,152 12,392 12,467 12,292 12,164

Other assets 2,202 2,262 2,630 2,653 2,679

Total assets 15,534 17,235 18,982 18,692 19,342


Trade payables 485 472 268 280 293





Cashflow


EBIT 1,724 2,335 2,493 2,866 3,274

Depreciation 927 1,084 1,208 1,194 1,181

Working capital (334) 147 (143) (25) (28)




Free cash flow (848) 464 1,556 1,810 2,306


Net borrowings 1,261 46 315 (1,934) (1,547)

Other financing (36) (6) (531) (67) (65)

Net cash flow 376 504 1,340 (190) 694



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 4.8 20.2 19.2 25.0 26.2

ROAA (%) 1.2 5.1 5.4 8.4 11.2

EBITDA margin (%) 82.9 83.3 83.8 83.8 83.8

EBIT margin (%) 53.9 56.9 56.5 59.2 61.6

Net margin (%) 5.3 20.5 22.3 32.8 40.1


Current ratio (x) 0.9 1.3 1.5 1.5 1.8


Net gearing (%) 213.8 152.1 112.9 64.3 25.4

Debts to assets (%) 60 54 51 41 32



Inventory turnover (days) 408 - 410 410 410 Source: Company, Bahana estimates

2016 Compendium

286

SEMEN BATURAJA HOLD*

2008A 2009A

2010F 2011F


SMBR, the smallest cement player under our coverage with 2mnt

capacity and 2.8% market share, would be adversely impacted by high

capex on its 1.8mn ton Baturaja II plant construction partly finishing in

2017. Added margin pressure could stem from higher contribution of

low-margin bulk cement (10M15: 31% of total sales) and competition.

On the demand side, construction of Trans Sumatra toll road would

only benefit SMBR in the long run, as multiplier effects from the

property sector would only occur once toll-roads are operational. That

said, demand support for SMBR would be derived from infra-related

projects, especially in South Sumatra prior to the 2018 Asian Games.

On valuation, our IDR300 TP reflects 2016E PE of 10x, a 40% discount

to the sector on smaller capacity and 2016-17F earnings contractions.

However, recent price fall has us raising to a HOLD. Upside risk:

Accelerated Trans Sumatra toll-road built; Downside risk: Lower ASP.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 1,169 1,215 1,479 1,528 1,633

EBIT (IDRbn) 327 236 339 325 344

Net profit (IDRbn) 312 328 364 300 252


EPS (IDR) 35 33 37 30 26

EPS growth (%) (11.5) (5.2) 10.8 (17.5) (16.1)

EV/EBITDA (x) 2.9 3.2 3.7 6.1 8.3

P/E (x) 8.8 9.3 8.4 10.1 12.1

FCFPS (IDR) 15 27 (51) (103) (120)

FCF yield (%) 4.8 8.8 (16.6) (33.3) (38.7)

BVPS (IDR) 251 276 304 327 346

P/BV (x) 1.2 1.1 1.0 0.9 0.9

DPS (IDR) 8 8 9 8 6



0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

230

280

330

380

430


('000)(IDR)

Volume (RHS) SMBR IJ Px Last

(5.7)

1.9

14.3

5.5

1.0

(10.6) (15)

(10)

(5)

0

5

10

15

20

(15)

(10)

(5)

0

5

10

15

20

ytd 1M 3M 6M 9M 12M

(%) (%)

SMBR IJ relative to JCI Source: Bloomberg

Bob Setiadi ([email protected]) +6221 250 5081 ext. 3605 *New, please refer to appendix II

Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F


Export volumes ('000 tons) - - - - -




Company information

12M high/low (IDR) : 404/250






Bloomberg/Reuters code : SMBR IJ/SMBR.JK Source: Bloomberg, Reuters based on 3 December 2015 closing price

2016 Compendium

287

SEMEN BATURAJA

Profit & loss


Sales 1,169 1,215 1,479 1,528 1,633

Gross profit 462 372 492 489 521

EBITDA 394 311 429 438 470


EBIT 327 236 339 325 344

Net interest inc./(expense) 71 152 123 54 (33)



Pre-tax profit 400 395 472 395 331

Taxes (88) (66) (109) (95) (80)




Balance sheet


Cash and equivalents 1,883 2,054 1,450 363 272



Inventories 132 187 189 199 213

Fixed assets 590 558 1,435 2,747 4,171


Total assets 2,711 2,926 3,212 3,452 4,809

Interest bearing liabilities - - - - 1,150



Total liabilities 244 209 222 237 1,405



Cash flow


EBIT 327 236 339 325 344


Working capital (55) (73) 1 (8) (13)

Other operating items (56) 72 31 (18) (85)


Net capital expenditure (139) (43) (968) (1,425) (1,550)

Free cash flow 144 267 (506) (1,013) (1,178)

Equity raised/(bought) 1,378 - - - -

Net borrowings - - - - 1,150

Other financing (182) (96) (97) (75) (63)

Net cash flow 1,340 171 (604) (1,088) (91)

Cash balances, beginning 543 1,883 2,054 1,450 363

Ending cash 1,883 2,054 1,450 363 272 Source: Company, Bahana estimates

Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 18.3 12.7 12.7 9.7 7.6

ROAA (%) 16.0 11.6 11.9 9.0 6.1

Gross margin (%) 39.6 30.7 33.3 32.0 31.9

EBITDA margin (%) 33.7 25.6 29.0 28.6 28.8

EBIT margin (%) 28.0 19.4 22.9 21.3 21.1

Net margin (%) 26.7 27.0 24.6 19.6 15.4

Payout ratio (%) 25.0 25.0 25.0 25.0 25.0

Current ratio (x) 10.9 13.0 9.1 3.3 2.7

Interest coverage (x) na na na na 10.5

Net gearing (%) nc nc nc nc 25.8




2016 Compendium

288

SEMEN INDONESIA HOLD

2008A 2009A

2010F 2011F

PX: IDR11,075 - TP: IDR10,600*

With total installed capacity of 17.5mn tons on three strategic islands

(Java, Sumatra and Sulawesi), SMGR, Indonesia’s largest cement

player by volume, should have the competitive advantage to defend

market share through its new focus on volume rather than margins.

In 2016, cement demand should be driven by increasing bulk cement

volume growth, supported by government infra-related projects, which

must use cement from SOE cement producers, including SMGR.

However, bulk cement has lower margins.

This shift in cement product mix to bulk and intensifying competition is

likely to pressure margins, dampening SMGR’s earnings outlook. Thus,

we retain a HOLD on SMGR with IDR 10,600 TP (from IDR 9,800) on a

2016F P/E of 14.0x. Upside risks: Cost efficiencies and higher domestic

demand; Downside risks: Worsening competition from new cement

players and lower regional cement prices on higher China exports.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 24,501 26,987 26,545 27,486 28,611

EBIT (IDRbn) 6,972 6,954 5,612 5,594 5,873

Net profit (IDRbn) 5,370 5,566 4,352 4,503 4,727


EPS (IDR) 905 938 734 759 797

EPS growth (%) 10.8 3.6 (21.8) 3.5 5.0

EV/EBITDA (x) 8.2 7.9 9.5 9.4 8.5

P/E (x) 12.2 11.8 15.1 14.6 13.9

FCFPS (IDR) 568 647 (4) (150) 799

FCF yield (%) 5.1 5.8 (0.0) (1.4) 7.2

BVPS (IDR) 3,521 4,053 4,307 4,844 5,411

P/BV (x) 3.1 2.7 2.6 2.3 2.0

DPS (IDR) 407 375 220 228 239



0

10,000

20,000

30,000

40,000

50,000

7,000

9,000

11,000

13,000

15,000

17,000


('000)(IDR)

Volume (RHS) SMGR IJ Px Last

(18.4)

8.5

17.7

(5.2)(8.9)

(21.0)(30)

(20)

(10)

0

10

20

(30)

(20)

(10)

0

10

20

ytd 1M 3M 6M 9M 12M

(%) (%)

SMGR IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F


Export volumes ('000 tons) 329 197 857 959 1,075




Company information

12M high/low (IDR) : 16,625/7,200






Bloomberg/Reuters code : SMGR IJ/SMGR.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

289

SEMEN INDONESIA

Profit & loss


Sales 24,501 26,987 26,545 27,486 28,611

Gross profit 10,944 11,599 10,254 10,286 10,466

EBITDA 8,048 8,190 7,016 7,303 7,941

Depreciation 1,076 1,237 1,404 1,709 2,068

EBIT 6,972 6,954 5,612 5,594 5,873




Pre-tax profit 6,920 7,091 5,688 5,690 5,957

Taxes (1,566) (1,517) (1,328) (1,178) (1,220)




Balance sheet





Inventories 2,646 2,812 2,889 3,218 3,218

Fixed assets 18,863 20,221 23,066 28,174 29,265

Other assets 2,833 3,697 4,481 5,596 7,789

Total assets 30,793 34,315 39,438 44,988 49,125


Trade payables 2,502 3,032 2,929 3,092 3,262





Cash flow


EBIT 6,972 6,954 5,612 5,594 5,873

Depreciation 1,076 1,237 1,404 1,709 2,068

Working capital (269) 49 47 (263) 79




Free cash flow 3,372 3,840 (21) (890) 4,741


Net borrowings 308 (153) 3,209 980 26

Other financing (2,632) (2,832) (1,476) (1,198) (4,013)

Net cash flow 1,048 855 1,712 (1,107) 754



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 28.1 24.8 17.6 16.6 15.5

ROAA (%) 18.7 17.1 11.8 10.7 10.0

Gross margin (%) 44.7 43.0 38.6 37.4 36.6

EBITDA margin (%) 32.8 30.3 26.4 26.6 27.8

EBIT margin (%) 28.5 25.8 21.1 20.4 20.5

Net margin (%) 21.9 20.6 16.4 16.4 16.5

Payout ratio (%) 45.0 40.0 30.0 30.0 30.0

Current ratio (x) 1.9 2.2 2.5 1.9 1.3


Net gearing (%) 0.9 nc 2.6 9.6 6.3




2016 Compendium

290

SIDO MUNCUL BUY

2008A 2009A

2010F 2011F


Beset by competition from Kalbe Farma (KLBF) through its Extra Joss

energy drink, SIDO, a leading traditional herbal medicine producer,

has recently entered higher-margin businesses in pharmaceuticals

(via its acquisition of Berlico Farma) and RTD by launching Ener-G to

provide top-line support. Its GPM rose to 39% in 9M15 (2014: 35%)

following improved sales mix and Tolak Angin's 7-8% ASP hike.

Given its already strong traditional trade channels in Java, SIDO

plans to seek growth by expanding into the eastern part of Indonesia,

by promoting four products launched in mid-2015: Tolak Angin-Sugar

Free, Ener-G, Tolak Linu and Tolak Angin Care.

Our IDR630 TP (from IDR585) on a 2016F PE of 17x (50% discount

to sector) is sufficient to account for its small cap and the competitive

energy drink market. Thus, SIDO’s recent under-performance should

reverse. BUY. Risk: Unsuccessful tries into new markets.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 2,372 2,198 2,301 2,579 2,906

EBIT (IDRbn) 516 438 499 560 625

Net profit (IDRbn) 406 415 469 560 638


EPS (IDR) 30 28 31 37 42

EPS growth (%) 4.5 (8.0) 13.1 19.4 13.8

EV/EBITDA (x) 10.9 15.0 11.5 9.8 8.2

P/E (x) 18.5 20.1 17.8 14.9 13.1

FCFPS (IDR) (4) 4 64 28 36

FCF yield (%) (0.8) 0.7 11.6 5.1 6.5

BVPS (IDR) 194 176 201 232 267

P/BV (x) 2.9 3.2 2.8 2.4 2.1

DPS (IDR) 11 27 6 6 7



0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

450

500

550

600

650

700


('000)(IDR)

Volume (RHS) SIDO IJ Px Last

2.3

12.6

2.9

6.4

11.6

(2.5) (5)

0

5

10

15

(5)

0

5

10

15

ytd 1M 3M 6M 9M 12M

(%) (%)

SIDO IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Herbal vol. growth (%) 15.0 10.0 8.0 8.0 8.0

Herbal price growth (%) 6.0 2.0 3.0 3.0 5.0

Energy drinks vol. growth (%) (7.0) (29.0) (12.0) (12.0) 3.0

Energy drinks price growth (%) (20.0) (19.8) (12.0) 8.0 9.0 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 655/440


Majority shareholder (%) : Sulistio Desi (40.5)




Bloomberg/Reuters code : SIDO IJ/SIDO.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

291

SIDO MUNCUL

Profit & loss


Sales 2,372 2,198 2,301 2,579 2,906

Gross profit 1,011 840 893 1,006 1,142

EBITDA 565 496 568 636 709


EBIT 516 438 499 560 625



Other income/(expense) (55) 4 5 - -

Pre-tax profit 583 546 606 723 823

Taxes (177) (130) (136) (163) (185)




Balance sheet





Inventories 288 231 231 280 314

Fixed assets 556 791 913 987 1,053

Other assets 296 601 149 179 179

Total assets 2,951 2,821 3,295 3,790 4,350


Trade payables 175 137 162 181 203





Cash flow


EBIT 516 438 499 560 625


Working capital (120) 31 228 (62) (35)

Other operating items (349) (159) 297 1 14

Operating cash flow 96 368 1,093 576 689


Free cash flow (65) 59 963 426 539

Equity raised/(bought) 1,062 - - - -

Net borrowings (7) - - - -

Other financing (51) (544) (39) (123) (111)

Net cash flow 938 (484) 924 303 428



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 20.7 15.8 16.6 17.2 17.0

ROAA (%) 15.9 14.4 15.3 15.8 15.7

Gross margin (%) 42.6 38.2 38.8 39.0 39.3

EBITDA margin (%) 23.8 22.6 24.7 24.7 24.4

EBIT margin (%) 21.8 19.9 21.7 21.7 21.5

Net margin (%) 17.1 18.9 20.4 21.7 21.9

Payout ratio (%) 36.9 97.8 20.0 20.0 20.0

Current ratio (x) 7.3 10.3 8.4 8.9 9.4






2016 Compendium

292

SILOAM INTERNATIONAL HOSPITALS BUY

2008A 2009A

2010F 2011F

PX: IDR9,700 - TP: IDR14,700*

SILO, Indonesia’s largest private hospital chain, with 13 of its 20

hospitals accepting National Health Insurance (JKN), has seen delays

in its expansion plans due to construction issues and slower demand

on non-urgent treatment due to the slowing economy.

SILO plans to open 2 private and 2 hybrid hospitals (for private and

JKN patients) p.a. in the next 5 years. We expect additional growth

from the conversion of 6 other private hospitals into hybrid hospitals.

As these hospitals mature, we expect higher utilization rates and

greater efficiencies, resulting in improved EBITDA margins.

Following SILO’s market underperformance, valuation looks

attractive. Our IDR14,700 TP (from IDR17,200) is based on a 24x

2016F EV/EBITDA, a 50% discount to MIKA IJ’s valuation and 10-

year DCF valuation, sufficient to account for JKN’s continued fund

deficit on poor cost control. Risk: a weak IDR.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 2,504 3,341 4,116 5,242 6,675

EBIT (IDRbn) 76 168 215 276 351



EPS (IDR) 50 54 81 123 174

EPS growth (%) (1.2) 8.5 49.7 51.8 41.4

EV/EBITDA (x) 31.8 23.5 19.0 14.9 11.4

P/E (x) 194.6 179.2 119.8 78.9 55.8

FCFPS (IDR) (563) (96) (111) (172) 31

FCF yield (%) (5.8) (1.0) (1.1) (1.8) 0.3

BVPS (IDR) 1,611 1,426 1,496 1,603 1,752

P/BV (x) 6.0 6.8 6.5 6.1 5.5

DPS (IDR) - - 11 16 25



0

10,000

20,000

30,000

40,000

50,000

7,000

9,000

11,000

13,000

15,000

17,000


('000)(IDR)

Volume (RHS) SILO IJ Px Last

(16.0)

(0.6)

(40.9)

(19.0)

(5.6)

(16.9)

(50)

(40)

(30)

(20)

(10)

0

(50)

(40)

(30)

(20)

(10)

0

ytd 1M 3M 6M 9M 12M

(%) (%)

SILO IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Beds occupancy rate (%) 51.3 56.2 54.4 55.5 57.1

Ave. IPD length of stay (days) 4.3 4.1 3.9 3.8 3.8

IPD/OPD admissions (%) 7.1 7.7 8.1 8.3 8.6

No. of beds in operation (unit) 1,985 2,277 2,790 3,365 4,030 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 16,900/9,625


Majority shareholder (%) : LPKR IJ (70.8)




Bloomberg/Reuters code : SILO IJ/SILO.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

293

SILOAM INTERNATIONAL HOSPITALS

Profit & loss


Sales 2,504 3,341 4,116 5,242 6,675

Gross profit 659 952 1,194 1,544 1,982

EBITDA 303 487 610 795 1,043

Depreciation 227 319 395 518 692

EBIT 76 168 215 276 351



Other income/(expense) 3 (34) (40) (20) 10

Pre-tax profit 72 94 131 200 284

Taxes (22) (34) (39) (60) (85)




Balance sheet





Inventories 95 106 123 156 198

Fixed assets 1,402 1,589 1,739 2,005 2,123

Other assets 317 470 523 591 671

Total assets 2,601 2,844 2,918 3,367 3,863


Trade payables 164 193 236 298 379





Cash flow


EBIT 76 168 215 276 351

Depreciation 227 319 395 518 692

Working capital (76) 13 (72) (75) (48)




Free cash flow (563) (111) (128) (199) 35


Net borrowings (408) 46 1 241 170

Other financing (11) (145) (58) (79) (100)

Net cash flow 347 (235) (186) (37) 105



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 5.4 3.8 5.5 7.9 10.4

ROAA (%) 2.4 2.3 3.2 4.5 5.6

Gross margin (%) 26.3 28.5 29.0 29.5 29.7

EBITDA margin (%) 12.1 14.6 14.8 15.2 15.6

EBIT margin (%) 3.0 5.0 5.2 5.3 5.3

Net margin (%) 2.0 1.9 2.3 2.7 3.0

Payout ratio (%) - - 20.0 20.0 20.0

Current ratio (x) 3.1 1.8 1.5 1.5 1.6


Net gearing (%) nc 14.2 20.6 33.3 34.8




2016 Compendium

294

SOECHI LINES BUY

2008A 2009A

2010F 2011F


Despite stable business from oil companies like Pertamina (50% of

total revenue) and Conoco Phillips, SOCI, a leading oil tanker logistic

company with some 20% market share in Indonesia, has seen lower

2015 margins due to an increased portion of lower-margin ship

building business (GPM: 15%) and higher docking vessels.

Going into 2016, we expect new vessels and increased utilization

rates to pave the way for 2016 revenue to reach USD163mn, up 22%

y-y. On the cost front, we expect 2016 margin support to come from

its new ship-maintenance business (GPM: 30%).

We expect SOCI to book 2016 EBIT growth of 32%, helped by stable

incomes from long-term contracts. On valuation, our 12M TP of

IDR630, based on 2016F PE of 7x, reflects a 25% discount to regional

peers. BUY on 37% potential upside to our TP. Risk: Lower-than-

expected utilization rates.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (USDmn) 106 127 134 163 170

EBIT (USDmn) 29 45 42 56 59

Net profit (USDmn) 30 33 38 45 45


EPS (IDR) 119 95 76 89 90

EPS growth (%) (20.5) (19.7) (20.4) 21.6 0.4

EV/EBITDA (x) 10.1 6.9 7.0 5.7 5.5

P/E (x) 3.9 4.8 6.0 5.0 5.1

FCFPS (IDR) (184) (32) (27) 1 3

FCF yield (%) (40) (7) (6) 0 1

BVPS (IDR) 542 683 533 604 681

P/BV (x) 0.8 0.7 0.9 0.8 0.7

DPS (IDR) - - 20 23 27



Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

General purpose vessels (units) 22 24 26 26 26

Medium range vessels (units) 4 3 3 5 7

Aframax tanker & VLCC (units) 6 8 8 9 10

Utilization rates (%) 91.0 89.1 85.0 88.0 87.3

IDR/USD 12,157 12,385 14,000 14,500 14,000 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 735/393


Majority shareholder (%) : Soechi Group (80)




Bloomberg/Reuters code : SOCI IJ/SOCI.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

350

450

550

650

750


('000)(IDR)

Volume (RHS) SOCI IJ Px Last

(20.4)

(5.9)(9.2)

(17.2)

(7.4)

(13.8)

(30)

(20)

(10)

0

(30)

(20)

(10)

0

ytd 1M 3M 6M 9M 12M

(%) (%)

SOCI IJ relative to JCI

2016 Compendium

295

SOECHI LINES

Profit & loss


Sales 106 127 134 163 170


EBITDA 41 56 56 71 76


EBIT 29 45 42 56 59



Other income/(expense) (4) (1) - - -


Taxes (0) (2) (2) (3) (3)




Balance sheet


Cash and equivalents 3 21 5 (2) (6)




Fixed assets 327 383 426 474 520


Total assets 375 440 475 524 568







Cash flow


EBIT 29 45 42 56 59


Working capital (20) 18 (12) (3) (1)




Free cash flow (47) (11) (14) (7) (3)


Net borrowings 18 (10) 10 9 4

Other financing 2 (27) (12) (9) (6)

Net cash flow (1) 18 (16) (7) (5)

Cash balances, beginning 4 3 21 5 (2)

Ending cash 3 21 5 (2) (6) Source: Company, Bahana estimates

Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 27.4 17.7 10.3 13.6 13.8

ROAA (%) 9.0 8.2 3.6 6.2 8.1

Gross margin (%) 33.7 40.3 37.1 39.2 39.5

EBITDA margin (%) 38.1 43.7 42.1 43.9 44.7

EBIT margin (%) 27.4 35.0 31.6 34.4 34.7

Net margin (%) 28.5 26.0 28.6 27.7 26.6

Payout ratio (%) - - 30.0 30.0 30.0

Current ratio (x) 0.4 0.6 0.6 0.5 0.5


Net gearing (%) 128.8 63.2 65.5 62.9 58.4




2016 Compendium

296

SRI REJEKI ISMAN BUY

2008A 2009A

2010F 2011F


Given the recent weak IDR, SRIL, Southeast Asia’s largest fully

integrated textile player, has enjoyed higher margins due to its high

USD-linked sales (70% of top line) while most opex is in IDR. Looking

ahead, we expect SRIL to benefit not only from cheap labor but also

from orders shifting away from China on labor shortages.

With SRIL’s rapid expansion across all of its business segments, the

company has decided to embark on constructing its own USD100mn

60MW power plant by end-2016. This would be partly funded by a

USD400mn bond issuance (8-9% indicative coupon rate), of which

USD300mn would be used for debt refinancing.

With the power plant’s IRR expected at 15% (equivalent to 3% higher

margin) using current coal price, we retain our positive view on SRIL.

At our new TP of IDR500 (from IDR350), or a 9.6x 2016F PE, SRIL still

trades at a 30% discount to PBRX’s valuation. Risk: Stronger IDR.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (USDmn) 451 555 599 680 791

EBIT (USDmn) 73 95 114 129 154

Net profit (USDmn) 30 45 52 67 84

Bahana/cons.(%) - - 113 124 -

EPS (IDR) 25 34 39 52 66

EPS growth (%) (2.9) 32.2 25.3 32.3 25.7

EV/EBITDA (x) 34.6 8.0 6.6 5.6 5.0

P/E (x) 14.1 10.7 9.1 6.9 5.5

FCFPS (IDR) 2 (5) (1) 3 4

FCF yield (%) 0.4 (1.5) (0.3) 0.8 1.1

BVPS (IDR) 164 175 218 276 320

P/BV (x) 2.2 2.0 1.6 1.3 1.1

DPS (IDR) 3 3 4 5 7



0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

100

150

200

250

300

350

400

450

500


('000)(IDR)

Volume (RHS) SRIL IJ Px Last

138.3

(5.9)

1.1

20.7

130.5 120.6

(20)

0

20

40

60

80

100

120

140

160

(20)

0

20

40

60

80

100

120

140

160

ytd 1M 3M 6M 9M 12M

(%) (%)

SRIL IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Spinning volume (bale of yarn) 427 509 543 554 622

Garment volume (shirt) 9.1 12.6 17.2 20.7 24.5

Total debt (IDRbn) 200 416 454 480 450 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 474/150


Majority shareholder (%) : Huddleston Indonesia (56.1)




Bloomberg/Reuters code : SRIL IJ/SRIL.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

297

SRI REJEKI ISMAN

Profit & loss


Sales 451 555 599 680 791

Gross profit 97 122 141 161 191

EBITDA 88 109 132 152 179


EBIT 73 95 114 129 154



Other income/(expense) 3 1 - - -


Taxes (13) (15) (15) (18) (22)


Extraordinary gain/(losses) (2) (6) (3) (3) (3)


Balance sheet





Inventories 120 110 134 152 176

Fixed assets 250 323 459 516 551


Total assets 459 699 814 892 977







Cash flow


EBIT 73 95 114 129 154

Depreciation (8) 17 18 22 25

Working capital (9) (110) 15 (3) (21)




Free cash flow 27 (102) (22) 51 76


Net borrowings (8) 216 34 - -

Other financing (117) (21) (41) (47) (52)

Net cash flow (2) 75 (29) 4 24



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 17.5 21.1 21.1 21.1 21.6

ROAA (%) 6.6 7.7 7.3 8.0 9.0

Gross margin (%) 21.6 22.1 23.5 23.7 24.2

EBITDA margin (%) 19.5 19.6 22.0 22.3 22.6

EBIT margin (%) 16.2 17.1 19.0 19.0 19.5

Net margin (%) 6.6 8.1 8.7 9.8 10.6

Payout ratio (%) 10.3 10.3 10.3 10.3 10.3

Current ratio (x) 1.0 5.3 5.0 4.6 4.6


Net gearing (%) 101.9 143.4 137.2 111.4 87.0




2016 Compendium

298

SUMMARECON AGUNG BUY

2008A 2009A

2010F 2011F

PX: IDR1,570 - TP: IDR1,820

Known as a specialist and the first Indonesian township developer,

SMRA, is trying to diversify its portfolio by developing hotels in Bali

and offices in Serpong (to be opened in 1H16) in order to provide

greater income stability with 2016F recurring income of around 30%

(9M15: 28%) and higher y-y revenue growth of 9% (9M15: 14%).

In 2016, we forecast SMRA’s marketing sales to rise 15% y-y to

IDR4.9tn, backed by its new 330ha township mega project in

Bandung, West Java (launch by end-2015). This project should benefit

from the Bandung government’s plan to move its administrative

centre near the area and also build a toll-road access nearby.

With a rising recurring-income, solid project launches ahead and no

USD debt, we raise our NAV-based TP to IDR1,820 (60% NAV

discount). BUY. Risk: lower-than-expected demand causing poor

marketing sales.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 4,549 5,757 6,150 6,724 7,485

EBIT (IDRbn) 1,624 2,077 1,948 2,146 2,384

Net profit (IDRbn) 1,140 1,386 1,259 1,382 1,540

Bahana/cons.(%) - - 99 98 92

EPS (IDR) 79 96 87 96 107

EPS growth (%) (29.2) 21.6 (9.1) 9.7 11.4

EV/EBITDA (x) 12.6 11.1 12.1 11.2 10.1

P/E (x) 19.9 16.3 18.0 16.4 14.7

FCFPS (IDR) (97) (204) (79) (26) (3)

FCF yield (%) (6.2) (13.0) (5.1) (1.7) (0.2)

BVPS (IDR) 346 445 523 608 703

P/BV (x) 4.5 3.5 3.0 2.6 2.2

DPS (IDR) 20 20 18 20 22



0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

1,000

1,200

1,400

1,600

1,800

2,000


('000)(IDR)

Volume (RHS) SMRA IJ Px Last

16.5

8.2

0.6

(0.2)

12.0 11.5

(5)

0

5

10

15

20

(5)

0

5

10

15

20

ytd 1M 3M 6M 9M 12M

(%) (%)

SMRA IJ relative to JCI Source: Bloomberg

Sanni Satrio Dwi Utomo ([email protected]) +6221 2505081 ext. 3611


9M15




Discount (%) 60


Company information

12M high/low (IDR) : 1,995/1,035


Majority shareholder (%) : Semarop Agung (25.4)




Bloomberg/Reuters code : SMRA IJ/SMRA.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

299

SUMMARECON AGUNG

Profit & loss


Sales 4,549 5,757 6,150 6,724 7,485

Gross profit 2,441 3,057 3,122 3,428 3,830

EBITDA 1,774 2,282 2,180 2,407 2,679

Depreciation 151 204 233 262 295

EBIT 1,624 2,077 1,948 2,146 2,384




Pre-tax profit 1,615 1,937 1,679 1,843 2,053

Taxes (247) (319) (252) (276) (308)




Balance sheet





Inventories 3,264 3,341 4,343 5,211 6,253

Fixed assets 3,486 4,387 5,050 5,734 6,476

Other assets 4,504 6,297 7,647 8,941 9,938

Total assets 14,255 15,872 18,747 21,493 24,380







Cash flow


EBIT 1,624 2,077 1,948 2,146 2,384

Depreciation 151 204 233 262 295

Working capital (1,136) (1,554) (863) (366) (490)


Operating cash flow 612 (659) 1,043 1,687 1,795


Free cash flow (1,394) (2,945) (1,146) (380) (48)


Net borrowings 1,572 1,864 996 417 300

Other financing (21) 33 (132) (158) (172)

Net cash flow 156 (1,048) (283) (122) 80



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 25.7 28.2 21.2 19.7 18.8

ROAA (%) 8.9 9.2 7.3 6.9 6.7

Gross margin (%) 53.7 53.1 50.8 51.0 51.2

EBITDA margin (%) 39.0 39.6 35.5 35.8 35.8

EBIT margin (%) 35.7 36.1 31.7 31.9 31.9

Net margin (%) 25.1 24.1 20.5 20.6 20.6

Payout ratio (%) 29.2 20.8 21.0 21.0 21.0

Current ratio (x) 1.4 2.7 3.2 3.2 3.1


Net gearing (%) nc 48.2 56.9 55.6 50.2




2016 Compendium

300

SURYA CITRA MEDIA HOLD

2008A 2009A

2010F 2011F

PX: IDR3,070 - TP: IDR3,250*

To secure sustained growth, SCMA, the leading media player after

MNCN with two FTA TV stations (SCTV and Indosiar) and in-house

production houses (IEG and Screenplay), is in the process of

reorganizing its content business to target and monetize new revenue

sources (e.g., pay TV providers and online marketers).

In 2016, soft GDP growth and slow ad spend recovery should remain

challenges, although SCMA’s top line should see support from new e-

commerce players (already 5% of revenues) and programming mix to

maintain rate cards. We expect earnings benefits from lower

programming costs on terminating pricey European sports in 1H16.

On valuation, our 12M TP of IDR3,250, based on a 2016F PE of 28.5x

(c. 10% sector premium), provides limited upside potential from

current levels. Upside risks: TV digitalization and faster GDP growth;

Downside risks: Stricter implementation of cigarette ad ban.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 3,695 4,056 4,253 4,573 4,983

EBIT (IDRbn) 1,759 1,917 1,997 2,192 2,408

Net profit (IDRbn) 1,280 1,454 1,519 1,674 1,848


EPS (IDR) 88 99 104 114 126

EPS growth (%) 9.4 13.6 4.4 10.2 10.4

EV/EBITDA (x) 23.8 22.2 21.5 19.5 17.6

P/E (x) 35.1 30.9 29.6 26.8 24.3

FCFPS (IDR) 75 69 98 106 115

FCF yield (%) 2.4 2.2 3.2 3.4 3.8

BVPS (IDR) 191 238 272 309 349

P/BV (x) 16.1 12.9 11.3 9.9 8.8

DPS (IDR) 51 70 78 86 95



0

10,000

20,000

30,000

40,000

50,000

2,000

2,250

2,500

2,750

3,000

3,250

3,500

3,750

4,000


('000)(IDR)

Volume (RHS) SCMA IJ Px Last

0.9 1.1

19.7

13.7

1.4 2.7

0

5

10

15

20

0

5

10

15

20

ytd 1M 3M 6M 9M 12M

(%) (%)

SCMA IJ relative to JCI Source: Bloomberg

Bagus Adi Yoga Prawira ([email protected]) +6221 2505081 ext. 3604 *New, please refer to appendix II

Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Advertising rate growth (%) 12.7 9.8 4.9 7.5 9.0

Prog. cost rate growth (%) 35.7 34.6 35.1 34.6 34.1

Operating exp. to revenue (%) 16.4 16.4 16.1 15.9 15.9 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 3,900/2,445


Majority shareholder (%) : Elang Mahkota Teknologi Tbk (61.8)




Bloomberg/Reuters code : SCMA IJ/SCMA.JK Source: Bloomberg, Reuters based on 3 December 2015 closing price

2016 Compendium

301

SURYA CITRA MEDIA

Profit & loss


Sales 3,695 4,056 4,253 4,573 4,983

Gross profit 2,313 2,576 2,673 2,910 3,190

EBITDA 1,846 1,968 2,050 2,247 2,466


EBIT 1,759 1,917 1,997 2,192 2,408



Other income/(expense) - - - - -

Pre-tax profit 1,764 1,917 2,020 2,226 2,457

Taxes (448) (469) (494) (544) (601)


Extraordinary gain/(losses) (30) - - - -


Balance sheet


Cash and equivalents 1,043 1,246 837 1,151 1,478



Inventories 375 462 459 478 511

Fixed assets 725 762 809 853 895

Other assets 853 967 982 993 1,011

Total assets 4,010 4,728 4,446 4,937 5,487


Trade payables 989 931 973 1,023 1,083





Cash flow


EBIT 1,759 1,917 1,997 2,192 2,408


Working capital (92) (329) (79) (109) (144)




Free cash flow 1,111 1,053 1,442 1,548 1,686


Net borrowings 51 50 10 (23) (17)

Other financing (967) (881) (1,862) (1,211) (1,342)

Net cash flow (22) 203 (410) 314 327

Cash balances, beginning 1,066 1,043 1,246 837 1,151

Ending cash 1,043 1,246 837 1,151 1,478 Source: Company, Bahana estimates

Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 47.6 47.0 41.1 39.7 38.7

ROAA (%) 32.6 33.3 33.1 35.7 35.5

Gross margin (%) 62.6 63.5 62.8 63.6 64.0

EBITDA margin (%) 50.0 48.5 48.2 49.1 49.5

EBIT margin (%) 47.6 47.3 46.9 47.9 48.3

Net margin (%) 34.6 35.8 35.7 36.6 37.1

Payout ratio (%) 58.3 70.2 75.0 75.0 75.0

Current ratio (x) 3.6 3.9 3.3 3.7 4.0






2016 Compendium

302

SURYA SEMESTA INTERNUSA BUY

2008A 2009A

2010F 2011F


With the biggest exposure to construction of its peers, SSIA, through

its subsidiary NRCA, is attempting to diversify from its core industrial

land sales, which have been weak (9M15 marketing sales: 10ha, 50%

of full-year target). That said, NRCA booked 9M15 new contracts of

IDR2.7tn, 15% higher than the 2014 full-year figure, mainly from

SSIA’s residential and commercial projects.

In 2016, NRCA targets IDR4.5tn in new contracts, up 9.75% from the

2015 target of IDR4.1tn, backed by SSIA’s plan to obtain government

toll-road and infrastructure projects. We see this as a positive catalyst

and look for top-line growth of 15% y-y in 2016.

On valuation, we apply a 70% discount to our 2016F NAV to derive

our IDR720 TP, above the sector’s 67% average given SSIA’s low-

margin construction business. BUY. Risks are higher-than-expected

project write-offs and a weak IDR.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 4,583 4,464 5,282 6,065 6,939

EBIT (IDRbn) 872 535 845 937 1,095

Net profit (IDRbn) 691 415 579 618 716


EPS (IDR) 147 88 123 131 152

EPS growth (%) (2.3) (39.9) 39.4 6.8 15.9

EV/EBITDA (x) 2.4 4.3 3.2 2.9 2.6

P/E (x) 4.0 6.7 4.8 4.5 3.9

FCFPS (IDR) (124) (48) (93) 7 8

FCF yield (%) (21) (8) (16) 1 1

BVPS (IDR) 493 563 673 780 906

P/BV (x) 1.2 1.0 0.9 0.8 0.7

DPS (IDR) 25 18 25 26 30



0

20,000

40,000

60,000

80,000

100,000

400

600

800

1,000

1,200

1,400


('000)(IDR)

Volume (RHS) SSIA IJ Px Last

(31.7)

(8.6)

(23.2)

(36.5)(34.7)

(30.0)

(40)

(35)

(30)

(25)

(20)

(15)

(10)

(5)

0

(40)

(35)

(30)

(25)

(20)

(15)

(10)

(5)

0

ytd 1M 3M 6M 9M 12M

(%) (%)

SSIA IJ relative to JCI Source: Bloomberg



NAV Table 9M15

Land value (IDRbn) 614 (Based on 70% discount to NAV)

Property value (IDRbn) 1,301 (Based on DCF)

Construction business (IDRbn) 2,282 (Based on 12x 2016F P/E)

Total Value (IDRbn) 3,399

Value/share (IDR) 722 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 1,345/565


Majority shareholder (%) : Arman Investment Utama (9.5)




Bloomberg/Reuters code : SSIA IJ/SSIA.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

303

SURYA SEMESTA INTERNUSA

Profit & loss


Sales 4,583 4,464 5,282 6,065 6,939

Gross profit 1,320 1,054 1,450 1,632 1,890

EBITDA 988 668 983 1,079 1,241

Depreciation 116 133 138 142 146

EBIT 872 535 845 937 1,095



Other income/(expense) 3 (34) - - -

Pre-tax profit 907 671 880 942 1,078

Taxes (160) (158) (174) (188) (215)




Balance sheet





Inventories 459 351 421 463 509

Fixed assets 1,483 1,688 1,850 2,008 2,163

Other assets 1,482 2,312 3,282 4,042 4,808

Total assets 5,814 5,993 7,149 7,946 8,977


Trade payables 346 356 465 622 713





Cash flow


EBIT 872 535 845 937 1,095

Depreciation 116 133 138 142 146

Working capital (801) 279 338 273 169


Operating cash flow (353) 83 1,004 962 959

Net capital expenditure (231) (311) (1,440) (930) (920)

Free cash flow (584) (228) (436) 32 39


Net borrowings (39) 1 225 (80) 100

Other financing 254 (323) 218 (74) (77)

Net cash flow (198) (497) 8 (122) 62



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 35.3 16.7 19.9 18.1 18.1

ROAA (%) 13.0 7.0 8.8 8.2 8.5

Gross margin (%) 28.8 23.6 27.5 26.9 27.2

EBITDA margin (%) 21.6 15.0 18.6 17.8 17.9

EBIT margin (%) 19.0 12.0 16.0 15.5 15.8

Net margin (%) 15.1 9.3 11.0 10.2 10.3

Payout ratio (%) 16.9 20.2 20.0 20.0 20.0

Current ratio (x) 1.8 1.5 1.3 1.3 1.4


Net gearing (%) nc 4.0 10.2 10.0 9.5




2016 Compendium

304

TAMBANG BATUBARA BUKIT ASAM BUY

2008A 2009A

2010F 2011F

PX: IDR5,200- TP: IDR7,800

Around 52% of PTBA’s coal sales volumes are domestically distributed

with PLN as the biggest off taker (38% of 9M15 revenues), allowing

PTBA, the only coal company to use railway for coal transport and its

1.99bn mt of total reserves (second highest), to support Indonesia’s

rising electricity requirements.

With South Sumatra projects of Tarahan port expansion to 24mn ton

and construction of the Banjarsari power plant, PTBA will increasingly

supply to the domestic market, protecting it from weak global coal

demand. Thus, in 2016, we expect PTBA’s sales volumes to rise 9% y-

y, resulting in a slight 1.3% y-y EPS growth on our 2016 conservative

SR assumption of 5.0x (9M15:4.6x).

On valuation, we set our DCF-based TP at IDR7,800 using 19.9%

WACC, translating to 8.2x 2016F PE. Downside risks to our call

include lower-than-expected coal prices and weak electricity sales.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 11,209 13,078 14,428 15,832 15,981

EBIT (IDRbn) 2,153 2,310 2,661 2,774 2,547

Net profit (IDRbn) 1,826 2,016 2,170 2,198 1,990


EPS (IDR) 793 875 942 954 864

EPS growth (%) (37.0) 10.4 7.6 1.3 (9.5)

EV/EBITDA (x) 5.6 5.8 3.6 3.6 5.6

P/E (x) 6.6 5.9 5.5 5.5 6.0

FCFPS (IDR) 157 102 328 426 228

FCF yield (%) 3.0 2.0 6.3 8.2 4.4

BVPS (IDR) 3,228 3,712 4,005 4,441 4,780

P/BV (x) 1.6 1.4 1.3 1.6 1.5

DPS (IDR) 476 436 518 525 475

Div. yield (%) 9.1 8.4 9.3 10.0 10.1



0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

4,500

6,500

8,500

10,500

12,500

14,500


('000)(IDR)

Volume (RHS) ptba IJ Px Last

(43.6)

(29.2)

(13.3)

(33.1) (35.2)

(48.2)(60)

(50)

(40)

(30)

(20)

(10)

0

(60)

(50)

(40)

(30)

(20)

(10)

0

ytd 1M 3M 6M 9M 12M

(%) (%)

ptba IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Avg. coal price (IDR’000/ton) 629.7 723.6 700 706 694

growth % (16.5) 14.9 (3.3) 0.9 (1.8)

Coal sales vol. (m tons) 17.8 18.0 20.6 22.4 23.0

growth % 15.8 1.2 14.7 8.7 2.8


Company information

12M high/low (IDR) : 13,500/5,175






Bloomberg/Reuters code : PTBA IJ/PTBA.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

305

TAMBANG BATUBARA BUKIT ASAM

Profit & loss


Sales 11,209 13,078 14,428 15,832 15,981

Gross profit 3,464 4,022 4,388 4,435 4,264

EBITDA 2,281 2,459 2,932 3,032 2,853

Depreciation 128 149 271 258 307

EBIT 2,153 2,310 2,661 2,774 2,547




Pre-tax profit 2,461 2,675 2,884 2,922 2,645

Taxes (607) (656) (711) (721) (652)



Net profit 1,826 2,016 2,170 2,198 1,990


Balance sheet





Inventories 902 1,033 837 950 975

Fixed assets 3,796 5,507 5,848 7,091 8,784

Other assets 2,208 2,793 2,793 2,793 2,793

Total assets 11,677 14,812 16,116 18,148 19,325


Trade payables 1,554 1,749 1,673 1,900 1,953






Cash flow


EBIT 2,153 2,310 2,661 2,774 2,547

Depreciation 128 149 271 258 307

Working capital 408 52 (783) (115) 2




Free cash flow 445 370 658 841 299


Net borrowings (10) 962 706 801 342

Other financing (3,008) (636) (1,109) (1,193) (1,209)

Net cash flow (2,573) 695 256 449 (569)


Ending cash 3,344 4,039 4,295 4,744 4,175


Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 23.0 25.2 24.4 22.6 18.7

ROAA (%) 15.0 15.2 14.0 12.8 10.6

Gross margin (%) 30.9 30.8 30.4 28.0 26.7

EBITDA margin (%) 20.4 18.8 20.3 19.1 17.9

EBIT margin (%) 19.2 17.7 18.4 17.5 15.9

Net margin (%) 16.3 15.4 15.0 13.9 12.5

Payout ratio (%) 55.0 55.0 55.0 55.0 55.0

Current ratio (x) 2.9 2.1 2.1 2.0 1.8







2016 Compendium

306

TELEKOMUNIKASI INDONESIA BUY

2008A 2009A

2010F 2011F

PX: IDR3,035 - TP: IDR3,750

Given its 50% domestic cellular share through 65%-owned Telkomsel

(35%-owned by Singtel), TLKM should benefit from higher ARPUs and

a data migration trend, as we expect the Indonesian smartphone

subscriber proportion to rise from 37% in 9M15 to 50% in 2017.

On the cost front, improved pricing in the cellular segment on rational

competition would mean margin protection for TLKM.

Furthermore, the company targets its IndiHome triple-play business

(cable, internet and fixed line) to have 3mn subscribers in 2016,

allowing for additional revenue of IDR10tn (10% of TLKM’s top line).

At this stage, we expect continued outperformance for TLKM on easing

competition, strong data growth and stable EBITDA margins. Our DCF-

based TP of IDR3,750 reflects a 2016F EV/EBITDA of 9.5x, an 8%

premium to its regional peers. Risks: Lower-than-expected EBITDA

margins on tougher-than-expected competition.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 82,967 89,696 102,143 113,031 124,788

EBIT (IDRbn) 25,996 28,713 32,141 36,256 41,388

Net profit (IDRbn) 14,205 14,638 15,778 17,773 20,468


EPS (IDR) 141 145 157 176 203

EPS growth (%) 10.5 2.4 7.8 12.6 15.2

EV/EBITDA (x) 10.4 9.5 8.6 7.7 6.8

P/E (x) 21.5 20.9 19.4 17.2 14.9

FCFPS (IDR) (101) 65 91 120 145

FCF yield (%) (3.3) 2.1 3.0 4.0 4.8

BVPS (IDR) 594 673 742 817 905

P/BV (x) 5.1 4.5 4.1 3.7 3.4

DPS (IDR) 99 87 102 115 132



Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Subscribers (‘000) 131,512 140,585 149,020 150,510 152,015

Net additional (‘000) 6,366 9,073 8,435 1,490 1,505

ARPU (IDR’000/month) 37 39 42 45 49 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 3,035/2,600






Bloomberg/Reuters code : TLKM IJ/TLKM.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

19.7

10.7

6.0

26.9

22.3 19.2

0

5

10

15

20

25

30

0

5

10

15

20

25

30

ytd 1M 3M 6M 9M 12M

(%) (%)

TLKM IJ relative to JCI

0

50,000

100,000

150,000

200,000

250,000

300,000

2,500

2,600

2,700

2,800

2,900

3,000

3,100


('000)(IDR)

Volume (RHS) TLKM IJ Px Last

2016 Compendium

307

TELEKOMUNIKASI INDONESIA

Profit & loss


Sales 82,967 89,696 102,143 113,031 124,788


EBITDA 41,776 45,844 50,442 55,794 62,051

Depreciation 15,780 17,131 18,302 19,537 20,663

EBIT 25,996 28,713 32,141 36,256 41,388

Net interest inc./(expense) (668) (576) (983) (1,084) (800)

Forex gain/(losses) (249) (14) 37 12 (13)

Other income/(expense) 2,070 661 361 361 361

Pre-tax profit 27,149 28,784 31,556 35,545 40,936

Taxes (6,859) (7,338) (7,889) (8,886) (10,234)

Minority interest (6,085) (6,808) (7,889) (8,886) (10,234)



Balance sheet



S-T investments 6,872 2,797 3,207 3,549 3,918


Inventories 509 474 583 640 695

Fixed assets 86,761 94,809 101,507 106,970 112,505

Other assets 13,094 19,073 19,962 22,090 24,388

Total assets 128,555 141,822 160,941 171,310 184,633


Trade payables 12,197 12,362 13,593 14,350 15,027





Cash flow


EBIT 25,996 28,713 32,141 36,256 41,388

Depreciation 15,780 17,131 18,302 19,537 20,663

Working capital 3,587 (174) (394) (206) (358)




Free cash flow (10,191) 6,562 9,142 12,128 14,601

Equity raised/(bought) 1,250 576 - - -

Net borrowings 981 3,196 10,000 (2,000) (1,000)

Other financing 9,538 (7,358) (9,646) (8,654) (9,516)

Net cash flow 1,578 2,976 9,497 1,474 4,085



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 25.5 22.9 22.1 22.6 23.6

ROAA (%) 11.8 10.8 10.4 10.7 11.5

EBITDA margin (%) 50.4 51.1 49.4 49.4 49.7

EBIT margin (%) 31.3 32.0 31.5 32.1 33.2

Net margin (%) 17.1 16.3 15.4 15.7 16.4

Payout ratio (%) 70.0 60.0 65.0 65.0 65.0

Current ratio (x) 1.2 1.1 1.4 1.3 1.4


Net gearing (%) 9.3 8.5 8.4 3.4 nc

Debts to assets (%) 15.8 16.5 20.8 18.4 16.5




2016 Compendium

308

TEMPO SCAN PACIFIC BUY

2008A 2009A

2010F 2011F

PX: IDR1,720 - TP: IDR2,000

Given the slowdown in sales of its well-known consumer health

brands, Bodrex, Oskadon and Hemaviton, TSPC, the second-largest

listed pharmaceutical company, is growing its prescription drug

segment (c. 10% of total pharmaceutical sales) via Tempo RX Farma,

which is participating in the National Health Insurance (JKN) program.

With approval from the Food & Drug Administration (BPOM),

production on 2 unbranded generic drugs should start in 2016. In the

nutritional division, top-line support should come from new baby milk

product launches (stages 1-4) under the Vidoran brand.

On the cost side, TSPC plans to cap third-party distribution sales (13%

GPM) to allow for higher-margin products under its own brands (50-

65% GPM). On valuation, our IDR2,000 TP is based on a 14.5x 2016F

PE, at a 35% discount to the sector. Risks: slower-than-expected RX

Farma’s growth and IDR depreciation to pressure margins.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 6,855 7,512 8,220 9,160 10,088

EBIT (IDRbn) 648 636 640 713 785

Net profit (IDRbn) 635 579 575 622 672

Bahana/consensus (%) - - 93.2 87.6 94.6

EPS (IDR) 141 129 128 138 149

EPS growth (%) 1.1 (8.7) (0.7) 8.1 8.1

EV/EBITDA (x) 8.3 8.0 7.8 7.1 6.3

P/E (x) 12.2 13.4 13.5 12.4 11.5

FCFPS (IDR) 64 46 51 60 93

FCF yield (%) 3.7 2.6 3.0 3.5 5.4

BVPS (IDR) 849 920 990 1,066 1,215

P/BV (x) 2.0 1.9 1.7 1.6 1.4

DPS (IDR) 58 58 58 62 67



0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

1,500

2,000

2,500

3,000

3,500


('000)(IDR)

Volume (RHS) TSPC IJ Px Last

(26.1)

(0.4)

3.5

(3.3)

(14.4)

(32.6) (35)

(30)

(25)

(20)

(15)

(10)

(5)

0

5

10

(35)

(30)

(25)

(20)

(15)

(10)

(5)

0

5

10

ytd 1M 3M 6M 9M 12M

(%) (%)

TSPC IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Indo pharma. sales (IDRtn) 4.6 4.9 5.9 6.6 7.4

Sales growth (%) 14.7 3.4 8.4 10.9 10.9


Company information

12M high/low (IDR) : 3,070/1,530


Majority shareholder (%) : Bogamulia Nagadi (77.3)




Bloomberg/Reuters code : TSPC IJ/TSPC.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

309

TEMPO SCAN PACIFIC

Profit & loss


Sales 6,855 7,512 8,220 9,160 10,088

Gross profit 2,720 2,940 3,147 3,498 3,861

EBITDA 743 765 793 892 989

Depreciation 95 128 153 179 204

EBIT 648 636 640 713 785




Pre-tax profit 830 743 742 802 868

Taxes (191) (158) (161) (174) (188)




Balance sheet




Trade receivables 809 884 996 1,145 1,261

Inventories 1,001 1,016 1,194 1,381 1,519

Fixed assets 1,204 1,475 1,747 1,994 2,214

Other assets 602 576 581 601 901

Total assets 5,408 5,692 6,127 6,626 7,413


Trade payables 745 795 922 1,078 1,186





Cash flow


EBIT 648 636 640 713 785

Depreciation 95 128 153 179 204

Working capital (84) (158) (138) (199) (147)




Free cash flow 287 205 231 271 420


Net borrowings 91 (92) (18) (15) (12)

Other financing (237) (164) (344) (360) (395)

Net cash flow 141 (51) (132) (104) 13



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 17.8 14.6 13.4 13.4 13.1

ROAA (%) 12.6 10.4 9.7 9.8 9.6

Gross margin (%) 39.7 39.1 38.3 38.2 38.3

EBITDA margin (%) 10.8 10.2 9.6 9.7 9.8

EBIT margin (%) 9.5 8.5 7.8 7.8 7.8

Net margin (%) 9.3 7.7 7.0 6.8 6.7

Payout ratio (%) 41.1 40.0 40.0 40.0 40.0

Current ratio (x) 3.0 3.0 2.8 2.7 2.6






2016 Compendium

310

TIMAH REDUCE

2008A

2009A 2010F

2011F


While new government policies to reduce illegal mining activities were

expected to aid TINS, the world’s second-largest tin producer and

biggest tin exporter, the company still struggles in dealing with tin

oversupply conditions. This hurt TINS’s 9M15 ASP, which fell 27% y-y

to USD16,516/mt, depressing 9M15 earnings to just IDR10bn, down

98% y-y, and diminishing its gross margin to 10% (9M14: 24%).

With Indonesian illegal tin production reaching 24% of global tin ore

production, TINS is diversifying its business to rare earth metals to

mitigate tin’s unexciting outlook. However, we believe 2016 will be

another tough year for TINS, due to its still-unfinished rare-earth

smelter and soft global cellphone demand.

Our DCF-based new TP is IDR411 (from IDR500), using a 16.5%

WACC, and we retain our REDUCE rating. Risk: a faster-than-

expected eradication of illegal tin mining.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenue (IDRbn) 5,852 7,371 5,632 5,615 5,725

EBIT (IDRbn) 829 925 60 28 29

Net profit (IDRbn) 581 638 16 14 (31)

Bahana/consensus (%) - - 2 2 (6)

EPS (IDR) 115 99 2 2 (4)

EPS growth (%) 34.5 (14.1) (97.9) (13.2) na

EV/EBITDA (x) 4.9 4.5 13.2 11.8 10.7

PER (x) 4.5 5.3 248.2 285.9 na

FCFPS (IDR) (259) (163) 146 (3) (20)

FCF yield (%) (3.5) (2.2) 2.0 (0.0) (0.3)

BVPS (IDR) 592 604 706 709 704

PBV (x) 0.9 0.9 0.7 0.7 0.7

DPS (IDR) 38 26 1 1 na

Yield (%) 6.9 4.6 0.2 0.1 na



0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

450

650

850

1,050

1,250

1,450


('000)(IDR)

Volume (RHS) tins IJ Px Last

(44.4)

(14.7)(13.3)

(26.8)

(33.5)

(44.5) (50)

(40)

(30)

(20)

(10)

0

(50)

(40)

(30)

(20)

(10)

0

ytd 1M 3M 6M 9M 12M

(%) (%)

tins IJ relative to JCI Source: Bloomberg

Arandi Ariantara ([email protected]) +6221 2505081 ext. 3619 *New, please refer to appendix II

Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Tins sales vol. (tons) 23,237 26,907 26,000 26,780 26,780

growth (%) (33.5) 15.8 (3.4) 3.0 0.0

Avg. tin price (USD/ton) 22,751 21,686 15,000 14,000 16,000

growth (%) 6.6 (4.7) (30.8) (6.7) 14.3


Company information

12M high/low (IDR) : 1,235/515


Majority shareholder (%) : Government of Indonesia (65.0)




Bloomberg/Reuters code : TINS IJ/TINS.JK Source: Bloomberg, Reuters based on 3 December 2015 closing price

2016 Compendium

311

TIMAH

Profit & loss


Sales 5,852 7,371 5,632 5,615 5,725

Gross profit 1,444 1,598 562 482 485

EBITDA 1,220 1,315 451 504 554

Depreciation 391 390 391 476 525

EBIT 829 925 60 28 29

Net interest income/(expense) (19) (96) (109) (46) (107)

Forex gain/(losses) (103) (56) 0 0 0


Pre-tax profit 867 1,023 41 38 (21)

Taxes (257) (346) (10) (10) 5


Extraordinary gain/(losses) (29) (39) (15) (15) (15)

Net profit 581 638 16 14 (31)


Balance sheet




Trade receivables 1,082 1,484 704 702 716

Inventories 2,345 3,384 2,816 2,808 2,862

Fixed assets 2,438 2,656 3,373 3,482 3,507

Other assets 1,955 1,973 2,075 2,018 2,069

Total assets 8,433 9,844 9,232 9,274 9,443


Trade payables 406 851 563 562 572






Cash flow


EBIT 829 925 60 28 29

Depreciation 391 390 391 476 525


Other operating items (1,082) (1,801) 433 (409) (471)

Operating cash flow 64 (392) 1,304 595 442

Net capital expenditure (1,994) (820) (219) (621) (593)

Free cash flow (1,930) (1,212) 1,086 (26) (151)


Net borrowings 1,091 979 1 4 150

Other financing 782 (35) (1,170) 23 25

Net cash flow (57) (267) (83) 1 24


Ending cash 614 346 264 264 289


Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 12.9 14.3 0.3 0.3 (0.6)

ROAA (%) 8.0 7.0 0.2 0.1 (0.3)

Gross margin (%) 24.7 21.7 10.0 8.6 8.5

EBITDA margin (%) 20.8 17.8 8.0 9.0 9.7

EBIT margin (%) 14.2 12.6 1.1 0.5 0.5

Net margin (%) 9.9 8.7 0.3 0.2 (0.5)

Payout ratio (%) 48.8 30.0 30.0 30.0 30.0

Current ratio (x) 2.1 1.8 1.6 1.6 1.6


Net gearing (%) 16.8 44.2 39.4 39.3 41.9





2016 Compendium

312

TIPHONE MOBILE INDONESIA BUY

2008A 2009A

2010F 2011F

PX: IDR725 - TP: IDR1,180

TELE, the largest Telkomsel (TSEL) pre-paid card and voucher

distributor, should increase its dominance in the conventional market

segment following a recent cluster re-arrangement. We expect this,

coupled with new deals from private banks in the banking segment, to

increase TELE’s market share from 20% currently to 30% in 2016.

The increasing smartphone penetration rate should also benefit TELE’s

handset distribution business (30% of revenues) as TELE distributes

most of the popular brands, including Samsung and Apple. Additional

growth could stem from TSEL’s handset bundling programs.

Looking ahead, TELE should continue to book strong earnings growth,

supported by rising voucher contributions due to higher market share

and solid Telkomsel growth. We maintain our BUY on TELE and DCF-

based TP of IDR1,180, reflecting a 2016F PE of 18x, due to its strong

growth prospects. Risk: lower margins and higher interest rates.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 10,485 14,590 20,524 29,578 34,851

EBIT (IDRbn) 437 507 758 905 1,074

Net profit (IDRbn) 295 305 382 462 592


EPS (IDR) 42 43 54 66 84

EPS growth (%) 44.9 3.4 25.2 21.0 28.3

EV/EBITDA (x) 11.0 11.8 9.4 8.5 7.1

P/E (x) 17.3 16.7 13.4 11.0 8.6

FCFPS (IDR) (170) (136) (89) (67) 21

FCF yield (%) (23.4) (18.7) (12.2) (9.3) 2.9

BVPS (IDR) 253 355 400 452 519

P/BV (x) 2.9 2.0 1.8 1.6 1.4

DPS (IDR) - 10 14 16 21



Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Vouchers and starter kit (IDRbn) 8,116 8,799 12,947 21,153 25,469

Cellphones (IDRbn) 2,171 5,426 7,067 7,788 8,585

Telkomsel market share (%) 13 13 21 30 33 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 1,045/690


Majority shareholder (%) : Upaya Cipta Sejahtera (38.8)




Bloomberg/Reuters code : TELE IJ/TELE.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

(8.9)

1.3

(12.3)(13.7)

(15.4)

(8.6)

(20)

(15)

(10)

(5)

0

5

(20)

(15)

(10)

(5)

0

5

ytd 1M 3M 6M 9M 12M

(%) (%)

TELE IJ relative to JCI

0

10,000

20,000

30,000

40,000

50,000

650

700

750

800

850

900

950

1,000

1,050


('000)(IDR)

Volume (RHS) TELE IJ Px Last

2016 Compendium

313

TIPHONE MOBILE INDONESIA

Profit & loss


Sales 10,485 14,590 20,524 29,578 34,851

Gross profit 628 819 1,215 1,565 1,852

EBITDA 452 528 738 880 1,042


EBIT 437 507 758 905 1,074




Pre-tax profit 393 412 510 616 791

Taxes (99) (107) (127) (154) (198)




Balance sheet


Cash and equivalents 493 638 1,148 585 622



Inventories 661 949 1,485 1,868 1,941

Fixed assets 156 145 187 227 263

Other assets 844 1,644 1,724 1,845 1,892

Total assets 3,455 5,018 6,705 7,482 8,038


Trade payables 533 673 772 1,167 1,320





Cash flow


EBIT 437 507 758 905 1,074


Working capital (731) (489) (943) (778) (268)


Operating cash flow (1,135) (938) (556) (401) 222


Free cash flow (1,194) (955) (624) (472) 148


Net borrowings 1,299 277 1,200 - -

Other financing (40) 16 (66) (91) (110)

Net cash flow 98 145 510 (563) 38

Cash balances, beginning 395 493 638 1,148 585

Ending cash 493 638 1,148 585 622 Source: Company, Bahana estimates

Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 23.6 15.7 14.4 15.4 17.3

ROAA (%) 12.3 7.2 6.5 6.5 7.6

EBITDA margin (%) 4.3 3.6 3.6 3.0 3.0

EBIT margin (%) 4.2 3.5 3.7 3.1 3.1

Net margin (%) 2.8 2.1 1.9 1.6 1.7

Payout ratio (%) - 23.4 25.0 25.0 25.0

Current ratio (x) 1.4 1.8 6.4 4.6 4.3


Net gearing (%) 69.9 44.4 64.1 74.4 63.6

Debts to assets (%) 42.7 34.9 44.0 39.5 36.7




2016 Compendium

314

TOTAL BANGUN PERSADA BUY

2008A 2009A

2010F 2011F


TOTL, the smallest construction player under our coverage, and one of

the most well-respected private contractors for high-end high-rise

buildings, has underperformed the market despite relatively strong

contracts (2015F: IDR9.2tn, +18% y-y) and solid project execution.

In 2016, TOTL plans to focus on office and commercial projects,

where it has abundant experience, such as in the current development

of Sequis Tower and Menara Kompas in Jakarta. Other growth

potential would stem from residential demand (around 47% of TOTL’s

3Q15 revenue) on an economic turnaround in 2H16. This could lead to

higher land prices, justifying TOTL’s 0.8ha Serpong land purchase.

On valuation, our 12M TP of IDR940 is based on a 2016F PE of 14x, a

30% sector discount due to TOTL’s smaller market cap. Retain BUY on

TOTL’s proven track record and management team. Risk is further

IDR weakness causing high costs and project slowdowns.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 2,287 2,106 2,338 2,618 3,400

EBIT (IDRbn) 256 177 218 266 317

Net profit (IDRbn) 194 164 197 230 255

Bahana/cons.(%) - - 104 99 84

EPS (IDR) 57 48 58 67 75

EPS growth (%) 10.6 (15.7) 20.4 16.7 10.9

EV/EBITDA (x) 6.0 8.7 6.9 5.7 4.8

P/E (x) 11.2 13.3 11.1 9.5 8.6

FCFPS (IDR) (41) 130 36 29 34

FCF yield (%) (5.7) 18.3 5.1 4.0 4.7

BVPS (IDR) 221 234 262 294 329

P/BV (x) 2.9 2.7 2.4 2.2 1.9

DPS (IDR) 29 35 30 35 40



0

5,000

10,000

15,000

20,000

25,000

30,000

500

600

700

800

900

1,000

1,100

1,200


('000)(IDR)

Volume (RHS) TOTL IJ Px Last

(29.8)

(11.2)

(4.1)

(20.3) (22.0)

(27.5)

(35)

(30)

(25)

(20)

(15)

(10)

(5)

0

(35)

(30)

(25)

(20)

(15)

(10)

(5)

0

ytd 1M 3M 6M 9M 12M

(%) (%)

TOTL IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F




Company information

12M high/low (IDR) : 1,180/585


Majority shareholder (%) : Total Inti Persada (56.5)




Bloomberg/Reuters code : TOTL IJ/TOTL.JK Source: Bloomberg, Reuters based on 3 December 2015 closing price

2016 Compendium

315

TOTAL BANGUN PERSADA

Profit & loss


Sales 2,287 2,106 2,338 2,618 3,400

Gross profit 441 330 392 462 557

EBITDA 275 184 232 281 332


EBIT 256 177 218 266 317




Pre-tax profit 290 241 274 317 368

Taxes (77) (77) (77) (86) (112)




Balance sheet





Inventories 185 - - - -

Fixed assets 93 71 150 158 166

Other assets 1,020 1,348 1,438 1,529 1,734

Total assets 2,226 2,484 2,671 2,865 3,188

Interest bearing liabilities 93 - - - -





Shareholders' equity 753 797 892 1,004 1,121 Source: Company, Bahana estimates

Cash flow


EBIT 256 177 218 266 317


Working capital (199) 191 (48) (153) (252)

Other operating items (188) 35 29 (11) 55


Net capital expenditure (26) 32 (90) (20) (20)

Free cash flow (139) 443 123 97 115


Net borrowings 72 (93) - - -

Other financing (82) (319) (124) (91) (111)

Net cash flow (150) 31 (2) 7 5



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 27.5 21.1 23.3 24.3 24.0

ROAA (%) 9.1 7.0 7.6 8.3 8.4

Gross margin (%) 18.9 14.6 14.2 14.2 14.6

EBITDA margin (%) 12.0 8.7 9.9 10.7 9.8

EBIT margin (%) 11.2 8.4 9.3 10.2 9.3

Net margin (%) 8.5 7.8 8.4 8.8 7.5

Payout ratio (%) 51.5 72.9 51.9 51.4 54.1

Current ratio (x) 1.6 1.3 1.3 1.3 1.4





Inventory turnover (days) 28 15 - - - Source: Company, Bahana estimates

2016 Compendium

316

TOWER BERSAMA INFRASTRUCTURE* HOLD

2008A 2009A

2010F 2011F

PX: IDR6,150 - TP: IDR6,500

As one of Indonesia’s largest independent tower providers, with

11,291 towers and 18,642 tenants (as of 9M15) and a tenancy ratio of

1.65x, TBIG, may see limited growth capability due to its higher-than-

peers 2016F net gearing of 481%.

TBIG’s total telecommunication sites (including shelter only and DAS

networks) extend to 12,292 with total tenants of 19,643. Despite

having solid tenant support (83% incumbents), we are concerned with

TBIG’s policy of not depreciating its tower portfolio annually, which

could result in overstated net profit.

We iniatiate coverage on TBIG with a DCF-based 12M TP of IDR6,500,

reflecting a 2016F EV/EBITDA of 15.7x, already a 15% premium to

TOWR’s valuation at its TP. With limited upside potential, TBIG is a

HOLD. Risks include the rearrangement of the TLKM deal, higher or

lower revenue growth and stronger or weaker competition.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 2,691 3,307 3,437 3,801 4,229

EBIT (IDRbn) 2,052 2,505 2,637 2,915 3,243

Net profit (IDRbn) 1,248 1,301 1,056 1,289 1,593


EPS (IDR) 260 271 220 269 332

EPS growth (%) 45.7 1.5 (18.0) 22.0 23.2

EV/EBITDA (x) 19.0 16.4 16.6 15.2 13.8

P/E (x) 23.6 22.7 27.9 22.9 18.5

FCFPS (IDR) (404) (223) (503) (303) (307)

FCF yield (%) (6.6) (3.6) (8.2) (4.9) (5.0)

BVPS (IDR) 831 830 605 837 1,123

P/BV (x) 7.4 7.4 10.2 7.3 5.5

DPS (IDR) 60 60 44 54 66



Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ASP (IDR mn) 162 173 173 184 195

Tower sites (unit) 10,134 11,820 12,399 13,143 13,932

Collocation (x) 6,443 7,256 7,430 7,541 7,778 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 9,800/6,075


Majority shareholder (%) : Wahana Anugerah Sejahtera (27.5)




Bloomberg/Reuters code : TBIG IJ/TBIG.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

(23.4)

(14.7)

(11.9)

(16.6)

(20.7)

(24.4)(30)

(25)

(20)

(15)

(10)

(5)

0

(30)

(25)

(20)

(15)

(10)

(5)

0

ytd 1M 3M 6M 9M 12M

(%) (%)

TBIG IJ relative to JCI

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

5,000

6,000

7,000

8,000

9,000

10,000


('000)(IDR)

Volume (RHS) TBIG IJ Px Last

2016 Compendium

317

TOWER BERSAMA INFRASTRUCTURE

Profit & loss


Sales 2,691 3,307 3,437 3,801 4,229

Gross profit 2,295 2,797 2,956 3,269 3,637

EBITDA 2,205 2,717 2,907 3,214 3,576

Depreciation 153 212 270 299 332

EBIT 2,052 2,505 2,637 2,915 3,243

Net interest inc./(expense) (703) (972) (1,417) (1,472) (1,499)



Pre-tax profit 1,177 1,431 1,178 1,438 1,771

Taxes 174 (58) (53) (65) (80)




Balance sheet





Inventories 328 404 426 471 524

Fixed assets 13,184 15,515 16,613 17,793 18,976

Other assets 3,955 4,722 6,185 6,772 7,464

Total assets 18,719 22,034 24,705 26,336 28,376


Trade payables 126 178 278 307 342





Cash flow


EBIT 2,052 2,505 2,637 2,915 3,243

Depreciation 153 212 270 299 332

Working capital (695) 69 (130) (93) (110)


Operating cash flow 42 644 (1,402) (438) (452)


Free cash flow (1,936) (1,070) (2,412) (1,455) (1,475)

Equity raised/(bought) (577) (555) (122) - -

Net borrowings 4,252 3,081 3,500 300 400

Other financing (1,598) (1,202) (1,075) 901 1,101

Net cash flow 140 253 (109) (254) 27



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 31.3 32.7 30.7 37.3 33.9

ROAA (%) 7.6 6.4 4.5 5.1 5.8

Gross margin (%) 85.3 84.6 86.0 86.0 86.0

EBITDA margin (%) 82.0 82.2 84.6 84.6 84.6

EBIT margin (%) 76.3 75.8 76.7 76.7 76.7

Net margin (%) 46.4 39.4 30.7 33.9 37.7

Payout ratio (%) 23.1 22.1 20.0 20.0 20.0

Current ratio (x) 0.7 0.3 0.6 0.5 0.6


Net gearing (%) 309.3 380.9 647.2 481.2 365.6




2016 Compendium

318

TUNAS BARU LAMPUNG BUY

2008A 2009A

2010F 2011F


With the smallest CPO plantation area under our coverage of 60k ha

(88% palm oil, 12% sugar), TBLA is currently in the midst of building

a new sugar mill (1.2mn ton pa) to start operation in 4Q16, which

would support its lower-than-expected sugar sales volumes, following

the government’s policy to limit sugar import quota.

TBLA targets its total sugar plantation to reach 12k ha in 2016 from

9M15’s level of 7k ha, and we expect the company’s sugar business to

contribute around 35% of 2017F revenues. On CPO, 2016 FFB nucleus

production should reach 603k tons, -6% y-y due to El Nino occurrence.

As we have a long-term positive view on the company’s sugar

business development, we reiterate our BUY rating with IDR630 TP,

reflecting a 2016 P/E of 10.3x, still a substantial 55% discount to the

Malaysian sector. Risk: Possible further import restrictions by the

government on raw sugar required to support TBLA’s refinery mill.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 3,705 6,338 5,405 5,668 7,041

EBIT (IDRbn) 493 795 611 689 941

Net profit (IDRbn) 84 433 230 325 584

Bahana/cons.(%) - - - - -

EPS (IDR) 16 88 43 61 109

EPS growth (%) (65.1) 456.5 (51.0) 41.4 79.5

EV/EBITDA (x) 7.7 5.5 7.0 6.4 5.1

P/E (x) 35.8 6.4 13.1 9.3 5.2

FCFPS (IDR) (156) (126) (145) (42) (11)

FCF yield (%) (27.7) (22.2) (25.6) (7.4) (2.0)

BVPS (IDR) 334 458 485 538 635

P/BV (x) 1.7 1.2 1.2 1.1 0.9

DPS (IDR) 11 16 9 12 22



0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

400

500

600

700

800


('000)(IDR)

Volume (RHS) TBLA IJ Px Last

(10.0)

15.7 18.6 13.4

(4.2)

(16.8)(25)

(15)

(5)

5

15

25

(25)

(15)

(5)

5

15

25

ytd 1M 3M 6M 9M 12M

(%) (%)

TBLA IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F



Growth (%) (7.1) 41.4 (4.9) (9.9) 9.9

ASP CPO (USD/ton) 754 736 560 600 620

Sugar plantation (ha) 1,736 4,516 9,000 12,000 12,000 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 800/425


Majority shareholder (%) : Budi Delta Swakarya & Sungai Budi (58.7)




Bloomberg/Reuters code : TBLA IJ/TBLA.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

319

TUNAS BARU LAMPUNG

Profit & loss


Sales 3,705 6,338 5,405 5,668 7,041

Gross profit 950 1,293 1,083 1,260 1,680

EBITDA 705 1,065 959 1,102 1,406

Depreciation 211 270 348 413 466

EBIT 493 795 611 689 941




Pre-tax profit 119 562 309 435 778

Taxes (33) (126) (76) (107) (191)


Extraordinary gain (losses) - - - - -


Balance sheet





Inventories 787 956 1,125 1,147 1,395

Fixed assets 3,516 4,245 5,104 5,591 5,926

Other assets 835 886 715 712 833

Total assets 6,212 7,328 8,059 8,652 9,502


Trade payables 183 292 360 378 440

Other liabilities 1,143 1,173 839 885 1,054




Cash flow


EBIT 493 795 611 689 941

Depreciation 211 270 348 413 466

Working capital (189) (408) (199) (71) (350)



Net capital expenditure (935) (999) (1,200) (900) (800)

Free cash flow (835) (671) (774) (225) (61)


Net borrowings 981 309 851 250 100

Other financing (46) (57) (84) (46) (65)

Net cash flow 99 (128) (7) (21) (26)



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 4.8 20.5 9.1 11.9 18.7

ROAA (%) 1.5 6.4 3.0 3.9 6.4

Gross margin (%) 25.6 20.4 20.0 22.2 23.9

EBITDA margin (%) 19.0 16.8 17.8 19.4 20.0

EBIT margin (%) 13.3 12.5 11.3 12.2 13.4

Net margin (%) 2.3 6.8 4.3 5.7 8.3

Payout ratio (%) 20.4 70.3 20.0 20.0 20.0

Current ratio (x) 1.1 1.1 1.1 1.1 1.1


Net gearing (%) 136.9 117.7 144.1 139.6 121.9




2016 Compendium

320

UNILEVER INDONESIA BUY PX: IDR36,750 - TP: IDR46,000

Despite retaining its dominance with a 40-60% market share in 13 of

14 product categories, UNVR, Indonesia’s largest non-tobacco FMCG

company, only experienced low-single-digit volume growth in 2015,

highlighting the severity of the current economic downturn.

Going forward, we expect growth support to come from its F&B

division and from launchings and re-launchings of powerful household

brands. On the cost front, margin protection should stem from UNVR’s

three price increases: March-15 (1%), August-15 (1%) and October-

15 (1.8%), coupled with corrections in key raw materials prices,

helped by the parent company’s global procurement program.

On valuation, UNVR has never been cheap due to strong

management, as reflected in a high ROAE of more than 120%. Our

IDR46,000 TP is based on a 2016F PE of 53x (3-year average), on

UNVR’s excellent portfolio of brands. Risk: More intense competition.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 30,757 34,512 36,115 40,257 45,540

EBIT (IDRbn) 7,122 7,779 7,976 8,943 10,108

Net profit (IDRbn) 5,353 5,739 5,885 6,612 7,489


EPS (IDR) 702 752 771 867 982

EPS growth (%) 10.6 7.2 2.5 12.4 13.3

EV/EBITDA (x) 37.2 35.4 34.1 30.7 27.1

P/E (x) 52.4 48.9 47.6 42.4 37.4

FCFPS (IDR) 821 932 921 1,043 1,206

FCF yield (%) 2.2 2.5 2.5 2.8 3.3

BVPS (IDR) 558 603 643 742 858

P/BV (x) 65.9 61.0 57.1 49.5 42.8

DPS (IDR) 701 752 725 815 923



0

1,000

2,000

3,000

4,000

5,000

6,000

30,000

35,000

40,000

45,000

50,000


('000)(IDR)

Volume (RHS) UNVR IJ Px Last

25.4

0.0

(9.2)(3.6)

18.1

29.3

(20)

(10)

0

10

20

30

40

(20)

(10)

0

10

20

30

40

ytd 1M 3M 6M 9M 12M

(%) (%)

UNVR IJ relative to JCI Source: Bloomberg

Harry Su ([email protected]) +6221 250 5735

Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Sales growth (%) 12.7 12.2 4.6 11.5 13.1


Company information

12M high/low (IDR) : 46,000/30,525


Majority shareholder (%) : Unilever Indonesia (85.0)




Bloomberg/Reuters code : UNVR IJ/UNVR.JK Source: Bloomberg, Reuter; based on 3 December 2015 closing price

2016 Compendium

321

UNILEVER INDONESIA

Profit & loss


Sales 30,757 34,512 36,115 40,257 45,540

Gross profit 15,778 17,099 18,504 20,683 23,542

EBITDA 7,562 7,923 8,239 9,143 10,332

Depreciation 441 144 263 199 224

EBIT 7,122 7,779 7,976 8,943 10,108




Pre-tax profit 7,159 7,677 7,872 8,851 10,025

Taxes (1,806) (1,938) (1,988) (2,239) (2,536)




Balance sheet


Cash and equivalents 261 859 704 827 1,113



Inventories 2,084 2,326 2,268 2,521 2,772

Fixed assets 6,874 6,763 7,700 8,751 9,777

Other assets 859 1,437 1,574 1,770 2,229

Total assets 12,703 14,281 15,134 17,088 19,534

Interest bearing liabilities 977 1,250 1,125 1,013 962

Trade payables 3,765 4,632 4,342 4,827 5,424





Cash flow


EBIT 7,122 7,779 7,976 8,943 10,108

Depreciation 441 144 263 199 224

Working capital (267) 314 (12) 68 122

Other operating items - - - - -



Free cash flow 6,264 7,111 7,027 7,961 9,204


Net borrowings (63) 273 (125) (113) (51)

Other financing (6,169) (6,786) (7,058) (7,725) (8,867)

Net cash flow 32 598 (155) 123 286


Ending cash 261 859 704 827 1,113 Source: Company, Bahana estimates

Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 130.2 129.6 123.8 125.1 122.6

ROAA (%) 43.4 42.5 40.0 41.0 40.9

Gross margin (%) 51.3 49.5 51.2 51.4 51.7

EBITDA margin (%) 24.6 23.0 22.8 22.7 22.7

EBIT margin (%) 23.2 22.5 22.1 22.2 22.2

Net margin (%) 17.4 16.6 16.3 16.4 16.4

Payout ratio (%) 94.5 94.0 94.0 94.0 94.0

Current ratio (x) 0.7 0.8 0.7 0.8 0.8

Interest coverage (x) 1,263.4 90.9 93.5 124.7 169.4

Net gearing (%) 16.8 8.5 8.6 3.3 nc




2016 Compendium

322

UNITED TRACTORS HOLD*

2008A 2009A

2010F 2011F

PX: IDR16,100 - TP: IDR16,000

UNTR, Indonesia’s largest heavy equipment (HE) and mining

contracting play, should continue to see flat earnings growth ahead as

87% of its businesses are exposed to the coal/mining sectors. In HE

(27% of revenues), we expect soft 2016 sales of 2k units, -3% y-y.

In mining contracting (62% of total revenues), we expect Pama to

improve its efficiency in order to limit declining margin as most coal

players will continue to implement various cost-cutting measures to

maintain profitability against a backdrop of declining coal prices, which

we expect to average USD55/ton (-5% y-y) in 2016.

UNTR’s severe 3M market underperformance of 21.5% on weak coal

price has run its course, in our view. Thus, we upgrade UNTR to HOLD

from REDUCE with our DCF-based (WACC: 13%) TP unchanged at

IDR16,000, representing 2016F PE of 9.4x. Risks to our call include

higher/lower coal prices and IDR.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 51,012 53,142 49,968 49,619 51,535

EBIT (IDRbn) 6,741 8,866 8,357 8,192 8,437

Net profit (IDRbn) 4,833 5,369 6,847 6,383 6,395


EPS (IDR) 1,296 1,439 1,836 1,711 1,715

EPS growth (%) (16.4) 11.1 27.5 (6.8) 0.2

EV/EBITDA (x) 5.5 4.1 3.8 3.6 3.2

P/E (x) 12.4 11.2 8.8 9.4 9.4

FCFPS (IDR) 2,068 1,081 2,233 1,605 1,738

FCF yield (%) 12.8 6.7 13.9 10.0 10.8

BVPS (IDR) 8,906 9,828 11,119 12,096 13,126

P/BV (x) 1.8 1.6 1.4 1.3 1.2

DPS (IDR) 515 545 734 684 686



Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Komatsu sales (units) 4,203 3,513 2,021 1,970 2,045

Coal extraction (mn tons) 105 120 114 102 102

Ovr. Removal (mn bcm) 845 805 765 688 688

Coal mines (mn tons) 4.2 5.8 4.6 6.0 6.0 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 23,925/16,100 1,650/1,125

12M High/low consensus TP (IDR) : 25,000/13,250 1,848/1,086

Majority shareholder (%) : Astra International (59.5) Austindo (40.3)

Shares outstanding (mn)/Free float (%) : 3,730/40.5 3,333/10

Mkt. cap. (IDRbn/USDmn) : 60,055/4,352 3,750/317

3-m avg.daily t.o.(IDRbn/USDmn) : 63.8/4.6 0.1/0.01

Bloomberg/Reuters code : UNTR IJ/UNTR.JK ANJT IJ/ANJT.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

0

2,000

4,000

6,000

8,000

10,000

12,000

15,000

17,000

19,000

21,000

23,000

25,000


('000)(IDR)

Volume (RHS) UNTR IJ Px Last

6.0

(12.2)

(21.5)

(13.7)

(9.3)

(0.2)

(25)

(20)

(15)

(10)

(5)

0

5

10

(25)

(20)

(15)

(10)

(5)

0

5

10

ytd 1M 3M 6M 9M 12M

(%) (%)

UNTR IJ relative to JCI

2016 Compendium

323

UNITED TRACTORS

Profit & loss


Sales 51,012 53,142 49,968 49,619 51,535

Gross profit 9,517 12,070 11,356 11,170 11,529

EBITDA 10,446 14,562 12,620 12,250 12,444

Depreciation 3,705 5,697 4,263 4,058 4,008

EBIT 6,741 8,866 8,357 8,192 8,437



Other income/(expense) 183 (2,404) 50 55 61

Pre-tax profit 6,587 6,622 9,078 8,457 8,471

Taxes (1,789) (1,782) (2,270) (2,114) (2,118)




Balance sheet



S-T investments 1,242 1,856 2,413 2,413 2,413


Inventories 6,176 7,770 7,511 7,690 8,220

Fixed assets 26,602 22,774 23,511 22,703 21,945

Other assets 3,265 4,245 6,283 6,269 6,396

Total assets 57,362 60,292 70,166 73,144 77,984


Trade payables 10,887 12,624 14,810 15,011 15,893





Cash flow


EBIT 6,741 8,866 8,357 8,192 8,437

Depreciation 3,705 5,697 4,263 4,058 4,008

Working capital 3,135 (1,427) 3,238 (1,179) (501)




Free cash flow 7,713 4,032 8,329 5,986 6,482


Net borrowings (974) (1,507) 810 130 120

Other financing (2,799) (401) (2,440) (2,739) (2,553)

Net cash flow 3,941 2,124 6,699 3,377 4,048



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 15.4 15.4 17.5 14.7 13.6

ROAA (%) 9.0 9.1 10.5 8.9 8.5

Gross margin (%) 18.7 22.7 22.7 22.5 22.4

EBITDA margin (%) 20.5 24.5 25.0 24.7 24.1

EBIT margin (%) 13.2 16.7 16.7 16.5 16.4

Net margin (%) 9.5 10.1 13.7 12.9 12.4

Payout ratio (%) 39.7 37.9 40.0 40.0 40.0

Current ratio (x) 1.9 2.1 2.0 2.3 2.4






2016 Compendium

324

VALE INDONESIA BUY

2008A 2009A

2010F 2011F

PX: IDR1,555 - TP: IDR2,500

INCO, the biggest listed nickel-in-matte producer and an essential

subsidiary for Vale SA (accounting for 41% of reserves), is troubled by

low nickel prices due to sluggish global economic conditions,

particularly in China, although we continue to like its low 3Q15 cash

cost at USD7,261/mt (the lowest level in the past 5 years), helped by

its hydropowerplant and coal-conversion project (CCP).

On the 2016 production front, we assume 80k mt nickel-in-matte to be

fully absorbed by INCO’s buyers at a USD12.5k/mt nickel price,

translating into 4% YoY revenue growth and 53% YoY net profit

expansion on a gross margin of 23% (2015F: 17%; 2014: 30%).

Given the unexciting nickel price of below USD10k/mt, we conservatively

set our DCF-based TP at IDR2,500 (15% WACC), on a 2016F PE of 16x.

BUY on 60% upside potential. Risks: Hydro power plants being hurt by El

Nino, CCP failures and a longer-than-expected nickel price recovery.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (USDmn) 922 1,038 749 780 874

EBIT (USDmn) 70 249 103 150 206

Net profit (USDmn) 39 172 70 107 151


EPS (IDR) 41 211 98 156 213

EPS growth (%) (38.0) 417.3 (53.4) 58.8 36.5

EV/EBITDA (x) 11.4 5.5 4.3 3.2 2.3

P/E (x) 38.2 7.4 15.8 10.0 7.3

FCFPS (IDR) 137 302 120 126 127

FCF yield (%) 8.8 19.4 7.7 8.1 8.2

BVPS (IDR) 1,806 2,183 2,468 2,651 2,682

P/BV (x) 0.9 0.7 0.6 0.6 0.6

DPS (IDR) 53 122 59 94 128

Div. yield (%) 3.4 7.9 3.8 6.0 8.2



0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

1,100

1,600

2,100

2,600

3,100

3,600

4,100

4,600


('000)(IDR)

Volume (RHS) inco IJ Px Last

(43.9)

(29.1)

11.2

(38.6) (37.7)

(47.1)(60)

(50)

(40)

(30)

(20)

(10)

0

10

20

(60)

(50)

(40)

(30)

(20)

(10)

0

10

20

ytd 1M 3M 6M 9M 12M

(%) (%)

inco IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Sales vol. (tons) 77,198 79,477 80,000 80,000 80,000

growth (%) 8.2 3.0 0.7 0.0 0.0

ASP (USD/m ton) 11,939 13,061 9,360 9,750 10,920

growth (%) (11.9) 9.4 (28.3) 4.2 12.0


Company information

12M high/low (IDR) : 4,135/1,250


Majority shareholder (%) : Vale Canada Limited (58.7)




Bloomberg/Reuters code : INCO IJ/INCO.JK

Source: Bloomberg, Reuters based on 3 December 2015 closing price

2016 Compendium

325

VALE INDONESIA

Profit & loss


Sales 922 1,038 749 780 874

Gross profit 140 307 128 176 233

EBITDA 181 372 232 287 353

Depreciation 111 122 130 137 147

EBIT 70 249 103 150 206




Pre-tax profit 55 237 93 143 202

Taxes (17) (65) (23) (36) (50)



Net profit 39 172 70 107 151


Balance sheet





Inventories 151 139 115 119 127

Fixed assets 1,652 1,609 1,629 1,642 1,695

Other assets 212 191 190 190 191

Total assets 2,281 2,334 2,252 2,280 2,336








Cash flow


EBIT 70 249 103 150 206

Depreciation 111 122 130 137 147

Working capital 52 (12) 36 (7) (11)




Free cash flow 130 247 85 87 87


Net borrowings (37) (37) (33) (38) (38)

Other financing (65) (108) (103) (42) (64)

Net cash flow 28 102 (51) 7 (14)


Ending cash 200 302 252 259 244


Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 2.3 9.8 3.9 6.2 8.1

ROAA (%) 1.7 7.5 3.0 4.7 6.6

Gross margin (%) 15.2 29.5 17.1 22.5 26.7

EBITDA margin (%) 19.6 35.8 31.0 36.8 40.4

EBIT margin (%) 7.6 24.0 13.7 19.2 23.6

Net margin (%) 4.2 16.6 9.3 13.7 17.3

Payout ratio (%) 258.9 60.0 60.0 60.0 60.0

Current ratio (x) 3.3 3.0 2.7 2.7 2.7



Debtor turnover (days) 9.6 7.8 6.7 4.9 3.2




2016 Compendium

326

WASKITA KARYA BUY

2008A 2009A

2010F 2011F

PX: IDR1,670 - TP: IDR1,975

WSKT, the largest market cap construction player in Indonesia post

its IDR5.3tn rights issue, is poised to expand its investment portfolio,

particularly in toll-road projects where the company now owns stakes

in 10 sections, totaling 380km. An enlarged balance sheet would also

enable WSKT to raise 2016F total order book to IDR57tn (+12% y-y).

In 2016, we expect WSKT to extend its solid sales growth (2011-16F

CAGR: 23%) by partaking in several high-profile projects such as the

Palembang light-rail-transit and 395km Sumatra transmission lines.

This should also translate to increased demand for its subsidiary,

Waskita Beton Precast, which has total plant capacity of 1.8mn tons.

Our SOTP-based TP of IDR1,975 reflects a 2016F PE of 24x, a 20%

premium to the sector, justified by solid earnings visibility as most

projects stem from the government and SOEs. Risks: Land clearing

delays and higher-than-expected project write-offs.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 9,687 10,287 15,174 20,580 24,605

EBIT (IDRbn) 672 875 1,434 1,918 2,148

Net profit (IDRbn) 368 502 818 1,116 1,174

Bahana/cons.(%) - - 111 110 95

EPS (IDR) 38 52 71 83 88

EPS growth (%) 2.4 35.0 37.9 17.3 5.2

EV/EBITDA (x) 31.6 26.1 13.4 13.3 12.8

P/E (x) 43.7 32.4 23.5 20.0 19.0

FCFPS (IDR) (81) (98) (456) (269) (214)

FCF yield (%) (4.8) (5.8) (27.1) (16.0) (12.7)

BVPS (IDR) 247 292 657 724 794

P/BV (x) 6.8 5.7 2.5 2.3 2.1

DPS (IDR) 11 10 12 17 18



0

50,000

100,000

150,000

200,000

800

1,000

1,200

1,400

1,600

1,800

2,000


('000)(IDR)

Volume (RHS) WSKT IJ Px Last

28.5

(1.4)(1.0)

11.8 12.2

67.9

(10)

0

10

20

30

40

50

60

70

80

(10)

0

10

20

30

40

50

60

70

80

ytd 1M 3M 6M 9M 12M

(%) (%)

WSKT IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F




Company information

12M high/low (IDR) : 1,870/926






Bloomberg/Reuters code : WSKT IJ/WSKT.JK Source: Bloomberg, Reuters based on 3 December 2015 closing price

2016 Compendium

327

WASKITA KARYA

Profit & loss


Sales 9,687 10,287 15,174 20,580 24,605

Gross profit 911 1,109 1,767 2,326 2,711

EBITDA 724 913 1,815 2,053 2,336


EBIT 672 875 1,434 1,918 2,148




Pre-tax profit 611 756 1,127 1,441 1,419

Taxes (243) (254) (379) (515) (615)




Balance sheet





Inventories 292 604 839 879 922

Fixed assets 415 622 776 921 1,058

Other assets 5,226 7,310 15,822 21,210 25,880

Total assets 8,788 12,542 24,544 29,709 34,425


Trade payables 2,291 2,572 3,673 5,001 5,998



Minority interest 1 6 780 1,676 1,775


Cash flow


EBIT 672 875 1,434 1,918 2,148


Working capital (483) (183) (1,708) (1,434) (2,165)

Other operating items (538) (470) (820) (1,078) (1,208)

Operating cash flow (298) 260 (713) (460) (1,036)


Free cash flow (777) (952) (6,100) (3,600) (2,868)

Equity raised/(bought) - 59 5,300 - -

Net borrowings (296) 1,544 2,562 1,438 2,065

Other financing 10 (95) 610 673 (136)

Net cash flow (1,064) 556 2,373 (1,489) (939)



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 16.8 19.2 14.1 12.1 11.6

ROAA (%) 4.3 4.7 4.4 4.1 3.7

Gross margin (%) 9.4 10.8 11.6 11.3 11.0

EBITDA margin (%) 7.5 8.9 12.0 10.0 9.5

EBIT margin (%) 6.9 8.5 9.4 9.3 8.7

Net margin (%) 3.8 4.9 5.4 5.4 4.8

Payout ratio (%) 30.0 20.0 20.0 20.0 20.0

Current ratio (x) 1.5 1.4 1.4 1.8 1.7


Net gearing (%) 21.1 52.3 19.1 47.5 71.6




2016 Compendium

328

WIJAYA KARYA BUY

2008A 2009A

2010F 2011F

PX: IDR2,805 - TP: IDR3,100*

Through rising private infrastructure investments, especially in power

plants and ports, WIKA is looking to turn around its likely weak 2015

performance on enhanced project implementation and improvement

in its embattled precast subsidiary, Wika Beton (WTON), offsetting

slower property sales from Wika Realty.

Balance sheet augmentation through the planned rights issue and

IDR4tn state capital injection (PMN) would be required for future

investments, including the USD5.5bn Jakarta-Bandung fast train

project. Other positive catalysts could be derived from possible big-

ticket projects (i.e. Java V power plant and Antam’s processing plant).

Our TP of IDR3,100 is based on a 2016F PE of 24x, a 20% premium

to the sector, given our expectation of a 2016 net earnings rebound to

IDR785bn (+40.6% y-y) and high precast valuation. BUY on expected

higher new construction projects. Risk: Jump in financing charges.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 11,885 12,463 12,150 14,875 17,597

EBIT (IDRbn) 1,216 1,401 1,297 1,718 2,050

Net profit (IDRbn) 570 615 559 785 957

Bahana/cons.(%) - - 90 94 91

EPS (IDR) 93 100 91 128 156

EPS growth (%) 19.2 7.9 (9.2) 40.6 21.8

EV/EBITDA (x) 13.1 11.3 12.5 9.7 8.1

P/E (x) 30.2 28.0 30.8 21.9 18.0

FCFPS (IDR) (78) (312) (251) (85) (51)

FCF yield (%) (2.8) (11.1) (8.9) (3.0) (1.8)

BVPS (IDR) 481 650 730 852 992

P/BV (x) 5.8 4.3 3.8 3.3 2.8

DPS (IDR) 28 30 27 38 47



0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

2,000

2,500

3,000

3,500

4,000


('000)(IDR)

Volume (RHS) WIKA IJ Px Last

(11.8)

(1.5)(0.4)

1.7

(3.4)

2.0

(14)

(12)

(10)

(8)

(6)

(4)

(2)

0

2

4

(14)

(12)

(10)

(8)

(6)

(4)

(2)

0

2

4

ytd 1M 3M 6M 9M 12M

(%) (%)

WIKA IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F




Company information

12M high/low (IDR) : 3,815/2,460






Bloomberg/Reuters code : WIKA IJ/WIKA.JK Source: Bloomberg, Reuters based on 3 December 2015 closing price

2016 Compendium

329

WIJAYA KARYA

Profit & loss


Sales 11,885 12,463 12,150 14,875 17,597

Gross profit 1,584 1,794 1,697 2,201 2,622

EBITDA 1,336 1,589 1,562 2,050 2,449

Depreciation 120 188 266 332 399

EBIT 1,216 1,401 1,297 1,718 2,050


Forex gain/(losses) (31) (2) 25 10 (2)


Pre-tax profit 1,017 1,146 1,030 1,372 1,654

Taxes (392) (395) (385) (472) (558)




Balance sheet





Inventories 1,118 817 891 1,087 1,286

Fixed assets 1,640 2,676 3,810 4,678 5,479

Other assets 6,970 8,158 8,917 10,157 11,442

Total assets 12,595 15,915 17,058 19,822 22,421


Trade payables 3,117 3,974 3,904 4,760 5,633





Cash flow


EBIT 1,216 1,401 1,297 1,718 2,050

Depreciation 120 188 266 332 399

Working capital 18 (166) (425) (422) (338)


Operating cash flow 422 (154) 173 937 1,217


Free cash flow (476) (1,917) (1,538) (520) (314)

Equity raised/(bought) 357 724 115 127 139

Net borrowings 417 1,359 759 300 -

Other financing (443) 747 (161) 114 48

Net cash flow (145) 914 (826) 21 (127)



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 20.6 17.7 13.2 16.2 16.9

ROAA (%) 4.8 4.3 3.4 4.3 4.5

Gross margin (%) 13.3 14.4 14.0 14.8 14.9

EBITDA margin (%) 11.2 12.7 12.9 13.8 13.9

EBIT margin (%) 10.2 11.2 10.7 11.5 11.6

Net margin (%) 4.8 4.9 4.6 5.3 5.4

Payout ratio (%) 30.0 30.0 30.0 30.0 30.0

Current ratio (x) 1.1 1.1 1.1 1.1 1.0


Net gearing (%) 9.7 18.3 51.7 49.7 44.7




2016 Compendium

330

WIJAYA KARYA BETON HOLD*

2008A 2009A

2010F 2011F


Facing shrinking orders on heavy plant expansions by other

construction SOEs, WTON, the largest concrete maker in Indonesia, is

likely to raise its project reliance on parent Wijaya Karya (WIKA)

ahead. To partly offset potential loss orders, WTON has put further

focus in its engineering services and come up with, among others, a

product innovation for fully constructed precast-based buildings.

Going forward, improved utilization rates and a more evenly disbursed

government’s budget would mean recovery in 2016F GPM to 14.5%

(2015: 14.1%) and sales to IDR3.3tn (+32% y-y), helped by WTON’s

widely covered areas with 12 production plants in three major islands.

On 2016F EPS growth of 46% y-y and an experienced management

team, we retain our TP of IDR965 on 27x 2016F PER, at par with

regional peers. But, given share price drop, we upgrade to HOLD from

Reduce. Upside risk: Huge fast train contract; Downside risk: ASP fall.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 2,644 3,277 2,527 3,347 4,147

EBIT (IDRbn) 337 409 292 403 500

Net profit (IDRbn) 243 329 218 316 407

Bahana/cons.(%) - - 84 90 95

EPS (IDR) 36 41 25 36 47

EPS growth (%) 35.4 12.2 (38.9) 45.0 28.8

EV/EBITDA (x) 19.9 14.8 19.9 14.9 12.1

P/E (x) 24.5 21.9 35.8 24.7 19.2

FCFPS (IDR) (28) 21 (58) 26 20

FCF yield (%) (3.1) 2.3 (6.3) 2.9 2.2

BVPS (IDR) 102 249 257 282 315

P/BV (x) 8.8 3.6 3.5 3.2 2.8

DPS (IDR) 7 11 7 11 14



0

50,000

100,000

150,000

200,000

600

800

1,000

1,200

1,400


('000)(IDR)

Volume (RHS) WTON IJ Px Last

(19.7)

(6.4)

(13.1)

(7.4)

(18.1)(16.0)

(25)

(20)

(15)

(10)

(5)

0

(25)

(20)

(15)

(10)

(5)

0

ytd 1M 3M 6M 9M 12M

(%) (%)

WTON IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Sales volumes (mn tons) 1.5 1.7 1.4 1.8 2.0

Prod. capacity (mn tons/annum) 2.0 2.2 2.3 2.5 2.5

Price/ton (IDRmn) 1.8 2.0 1.9 1.9 2.0 Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 1,425/780


Majority shareholder (%) : Wijaya Karya (60.0)




Bloomberg/Reuters code : WTON IJ/WTON.JK Source: Bloomberg, Reuters based on 3 December 2015 closing price

2016 Compendium

331

WIJAYA KARYA BETON

Profit & loss


Sales 2,644 3,277 2,527 3,347 4,147

Gross profit 388 487 356 485 601

EBITDA 397 494 398 517 622


EBIT 337 409 292 403 500

Net interest inc./(expense) (4) 6 (17) (5) 11



Pre-tax profit 329 412 270 399 516

Taxes (87) (89) (59) (92) (119)




Balance sheet


Cash and equivalents 413 1,038 279 274 254



Inventories 846 458 832 862 1,078

Fixed assets 1,012 1,671 2,066 2,151 2,229

Other assets 224 159 127 166 206

Total assets 2,917 3,802 3,858 4,096 4,573

Interest bearing liabilities 539 565 400 200 -

Trade payables 325 420 446 470 593

Other liabilities 1,324 591 706 892 1,156




Cash flow


EBIT 337 409 292 403 500


Working capital (97) 432 (405) (88) (250)




Free cash flow (333) (567) (456) 284 296

Equity raised/(bought) 494 1,178 - - -

Net borrowings 519 26 (165) (200) (200)

Other financing (552) 78 (78) (0) 0

Net cash flow 73 625 (759) (5) (21)

Cash balances, beginning 340 413 1,038 279 274

Ending cash 413 1,038 279 274 254 Source: Company, Bahana estimates

Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 36.4 39.3 9.9 13.4 15.6

ROAA (%) 9.1 9.8 5.7 7.9 9.4

Gross margin (%) 14.7 14.9 14.1 14.5 14.5

EBITDA margin (%) 15.0 15.1 15.7 15.5 15.0

EBIT margin (%) 12.7 12.5 11.6 12.1 12.1

Net margin (%) 9.2 10.0 8.6 9.4 9.8

Payout ratio (%) 25.8 30.0 30.0 30.0 30.0

Current ratio (x) 1.1 1.4 1.2 1.3 1.4

Interest coverage (x) 0.0 na 0.1 0.0 na

Net gearing (%) 18.5 nc 5.4 nc nc




2016 Compendium

332

WINTERMAR OFFSHORE MARINE HOLD

2008A 2009A

2010F 2011F


As one of the largest domestic providers of offshore marine services

with 70 OSVs, WINS’s earnings have been hurt by discontinued

domestic projects on low oil prices and regulatory changes.

Going forward, WINS is attempting to raise its vessel utilization rates,

which dropped to 59% in 9M15 (2014: 70%), by seeking other

offshore drilling projects in Brunei and Vietnam. However, against a

backdrop of persistently weak oil prices, we believe WINS will

continue to face operating challenges in the next two years.

Due to poor earnings and the low oil price outlook, WINS has already

underperformed the market by 63% YTD. This provides limited

downside, in our view. Hence, WINS is a HOLD with a DCF-based 12M

target price of IDR190 (from IDR700). The downside risks to our call

on the stock are continued project delays, while an upside risk is a

rebound in oil prices causing a demand recovery.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (USDmn) 195 177 97 111 120

EBIT (USDmn) 51 45 2 17 20



EPS (IDR) 95 75 (14) 11 23

EPS growth (%) 252.9 (20.6) na na 103.4

EV/EBITDA (x) 6.1 5.9 12.2 7.7 7.3

P/E (x) 1.9 2.4 (12.5) 15.1 7.7

FCFPS (IDR) (52) (54) 37 90 107

FCF yield (%) (29.3) (30.1) 20.6 50.4 60.4

BVPS (IDR) 546 667 657 695 692

P/BV (x) 0.3 0.3 0.3 0.3 0.3

DPS (IDR) 5 11 (2) 2 3

Div. yield (%) 3.0 6.4 (1.2) 1.0 1.9 Source: Company, Bahana estimates note: based on 3 December 2015 closing price


0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

0

200

400

600

800

1,000

1,200


('000)(IDR)

Volume (RHS) WINS IJ Px Last

(65.4)

(9.8)

1.8

(44.0)

(55.9)

(71.3) (80)

(60)

(40)

(20)

0

20

(80)

(60)

(40)

(20)

0

20

ytd 1M 3M 6M 9M 12M

(%) (%)

WINS IJ relative to JCI Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Low-tier vessels (unit) 28 28 28 28 28

Mid-high-tier vessels (unit) 43 43 43 43 43

Utilization rates (%) 76 73 58 61 65

Vessels additional (units) 7 - - - - Source: Company, Bahana estimates

Company information

12M high/low (IDR) : 1,105/159


Majority shareholder (%) : Wintermarjaya Lestari (48.8)




Bloomberg/Reuters code : WINS IJ/WINS.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

2016 Compendium

333

WINTERMAR OFFSHORE MARINE

Profit & loss


Sales 195 177 97 111 120


EBITDA 70 71 30 47 51


EBIT 51 45 2 17 20


Forex gain/(losses) 0 - - - -


Pre-tax profit 41 33 (8) 7 11

Taxes (3) (3) - (2) (2)




Balance sheet






Fixed assets 301 380 380 376 369


Total assets 422 501 467 465 455







Cash flow


EBIT 51 45 2 17 20



Other operating items 0 1 (1) (0) (0)



Free cash flow (17) (17) 11 25 31

Equity raised/(bought) 39 20 (20) - -

Net borrowings 35 22 - (20) (30)

Other financing (49) (20) (0) (5) (4)

Net cash flow 8 4 (10) 0 (3)



Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 13.8 9.0 (2.0) 1.7 2.5

ROAA (%) 7.2 4.7 (0.8) 0.7 1.4

Gross margin (%) 31.9 32.8 13.4 25.4 25.9

EBITDA margin (%) 35.6 40.0 31.3 42.0 42.1

EBIT margin (%) 26.0 25.5 2.5 15.4 16.5

Net margin (%) 14.0 12.3 (4.2) 3.0 5.5

Payout ratio (%) 22.6 13.3 15.0 15.0 15.0

Current ratio (x) 1.3 1.2 1.4 1.5 1.5


Net gearing (%) 59.4 57.8 71.5 59.6 44.3




2016 Compendium

334

XL AXIATA BUY

2008A 2009A

2010F 2011F

PX: IDR3,750 - TP: IDR3,900

EXCL, a pure GSM mobile telecommunications operator and the third

largest in terms of subscribers, plans to continue to focus on its value

strategy, monetizing its strong network following the consolidation of

Axis Telekom’s infrastructure.

Supported by strong improvements in ARPU and higher data usage,

we expect EXCL to start to enjoy revenue growth of around 5% y-y in

2016. Furthermore, we look for EBITDA margins to be supportive on

its continued enhanced pricing strategy against a market landscape

marked by persistent rational pricing.

Following the repayment of its unhedged external debt, we expect

limited volatility from forex. Thus, EXCL is a BUY with a DCF-based TP

of IDR3,900, reflecting a 2016F EV/EBITDA of 6.2x, a 30% discount to

regional peers. Risks include tough competition and high infrastructure

costs.


Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Revenues (IDRbn) 21,265 23,460 22,754 23,798 25,507

EBIT (IDRbn) 2,901 1,782 1,186 1,408 1,720

Net profit (IDRbn) 1,033 (775) (128) (125) 300

Bahana/consensus (%) - - na na 28

EPS (IDR) 121 (91) (15) (15) 35

EPS growth (%) (62.6) na na na na

EV/EBITDA (x) 5.6 6.3 6.7 6.1 5.4

P/E (x) 31.0 na na na 106.6

FCFPS (IDR) (313) (667) (94) 92 195

FCF yield (%) (8.4) (17.8) (2.5) 2.4 5.2

BVPS (IDR) 1,793 1,646 1,631 1,616 1,641

P/BV (x) 2.1 2.3 2.3 2.3 2.3

DPS (IDR) 63 - - - 11

Div. yield (%) 1.7 - - - 0.3 Source: Company, Bahana estimates note: based on 3 December 2015 closing price


0

5,000

10,000

15,000

20,000

25,000

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500


('000)(IDR)

Volume (RHS) EXCL IJ Px Last

Source: Bloomberg


Major assumptions

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

Subscribers ('000) 60,577 59,623 41,736 42,988 44,278

Net adds ('000) 14,822 (954) (17,887) 1,252 1,290

ARPU ('000) 27 26 32 41 43


Company information

12M high/low (IDR) : 5,200/2,325


Majority shareholder (%) : Axiata Group (66.4)




Bloomberg/Reuters code : EXCL IJ/EXCL.JK Source: Bloomberg, Reuters; based on 3 December 2015 closing price

(9.7)

13.5

28.8

3.7

(5.2)

(11.8)(20)

(10)

0

10

20

30

40

(20)

(10)

0

10

20

30

40

ytd 1M 3M 6M 9M 12M

(%) (%)

EXCL IJ relative to JCI

2016 Compendium

335

XL AXIATA

Profit & loss


Sales 21,265 23,460 22,754 23,798 25,507


EBITDA 8,659 8,623 8,271 8,988 9,782

Depreciation 5,759 6,841 7,086 7,580 8,063

EBIT 2,901 1,782 1,186 1,408 1,720

Net interest inc./(expense) (293) (1,397) (906) (1,565) (1,454)

Forex gain/(losses) (1,037) (1,295) (3,008) (276) (131)

Other income/(expense) (181) (44) 2,000 266 266

Pre-tax profit 1,390 (953) (728) (167) 400

Taxes (357) 179 600 42 (100)



Net profit 1,033 (775) (128) (125) 300 Source: Company, Bahana estimates

Balance sheet






Fixed assets 30,928 35,207 34,619 33,537 32,309

Other assets 3,505 15,114 14,400 14,585 15,123

Total assets 40,278 63,631 58,518 57,431 57,155


Trade payables 3,226 4,444 6,162 6,397 6,796





Cash flow


EBIT 2,901 1,782 1,186 1,408 1,720

Depreciation 5,759 6,841 7,086 7,580 8,063

Working capital 4,589 5,652 7,505 7,801 8,300




Free cash flow (2,673) (5,696) (805) 782 1,665


Net borrowings 4,302 11,807 (3,000) (1,500) (1,500)

Other financing (1,103) (478) - - (90)

Net cash flow 526 5,633 (3,805) (718) 75

Cash balances, beginning 792 1,318 6,951 3,146 2,428


Key ratios

Year to 31 Dec 2013A 2014A 2015F 2016F 2017F

ROAE (%) 6.7 (5.3) (0.9) (0.9) 2.2

ROAA (%) 2.7 (1.5) (0.2) (0.2) 0.5

EBITDA margin (%) 40.7 36.8 36.4 37.8 38.4

EBIT margin (%) 13.6 7.6 5.2 5.9 6.7

Net margin (%) 4.9 (3.3) (0.6) (0.5) 1.2

Payout ratio (%) 52.3 - - - 30.0

Current ratio (x) 0.7 0.9 0.6 0.6 0.6


Net gearing (%) 107.9 161.4 168.7 164.6 150.8

Debts to assets (%) 44.2 46.6 45.5 43.8 41.3




2016 Compendium

336


2016 Compendium

337

APPENDIX

2016 Compendium

338

APPENDIX I: STOCK HIGHLIGHTS Stock JCI code Ticker Rating Price TP Shares Free float Mkt cap 3M avg to

(IDR) (IDR) (m) (%) (IDRb) (IDRb) 2015F 2016F 2015F 2016F 2015F 2016F 2015F 2016F 2015F 2016F 2015F 2016F 2015F 2016F 2015F 2016F 2015F 2016F 2015F 2016F 2015F 2016F 2015F 2016F

AVIATION N 10,265 8.1 59,049 68,925 1,468 2,022 1,090 1,781 na 33.5 9.4 5.8 5.9 5.5 1.8 1.5 0.3 0.3 95.5 83.1 13.0 15.1 4.2 5.1 9.3 10.4

Garuda Indonesia GIAA IJ Equity GIAA IJ* BUY 300 400 25,869 14.9 7,761 8.1 57,368 67,019 1,050 1,526 966 1,639 na 63.8 8.1 4.9 6.1 5.8 0.6 0.5 0.0 0.0 125.2 108.0 7.6 11.1 2.2 3.3 3.9 5.2

Cardig Aero Service CASS IJ Equity CASS IJ HOLD 1,200 1,250 2,087 56.6 2,504 0.0 1,680 1,905 418 496 124 142 12.2 14.6 20.2 17.7 5.4 4.6 5.4 4.4 1.2 1.4 3.6 5.9 29.7 27.5 10.7 10.9 26.2 26.3

AUTOMOTIVE UW 263,115 386.8 215,860 227,222 18,472 19,678 16,030 17,779 (17.0) 10.9 16.4 14.8 12.6 12.0 2.4 2.2 2.9 3.0 51.8 50.6 16.1 15.7 6.7 6.8 10.9 10.8

Astra International ASII IJ Equity ASII IJ REDUCE 6,300 5,550 40,484 49.8 255,046 196 184,851 193,520 17,427 18,498 16,764 17,591 (12.6) 4.9 15.2 14.5 12.1 11.6 2.5 2.2 3.0 3.1 45.9 44.1 16.8 16.2 7.0 7.0 11.3 11.2

Indomobil Sukses InternationalIMAS IJ Equity IMAS IJ REDUCE 2,250 2,000 2,765 10.5 6,222 189 18,176 19,770 96 149 (312) 126 na na na 49.2 33.9 33.3 1.2 1.1 0.0 0.5 269.4 297.2 (5.6) 2.3 (1.3) 0.5 (1.6) 0.6

Gajah Tunggal GJTL IJ Equity GJTL IJ BUY 530 860 3,485 39.8 1,847 2 12,833 13,932 950 1,031 (422) 62 na na na 29.8 5.1 4.7 0.4 0.4 0.0 0.8 130.5 129.3 (7.7) 1.3 (2.6) 0.4 (3.6) 0.5

BANKS N 981,498 842.5 266,270 291,640 99,194 109,580 80,313 88,704 1.9 10.4 12.2 11.1 na na 2.5 2.1 1.8 1.9 na na 19.9 18.7 2.6 2.6 na na

Bank Central Asia BBCA IJ Equity BBCA IJ BUY 13,300 14,700 24,655 50.8 327,912 185.4 48,667 52,850 22,474 24,585 18,176 19,883 10.3 9.4 18.0 16.5 na na 3.6 3.1 1.2 1.3 na na 22.0 20.3 3.1 3.1 na na

Bank Rakyat Indonesia BBRI IJ Equity BBRI IJ BUY 11,275 13,000 24,669 43.2 278,145 288.0 66,953 73,440 28,314 31,205 24,426 26,815 0.8 9.8 11.4 10.4 na na 2.4 2.0 1.8 1.9 na na 22.9 21.2 2.9 2.9 na na

Bank Mandiri BMRI IJ Equity BMRI IJ BUY 8,800 9,700 23,333 40.0 205,333 187.4 62,897 69,286 26,068 26,665 20,004 20,330 0.7 1.6 10.3 10.1 na na 1.8 1.5 2.2 2.0 na na 18.2 16.3 2.2 2.1 na na

Bank Negara Indonesia BBNI IJ Equity BBNI IJ BUY 4,990 5,700 18,649 40.0 93,057 137.6 37,239 40,951 9,966 13,232 8,372 11,022 (22.4) 31.7 11.1 8.4 na na 1.5 1.3 2.0 2.4 na na 14.0 16.4 1.9 2.2 na na

Bank Danamon BDMN IJ Equity BDMN IJ BUY 3,005 3,400 9,585 32.5 28,802 9.1 20,353 21,026 3,623 4,017 2,613 2,998 0.3 14.8 11.0 9.6 na na 0.8 0.8 2.7 2.9 na na 7.8 8.4 1.3 1.3 na na

Bank Tabungan Pensiunan NasionalBTPN IJ EQUITY BTPN IJ REDUCE 2,500 2,350 5,840 50.8 14,601 0.0 8,452 9,489 2,444 2,665 1,822 1,987 (1.7) 9.0 8.0 7.3 na na 1.1 1.0 1.9 2.0 na na 14.3 13.7 2.3 2.2 na na

Bank Tabungan Negara BBTN IJ Equity BBTN IJ BUY 1,285 1,520 10,582 39.9 13,598 22.0 7,439 8,816 2,215 2,686 1,663 2,084 49.1 25.3 8.2 6.5 na na 1.0 0.9 2.4 2.7 na na 12.9 14.3 1.0 1.1 na na

Bank Jabar Banten BJBR IJ Equity BJBR IJ BUY 735 850 9,696 25.0 7,127 9.6 6,392 6,898 1,432 1,599 1,227 1,368 9.5 11.5 5.8 5.2 na na 0.9 0.9 9.5 9.6 na na 16.8 17.3 1.5 1.5 na na

Bank Jatim BJTM IJ Equity BJTM IJ REDUCE 443 420 14,918 20.0 6,609 1.6 3,633 4,052 1,290 1,398 942 1,023 0.3 8.6 7.0 6.5 na na 1.0 1.0 9.0 8.9 na na 15.2 15.6 2.3 2.2 na na

Bank Bukopin BBKP IJ Equity BBKP IJ HOLD 695 730 9,087 40.5 6,315 1.8 4,247 4,832 1,366 1,528 1,067 1,194 47.3 11.9 5.9 5.3 na na 0.8 0.7 3.4 3.8 na na 14.8 14.8 1.3 1.2 na na

CEMENT UW 150,318 109.5 54,849 56,706 11,006 11,319 8,831 9,245 (25.4) 4.7 17.0 16.3 10.6 10.3 2.7 2.5 3.5 3.6 4.8 7.6 16.4 16.2 12.7 12.0 22.1 19.1

Semen Indonesia SMGR IJ Equity SMGR IJ HOLD 11,075 10,600 5,932 49.0 65,692 59.6 26,545 27,486 5,612 5,594 4,352 4,503 (21.8) 3.5 15.1 14.6 9.5 9.4 2.6 2.3 2.0 2.1 2.6 9.6 17.6 16.6 11.8 10.7 17.6 15.6

Indocement INTP IJ Equity INTP IJ REDUCE 19,925 16,400 3,681 36.0 73,349 46.9 17,473 18,073 4,768 4,834 4,340 4,353 (17.7) 0.3 16.9 16.8 11.7 11.3 3.0 3.0 5.3 5.3 nc nc 17.7 17.9 15.0 14.7 28.3 24.4

Holcim Indonesia SMCB IJ Equity SMCB IJ REDUCE 1,075 925 7,663 19.4 8,238 0.5 9,352 9,619 287 566 (225) 89 na na na 92.7 13.3 9.7 1.0 1.0 0.0 0.8 66.6 61.7 (2.7) 1.1 (1.3) 0.5 (1.6) 0.7

Semen Baturaja SMBR IJ Equity SMBR IJ HOLD 309 300 9,838 23.8 3,040 2.4 1,479 1,528 339 325 364 300 10.8 (17.5) 8.4 10.1 3.7 6.1 1.0 0.9 3.0 2.5 nc nc 12.7 9.7 11.9 9.0 33.0 13.7

COAL UW 98,526 138.9 130,282 129,331 19,415 17,847 13,545 12,537 12.1 (7.4) 7.3 7.9 3.2 3.0 1.2 1.1 6.2 5.6 4.5 2.3 16.0 13.5 9.4 8.0 19.2 17.6

United Tractors UNTR IJ Equity UNTR IJ HOLD 16,100 17,500 3,730 40.5 60,055 63.8 49,968 49,619 8,357 8,192 6,847 6,383 27.5 (6.8) 8.8 9.4 3.8 3.6 1.4 1.3 4.6 4.3 nc nc 17.5 14.7 10.5 8.9 21.5 20.6

Adaro Energy ADRO IJ Equity ADRO IJ* BUY 535 700 31,986 43.0 17,112 25.7 39,074 40,223 5,712 5,452 2,982 2,958 40.9 (1.1) 5.8 5.8 2.7 2.3 0.4 0.4 5.2 5.2 26.0 13.2 7.9 6.9 3.6 3.4 5.9 5.8

Indo Tambangraya Megah ITMG IJ Equity ITMG IJ* REDUCE 6,600 5,200 1,130 34.8 7,458 11.1 23,102 20,013 2,643 1,400 1,546 1,027 (44.9) (35.9) 4.8 7.5 1.0 1.2 0.6 0.6 16.6 10.6 nc nc 13.4 8.4 8.8 5.5 19.2 13.0

Tambang Batubara Bukit AsamPTBA IJ Equity PTBA IJ BUY 5,200 7,800 2,304 28.7 11,981 37.7 14,428 15,832 2,661 2,774 2,170 2,198 7.7 1.3 5.5 5.5 3.6 3.6 1.3 1.2 10.0 10.1 nc nc 24.4 22.6 14.0 12.8 29.6 25.6

Harum Energy HRUM IJ Equity HRUM IJ* REDUCE 710 500 2,704 28.8 1,920 0.6 3,710 3,644 42 29 0 (29) (50) (1,000) 710.0 (78.9) (6.7) (9.0) 0.5 0.5 0.1 0.0 nc nc 0.0 (0.7) 0.0 (0.5) 0.0 (2.6)

CONS. & TOLL ROADS N 108,590 226.7 65,439 84,958 8,688 11,064 4,170 5,346 6.1 25.0 26.0 20.3 12.3 10.9 3.5 3.0 1.1 1.4 53.5 72.4 15.1 15.6 4.1 4.4 12.0 11.4

Jasa Marga JSMR IJ Equity JSMR IJ BUY 4,790 6,250 6,800 30.0 32,572 34.5 7,592 8,703 2,870 3,351 1,278 1,445 (9.0) 13.1 25.5 22.5 11.9 11.1 3.1 2.8 1.2 1.3 120.4 147.1 12.5 13.0 3.7 3.7 5.9 5.5

Wijaya Karya WIKA IJ Equity WIKA IJ BUY 2,805 3,100 6,149 34.9 17,249 26.7 12,150 14,875 1,297 1,718 559 785 (9.2) 40.6 30.8 21.9 12.5 9.7 3.8 3.3 1.0 1.4 51.7 49.7 13.2 16.2 3.4 4.3 9.7 10.8

Pembangunan Perumahan PTPP IJ Equity PTPP IJ BUY 3,770 4,300 4,842 49.0 18,256 21.4 15,842 20,154 1,794 2,253 706 920 32.7 30.3 25.9 19.9 10.3 8.5 5.8 4.7 1.2 1.5 28.8 44.2 25.7 26.3 4.3 4.6 20.1 19.2

Waskita Karya WSKT IJ Equity WSKT IJ BUY 1,670 1,975 13,572 33.8 22,666 48.0 15,174 20,580 1,434 1,918 818 1,116 37.9 17.3 23.5 20.0 13.4 13.3 2.5 2.3 0.7 1.0 19.1 47.5 14.1 12.1 4.4 4.1 11.0 9.0

Wijaya Karya Beton WTON IJ Equity WTON IJ HOLD 895 965 8,715 28.1 7,800 18.0 2,527 3,347 292 403 218 316 (38.9) 45.0 35.8 24.7 19.9 14.9 3.5 3.2 0.8 1.2 5.4 nc 9.9 13.4 5.7 7.9 10.7 13.3

Adhi Karya ADHI IJ Equity ADHI IJ BUY 2,210 2,550 3,559 74.2 7,865 74.6 9,817 14,680 784 1,155 395 534 0.9 (17.4) 12.2 14.7 8.8 8.5 1.6 1.5 1.6 1.4 nc 41.6 12.0 10.6 3.2 3.3 10.8 9.2

Total Bangun Persada TOTL IJ Equity TOTL IJ BUY 640 940 3,410 33.7 2,182 3.5 2,338 2,618 218 266 197 230 20.4 16.7 11.1 9.5 6.9 5.7 2.4 2.2 4.7 5.4 nc nc 23.3 24.3 7.6 8.3 73.8 62.6

CONSUMER - DISCRE. N 156,416 122.1 76,680 84,783 8,650 9,998 6,000 7,422 (6.7) 25.0 26.1 21.1 17.0 14.3 13.8 8.6 1.9 2.3 8.5 7.1 84.3 47.5 26.9 26.4 21.7 21.4

Surya Citra Media SCMA IJ Equity SCMA IJ HOLD 3,070 3,250 14,622 38.2 44,888 19.1 4,253 4,573 1,997 2,192 1,519 1,674 4.4 10.2 29.6 26.8 21.5 19.5 11.3 9.9 2.5 2.8 nc nc 41.1 39.7 33.1 35.7 55.0 50.4

Matahari Department Store LPPF IJ Equity LPPF IJ BUY 15,950 19,800 2,918 79.5 46,541 57.7 9,340 10,872 2,474 2,868 1,859 2,219 31.0 19.3 25.0 21.0 16.5 13.7 31.7 15.8 1.6 1.9 nc nc 225.8 100.6 46.7 41.1 na na

Media Nusantara Citra MNCN IJ Equity MNCN IJ BUY 1,690 2,000 14,276 36.4 24,127 12.1 6,675 7,006 2,580 2,724 1,280 1,648 (27.3) 28.7 18.8 14.6 9.8 9.1 2.5 2.2 2.7 3.4 30.7 24.8 14.1 16.8 9.0 10.7 11.1 13.2

Matahari Putra Prima MPPA IJ Equity MPPA IJ BUY 1,880 2,750 5,378 23.7 10,111 16.6 14,286 16,331 567 738 451 587 (18.6) 30.3 22.4 17.2 10.7 8.4 3.2 2.9 1.8 2.3 nc nc 15.1 17.8 7.3 8.5 20.6 24.4

ACE Hardware ACES IJ Equity ACES IJ BUY 775 875 17,150 40.0 13,291 7.3 4,698 5,086 648 704 559 608 1.4 8.9 23.8 21.9 17.4 15.5 4.7 4.0 0.8 0.9 nc nc 21.6 19.9 17.4 16.2 27.2 28.5

HERO Supermarket HERO IJ Equity HERO IJ REDUCE 1,100 650 4,184 13.4 4,602 0.1 15,118 16,906 (215) (113) (29) 57 na na na 80.1 52.6 23.0 0.8 0.8 0.0 0.0 7.1 7.7 (0.5) 1.0 (0.3) 0.6 (0.5) 1.0

Ramayana Lestari Sentosa RALS IJ Equity RALS IJ REDUCE 680 640 7,096 40.5 4,825 1.7 7,774 8,038 218 246 311 333 (12.3) 6.8 15.5 14.5 6.3 5.6 1.4 1.3 3.2 3.4 nc nc 9.1 9.3 6.7 7.0 18.9 20.4

Mitra Adiperkasa MAPI IJ Equity MAPI IJ BUY 4,195 4,750 1,660 44.0 6,964 7.2 12,760 14,054 399 608 34 242 (53.7) 604.6 202.9 28.8 10.6 8.1 2.4 2.2 0.0 0.5 80.7 67.2 1.3 7.9 0.4 2.5 0.6 4.6

Electronic City ECII IJ Equity ECII IJ REDUCE 800 700 1,334 25.0 1,067 0.3 1,776 1,917 (17) 31 15 54 (88.0) 245.5 68.9 19.9 na 15.5 0.6 0.6 0.1 0.5 nc nc 0.9 3.0 0.8 2.7 1.2 4.0

EV/EBITDA (x) P/BV (x) Yield (%) Net gearing (%) ROAE (%) ROIC (%)ROAA (%)Revenue (IDRb) Opt. profit (IDRb) Net profit (IDRb) EPS growth (%) PER (x)

Source: Bloomberg, Bahana estimates; note: based on 3 December 2015 closing price

2016 Compendium

339

APPENDIX I: STOCK HIGHLIGHTS (CONT’D) Stock JCI code Ticker Rating Price TP Shares Free float Mkt cap 3M avg to

(IDR) (IDR) (m) (%) (IDRb) (IDRb) 2015F 2016F 2015F 2016F 2015F 2016F 2015F 2016F 2015F 2016F 2015F 2016F 2015F 2016F 2015F 2016F 2015F 2016F 2015F 2016F 2015F 2016F 2015F 2016F

CONSUMER - STAPLES OW 1,111,862 386.5 347,005 381,132 48,590 52,691 32,252 36,639 3.9 12.0 34.5 30.3 26.9 25.2 21.3 19.3 2.0 2.3 9.6 6.7 55.0 50.9 24.7 23.2 57.2 53.1

HM Sampoerna HMSP IJ Equity HMSP IJ BUY 97,580 115,000 4,653 7.5 454,013 93.7 88,712 97,119 14,004 14,253 10,389 11,161 (2.3) 6.5 43.4 40.8 31.3 30.6 13.2 13.3 2.3 2.5 9.5 nc 43.6 32.6 26.7 22.5 38.4 29.8

Unilever Indonesia UNVR IJ Equity UNVR IJ BUY 36,750 46,000 7,630 15.0 280,403 56.6 36,115 40,257 7,976 8,943 5,885 6,612 2.5 12.4 47.6 42.4 34.0 30.6 57.1 49.5 2.0 2.2 (8.6) nc 123.8 125.1 40.0 41.0 135.4 132.7

Gudang Garam GGRM IJ Equity GGRM IJ BUY 51,575 65,000 1,924 23.5 99,235 53.6 69,029 73,916 8,963 9,718 5,445 5,950 1.4 9.3 18.2 16.7 10.6 9.8 2.7 2.5 1.6 2.5 45.2 42.7 15.6 15.4 8.8 8.7 10.5 10.7

Kalbe Farma KLBF IJ Equity KLBF IJ HOLD 1,350 1,480 46,875 43.3 63,281 66.9 17,786 19,300 2,549 2,812 1,949 2,167 (5.6) 11.2 32.5 29.2 20.2 17.6 6.1 5.4 1.5 1.7 nc nc 19.7 19.7 15.0 15.1 24.0 24.6

Indofood Sukses Makmur INDF IJ Equity INDF IJ BUY 5,175 6,600 8,780 49.9 45,439 40.8 64,352 70,849 6,801 7,610 2,084 3,454 (46.4) 65.7 21.8 13.2 6.5 5.5 1.8 1.6 2.2 3.7 58.1 38.7 8.1 12.8 2.4 3.8 5.0 8.7

Indofood CBP Sukses MakmurICBP IJ Equity ICBP IJ BUY 12,675 16,800 5,831 19.5 73,907 25.2 32,115 35,481 3,936 4,507 3,082 3,543 18.4 15.0 24.0 20.9 15.9 14.0 4.7 4.2 1.8 2.1 nc nc 20.6 21.1 11.7 12.1 28.6 27.9

Mayora Indah MYOR IJ Equity MYOR IJ BUY 25,875 31,000 894 66.9 23,141 0.6 14,886 16,395 1,697 1,773 1,161 1,122 187.6 (3.4) 19.9 20.6 11.8 11.1 4.6 3.9 1.0 1.0 48.7 37.2 25.9 20.8 10.7 9.7 15.5 14.6

Tempo Scan Pacific TSPC IJ Equity TSPC IJ BUY 1,720 2,000 4,500 21.9 7,740 0.8 8,220 9,160 640 713 575 622 (0.7) 8.1 13.5 12.4 7.8 7.1 1.7 1.6 3.3 3.6 nc nc 13.4 13.4 9.7 9.8 21.2 19.8

Sido Muncul SIDO IJ Equity SIDO IJ BUY 555 630 15,000 19.0 8,325 2.6 2,301 2,579 499 560 469 560 13.1 19.4 17.8 14.9 11.5 9.8 2.8 2.4 1.0 1.1 nc nc 16.6 17.2 15.3 15.8 31.3 42.7

Nippon Indosari Corpindo ROTI IJ Equity ROTI IJ BUY 1,250 1,450 5,062 29.3 6,327 2.1 2,189 2,693 389 458 265 322 40.3 21.6 23.9 19.7 12.9 10.8 5.5 4.5 1.0 1.3 39.2 17.6 25.0 25.2 11.1 11.4 16.3 19.7

Kimia Farma KAEF IJ Equity KAEF IJ BUY 980 1,350 5,554 10.0 5,443 3.8 5,070 5,754 342 422 279 327 19.1 17.1 19.5 16.6 15.3 12.9 2.7 2.4 1.3 1.5 7.7 15.4 14.8 15.4 9.0 9.4 15.1 13.8

Mitra Keluarga Karyasehat MIKA IJ Equity MIKA IJ REDUCE 2,295 1,900 14,551 18.0 33,394 0.0 2,114 2,387 580 645 576 657 8.8 9.3 56.4 51.6 45.7 43.3 10.5 10.3 1.5 1.4 nc nc 24.0 20.9 20.2 17.9 67.2 63.2

Siloam International Hospital SILO IJ Equity SILO IJ BUY 9,700 14,700 1,156 29.2 11,214 39.7 4,116 5,242 215 276 94 142 49.7 51.8 119.8 78.9 19.0 14.9 6.5 6.1 0.1 0.2 20.6 33.3 5.5 7.9 3.2 4.5 4.7 6.2

INDUSTRIAL ESTATES N 25,673 44.7 12,775 11,841 4,286 4,883 3,576 4,065 18.6 13.7 7.2 6.3 6.5 6.2 1.2 1.0 2.7 3.1 15.3 16.2 18.9 17.9 13.2 12.8 20.4 19.1

Puradelta Lestari DMAS IJ Equity DMAS IJ BUY 203 290 48,198 10.0 9,784 2.1 2,175 1,375 1,711 1,520 1,705 57.7 12.2 6.4 5.7 6.1 4.9 1.3 1.1 4.7 5.2 nc nc 22.0 21.2 18.9 19.3 26.0 25.6

Kawasan Industri Jababeka KIJA IJ Equity KIJA IJ BUY 221 270 20,662 68.9 4,566 11.8 2,810 3,031 756 851 283 431 (31.1) 52.6 16.2 10.6 8.2 7.3 1.0 0.9 1.9 2.8 62.2 56.5 6.4 9.2 3.1 4.3 4.1 5.8

Bekasi Fajar Industrial EstateBEST IJ Equity BEST IJ REDUCE 343 300 9,647 41.8 3,309 10.5 681 563 411 321 225 159 (42.5) (29.3) 14.7 20.8 9.6 13.8 1.1 1.0 0.9 0.7 23.9 39.5 7.6 5.1 5.4 3.2 6.6 3.9

Surya Semesta Internusa SSIA IJ Equity SSIA IJ BUY 590 720 4,705 68.6 2,776 14.2 5,282 6,065 845 937 579 618 39.4 6.8 4.8 4.5 3.2 2.9 0.9 0.8 4.2 4.5 10.2 10.0 19.9 18.1 8.8 8.2 18.5 16.4

Lippo Cikarang LPCK IJ Equity LPCK IJ BUY 7,525 8,300 696 57.8 5,237 6.1 1,828 2,183 900 1,063 970 1,152 15.0 18.7 5.4 4.5 5.4 4.6 1.4 1.1 0.0 0.0 nc nc 30.8 27.4 18.7 16.8 33.9 29.7

INDUSTRY - Various 15,592 24.7 49,489 57,962 (1,061) 77 (2,329) (1,693) na na na na 5.0 4.8 1.0 0.8 2.4 0.7 88.8 86.8 4.7 6.6 1.2 2.2 1.4 2.9

Krakatau Steel KRAS IJ Equity KRAS IJ* REDUCE 304 275 15,775 20.0 4,796 2.0 19,341 21,695 (2,555) (1,693) (3,047) (2,730) na na na na na na 0.2 0.2 0.0 0.0 83.6 112.8 (16.9) (11.8) (7.0) (5.1) (8.9) (6.1)

Anabatic Technologies ATIC IJ Equity ATIC IJ BUY 695 800 1,875 1.5 1,303 0.0 2,626 2,964 178 217 60 110 (19.2) 55.7 21.1 13.5 7.5 6.4 1.8 1.9 1.5 1.2 52.6 51.0 12.4 14.8 2.8 4.4 6.4 9.7

Sri Rejeki isman SRIL IJ Equity SRIL IJ BUY 359 500 18,593 43.9 6,675 19.9 8,388 9,860 1,596 1,877 734 970 25.6 32.3 9.1 6.9 6.6 5.6 1.6 1.3 1.1 1.5 137.2 111.4 21.1 21.1 7.3 8.0 8.8 9.5

Multipolar MLPL IJ Equity MLPL IJ BUY 280 550 10,065 68.0 2,818 2.8 19,134 22,097 (280) (324) (75) (43) na na na na 8.3 10.2 0.3 0.4 10.1 0.0 nc 1.1 (0.9) (0.5) (0.3) (0.2) (0.9) (0.6)

LAND TRANSPORTATION UW 17,333 15.5 7,845 13,058 1,621 1,802 902 958 0.6 6.3 19.2 18.1 9.4 8.8 4.0 3.5 2.0 2.1 48.4 54.7 21.5 19.7 11.3 10.9 15.9 13.6

Blue Bird BIRD IJ Equity BIRD IJ REDUCE 6,675 4,700 2,502 15.0 16,702 0.7 5,552 6,250 1,197 1,298 840 870 (0.0) 3.6 19.9 19.2 9.7 8.9 4.1 3.7 2.0 2.1 43.0 48.9 22.2 20.2 11.7 11.3 16.1 13.9

Express Transindo Utama TAXI IJ Equity TAXI IJ REDUCE 136 120 2,146 49.0 292 14.7 953 1,009 200 238 6 19 (95.0) 228.6 49.9 15.2 4.3 4.0 0.3 0.3 0.4 1.2 197.5 214.0 0.7 2.2 0.2 0.6 0.2 0.7

Adi Sarana Armada ASSA IJ Equity ASSA IJ BUY 100 130 3,398 37.4 340 0.0 1,340 1,552 224 266 55 69 29.0 24.0 6.1 4.9 3.7 3.7 0.4 0.4 4.9 6.1 186.8 206.4 6.4 7.6 2.1 2.4 2.3 2.5

METALS N 41,503 118.5 31,900 30,216 2,684 4,195 897 2,017 (60.1) 124.9 46.3 20.6 9.2 6.8 0.7 0.7 1.7 2.7 30.5 27.0 3.5 5.4 1.8 3.3 2.0 3.6

Vale Indonesia INCO IJ Equity INCO IJ* BUY 1,555 2,500 9,936 20.5 15,451 26.4 10,486 11,310 1,442 2,175 980 1,552 (53.6) 59.2 15.9 10.0 4.3 3.2 0.6 0.6 3.8 6.0 nc nc 4.2 6.1 3.1 4.7 4.5 6.6

Aneka Tambang ANTM IJ Equity ANTM IJ BUY 323 764 24,031 74.2 7,762 53.1 11,890 13,290 (8) 281 (449) (172) (76.5) (63.2) na na 19.5 13.2 0.4 0.5 0.0 0.0 38.7 46.7 (3.1) (1.0) (1.8) (0.6) (2.2) (0.7)

Timah TINS IJ Equity TINS IJ REDUCE 520 411 7,448 34.7 3,873 3.9 5,632 5,616 60 28 16 14 (97.9) (13.2) 248.2 285.9 13.2 11.8 0.7 0.7 0.2 0.2 39.4 39.3 0.3 0.3 0.2 0.2 0.2 0.2

J Resources Asia Pasifik PSAB IJ Equity PSAB IJ* BUY 1,355 2,000 5,292 7.4 7,171 7.3 3,892 4,959 1,274 1,856 448 841 59.8 83.6 18.6 10.1 6.5 4.7 1.2 1.2 0.0 0.0 82.5 57.4 10.8 13.8 3.6 6.2 5.1 8.2

Merdeka Copper Gold MDKA IJ Equity MDKA IJ* BUY 2,030 2,200 3,570 35.8 7,246 27.8 0 0 (84) (145) (98) (218) 58.3 na na na na na 4.1 4.5 0.0 0.0 7.7 75.0 (9.0) (10.4) (4.6) (6.9)

OIL & GAS N 97,377 168.8 69,660 78,897 11,859 13,832 6,507 7,962 (34.2) 22.4 15.0 12.2 9.3 7.7 2.2 1.9 3.5 3.7 13.8 14.4 14.6 14.8 6.4 6.9 10.7 10.6

Perusahaan Gas Negara PGAS IJ Equity PGAS IJ* REDUCE 2,875 2,500 24,242 43.0 69,694 104.7 40,166 43,022 8,302 8,425 5,824 6,279 (42.4) 4.0 12.8 12.3 7.1 6.5 1.6 1.5 4.3 4.5 nc nc 14.1 12.7 6.6 6.4 10.7 9.3

AKR Corporindo AKRA IJ Equity AKRA IJ BUY 6,200 7,000 3,949 40.1 24,484 62.2 19,344 23,231 1,345 2,043 1,047 1,495 28.1 42.8 23.3 16.3 16.2 11.4 4.0 3.3 1.7 1.7 40.9 40.9 18.2 22.3 7.1 9.1 12.1 15.8

Medco Energy MEDC IJ Equity MEDC IJ* BUY 960 1,300 3,332 49.0 3,199 2.0 10,150 12,644 2,212 3,364 (364) 189 (391.9) (150.9) NA 17.5 5.0 4.4 0.4 0.4 1.4 2.3 108.5 124.5 (3.0) 1.4 (0.9) 0.4 (1.4) 0.7

PLANTATIONS N 60,086 72.4 42,345 47,759 5,862 8,069 2,285 4,121 (61.4) 80.3 26.3 14.6 10.8 8.2 1.9 1.7 1.6 2.8 54.6 54.8 6.1 11.1 3.5 5.8 4.6 7.5

Astra Agro Lestari AALI IJ Equity AALI IJ BUY 17,650 22,500 1,575 20.3 27,794 32.3 14,739 16,467 1,969 2,773 781 1,647 (68.8) 110.8 35.6 16.9 12.0 9.2 2.5 2.2 1.3 2.7 62.8 63.2 6.9 13.8 3.9 7.2 4.7 8.5

Salim Ivomas Pratama SIMP IJ Equity SIMP IJ BUY 372 600 15,816 21.6 5,884 1.2 14,007 15,699 1,582 2,145 272 612 (67.7) 125.3 21.6 9.6 4.5 3.7 0.4 0.4 1.4 3.1 44.5 46.8 1.9 4.2 0.9 1.9 1.3 2.9

London Sumatra Indonesia LSIP IJ Equity LSIP IJ BUY 1,285 1,870 6,823 40.4 8,767 33.6 4,223 4,748 723 974 628 825 (31.5) 31.3 14.0 10.6 8.1 6.2 1.2 1.1 2.9 3.8 nc nc 8.6 10.6 7.1 8.7 10.3 12.5

Dharma Satya Nusantara DSNG IJ Equity DSNG IJ BUY 610 740 10,599 34.1 6,465 1.5 4,409 5,121 503 785 197 409 (69.6) 107.0 32.8 15.8 14.6 10.7 2.7 2.4 0.8 1.6 128.7 121.5 8.5 15.9 2.6 4.9 3.9 7.1

Austindo Nusantara Jaya ANJT IJ Equity ANJT IJ* REDUCE 1,610 1,000 3,335 10.0 5,369 0.2 1,849 2,212 62 216 (43) 43 na na na 129.9 13.3 9.5 1.5 1.5 1.2 1.6 16.8 18.6 (0.9) 0.8 (0.7) 0.6 (0.8) 0.7

Sampoerna Agro SGRO IJ Equity SGRO IJ BUY 1,475 1,970 1,890 33.0 2,788 3.3 3,118 3,512 411 487 220 260 (35.3) 17.9 12.7 10.7 7.1 6.5 0.9 0.9 3.9 4.7 66.4 75.1 7.3 8.2 3.9 4.2 4.6 4.8

Tunas Baru Lampung TBLA IJ Equity TBLA IJ BUY 565 630 5,342 45.6 3,018 0.2 5,405 5,668 611 689 230 325 (51.0) 41.4 13.1 9.3 7.0 6.4 1.2 1.1 1.5 2.2 144.1 139.6 9.1 11.9 3.0 3.9 3.9 4.9

POULTRY N 61,667 20.3 63,087 71,171 4,536 5,990 1,826 3,369 (8.4) 84.5 33.8 18.3 14.5 11.8 4.0 3.4 0.8 1.0 53.0 48.7 14.1 19.5 7.6 10.8 9.7 13.9

Charoen Pokphand IndonesiaCPIN IJ Equity CPIN IJ HOLD 3,280 3,500 16,398 44.5 53,785 17.2 32,909 38,526 3,416 4,268 1,885 2,810 7.9 49.1 28.5 19.1 15.1 12.4 4.4 3.7 0.9 1.0 39.1 34.4 16.2 20.9 8.8 11.9 11.2 15.3

Japfa Comfeed Indonesia JPFA IJ Equity JPFA IJ BUY 458 550 10,659 42.5 4,882 1.8 25,300 27,502 925 1,368 (68) 376 na na na 13.0 8.1 6.3 1.0 1.0 0.0 1.4 143.4 142.9 (1.4) 7.6 (0.4) 2.4 (0.6) 3.1

Malindo Feedmill MAIN IJ Equity MAIN IJ BUY 1,340 1,850 2,239 58.7 3,000 1.2 4,878 5,143 195 354 9 182 na 1,916.1 261.1 13.0 14.0 9.4 2.7 2.4 0.1 1.5 155.5 151.3 0.8 15.2 0.3 4.9 0.3 6.0

PROPERTY UW 147,064 270.4 47,048 52,448 16,222 17,929 10,251 11,752 (27.0) 14.6 14.3 12.5 10.7 9.7 2.1 1.9 1.2 1.4 39.5 41.1 15.8 15.7 6.3 6.3 11.9 11.5

Bumi Serpong Damai BSDE IJ Equity BSDE IJ BUY 1,770 2,020 19,247 35.4 34,067 26.7 6,609 7,856 3,226 3,701 2,545 2,876 (36.4) 13.0 13.4 11.8 10.9 9.7 1.9 1.7 0.7 0.8 21.3 24.1 15.4 15.2 8.1 7.8 13.4 12.4

Lippo Karawaci LPKR IJ Equity LPKR IJ REDUCE 1,320 1,130 23,078 94.7 30,463 88.9 9,156 11,116 2,237 2,841 1,257 1,894 (50.7) 50.7 24.2 16.1 14.6 12.1 1.8 1.7 1.0 1.6 49.9 51.2 7.8 11.0 3.2 4.3 5.4 7.3

Pakuwon Jati PWON IJ Equity PWON IJ HOLD 468 490 48,160 47.8 22,539 27.6 4,909 5,535 2,499 2,820 1,693 1,946 (32.7) 14.9 13.3 11.6 8.8 7.9 2.9 2.4 1.0 1.1 33.0 31.2 24.5 22.9 9.3 9.2 18.7 17.3

Summarecon Agung SMRA IJ Equity SMRA IJ BUY 1,570 1,820 14,427 67.7 22,650 50.1 6,150 6,724 1,948 2,146 1,259 1,382 (9.1) 9.7 18.0 16.4 12.1 11.2 3.0 2.6 1.2 1.3 56.9 55.6 21.2 19.7 7.3 6.9 13.9 12.6

Ciputra Development CTRA IJ Equity CTRA IJ BUY 1,230 1,400 15,331 69.5 18,857 15.8 7,232 8,141 2,119 2,301 1,285 1,390 (3.0) 8.2 14.7 13.6 8.7 8.1 2.2 1.9 1.1 1.2 18.3 20.9 16.1 15.2 5.2 5.0 13.8 12.7

Alam Sutera ASRI IJ Equity ASRI IJ REDUCE 363 300 19,649 48.5 7,133 38.8 3,491 3,667 1,782 1,790 899 1,004 (18.1) 11.8 7.9 7.1 7.1 7.1 1.0 0.9 2.5 3.1 88.6 82.3 13.8 13.8 5.1 5.2 7.2 7.4

Agung Podomoro Land APLN IJ Equity APLN IJ REDUCE 303 220 20,501 27.1 6,212 3.3 5,594 5,769 1,349 1,351 609 649 (28.8) 6.7 10.2 9.6 5.6 6.3 0.9 0.8 2.0 2.1 46.6 64.2 9.2 9.2 2.4 2.3 6.5 5.9

Ciputra Property CTRP IJ Equity CTRP IJ REDUCE 407 365 6,256 44.7 2,546 1.8 2,360 1,934 643 519 412 301 2.8 (27.0) 6.2 8.5 7.6 9.9 0.5 0.5 4.9 3.5 70.2 80.4 9.2 6.3 4.2 2.7 5.8 3.6

PP Property PPRO IJ Equity PPRO IJ HOLD 185 180 14,044 35.0 2,598 17.4 1,545 1,707 419 460 293 309 79.7 5.5 8.9 8.4 7.3 7.4 1.2 1.1 3.4 3.6 30.3 42.8 18.1 13.4 8.0 6.0 14.7 9.8

SHIPPING N 6,030 4.8 4,937 5,775 1,005 1,546 810 1,124 (8.2) 38.8 7.4 5.4 6.4 4.8 1.5 1.2 3.4 4.4 78.7 63.2 23.7 23.9 8.7 11.0 14.9 10.0

Soechi Lines SOCI IJ Equity SOCI IJ BUY 459 630 7,059 15.0 3,092 4.3 1,873 2,358 592 778 536 651 (20.4) 21.6 6.0 5.0 7.0 5.7 0.9 0.8 4.3 5.0 65.5 62.9 10.3 13.6 3.6 6.2 14.7 9.8

Pelayaran Tempuran Emas TMAS IJ Equity TMAS IJ BUY 1,945 3,000 1,141 13.5 2,219 0.4 1,700 1,810 378 520 332 425 63.7 28.2 6.7 5.2 5.5 4.1 2.9 2.0 3.7 4.8 99.5 64.6 50.7 45.4 18.8 21.0 23.4 25.3

Wintermar Offshore Marine WINS IJ Equity WINS IJ HOLD 178 700 4,038 42.3 719 0.1 1,364 1,606 34 248 (58) 47 (118.9) (182.5) (12.5) 15.1 6.1 3.5 0.3 0.3 (1.2) 1.0 71.5 59.6 (2.0) 1.7 (0.8) 0.7 (1.3) 1.1

TELCOS OW 446,424 226.8 198,093 223,225 42,543 48,563 17,097 22,574 17.6 32.0 26.1 19.8 9.2 8.2 4.6 3.9 2.4 2.8 81.5 59.0 18.6 21.2 7.9 8.7 14.9 16.7

Telekomunikasi Indonesia TLKM IJ Equity TLKM IJ BUY 3,035 3,750 100,800 48.8 305,928 189.7 102,143 113,031 32,141 36,256 15,778 17,773 7.8 12.6 19.4 17.2 8.6 7.7 4.1 3.7 3.4 3.8 8.4 3.4 22.1 22.6 10.4 10.7 20.4 21.4

XL Axiata EXCL IJ Equity EXCL IJ BUY 3,750 3,900 8,541 33.6 32,030 8.9 22,754 23,798 1,186 1,408 (128) (125) na na na na 6.7 6.1 2.3 2.3 0.0 0.0 168.7 164.6 (0.9) (0.9) (0.2) (0.2) (0.3) (0.3)

Tower Bersama InfrastructureTBIG IJ Equity TBIG IJ HOLD 6,150 6,500 4,797 47.8 29,499 9.0 3,437 3,801 2,637 2,915 1,056 1,289 (18.8) 22.0 27.9 22.9 16.6 15.2 10.2 7.3 0.7 0.9 647.2 481.2 30.7 37.3 4.5 5.1 4.9 5.5

Sarana Menara Nusantara TOWR IJ Equity TOWR IJ BUY 4,200 5,000 10,203 67.3 42,852 1.9 4,415 4,845 2,493 2,866 986 1,591 17.3 61.3 43.5 26.9 13.3 11.7 7.7 6.0 0.0 0.0 112.9 64.3 19.2 25.0 5.4 8.4 8.3 13.6

Indosat ISAT IJ Equity ISAT IJ BUY 5,400 6,800 5,434 20.7 29,343 3.6 26,249 28,395 2,953 3,799 (1,187) 1,334 40.3 19.6 NA 22.0 4.1 3.4 2.4 2.1 0.0 1.4 138.9 90.1 (9.1) 10.0 (2.2) 2.5 (3.8) 4.7

Tiphone Mobile Indonesia TELE IJ Equity TELE IJ BUY 725 1,180 7,121 23.0 5,163 9.0 20,524 29,578 758 905 382 462 25.2 21.0 13.4 11.0 9.4 8.5 1.8 1.6 1.9 2.3 64.1 74.4 14.4 15.4 6.5 6.5 6.1 7.0

Erajaya Swasembada ERAA IJ Equity ERAA IJ BUY 555 850 2,900 39.7 1,610 4.7 18,569 19,777 375 412 210 252 (0.6) 19.8 7.7 6.4 6.3 5.7 0.5 0.5 5.2 6.3 33.4 31.2 7.0 7.9 3.3 3.8 5.1 5.9

Market Market N 3,783,747 3,163 1,693,122 1,859,087 305,041 341,086 204,055 235,703 (7.5) 14.3 18.5 16.1 12.7 11.7 8.7 7.6 2.2 2.4 22.7 19.6 31.2 28.6 12.1 11.8 23.2 22.0

EV/EBITDA (x) P/BV (x) Yield (%) Net gearing (%) ROAE (%) ROIC (%)ROAA (%)Revenue (IDRb) Opt. profit (IDRb) Net profit (IDRb) EPS growth (%) PER (x)

Source: Bloomberg, Bahana estimates; note: based on 3 December 2015 closing price

2016 Compendium

340

APPENDIX II: EARNINGS REVISIONS TABLE Ticker Valuation basis Valuation basis

New Old 2015F 2016F 2017F 2015F 2016F 2017F New Old New Old 2015F 2016F 2017F 2015F 2016F 2017F New Old

AVIATION INDUSTRIAL ESTATES

GIAA* 400 460 69 113 143 69 113 143 BUY BUY Adjusted EV/EBITDAR BEST 300 300 225 159 326 225 159 289 REDUCE REDUCE 75% discount to NAV

CASS 1,250 1,250 124 142 160 124 142 160 HOLD REDUCE 20.6x 2015F P/E KIJA 270 270 283 431 600 335 385 525 BUY BUY 70% discount to NAV, DCF

LPCK 8,300 8,200 970 1,152 1,334 933 971 1,112 BUY BUY 60% discount to NAV

AUTOMOTIVE SSIA 720 795 579 618 716 476 507 607 BUY BUY 70% discount to NAV, DCF

ASII 5,550 5,550 16,764 17,591 19,543 16,764 17,591 19,543 REDUCE REDUCE SOTP valuation DMAS 290 290 1,520 1,705 1,799 1,340 1,391 1,409 BUY BUY 60% discount to NAV

IMAS 2,000 2,000 (312) 126 292 (122) (37) 34 REDUCE REDUCE 44.0x 2016F PE

GJTL 860 860 (422) 62 436 (431) 18 139 BUY BUY 0.4x 2016F P/BV INDUSTRY - Various

SRIL* 500 350 52 67 84 50 63 77 BUY BUY PE 10x 2016F

BANKS RALS 640 610 311 333 369 311 333 369 REDUCE REDUCE 13.6x 2016F PE

BBCA 14,700 15,100 18,176 19,883 21,806 17,445 19,146 21,103 BUY BUY Gordon growth model MLPL 550 550 (75) (43) (7) (63) (43) (13) BUY BUY SOTP Disc 70%

BBRI 13,000 12,800 24,426 26,815 29,624 24,426 26,815 29,624 BUY BUY Gordon growth model ATIC 800 800 60 110 146 104 151 189 BUY BUY PE 16.3x 2016F, DCF

BMRI 9,700 10,000 20,004 20,330 22,958 20,004 20,330 22,958 BUY HOLD Gordon growth model

BBNI 5,700 6,100 8,372 11,022 12,153 8,493 10,239 11,515 BUY BUY Gordon growth model METALS

BDMN 3,400 3,600 2,613 2,998 3,475 2,613 2,998 3,475 BUY HOLD Gordon growth model INCO* 2,500 2,500 70 107 151 70 107 151 BUY BUY DCF valuation

BTPN 2,350 2,400 1,822 1,987 2,099 1,822 1,987 2,099 REDUCE REDUCE Gordon growth model ANTM 764 764 (449) (172) 228 (449) (172) 228 BUY BUY DCF valuation

BBTN 1,520 1,500 1,663 2,084 2,419 1,663 2,084 2,419 BUY BUY Gordon growth model TINS 411 500 16 14 (31) 33 11 30 REDUCE REDUCE DCF valuation

BJBR 850 850 1,227 1,368 1,529 1,227 1,368 1,529 BUY BUY Gordon growth model PSAB* 2,000 1,300 32 58 114 32 58 114 BUY BUY 15x 2016F PE

BJTM 420 420 942 1,023 1,153 1,005 1,106 1,220 REDUCE HOLD Gordon growth model MDKA 2,200 2,200 (7) (15) 17 (7) (15) 17 BUY BUY DCF valuation

BBKP 730 740 1,067 1,194 1,320 1,067 1,194 1,320 HOLD HOLD Gordon growth model

OIL & GAS

CEMENT PGAS* 2,500 2,500 416 433 530 416 433 530 BUY BUY DCF valuation

SMGR 10,600 9,800 4,352 4,503 4,727 5,216 5,404 5,094 HOLD HOLD PE 14x 2016F AKRA 7,000 6,200 1,053 1,495 1,535 1,057 1,218 1,294 BUY BUY DCF valuation

INTP 16,400 16,400 4,340 4,353 4,558 4,477 4,357 4,437 REDUCE REDUCE PE 13.9x 2016F MEDC* 1,300 2,300 (26) 13 21 (12) 8 13 BUY REDUCE DCF valuation

SMBR 300 300 364 300 252 364 300 252 HOLD REDUCE PE 10x 2016F

SMCB 925 925 (225) 89 129 253 118 144 REDUCE REDUCE DCF valuation PLANTATIONS

AALI 22,500 22,500 781 1,647 2,495 781 1,647 2,495 BUY BUY 20x 2016F PE

COAL SIMP 600 600 272 612 1,045 272 612 1,045 BUY BUY 15.5x 2016F PE

UNTR 16,000 16,000 6,847 6,383 6,395 6,847 6,383 6,395 HOLD REDUCE DCF Valuation LSIP 1,870 1,870 628 825 904 628 825 904 BUY BUY 15.5x 2016F PE

ADRO* 700 700 213 204 140 213 204 140 BUY BUY DCF valuation DSNG 740 600 197 409 687 356 435 534 BUY BUY 19.1x 2016F PE

ITMG* 5,900 8,000 110 71 39 129 107 76 REDUCE REDUCE DCF valuation ANJT* 1,000 540 16 20 - (3) 3 7 REDUCE REDUCE USD5,500 2016F EV/ha

PTBA 7,800 7,800 2,170 2,198 1,990 2,170 2,198 1,990 BUY BUY DCF valuation SGRO 1,970 1,970 220 260 328 220 260 328 BUY BUY 14.3x 2016F PE

HRUM* 500 800 0 (2) (7) 4 2 (7) REDUCE REDUCE DCF valuation TBLA 630 630 230 325 584 230 325 584 BUY BUY 10.3x 2016F PE

CONS. & TOLL ROADS POULTRY

JSMR 6,250 6,250 1,278 1,445 1,481 1,278 1,445 1,481 BUY BUY DCF valuation CPIN 3,500 2,550 1,885 2,810 3,746 1,987 2,767 3,650 BUY HOLD PE 20x 2016F

WSKT 1,975 1,975 818 1,116 1,174 818 1,116 1,174 BUY BUY SOTP valuation JPFA 550 480 (68) 376 588 (88) 571 868 BUY BUY PE 16x 2016F

WIKA 3,100 3,200 559 785 957 559 785 957 BUY BUY PE 24x 2016F MAIN 1,850 1,500 9 182 287 211 324 373 BUY BUY PE 18x 2016F

PTPP 4,300 3,710 706 920 1,063 677 805 934 BUY HOLD SOTP valuation

WTON 965 965 218 316 407 218 316 407 HOLD REDUCE PE 27x 2016F PROPERTY

ADHI 2,550 2,550 395 534 690 395 534 690 BUY BUY PE 17x 2016F BSDE 2,020 2,020 2,545 2,876 3,386 2,540 2,873 3,377 BUY HOLD 60% discount to NAV

TOTL 940 1,100 197 230 255 194 229 242 BUY BUY 14x 2016F PE LPKR 1,130 1,130 1,257 1,894 2,081 1,589 1,964 2,128 REDUCE REDUCE 60% discount to NAV, DCF

PWON 490 450 1,693 1,946 2,360 1,693 1,937 2,346 HOLD HOLD 60% discount to NAV

CONSUMER - DISCRE. CTRA 1,400 1,385 1,285 1,390 1,523 1,276 1,369 1,484 BUY BUY 60% discount to NAV

SCMA 3,250 2,950 1,519 1,674 1,848 1,518 1,631 1,754 HOLD HOLD PE 28.5x 2016F SMRA 1,820 1,820 1,259 1,382 1,540 1,259 1,382 1,540 BUY BUY 60% discount to NAV

MNCN 2,000 1,950 1,280 1,648 1,990 1,456 1,732 2,018 BUY BUY PE 17.4x 2016F ASRI 300 720 899 1,004 1,206 1,135 1,248 1,734 REDUCE BUY 70% discount to NAV

LPPF 19,800 18,200 1,859 2,219 2,620 1,859 2,214 2,607 BUY BUY PE 26x 2016F APLN 220 220 609 649 683 469 539 623 REDUCE REDUCE 75% discount to NAV

MPPA 2,750 2,750 451 587 666 451 587 666 BUY BUY PE 25x 2016F CTRP 365 776 412 301 353 327 393 393 REDUCE BUY 70% discount to NAV

HERO 650 700 (29) 57 191 16 92 194 REDUCE REDUCE PS 0.2x 2016F PPRO 180 152 293 309 383 293 309 371 HOLD HOLD 70% discount to NAV

ACES 875 500 559 608 674 516 562 641 BUY REDUCE PE 25x 2016F

MAPI 4,750 4,000 34 242 380 51 277 399 BUY BUY 24x 2016F PE** SHIPPING

ECII 700 800 15 54 82 65 98 121 REDUCE REDUCE PE 17.5x 2016F SOCI 630 630 38 45 45 41 45 51 BUY BUY 7x 2016F PE

TMAS 3,000 3,000 332 425 571 332 358 468 BUY BUY 8.1x 2016F PE

CONSUMER - STAPLES WINS* 190 700 22 (4) 3 24 31 - HOLD HOLD DCF valuation

HMSP 115,000 108,000 10,393 11,156 12,806 10,393 11,156 12,806 BUY BUY PE 48x 2016F

MYOR 31,000 28,800 1,161 1,122 1,218 933 1,040 1,225 BUY BUY PE 25x 2016F STEEL

UNVR 46,000 46,000 5,885 6,612 7,489 5,885 6,612 7,489 BUY BUY PE 53x 2016F KRAS* 275 275 (218) (188) (179) (218) (188) (179) REDUCE REDUCE DCF valuation

GGRM 65,000 65,000 5,445 5,950 6,674 5,445 5,950 6,674 BUY BUY PE 21x 2016F

ICBP 16,800 8,300 3,082 3,543 4,039 3,082 3,543 4,039 BUY BUY 28x 2015F PE TELCOS

INDF 6,600 6,000 2,084 3,454 4,196 2,084 3,454 4,196 BUY BUY 17x 2015 PE TLKM 3,750 3,750 15,778 17,773 20,468 16,382 19,105 21,615 BUY BUY 9.5x 2016F EV/EBITDA

TSPC 2,000 2,000 575 622 672 575 615 672 BUY BUY PE 14.5x 2016F EXCL 3,900 3,900 (128) (125) 300 (1,042) 180 480 BUY BUY 6.2x 2016F EV/EBITDA

ROTI 1,450 1,450 265 322 416 245 317 416 BUY BUY PE 23x 2016F TOWR 5,000 5,100 986 1,591 2,133 1,502 1,934 2,724 BUY BUY 13.7x 2016F EV/EBITDA

SIDO 630 585 469 560 638 441 490 542 BUY BUY PE 18x 2016F ISAT 6,800 6,800 (1,187) 1,334 2,545 (1,187) 1,334 2,545 BUY BUY 4.0x 2016F EV/EBITDA

KAEF 1,350 1,060 279 327 396 286 329 394 BUY BUY PE 23x 2016F ERAA 850 940 210 252 299 260 289 310 BUY HOLD 9.8x 2016F PE

MIKA 1,900 1,900 576 657 725 576 657 725 REDUCE REDUCE DCF valuation TELE 1,180 1,180 382 462 592 382 480 632 BUY BUY DCF valuation

SILO 14,700 17,200 94 142 201 104 174 233 BUY BUY 24x EV/EBITDA, DCF

KLBF 1,480 1,480 1,949 2,167 2,400 1,949 2,167 2,400 HOLD BUY PE 32x 2016F TRANSPORTATION

ASSA 130 130 55 69 83 55 69 83 BUY BUY 7x 2016F PE

BIRD 4,700 5,800 840 870 877 840 870 877 REDUCE REDUCE 13.6x 2016F PE

TAXI 120 120 6 19 22 6 19 22 REDUCE REDUCE 13x 2016F PE

Old earnings RATINGTarget price New earnings Old earnings RATING Target price New earnings


* Reporting currency in USD; earnings figures are in USDm

2016 Compendium

341


2016 Compendium

342

Disclaimer This publication is prepared by PT.Bahana Securities and reviewed by Daiwa Securities Group Inc. and/or its affiliates, and distributed outside Indonesia by Daiwa Securities Group Inc. and/or its affiliates, except to the extent expressly provided herein. Certain copies of this publication may be distributed inside and outside of Indonesia by PT. Bahana Securities in accordance with relevant laws and regulations. This publication and the contents hereof are intended for information purposes only, and may be subject to change without further notice. Any use, disclosure, distribution, dissemination, copying, printing or reliance on this publication for any other purpose without our prior consent or approval is strictly prohibited. Any review does not constitute a full verification of the publication and merely provides a minimum check. Neither Daiwa Securities Group Inc. nor any of its respective parent, holding, subsidiaries or affiliates, nor any of its respective directors, officers, servants and employees, represent nor warrant the accuracy or completeness of the information contained herein or as to the existence of other facts which might be significant, and will not accept any responsibility or liability whatsoever for any use of or reliance upon this publication or any of the contents hereof. Neither this publication, nor any content hereof, constitute, or are to be construed as, an offer or solicitation of an offer to buy or sell any of the securities or investments mentioned herein in any country or jurisdiction nor, unless expressly provided, any recommendation or investment opinion or advice. Any view, recommendation, opinion or advice expressed in this publication constitutes the views of the analyst(s) named herein and does not necessarily reflect those of Daiwa Securities Group Inc. and/or its affiliates nor any of its respective directors, officers, servants and employees except where the publication states otherwise. This research report is not to be relied upon by any person in making any investment decision or otherwise advising with respect to, or dealing in, the securities mentioned, as it does not take into account the specific investment objectives, financial situation and particular needs of any person.

Neither Daiwa Securities Group Inc. nor any of its affiliates is licensed to undertake any business within the Republic of Indonesia. Any display of any trade name or logo of the Daiwa Securities Group Inc. on this publication shall not be deemed to be an undertaking of any business within the Republic of Indonesia.

Daiwa Securities Group Inc., its subsidiaries or affiliates, or its or their respective directors, officers and employees from time to time may have trades as principals, or have positions in, or have other interests in the securities of the company under research including market making activities, derivatives in respect of such securities or may have also performed investment banking and other services for the issuer of such securities. The following are additional disclosures.

Ownership of Securities

For “Ownership of Securities” information, please visit BlueMatrix disclosure link at https://daiwa3.bluematrix.com/sellside/Disclosures.action.

Investment Banking Relationship

For “Investment Banking Relationship”, please visit BlueMatrix disclosure link at https://daiwa3.bluematrix.com/sellside/Disclosures.action.

Japan

Daiwa Securities Co. Ltd. and Daiwa Securities Group Inc.

Daiwa Securities Co. Ltd. is a subsidiary of Daiwa Securities Group Inc.


Within the preceding 12 months, The subsidiaries and/or affiliates of Daiwa Securities Group Inc. * has lead-managed public offerings and/or secondary offerings (excluding straight bonds) of the securities of the following companies: Modern Land (China) Co. Ltd (1107 HK); econtext Asia Ltd (1390 HK); Accordia Golf Trust (AGT SP); GF Securities Co Ltd (1776 HK); Mirae Asset Life Insurance Co Ltd (085620 KS); China Reinsurance Group Corporation (1508 HK).

*Subsidiaries of Daiwa Securities Group Inc. for the purposes of this section shall mean any one or more of:

• Daiwa Capital Markets Hong Kong Limited (大和資本市場香港有限公司)

• Daiwa Capital Markets Singapore Limited

• Daiwa Capital Markets Australia Limited

• Daiwa Capital Markets India Private Limited

• Daiwa-Cathay Capital Markets Co., Ltd.

• Daiwa Securities Capital Markets Korea Co., Ltd

Disclosure of Interest of Bahana Securities


Within the preceding 12 months, Bahana Securities has lead-managed public offerings and/or secondary offerings (excluding straight bonds) of the securities of the following companies: Waskita Karya Persero Tbk PT (WSKT IJ); Adhi Karya Persero Tbk PT (ADHI IJ); PP Properti Tbk PT (PPRO IJ); Merdeka Copper Gold Tbk PT (MDKA IJ); Anabatic Technologies Tbk PT (ATIC IJ); Aneka Tambang Persero Tbk PT (ANTM IJ).

Hong Kong

This research is distributed in Hong Kong by Daiwa Capital Markets Hong Kong Limited (大和資本市場香港有限公司) (“DHK”) which is regulated by the Hong Kong Securities and Futures Commission. Recipients of this research in Hong Kong may contact DHK in respect of any matter arising from or in connection with this research.

Relevant Relationship (DHK)

DHK may from time to time have an individual employed by or associated with it serves as an officer of any of the companies under its research coverage.

Singapore

This research is distributed in Singapore by Daiwa Capital Markets Singapore Limited and it may only be distributed in Singapore to accredited investors, expert investors and institutional investors as defined in the Financial Advisers Regulations and the Securities and Futures Act (Chapter 289), as amended from time to time. By virtue of distribution to these category of investors, Daiwa Capital Markets Singapore Limited and its

https://daiwa3.bluematrix.com/sellside/Disclosures.action


2016 Compendium

343

representatives are not required to comply with Section 36 of the Financial Advisers Act (Chapter 110) (Section 36 relates to disclosure of Daiwa Capital Markets Singapore Limited’s interest and/or its representative’s interest in securities). Recipients of this research in Singapore may contact Daiwa Capital Markets Singapore Limited in respect of any matter arising from or in connection with the research.

Australia

This research is distributed in Australia by Daiwa Capital Markets Australia Limited and it may only be distributed in Australia to wholesale investors within the meaning of the Corporations Act. Recipients of this research in Australia may contact Daiwa Capital Markets Stockbroking Limited in respect of any matter arising from or in connection with the research.

India

This research is distributed in India to Institutional Clients only by Daiwa Capital Markets India Private Limited (Daiwa India) which is an intermediary registered with Securities & Exchange Board of India as a Stock Broker, Merchant Bank and Research Analyst. Daiwa India, its Research Analyst and their family members and its associates do not have any financial interest save as disclosed or other undisclosed material conflict of interest in the securities or derivatives of any companies under coverage. Daiwa India and its associates may have received compensation for any products other than Investment Banking (as disclosed) or brokerage services from the subject company in this report during the past 12 months. Unless otherwise stated in BlueMatrix disclosure link at https://daiwa3.bluematrix.com/sellside/Disclosures.action, Daiwa India and its associates do not hold more than 1% of any companies covered in this research report.

There is no material disciplinary action against Daiwa India by any regulatory authority impacting equity research analysis activities as of the date of this report.

Taiwan

This research is distributed in Taiwan by Daiwa-Cathay Capital Markets Co., Ltd and it may only be distributed in Taiwan to institutional investors or specific investors who have signed recommendation contracts with Daiwa-Cathay Capital Markets Co., Ltd in accordance with the Operational Regulations Governing Securities Firms Recommending Trades in Securities to Customers. Recipients of this research in Taiwan may contact Daiwa-Cathay Capital Markets Co., Ltd in respect of any matter arising from or in connection with the research.

Philippines

This research is distributed in the Philippines by DBP-Daiwa Capital Markets Philippines, Inc. which is regulated by the Philippines Securities and Exchange Commission and the Philippines Stock Exchange, Inc. Recipients of this research in the Philippines may contact DBP-Daiwa Capital Markets Philippines, Inc. in respect of any matter arising from or in connection with the research. DBP-Daiwa Capital Markets Philippines, Inc. recommends that investors independently assess, with a professional advisor, the specific financial risks as well as the legal, regulatory, tax, accounting, and other consequences of a proposed transaction. DBP-Daiwa Capital Markets Philippines, Inc. may have positions or may be materially interested in the securities in any of the markets mentioned in the publication or may have performed other services for the issuers of

such securities.

For relevant securities and trading rules please visit SEC and PSE link at http://www.sec.gov.ph/irr/AmendedIRRfinalversion.pdf and http://www.pse.com.ph/ respectively.

United Kingdom

This research report is produced by Daiwa Securities Co. Ltd. and/or its affiliates and is distributed in the European Union, Iceland, Liechtenstein, Norway and Switzerland. Daiwa Capital Markets Europe Limited is authorised and regulated by The Financial Conduct Authority (“FCA”) and is a member of the London Stock Exchange and Eurex. This publication is intended for investors who are not Retail Clients in the United Kingdom within the meaning of the Rules of the FCA and should not therefore be distributed to such Retail Clients in the United Kingdom. Should you enter into investment business with Daiwa Capital Markets Europe’s affiliates outside the United Kingdom, we are obliged to advise that the protection afforded by the United Kingdom regulatory system may not apply; in particular, the benefits of the Financial Services Compensation Scheme may not be available.

Daiwa Capital Markets Europe Limited has in place organisational arrangements for the prevention and avoidance of conflicts of interest. Our conflict management policy is available at http://www.uk.daiwacm.com/about-us/corporate-governance-regulatory.

Germany

This document is distributed in Germany by Daiwa Capital Markets Europe Limited, Niederlassung Frankfurt which is regulated by BaFin (Bundesanstalt fuer Finanzdienstleistungsaufsicht) for the conduct of business in Germany.

Bahrain

This research material is distributed by Daiwa Capital Markets Europe Limited, Bahrain Branch, regulated by The Central Bank of Bahrain and holds Investment Business Firm – Category 2 license and having its official place of business at the Bahrain World Trade Centre, South Tower, 7th floor, P.O. Box 30069, Manama, Kingdom of Bahrain. Tel No. +973 17534452 Fax No. +973 535113

This material is provided as a reference for making investment decisions and is not intended to be a solicitation for investment. Investment decisions should be made at your own discretion and risk. Accordingly, no representation or warranty, express or implied, is made as to and no reliance should be placed on the fairness, accuracy, completeness or correctness of the information and opinions contained in this document, Content herein is based on information available at the time the research material was prepared and may be amended or otherwise changed in the future without notice. All information is intended for the private use of the person to whom it is provided without any liability whatsoever on the part of Daiwa Capital Markets Europe Limited, Bahrain Branch, any associated company or the employees thereof. If you are in doubt about the suitability of the product or the research material itself, please consult your own financial adviser. Daiwa Capital Markets Europe Limited, Bahrain Branch retains all rights related to the content of this material, which may not be redistributed or otherwise transmitted without prior consent.

United States This report is distributed in the U.S. by Daiwa Capital Markets America Inc. (DCMA). It may not be accurate or complete and should not be relied upon as such. It reflects the preparer’s views at the time of its preparation, but may not reflect events occurring after its preparation; nor does it reflect PT.Bahana Securities’ or DCMA’s views at any time. Neither PT.Bahana Securities, DCMA nor the preparer has any obligation to update this report or to continue to prepare research on this subject. This report is not an offer to sell or the solicitation of any offer to buy securities. Unless this report says otherwise, any recommendation it makes is risky and appropriate only for sophisticated speculative investors able to incur significant losses.

http://www.sec.gov.ph/irr/AmendedIRRfinalversion.pdf%20and%20http:/www.pse.com.ph/

http://www.uk.daiwacm.com/about-us/corporate-governance-regulatory

2016 Compendium

344

Readers should consult their financial advisors to determine whether any such recommendation is consistent with their own investment objectives, financial situation and needs. This report does not recommend to U.S. recipients the use of any of PT.Bahana Securities’ or DCMA’s non-U.S. affiliates to effect trades in any security and is not supplied with any understanding that U.S. recipients of this report will direct commission business to such non-U.S. entities. Unless applicable law permits otherwise, non-U.S. customers wishing to effect a transaction in any securities referenced in this material should contact a Daiwa entity in their local jurisdiction. Most countries throughout the world have their own laws regulating the types of securities and other investment products which may be offered to their residents, as well as a process for doing so. As a result, the securities discussed in this report may not be eligible for sales in some jurisdictions. Customers wishing to obtain further information about this report should contact DCMA: Daiwa Capital Markets America Inc., Financial Square, 32 Old Slip, New York, New York 10005 (Tel no. 212-612-7000).

Ownership of Securities For “Ownership of Securities” information please visit BlueMatrix disclosure Link at https://daiwa3.bluematrix.com/sellside/Disclosures.action . Investment Banking Relationships For “Investment Banking Relationships” please visit BlueMatrix disclosure link at https://daiwa3.bluematrix.com/sellside/Disclosures.action. DCMA Market Making For “DCMA Market Making” please visit BlueMatrix disclosure link at https://daiwa3.bluematrix.com/sellside/Disclosures.action. Research Analyst Conflicts For updates on “Research Analyst Conflicts” please visit BlueMatrix disclosure link at https://daiwa3.bluematrix.com/sellside/Disclosures.action. The principal research analysts who prepared this report have no financial interest in securities of the issuers covered in the report, are not (nor are any members of their household) an officer, director or advisory board member of the issuer(s) covered in the report, and are not aware of any material relevant conflict of interest involving the analyst or DCMA, and did not receive any compensation from the issuer during the past 12 months except as noted: no exceptions. Research Analyst Certification For updates on “Research Analyst Certification” and “Rating System” please visit BlueMatrix disclosure link at https://daiwa3.bluematrix.com/sellside/Disclosures.action. The views about any and all of the subject securities and issuers expressed in this Research Report accurately reflect the personal views of the research analyst(s) primarily responsible for this report (or the views of the firm producing the report if no individual analysts[s] is named on the report); and no part of the compensation of such analyst(s) (or no part of the compensation of the firm if no individual analyst[s)] is named on the report) was, is, or will be directly or indirectly related to the specific recommendations or views contained in this Research Report. For stocks and sectors in Indonesia covered by Bahana Securities, the following rating system is in effect:

Stock ratings are based on absolute upside or downside, which is the difference between the target price and the current market price. Unless otherwise specified, these ratings are set with a 12-month horizon. It is possible that future price volatility may cause a temporary mismatch between upside/downside for a stock based on the market price and the formal rating. "Buy": the price of the security is expected to increase by 10% or more. "Hold": the price of the security is expected to range from an increase of less than 10% to a decline of less than 5%. "Reduce": the price of the security is expected to decline by 5% or more.

Sector ratings are based on fundamentals for the sector as a whole. Hence, a sector may be rated “Overweight” even though its constituent stocks are all rated “Reduce”; and a sector may be rated “Underweight” even though its constituent stocks are all rated “Buy”. “Overweight”: positive fundamentals for the sector. “Neutral”: neither positive nor negative fundamentals for the sector. “Underweight”: negative fundamentals for the sector.

Ownership of Securities For “Ownership of Securities” information, please visit BlueMatrix disclosure Link at https://daiwa3.bluematrix.com/sellside/Disclosures.action .

Investment Banking Relationships For “Investment Banking Relationship”, please visit BlueMatrix disclosure Link at https://daiwa3.bluematrix.com/sellside/Disclosures.action . Relevant Relationships (Bahana Securities) Bahana Securities may from time to time have an individual employed by or associated with it serves as an officer of any of the companies under its research coverage.

Bahana Securities market making Bahana Securities may from time to time make a market in securities covered by this research. Explanatory Document of Unregistered Credit Ratings (Moody’s Investors Service, Inc.) In order to ensure the fairness and transparency in the markets, Credit Rating Agencies became subject to the Credit Rating Agencies’ registration system based on the Financial Instruments and Exchange Act. In accordance with this Act, in soliciting customers, Financial Instruments Business Operators, etc. shall not use the credit ratings provided by unregistered Credit Rating Agencies without informing customers of the fact that those Credit Rating Agencies are not registered, and shall also inform customers of the significance and limitations of credit ratings, etc.








2016 Compendium

345

The Significance of Registration Registered Credit Rating Agencies are subject to the following regulations: 1) Duty of good faith. 2) Establishment of control systems (fairness of the rating process, and prevention of conflict of interest, etc.). 3) Prohibition of the ratings in cases where Credit Rating Agencies have a close relationship with the issuers of the financial instruments to be rated, etc. 4) Duty to disclose information (preparation and publication of rating policies, etc. and public disclosure of explanatory documents).

In addition to the above, Registered Credit Rating Agencies are subject to the supervision of the Financial Services Agency (“FSA”), and as such may be ordered to produce reports, be subject to on-site inspection, and be ordered to improve business operations, whereas unregistered Credit Rating Agencies are free from such regulations and supervision. The Name of the Credit Rating Agency Group, etc The name of the Credit Rating Agency group: Moody’s Investors Service, Inc. ("MIS") The name and registration number of the Registered Credit Rating Agency in the group: Moody’s Japan K.K. (FSA commissioner (Rating) No.2) How to acquire information related to an outline of the rating policies and methods adopted by the person who determines Credit Ratings The information is posted under “Unregistered Rating explanation” in the section on “The use of Ratings of Unregistered Agencies” on the website of Moody’s Japan K.K. (The website can be viewed after clicking on “Credit Rating Business” on the Japanese version of Moody’s website (http://www.moodys.co.jp) Assumptions, Significance and Limitations of Credit Ratings Credit ratings are Moody’s Investors Service, Inc.’s ("MIS") current opinions of the relative future credit risk of entities, credit commitments, or debt or debt-like securities. MIS defines credit risk as the risk that an entity may not meet its contractual, financial obligations as they come due and any estimated financial loss in the event of default. Credit ratings do not address any other risk, including but not limited to: liquidity risk, market value risk, or price volatility. Credit ratings do not constitute investment or financial advice, and credit ratings are not recommendations to purchase, sell, or hold particular securities. No warranty, express or implied, as to the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any such rating or other opinion or information is given or made by MIS in any form or manner whatsoever. Based on the information received from issuers or from public sources, the credit risks of the issuers or obligations are assessed. MIS adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MIS considers to be reliable. However, MIS is not an auditor and cannot in every instance independently verify or validate information received in the rating process. Explanatory Document of Unregistered Credit Ratings (Standard & Poor’s Ratings Services) In order to ensure the fairness and transparency in the markets, Credit Rating Agencies became subject to the Credit Rating Agencies’ registration system based on the Financial Instruments and Exchange Act. In accordance with this Act, in soliciting customers, Financial Instruments Business Operators, etc. shall not use the credit ratings provided by unregistered Credit Rating Agencies without informing customers of the fact that those Credit Rating Agencies are not registered, and shall also inform customers of the significance and limitations of credit ratings, etc.

The Significance of Registration Registered Credit Rating Agencies are subject to the following regulations: 1) Duty of good faith. 2) Establishment of control systems (fairness of the rating process, and prevention of conflict of interest, etc.). 3) Prohibition of the ratings in cases where Credit Rating Agencies have a close relationship with the issuers of the financial instruments to be rated, etc. 4) Duty to disclose information (preparation and publication of rating policies, etc. and public disclosure of explanatory documents). In addition to the above, Registered Credit Rating Agencies are subject to the supervision of the Financial Services Agency (“FSA”), and as such may be ordered to produce reports, be subject to on-site inspection, and be ordered to improve business operations, whereas unregistered Credit Rating Agencies are free from such regulations and supervision. The Name of the Credit Rating Agency group, etc The name of the Credit Rating Agency group: Standard & Poor’s Ratings Services The name and registration number of the Registered Credit Rating Agency in the group: Standard & Poor’s Ratings Japan K.K. (FSA commissioner (Rating) No.5) How to acquire information related to an outline of the rating policies and methods adopted by the person who determines Credit Ratings The information is posted under “Unregistered Rating Information” (http://www.standardandpoors.co.jp/unregistered) in the “Library and Regulations” section on the website of Standard & Poor’s Ratings Japan K.K. (http://www.standardandpoors.co.jp)

http://www.moodys.co.jp/

http://www.standardandpoors.co.jp/unregistered

http://www.standardandpoors.co.jp/

2016 Compendium

346

Assumptions, Significance and Limitations of Credit Ratings Credit ratings assigned by Standard & Poor's are statements of opinion on the future credit quality of specific issuers or issues as of the date they are expressed and do not guarantee timely payments of interest or principal. Credit ratings are not a recommendation to purchase, sell or hold any securities, or a statement of market liquidity or prices in the secondary market of any issues. Credit ratings may change depending on various factors, including issuers' performance, changes in external environment, performance of underlying assets, creditworthiness of counterparties and others. Standard & Poor's conducts rating analysis based on information it believes to be reliable in terms of quality and quantity. However, Standard & Poor's does not perform an audit, due diligence or independent verification of any information it receives, or guarantees its accuracy, completeness or timeliness.

Explanatory Document of Unregistered Credit Ratings (Fitch Ratings) In order to ensure the fairness and transparency in the markets, Credit Rating Agencies became subject to the Credit Rating Agencies’ registration system based on the Financial Instruments and Exchange Act. In accordance with this Act, in soliciting customers, Financial Instruments Business Operators, etc. shall not use the credit ratings provided by unregistered Credit Rating Agencies without informing customers of the fact that those Credit Rating Agencies are not registered, and shall also inform customers of the significance and limitations of credit ratings, etc. The Significance of Registration Registered Credit Rating Agencies are subject to the following regulations: 1) Duty of good faith. 2) Establishment of control systems (fairness of the rating process, and prevention of conflict of interest, etc.). 3) Prohibition of the ratings in cases where Credit Rating Agencies have a close relationship with the issuers of the financial instruments to be rated, etc. 4) Duty to disclose information (preparation and publication of rating policies, etc. and public disclosure of explanatory documents). In addition to the above, Registered Credit Rating Agencies are subject to the supervision of the Financial Services Agency (“FSA”), and as such may be ordered to produce reports, be subject to on-site inspection, and be ordered to improve business operations, whereas unregistered Credit Rating Agencies are free from such regulations and supervision. The Name of the Credit Rating Agency group, etc The name of the Credit Rating Agency group: Fitch Ratings ("Fitch") The name and registration number of the Registered Credit Rating Agency in the group: Fitch Ratings Japan Limited (FSA commissioner (Rating) No.7) How to acquire information related to an outline of the rating policies and methods adopted by the person who determines Credit Ratings The information is posted under “Outline of Rating Policies” in the section of “Regulatory Affairs” on the website of Fitch Ratings Japan Limited (http://www.fitchratings.co.jp) Assumptions, Significance and Limitations of Credit Ratings Ratings assigned by Fitch are opinions based on established criteria and methodologies. Ratings are not facts, and therefore cannot be described as being "accurate" or "inaccurate". Credit ratings do not directly address

any risk other than credit risk. Credit ratings do not comment on the adequacy of market price or market liquidity for rated instruments. Ratings are relative measures of risk; as a result, the assignment of ratings in the same category to entities and obligations may not fully reflect small differences in the degrees of risk. Credit ratings, as opinions on relative ranking of vulnerability to default, do not imply or convey a specific statistical probability of default. In issuing and maintaining its ratings, Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The assignment of a rating to any issuer or any security should not be viewed as a guarantee of the accuracy, completeness, or timeliness of the information relied on in connection with the rating or the results obtained from the use of such information. If any such information should turn out to contain misrepresentations or to be otherwise misleading, the rating associated with that information may not be appropriate. Despite any verification of current facts, ratings can be affected by future events or conditions that were not anticipated at the time a rating was issued or affirmed.

Additional information may be available upon request.

Japan - additional notification items pursuant to Article 37 of the Financial Instruments and Exchange Law

(This Notification is only applicable where report is distributed by Daiwa Securities Co. Ltd.)

If you decide to enter into a business arrangement with us based on the information described in materials presented along with this document, we ask you to pay close attention to the following items. In addition to the purchase price of a financial instrument, we will collect a trading commission* for each transaction as agreed beforehand with you. Since commissions may be included in the purchase price or may

not be charged for certain transactions, we recommend that you confirm the commission for each transaction. In some cases, we may also charge a maximum of ¥ 2 million (including tax) per year as a standing proxy fee for our deposit of your securities, if you are a non-resident of Japan. For derivative and margin transactions etc., we may require collateral or margin requirements in accordance with an agreement made beforehand with you. Ordinarily in such cases, the amount of the transaction will

be in excess of the required collateral or margin requirements. There is a risk that you will incur losses on your transactions due to changes in the market price of financial instruments based on fluctuations in interest rates, exchange rates, stock prices, real estate prices,

commodity prices, and others. In addition, depending on the content of the transaction, the loss could exceed the amount of the collateral or margin requirements.

http://www.fitchratings.co.jp/

2016 Compendium

347

There may be a difference between bid price etc. and ask price etc. of OTC derivatives handled by us. Before engaging in any trading, please thoroughly confirm accounting and tax treatments regarding your trading in financial instruments with such experts as certified public accountants. *The amount of the trading commission cannot be stated here in advance because it will be determined between our company and you based on current market conditions and the content of each transaction etc.

When making an actual transaction, please be sure to carefully read the materials presented to you prior to the execution of agreement, and to take responsibility for your own decisions regarding the signing of the agreement with us.

Corporate Name: Daiwa Securities Co. Ltd.

Financial instruments firm: chief of Kanto Local Finance Bureau (Kin-sho) No.108

Memberships: Japan Securities Dealers Association, Financial Futures Association of Japan

Japan Securities Investment Advisers Association

Type II Financial Instruments Firms Association

2016 Compendium

348

Dealing Room: +62 21 527 0808 (Foreign Institutional)

Research: +62 21 250 5081

+62 21 250 5508 (Domestic Institutional)

Harry [email protected]

Senior Associate DirectorHead of Corporate Strategy & Research

Consumer, Strategy

ext 3600direct: +62 21 250 5735

Teguh Hartanto

[email protected] Director

Deputy Head of Research

Banks, Cement, Aviationext 3610

Leonardo Henry Gavaza, [email protected]

Senior Research ManagerAuto, Heavy equipment, Telco

ext 3608

Michael W Setjoadi [email protected]

Research AnalystConsumer, Healthcare, Poultry

ext 3613

Bob [email protected]

Research AnalystCement, Infratructure,Toll roads

ext 3605

Agustinus Reza Kirana

[email protected] Analyst

Plantations, Shipping, Transportationext 3616

Arandi [email protected]

Research AnalystCoal, Metals, Oil & Gas

ext 3619

Made Ayu Wijayati

[email protected] Executive

ext 3607

Bagus Adi Yoga Prawira

[email protected] AnalystConsumer, Media

ext 3604

Zefanya Halim

[email protected] Manager

ext 3612

Novianty Permata Sari

[email protected]

ext 3618

Ashish Agrawal

[email protected] President

Institutional Equity Salesext 2550 / 2553

Reynard Poernawan

[email protected] Equity Sales

ext 2528

John M. Dasaad


ext 2549

Yohanes Adhi Handoko

[email protected], Surabaya Branch

ext 7250

Suwardi Widjaja


ext 2548

Amelia Husada

[email protected] President

Institutional Equity Salesext 2552

Nurul Farida


ext 2547

+62 31 535 2788 (Surabaya Branch)

Fakhrul [email protected]

Economistext 3602

Melvin Mikha Reminov

[email protected] Associate

ext 3621

Sanni Satrio Dwi Utomo


Industrial Estate, Propertyext 3611

Natalia [email protected] of Sales &

Client Relationship Management ext 2500

Sarah Jessica Hutapea


ext 3693

Nyoman Widita Prabawa


ext 3623

Renaldy Effendy


Consumer, Healthcareext 3606

Gilang Purnama


ext 3601

Adriana Kosasih

[email protected] Executive

ext 2541

Hanna Marionda

[email protected] Trader

ext 2525

Ari Santosa

[email protected] Trader

ext 2554

Bram Taarea


ext 2524

Jozabad Jonathan


Poultryext 3620

Muhammad Wafi


ext 3609

Inca [email protected]

Senior Equity Institutional Salesext 2545

2016 compendium -...

Documents