indonesia: elections & market update aburizal bakrie 9.2...
TRANSCRIPT
Asiamoney’s
2013
Best Domestic
Equity House
Politics spotlight
17 March 2014
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Indonesia: Elections & market update
Harry Su E-mail: [email protected] Phone: +6221 250 5735
Jokowi: The next Indonesian President?
Running under the PDI-P banner – Positive market reaction: Jokowi
has finally announced his long-awaited presidential bid under the banner of
Megawati’s PDI-P. This declaration not only displayed Megawati’s noble
political gesture but also provided greater certainty towards Indonesia’s
election roadmap. Backed by a robust electability survey (exhibit 1) and
support from local and foreign investors, Jokowi’s decision caused the equity
market (4%+ swing) to experience “panic” buying while the local currency
(+0.5% to IDR11,355/1USD) continued its appreciation trend. Unless
Jokowi becomes president, it is clear to us that the market will head south.
Timely announcement should result in a strong future government:
The affirmation of Jokowi’s move to run as president in the 2014 elections is
timely in our view, particularly in the lead up to the parliamentary election
campaigns, which started on 16 March (exhibits 3-4) and will last until 5
April 2014. With that said, Jokowi’s strong grass-root support should pave
the way for PDI-P to obtain greater votes in the upcoming legislative
elections, which will take place on 9 April (exhibit 6). Our channel checks
suggest that undecided voters (exhibit 7), amounting to 28% of total voters,
will be more willing to turn up and vote for PDI-P in the parliamentary
election, supported by the Jokowi figure. This should mean greater votes
and representation for PDI-P in the parliament, allowing for minimal coalition
with other parties, creating a more solid government formation ahead.
Implementation of pro-business and clean government ahead: Given
the progress of Jakarta in the past year thus far (exhibits 9 & 10), we expect
Jokowi’s presidential bid to also be successful on a platform of improved
business conditions and a corruption-free government. Additionally, we
expect a Jokowi government to be pro-democracy, market friendly and pro-
growth. Hence, going forward, we expect a jump-start implementation of
infrastructure-related projects as well as the formation of a strong cabinet,
backed by capable technocrats rather than “rewards” due to coalition
promises. We have listed possible PDI-P based shadow cabinet in exhibit 5.
Outlook: Well supported market outlook, but not without pitfalls
With Indonesia in a state of election euphoria, the market’s short-term
performance should remain well supported with possible achievement to our
5,000 index target. However, we expect pitfalls ahead in the form of “black”
campaign, particularly coming from other parties/ presidential candidates,
which could erode Jokowi’s popularity. Additional challenges should stem
from how PDI-P and Jokowi deal with the need to find the right VP running
mate. We note that all civilian governments of the past lasted less than a
term (exhibit 8). Furthermore, coalition formation with other political parties
remains to be seen. With that said, we recommend investors to take profit
in stocks with prices that have reached beyond our targets (exhibit 12) and
rotate into stocks with more reasonable valuations and attractive share price
upsides, which have lagged the market (exhibit 11). Happy trading!
Exhibit 1. Presidential candidates survey
3.1
6.1
9.2
11.1
43.5
0 10 20 30 40 50
Jusuf Kalla
Megawati Soekarnoputri
Aburizal Bakrie
Prabowo Subianto
Joko Widodo
(%)
Source: Kompas’ research
Exhibit 2. Party electability survey
2.3
2.4
3.2
5.1
6.6
6.9
7.2
11.5
16.5
21.8
0 5 10 15 20 25
PKS
PPP
PAN
PKB
Hanura
Nasdem
Demokrat
Gerindra
Golkar
PDI-P
(%)
Source: Kompas’ research
Exhibit 3. 2014 early campaign, PDI-P
Source: Merdeka
Exhibit 4. 2014 early campaign, Demokrat
Source: Lensa Indonesia
17 March 2014
PT Bahana Securities – Equity Research – Elections & market update 2
Asiamoney’s
2013
Best Domestic
Equity House
Exhibit 5. PDI-P party shadow cabinet Candidate name Position Latest education Current position
Arif Budimanta Minister of Finance University of Indonesia
Member of House of Representatives (DPR) commission XI
Arif Wibowo
Minister of Land and agrarian University of Gajah Mada Vice Chairman of DPR commission II
Maruarar Sirait
Minister of Manpower and transmigration University of Padjajaran Member of DPR-RI commission XI
Mohamad Prakosa
Minister of Agriculture and forestry University of Gajah Mada Former Honorary Chairman of DPR
Pramono Anung
Minister of Energy and mineral resources University of Padjajaran Vice Chairman of DPR commission II
Rokhmin Dahuri
Ministry of Marine affairs and fisheries
Institute of Bogor Agricultural Former Minister of Marine Affairs and Fisheries
Sri Adiningsih Minister of Trade University of Gajah Mada Gajah Mada University Economist Source: Bahana
Exhibit 6. 2013-2014 Elections schedules
Event Legislative Presidential
Candidates registration 9-15 Apr 2013 17 May 2014
Candidates announcement 4 Aug 2013 10 Jun 2014
List of voters’ finalization 21 Sep 2013-5 Mar 2014 13 Jun 2014
Election campaigns 16 Mar-5 Apr 2014 4 Jun-5 Jul 2014
26 Aug-5 Sep 2014*
The election 9 Apr 2014 9 Jul 2014
9 Sep 2014*
Results announcement 7-9 May 2014 21 Jul-22 Jul 2014
Source: Bahana estimates *second round if necessary
Exhibit 7. 2009 election result, by voter profile
Voted
72%
Abstaint
28%
Source: National Election Commission
17 March 2014
PT Bahana Securities – Equity Research – Elections & market update 3
Asiamoney’s
2013
Best Domestic
Equity House
Exhibit 8. Indonesia civilian presidents
Total duration
Name Term of office (years) Party
1st Soekarno 18/08/1945 - 19/12/1948 24 Partai Nasional Indonesia
27/12/1949 - 15/08/1950
(PNI)
15/08/1950 - 01/12/1956
10/12/1956 - 22/02/1967
3rd Bacharuddin Jusuf Habibie 21/05/1998 - 20/10/1999 1 Partai Golkar
4th Abdurrahman Wahid 20/10/1999 - 23/07/2001 2 Partai Kebangkitan Bangsa (PKB)
5th Megawati Soekarnoputri 23/07/2001 - 20/10/2004 3 Partai Demokrasi Indonesia -
Perjuangan (PDI-P) Source: Bahana
Exhibit 9. Jokowi & Ahok’s approval levels
High satisfaction issues
Health care 94.90%
Education 93.30%
Local government services 89.50%
Campaign promises 81.00%
Programs 80.00%
Public facilities & infrastructure 72.80%
Garbage problem 71.50%
Flood mitigation 71.30%
Transportation infrastructure 69.50%
Basic needs provision 67.80%
Public transport 64.00%
Low satisfaction issues
Drugs 47.00%
Prostitution 51.30%
Employment 59.00%
Congestion 73.30%
Overall rating
Jokowi’s rating overall approval 87.50%
Ahok’s rating overall approval 85.80%
Source: Bahana
Exhibit 10. Jokowi & Ahok’s progress, 1-year programs Missions Realizations
Revitalizing reservoir Succeeded for Pluit reservoir; ongoing process
at Ria Rio reservoir
Relocating street vendors (PKL)
Relocated Tanah Abang street vendors to Blok
G, Pasar Minggu, Pasar Gembrong, and
Kebayoran Lama
Complete Mass Rapid Transportation (MRT)
project
Groundbreaking of MRT in Dukuh Atas,
complete in 2018
Increasing local government workers'
performance and productivity
Auction system for 415 office positions of
headmen
Public socialization and events Jakarta Night Festival, Street vendors festival,
and Jakarnaval
Re-arousing traditional culture of Betawi
Encouraging provincial government officials to
wear Betawi cultural outfit every Friday,
revitalization of Setu Babakan
Clean and professional bureaucracy Re-designed local government office, better
and faster services
River revitalization 61 rivers out of 141 were revitalized
Flats Marunda flats and Pinus Elok flats
Source: Bahana
17 March 2014
PT Bahana Securities – Equity Research – Elections & market update 4
Asiamoney’s
2013
Best Domestic
Equity House
Exhibit 11. Bahana equity coverage with upside potential to our target prices
COMPANY STOCK CODE RATING TARGET PRICE Up/(Downside)
Potential (%) 03/14/2014 12/30/2014 YTD CHANGE (%)
Astra Agro Lestari AALI IJ BUY 35,000 34.2 26,075 25,100 3.9
Garuda Indonesia GIAA IJ BUY 620 28.1 484 500 (3.2)
Telekomunikasi Indonesia TLKM IJ BUY 2,900 27.2 2,280 2,150 6.0
Xl Axiata EXCL IJ BUY 5,500 24.9 4,405 5,200 (15.3)
Cardig Aero Services CASS IJ BUY 1,170 23.2 950 820 15.9 Sido Muncul SIDO IJ BUY 1,050 20.7 870 700 24.3
Harum Energy HRUM IJ REDUCE 2,700 18.9 2,270 2,750 (17.5)
Salim Ivomas Pratama SIMP IJ BUY 1,100 17.0 940 780 20.5
Malindo Feedmill MAIN IJ BUY 4,200 16.8 3,595 3,175 13.2
Bw Plantation BWPT IJ BUY 1,550 16.5 1,330 1,330 0.0
Austindo Nusantara Jaya ANJT IJ BUY 1,850 14.2 1,620 1,490 8.7 Adi Sarana Armada ASSA IJ BUY 330 13.8 290 280 3.6
Indosat ISAT IJ BUY 4,550 13.8 4,000 4,150 (3.6)
London Sumatra Indonesia LSIP IJ BUY 2,550 13.6 2,245 1,930 16.3
Express Transindo Utama TAXI IJ BUY 1,800 13.2 1,590 1,460 8.9
Matahari Department Store LPPF IJ BUY 14,700 12.2 13,100 11,000 19.1
Kalbe Farma KLBF IJ BUY 1,650 11.9 1,475 1,250 18.0 Tempo Scan Pacific TSPC IJ BUY 3,800 11.8 3,400 3,250 4.6
Jasa Marga JSMR IJ BUY 6,450 11.2 5,800 4,725 22.8
Japfa Comfeed Indonesia JPFA IJ BUY 1,800 11.1 1,620 1,220 32.8
Sampoerna Agro SGRO IJ BUY 2,250 10.8 2,030 2,000 1.5
Sri Rejeki Isman SRIL IJ BUY 310 10.3 281 245 14.7
Bukit Asam PTBA IJ REDUCE 10,000 8.1 9,250 10,200 (9.3) Citra Marga Nusaphala Persada CMNP IJ BUY 3,600 8.1 3,330 3,350 (0.6)
Indofood CBP Sukses Makmur ICBP IJ BUY 12,000 8.1 11,100 10,200 8.8
Surya Semesta Internusa SSIA IJ BUY 960 7.3 895 560 59.8
Timah TINS IJ BUY 1,800 4.7 1,720 1,600 7.5
Charoen Pokphand Indonesia CPIN IJ BUY 4,500 4.7 4,300 3,375 27.4
Bank Negara Indonesia BBNI IJ * * * 5,175 3,950 31.0 Agung Podomoro Land APLN IJ BUY 300 4.2 288 215 34.0
Bank Central Asia BBCA IJ BUY 11,500 3.8 11,075 9,600 15.4
Indofood Sukses Makmur INDF IJ BUY 7,950 2.6 7,750 6,600 17.4
Tiphone Mobile Indonesia TELE IJ BUY 800 2.6 780 620 25.8
Waskita Karya WSKT IJ BUY 820 2.5 800 405 97.5
Perusahaan GasNnegara PGAS IJ BUY 5,400 2.4 5,275 4,475 17.9 Unilever Indonesia UNVR IJ BUY 31,500 2.0 30,875 26,000 18.8
Alam Sutera Realty ASRI IJ BUY 640 0.8 635 430 47.7
Wintermar Offshore Marine WINS IJ BUY 750 0.7 745 680 9.6
Ace Hardware Indonesia ACES IJ BUY 760 0.7 755 590 28.0
Source: Bloomberg *under Bahana Securities’ restricted list note: sorted by upside potential
Exhibit 12. Bahana equity coverage with downside potential to our target prices
COMPANY STOCK CODE RATING TARGET PRICE Up/(Downside)
Potential (%) 03/14/2014 12/30/2014 YTD CHANGE (%)
Surya Citra Media SCMA IJ REDUCE 1,770 (42.0) 3,050 2,625 16.2 Ramayana Lestari Sentosa RALS IJ REDUCE 850 (40.6) 1,430 1,060 34.9
Gajah Tunggal GJTL IJ REDUCE 1,500 (39.4) 2,475 1,680 47.3
Erajaya Swasembada ERAA IJ HOLD 1,000 (35.9) 1,560 1,000 56.0
Aneka Tambang ANTM IJ REDUCE 800 (27.6) 1,105 1,090 1.4
Holcim Indonesia SMCB IJ REDUCE 2025 (27.4) 2,790 2,275 22.6
Krakatau Steel KRAS IJ REDUCE 400 (27.3) 550 495 11.1 Nippon Indosari Corpindo ROTI IJ REDUCE 840 (27.0) 1,150 1,020 12.7
Pembangunan Perumahan PTPP IJ BUY 1,350 (26.0) 1,825 1,160 57.3
United Tractors UNTR IJ REDUCE 15,000 (25.8) 20,225 19,000 6.4
Hero Supermarket HERO IJ REDUCE 2,200 (25.8) 2,965 2,425 22.3
Media Nusantara Citra MNCN IJ REDUCE 2,000 (24.8) 2,660 2,625 1.3
Bank Danamon Indonesia BDMN IJ REDUCE 3,250 (24.4) 4,300 3,775 13.9 Ciputra Development CTRA IJ BUY 870 (23.3) 1,135 750 51.3
Lippo Cikarang LPCK IJ BUY 6,000 (22.8) 7,775 4,875 59.5
Indomobil Sukses Internasional IMAS IJ REDUCE 4,000 (22.3) 5,150 4,900 5.1
Medco Energi Internasional MEDC IJ REDUCE 2,200 (22.1) 2,825 2,100 34.5
Total Bangun Persada TOTL IJ BUY 750 (21.9) 960 500 92.0
Sarana Menara Nusantara TOWR IJ BUY 2,950 (20.3) 3,700 2,750 34.5 Bumi Serpong Damai BSDE IJ HOLD 1,350 (20.1) 1,690 1,290 31.0
Wijaya Karya WIKA IJ BUY 2,000 (19.7) 2,490 1,580 57.6
Bumi Resources BUMI IJ REDUCE 250 (19.6) 311 300 3.7
Vale Indonesia INCO IJ REDUCE 2,050 (19.3) 2,540 2,650 (4.2)
Adhi Karya ADHI IJ BUY 2,475 (18.9) 3,050 1,510 102.0
Mitra Adiperkasa MAPI IJ BUY 5,750 (17.6) 6,975 5,500 26.8 Bank Tabungan Pensiunan Nasional BTPN IJ REDUCE 4,000 (17.5) 4,850 4,300 12.8
Pakuwon Jati PWON IJ BUY 315 (16.7) 378 270 40.0
Ciputra Property CTRP IJ BUY 720 (15.3) 850 620 37.1
Indocement Tunggal Prakarsa INTP IJ HOLD 20,500 (14.6) 24,000 20,000 20.0
AKR Corporindo AKRA IJ REDUCE 4,150 (13.2) 4,780 4,375 9.3
Summarecon Agung SMRA IJ BUY 975 (12.9) 1,120 780 43.6 Astra International ASII IJ HOLD 6,800 (12.8) 7,800 6,800 14.7
Adaro Energy ADRO IJ REDUCE 850 (12.4) 970 1,090 (11.0)
Bekasi Fajar Industrial Estates BEST IJ BUY 600 (11.1) 675 445 51.7
Semen Baturaja SMBR IJ HOLD 360 (10.9) 404 330 22.4
Bank Tabungan Negara BBTN IJ BUY 1,160 (10.8) 1,300 870 49.4
Semen Indonesia SMGR IJ HOLD 14,300 (10.6) 16,000 14,150 13.1 Lippo Karawaci LPKR IJ BUY 1,020 (10.1) 1,135 910 24.7
Indo Tambangraya Megah ITMG IJ REDUCE 22,250 (8.4) 24,300 28,500 (14.7)
Gudang Garam GGRM IJ BUY 45,000 (8.2) 49,000 42,000 16.7
Bank Rakyat Indonesia BBRI IJ BUY 9,600 (6.8) 10,300 7,250 42.1
Bank Jawa Timur BJTM IJ HOLD 440 (6.4) 470 375 25.3
Bank Bukopin BBKP IJ HOLD 600 (5.5) 635 620 2.4 Bank Jawa Barat dan Banten BJBR IJ HOLD 1,000 (4.3) 1,045 890 17.4
Supra Boga Lestari RANC IJ HOLD 650 (2.3) 665 660 0.8
Bank Mandiri BMRI IJ HOLD 10,000 (1.5) 10,150 7,850 29.3
Kawasan Industri Jababeka KIJA IJ BUY 235 (1.3) 238 193 23.3
Source: Bloomberg note: sorted by upside potential
17 March 2014
PT Bahana Securities – Equity Research – Elections & market update 5
Asiamoney’s
2013
Best Domestic
Equity House
Exhibit 13. Infrastructure-related sector relative performance
9.2
30.4
23.1
10.3
5.9
27.0
5.1
0
5
10
15
20
25
30
35
0
5
10
15
20
25
30
35
1M ytd 3M 6M 9M 12M 2013
(%) (%)
Infrastructure-related sector relative to JCI
Source: Bloomberg, Bahana
Exhibit 14. Property/ industrial estate sector relative performance
6.4
24.7
20.7
5.4
(20.6)
(5.6)(2.6)
(25)
(15)
(5)
5
15
25
(25)
(15)
(5)
5
15
25
1M ytd 3M 6M 9M 12M 2013
(%) (%)
Property/ industrial estates sector relative to JCI
Source: Bloomberg, Bahana
Exhibit 15. Banks sector relative performance
3.7
13.6 14.1
8.5
6.2
3.5
0.9
0
3
6
9
12
15
0
3
6
9
12
15
1M ytd 3M 6M 9M 12M 2013
(%) (%)
Banks sector relative to JCI
Source: Bloomberg, Bahana
Construction stocks
performed well ytd
on Jokowi’s
presidential bid
With inflation under
control and BI rate
no longer rising, the
sector has been one
of the best
performing ytd
With the prospect of
enhanced growth
ahead on a
successful election,
the sector has
outperformed the
market ytd
17 March 2014
PT Bahana Securities – Equity Research – Elections & market update 6
Asiamoney’s
2013
Best Domestic
Equity House
Exhibit 16. Poultry sector relative performance
0.6
13.3
15.5
1.0
(9.9)(7.3)
(2.6)
(10)
(5)
0
5
10
15
20
(10)
(5)
0
5
10
15
20
1M ytd 3M 6M 9M 12M 2013
(%) (%)
Poultry sector relative to JCI
Source: Bloomberg, Bahana
Exhibit 17. Oil & gas sector relative performance
(0.9)
3.6
(3.5)
(7.9)
(3.2)
3.3
1.9
(10)
(5)
0
5
(10)
(5)
0
5
1M ytd 3M 6M 9M 12M 2013
(%) (%)
Oil and gas sector relative to JCI Source: Bloomberg, Bahana
Exhibit 18. Cement sector relative performance
1.6 3.0
7.7
10.3
(3.8)(5.9)
22.1
(10)
(5)
0
5
10
15
20
25
(10)
(5)
0
5
10
15
20
25
1M ytd 3M 6M 9M 12M 2013
(%) (%)
Cement sector relative to JCI Source: Bloomberg, Bahana
Benefiting from
lower raw materials
prices which are
dollar linked
Supported by PGAS
performance on the
back of positive
sentiment coming
from discontinued
talks on the
acquisition by
Pertamina
Recent strength
should be used as an
exit mechanism as
we continue to
remain concerned
with the sector’s
oversupply condition
ahead
17 March 2014
PT Bahana Securities – Equity Research – Elections & market update 7
Asiamoney’s
2013
Best Domestic
Equity House
Exhibit 19. Consumer sector relative performance
0.7 2.7 2.0
(3.7)
16.8
27.0 27.5
(5)
0
5
10
15
20
25
30
(5)
0
5
10
15
20
25
30
1M ytd 3M 6M 9M 12M 2013
(%) (%)
Consumer sector relative to JCI Source: Bloomberg, Bahana
Exhibit 20. Automotive sector relative performance
7.3
1.0
10.2
13.0
7.8
(1.2)
(9.8)(10)
(5)
0
5
10
15
(10)
(5)
0
5
10
15
1M ytd 3M 6M 9M 12M 2013
(%) (%)
Automotive sector relative to JCI
Source: Bloomberg, Bahana
Exhibit 21. Plantations sector relative performance
5.8
(5.3) (5.7)
25.3
22.5
18.0
6.0
(10)
0
10
20
30
(10)
0
10
20
30
1M ytd 3M 6M 9M 12M 2013
(%) (%)
Plantations sector relative to JCI Source: Bloomberg, Bahana
Best performing
sector in the past 12
months and in the
whole of 2013
Recent strong
performance should
be used for profit
taking as we remain
concerned about
intense competition
Improved
performance of late
on higher CPO price
outlook, although
ytd market
underperformance
remains
17 March 2014
PT Bahana Securities – Equity Research – Elections & market update 8
Asiamoney’s
2013
Best Domestic
Equity House
Exhibit 22. Telco sector relative performance
(6.0)(7.0)
(5.9)(4.5)
7.3
3.9
12.7
(10)
(5)
0
5
10
15
(10)
(5)
0
5
10
15
1M ytd 3M 6M 9M 12M 2013
(%) (%)
Telco sector relative to JCI
Source: Bloomberg, Bahana
Exhibit 23. Metals sector relative performance
(1.4)
(14.7)(16.1)
(10.3)
7.4
(6.0)
5.5
(20)
(15)
(10)
(5)
0
5
10
(20)
(15)
(10)
(5)
0
5
10
1M ytd 3M 6M 9M 12M 2013
(%) (%)
Metals sector relative to JCI
Source: Bloomberg, Bahana
Exhibit 24. Coal sector relative performance
(4.9)
(17.4)
(20.8)
(9.9)
4.0
(22.0)
(19.6)
(25)
(20)
(15)
(10)
(5)
0
5
(25)
(20)
(15)
(10)
(5)
0
5
1M ytd 3M 6M 9M 12M 2013
(%) (%)
Coal sector relative to JCI
Source: Bloomberg, Bahana
Market
underperformance
should be used as a
rotational play,
particularly as the
sector is an election
beneficiary
Sentiment eroded by
stronger IDR
On continued bleak
coal price outlook,
the sector remains
as worst performing
sector ytd
Asiamoney’s
2013
Best Domestic
Equity House
Ricardo Silaen, CFA
[email protected] Sales
ext 2524
Harry Su
[email protected] Associate Director
Head of Equities & Research
Strategy, Consumerext 3600
direct: +62 21 250 5735
Dealing Room: +62 21 527 0808 (Foreign Institutional)
Research: +62 21 250 5081
+62 21 250 5508 (Domestic Institutional) +62 31 535 2788 (Surabaya Branch)
Teguh Hartanto
[email protected] Director
Deputy Head of Research
Banks, Cementext 3610
Leonardo Henry Gavaza
[email protected] Research Manager
Auto, Plantations, Heavy equipment,
Property, Industrial estateext 3608
Arga Samudro
[email protected] 3602
Aditya Eka Prakasa
[email protected] Analyst
Poultry, Telco, Aviationext 3603
Salman Fajari [email protected]
Research AnalystProperty, Industrial estate, Steel,
Cement, Toll roadsext 3605
Jennifer Frederika Yapply
[email protected] Analyst
Coal, Oil and gas, Metalsext 3606
Chandra Widjanarka
[email protected] Analyst, Transportation
ext 3609
Maxi [email protected] Analyst
Auto, Construction, Consumer, Mediaext 3615
Nuriah Sari
[email protected] Executive
ext 3001
Nurul Farida
[email protected] Sales
ext 2543
Siti Fathia Maisa Syafurah
[email protected] Sales
ext 2547
Ashish Agrawal
[email protected] President
Institutional Equity Salesext 2550 / 2553
Reynard Poernawan
[email protected] Equity Sales
ext 2528
John M. Dasaad
[email protected] Sales
ext 2549
Yohanes Adhi Handoko
[email protected], Surabaya Branch
ext 7250
Angky Amarylis
[email protected] Trader
ext 2525
Suwardi Widjaja
[email protected] Sales
ext 2548
Ricardo Silaen, CFA
[email protected] President
Institutional Equity Salesext 2524
Nurul Farida
[email protected] Sales
ext 2543
Amelia Husada
[email protected] President
Institutional Equity Salesext 2552
Made Ayu Wijayati
[email protected] Executive
ext 3607
Laurensius Teiseran
[email protected] Associate
ext 3601
Nico Laurens
[email protected] Associate
ext 3614
Zefanya Angeline Halim
[email protected] Associate/Corporate Access &
Client Relationsext 3612
Giovanni Aristo
[email protected] Research Associate
ext 3604
Michael W Setjoadi [email protected]
Research AnalystConsumerext 3613
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Fax. 62 21 522 6049 http://www.bahana.co.id Fax. 62 31 546 1157
Disclaimer This publication is prepared by PT.Bahana Securities and reviewed by Daiwa Securities Group Inc. and/or its non-U.S. affiliates, and distributed outside Indonesia by Daiwa Securities Group Inc. and/or its non-U.S. 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. 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 have trades as principals, or have positions in, or have other interests in the securities of the company under research including 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.
Japan
Daiwa Securities Co. Ltd. and Daiwa Securities Group Inc.
Daiwa Securities Co. Ltd. is a subsidiary of Daiwa Securities Group Inc.
Investment Banking Relationship
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: Blackgold International Holdings Ltd (BGG AU); Tosei Corporation (8923 JP); Modern Land (China) Co. Ltd (1107 HK); China Everbright Bank Company Limited (6818 HK); econtext Asia Ltd (1390 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
Investment Banking Relationship
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: Sri Rejeki Isman (SRIL IJ); Semen Baturaja (Persero) (SMBR IJ); Tiphone Mobile Indonesia (TELE IJ); Austindo Nusantara Jaya (ANJT IJ); Telekomunikasi Indonesia (Persero) (TLKM IJ); Garuda Indonesia (Persero) (GIAA 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.
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.
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.
DHK market making
DHK may from time to time make a market in the securities covered by this research.
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 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 Stockbroking 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.
Ownership of Securities
For “Ownership of Securities” information, please visit BlueMatrix disclosure Link at https://daiwa3.bluematrix.com/sellside/Disclosures.action.
India
This research is distributed by Daiwa Capital Markets India Private Limited (DAIWA) which is an intermediary registered with Securities & Exchange Board of India. This report is not to be considered as an offer or solicitation for any dealings in securities. While the information in this report has been compiled by DAIWA in good faith from sources believed to be reliable, no representation or warranty, express of implied, is made or given as to its accuracy, completeness or correctness. DAIWA its officers, employees, representatives and agents accept no liability whatsoever for any loss or damage whether direct, indirect, consequential or otherwise howsoever arising (whether in negligence or otherwise) out of or in connection with or from any use of or reliance on the contents of and/or omissions from this document. Consequently DAIWA expressly disclaims any and all liability for, or based on or relating to any such information contained in or errors in or omissions in this report. Accordingly, you are recommended to seek your own legal, tax or other advice and
should rely solely on your own judgment, review and analysis, in evaluating the information in this document. The data contained in this document is subject to change without any prior notice DAIWA reserves its right to modify this report as maybe required from time to time. DAIWA is committed to providing independent recommendations to its Clients and would be happy to provide any information in response to any query from its Clients. This report is strictly confidential and is being furnished to you solely for your information. The information contained in this document should not be reproduced (in whole or in part) or redistributed in any form to any other person. We and our group companies, affiliates, officers, directors and employees may from time to time, have long or short positions, in and buy sell the securities thereof, of company(ies) mentioned herein or be engaged in any other transactions involving such securities and earn brokerage or other compensation or act as advisor or have the potential conflict of interest with respect to any recommendation and related information or opinion. DAIWA prohibits its analyst and their family members from maintaining a financial interest in the securities or derivatives of any companies that the analyst cover. This report is not intended or directed for distribution to ,or use by any person, citizen or entity which is resident or located in any state or country or jurisdiction where such publication, distribution or use would be contrary to any statutory legislation, or regulation which would require DAIWA and its affiliates/ group companies to any registration or licensing requirements. The views expressed in the report accurately reflect the analyst’s personal views about the securities and issuers that are subject of the Report, and that no part of the analyst’s compensation was, is or will be directly or indirectly, related to the recommendations or views expressed in the Report. This report does not recommend to US recipients the use of Daiwa Capital Markets India Private Limited or any of its non – US affiliates to effect trades in any securities and is not supplied with any understanding that US recipients will direct commission business to Daiwa Capital Markets India Private Limited.
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 Capital Markets Europe Limited 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, Eurex and NYSE Liffe. Daiwa Capital Markets Europe Limited and/or its affiliates may, from time to time, to the extent permitted by law, participate or invest in other financing transactions with the issuers of the securities referred to herein (the “Securities”), perform services for or solicit business from such issuers, and/or have a position or effect transactions in the Securities or options thereof and/or may have acted as an underwriter during the past twelve months for the issuer of such securities. In addition, employees of Daiwa Capital Markets Europe Limited and/or its affiliates may have positions and effect transactions in such securities or options and may serve as Directors of such issuers. Daiwa Capital Markets Europe Limited may, to the extent permitted by applicable UK law and other applicable law or regulation, effect transactions in the Securities before this material is published to recipients.
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. Regulatory disclosures of investment banking relationships are available at https://daiwa3.bluematrix.com/sellside/Disclosures.action.
Germany
This document has been approved by Daiwa Capital Markets Europe Limited and 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 issued/compiled 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.
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.
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.
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