MNCS COMPANY UPDATE

MNC Sekuritas Research Division | May 26, 2020

Key Financial Highlight

Solid Performance backed by Office Space Rental as well as Security & Other Services KPIG recorded a revenue growth of 7.47% YoY amounting to IDR1.07 trillion in FY19 (vs IDR992.45 billion in FY18). This was driven by Office Space Rental followed by Security and other Services segments which increased by 12.18%/32.80% YoY each and contributing 17.44%/33.23% to total revenue in FY19. On the other hand, the cost of revenue also increased by 17.74% YoY, which caused gross profit to slipped by 6.18% YoY with GPM at 37.48% in FY19 (vs 42.94% in FY18). Furthermore, EBITDA recorded an increase of 15.75% YoY reaching IDR178.92 billion (vs IDR154.58 billion in FY18) with EBITDA margin at a level of 16.77%, due to an efficiency in general and administrative expenses by 15.95% YoY in FY19. MNC Lido City: Strategic and Integrated with World-class Facilities & Services Currently KPIG still focuses on developing MNC Lido City, a total land bank of 2,000 ha in Lido, Bogor. With potential transformation to Special Economic Zone (KEK), it will provide advantages such as reduced tax rates and other economic benefits. Furthermore, Lido has already been integrated with several road accesses, such as: 1) Bocimi toll connecting MNC Lido City with Bogor, Sukabumi, and Jakarta; 2) Bogor-Sukabumi double track train development was launched in 2018, with expected completion in FY21F; and 3) Cikembar Airport (Sukabumi). With these benefits and integration, KPIG took the advantage by building and developing Lido Lake Resort Extension, an additional 125 hotel rooms, a ballroom and MICE to accommodate the increasing demand in the area. Furthermore, the Company is in the process of revitalizing and changing the Lido Lake area to accommodate other facilities, including Lido Lake Adventure Park, the largest outbound facility in Southeast Asia and Soekarno Park, a historical place known as President Soekarno’s vacation home where he wrote the book titled “Sarinah”. In addition, KPIG will also construct Transit-Oriented Development (TOD) as a public transportation hub for busses and trains. MNC Bali Resort: One of the Most Luxurious MNC Bali Resort is an integrated luxury resort and residences development with a total area of 107 ha located in Tanah Lot, Tabanan, Bali. MNC Bali Resort will feature 6-star Trump International Resort, Golf Club and Residences, the first in Asia to collaborate with Trump Organization, complete with an 18 holes golf course designed by Phil Mickelson and world-class luxury residences. Management will be carried out by the world-leading luxurious hotel & golf operator to make this resort the largest and most integrated in Bali. The construction of MNC Bali Resort has commenced in all components: Golf course with cut and fill, progression in construction of the residential show unit, and almost completion of marketing gallery. The official launching of Trump International Lido and Bali projects was successfully conducted in August 2019. Trump Residences Bali will have 144 ultra-luxurious residences that offer resort lifestyles for its exclusive residence to enjoy. Valuation and Recommendation : NOT RATED Based on the Company data, KPIG FY19 RNAV was IDR482 per share. However the stock price is reflected at a 75% discount to RNAV and trailing PBV as of FY19 was at 0.49x, near –1.75 STD PBV. While MNCS is affiliated with the Company, it does not offer any recommendation related to company prospects. Recommendation: NOT RATED.

PT MNC LAND Tbk (KPIG IJ) Tourism, Restaurant, and Hotel Sector

Growing by Innovating

Source: Bloomberg, MNCS

In Billion IDR 2015 2016 2017 2018 2019 Revenue 1,139.37 946.47 938.27 992.45 1,066.63 EBITDA 372.39 204.00 157.15 154.58 178.92 EBITDA Margin (%) 32.68 21.55 16.75 15.58 16.77 Net Profit 228.24 1,770.79 1,295.32 619.84 259.73 Net Profit Margin (%) 20.03 187.09 138.05 62.46 24.35 ROA (%) 2.05 12.51 8.45 3.54 0.91 ROE (%) 2.57 15.72 10.48 4.79 1.13

NOT RATED Stock Data

Major Shareholders

Curent Price :

52wk Range H-L :

Share Outstanding :

Free Float (%) :

Mkt Capitalization (IDR bn)

:

IDR137

IDR117 - 192

74,079 mn

72.68

10,074

PT MNC Investama Tbk

: 17.06%

HT Investment Ltd : 10.89%

MNC Media Investment Ltd

: 2.06%

UOB Kay Hian Hongkong Ltd

: 16.01%

Public : 52.77%

Hary Tanoesoedibjo

1.21%

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MNCS Company Update | MNC Sekuritas Research Division

Exhibit 01. Trump International Residence MNC Lido City

Exhibit 02. Lido lake Resort Extension

Source: Company

Source: Company

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MNCS Company Update | MNC Sekuritas Research Division

Exhibit 03. Transit Oriented Development

Source: Company

Exhibit 04. Strategic Location and Accessibility

Source: Company

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• TOLL ROADSFrom Jakarta, MNC Lido City can be accessed throughJagorawi toll road and Bocimi toll road section 1.Under construction:1. Bocimi toll road section 2-4 connecting MNC Lido

City to Sukabumi2. Sukabumi - Bandung

• DOUBLE TRACK TRAINDouble track train development Bogor – Sukabumi waslaunched in 2018 with expected completion in 2021

• AIRPORTSupporting airports:1. Soekarno Hatta International Airport (Jakarta)2. Halim International Airport (Jakarta)3. Kertajati International Airport (Majalengka)4. Cikembar Airport (Sukabumi) – under construction

• LIGHT RAIL TRANSITJakarta – Bogor – Depok – Bekasi

•KEK: Kawasan Ekonomi Khususor Special Economic Zone willbe awarded soon by thegovernment, enjoying someprivileges such as reduced taxrates and some other economicbenefits for certain activitieswithin the zone 8

±1 HourTotal Drive Time FromJakarta to MNC Lido City

600-700 m above the sea level (between Mt. Salak and Mt. Gede Pangrango)

MNCS Company Update | MNC Sekuritas Research Division

Exhibit 05. Trump Beach Club Bali

Source: Company

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Exhibit 06. Trump International Residences Bali

Source: Company

Exhibit 07. PBV Band KPIG

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

1.10 PBV MEAN STD-1 STD-2 STD+1 STD+2

Source: Bloomberg, MNCS

Exhibit 08. Financial Summary

Source: Company, MNCS

Income Statement Balance Sheet

IDR Billion FY15 FY16 FY17 FY18 FY19 IDR Billion FY15 FY16 FY17 FY18 FY19

Revenue 1,139.37 946.47 938.27 992.45 1,066.63 Cash and cash equivalents 330.11 192.62 196.36 289.24 181.82

Cost of sales 600.76 585.14 573.18 566.37 666.86 Trade Receivables 90.84 115.86 108.00 179.45 153.41

Gross Profit 538.62 361.34 365.09 426.08 399.77 Inventory 947.76 975.56 1,031.27 1,153.05 1,251.95

Other Current Assets 894.32 4,082.81 2,537.37 2481.80 2,857.43

Operating Expenses 336.22 325.69 356.86 356.51 309.43 Total Current Assets 2,263.03 5,366.86 3,873.00 4,103.54 4,444.61

Operating Profit 202.40 35.65 8.23 69.57 90.34 Fixed Assets - net 6,814.04 7,745.93 10,245.59 12,094.47 22,874.48

Other Non-Current Assets 2,050.24 1,044.64 1,208.57 1,323.35 1,255.77

Interest Income 6.81 31.76 6.33 8.05 7.49 Total Non-Current Assets 8,864.29 8,790.57 11,454.16 13,417.83 24,130.25

Interest Expenses 70.83 86.86 129.16 164.04 156.51 TOTAL ASSETS 11,127.32 14,157.43 15,327.16 17,521.36 28,574.87

Other income (expenses)-net

123.56 1,809.11 1,424.56 782.60 343.03 Trade Payables 65.16 113.02 200.49 207.54 204.16

Short-term Debt 284.31 553.93 194.68 419.33 643.49

Profit Before Tax 261.94 1,789.65 1,309.96 696.18 284.35 Other current liabilities 283.74 325.56 168.41 421.32 708.90

Tax Expenses (Benefit)-net 22.25 (11.17) (5.27) 30.70 10.22 Total Current Liabilities 633.21 992.52 563.59 1,048.19 1,556.55

Long-term Debt 1,444.24 1,662.98 2,187.54 3,325.56 3,762.11

Minority Interest 11.45 30.04 19.91 45.64 14.41 Other Long-term liabilities 174.58 238.31 212.04 208.26 175.12

Net Income 228.24 1,770.79 1,295.32 619.84 259.73 Total Long-term Liabilities 1,618.83 1,901.28 2,399.58 3,533.81 3,937.23

EPS (full amount) 33.67 256.97 187.36 17.25 3.46 Total Equity 8,875.28 11,263.63 12,363.99 12,939.36 23,081.09

Cash Flow

IDR Billion FY15 FY16 FY17 FY18 FY19 Ratio FY15 FY16 FY17 FY18 FY19

Cash Receipt from Customers

1,159.43 894.82 883.86 945.07 1,054.86 Growth Year on Year

Cash Receipt from Interest and Dividend Income

6.81 31.76 6.33 8.04 7.49 Revenue Growth (%) 12.46% -16.93% -0.87% 5.77% 7.47%

Cash Paid to Suppliers and Employees

(783.92) (678.63) (861.70) (841.86) (908.54) Gross Profit Growth (%) 11.52% -32.91% 1.04% 16.71% -6.18%

Others (108.36) (149.79) (173.57) (198.72) (213.51) EBITDA Growth (%) 6.49% -45.22% -22.96% -1.64% 15.75%

CFO Total 273.96 98.16 (145.08) (87.47) (59.69) Net Income Growth (%) -41.05% 675.83% -26.85% -52.15% -58.10%

Capital Expenditure (1,020.60) (1,299.91) (1,121.32) (1,131.51) (1,247.42) Current Ratio (x) 3.57 5.41 6.87 3.91 2.86

Others (253.25) 631.66 312.00 (60.70) (783.62) Quick Ratio (x) 2.08 4.42 5.04 2.81 2.05

CFI (1,273.85) (668.26) (809.31) (1,192.21) (2,031.04)

Asset/Debt (x) 6.44 6.39 6.43 4.68 6.49

Dividend Paid (76.32) (46.51) (1.46) (9.34) (23.01) Debt/Equity (x) 0.19 0.20 0.19 0.29 0.19

Net Change in Debt 453.92 562.27 164.09 879.65 401.23

Equity Fund Raised 557.05 - 747.36 - 1,030.51 GPM (%) 47.27 38.18 38.91 42.93 37.48

Others 121.31 (82.41) 47.91 502.15 574.96 OPM (%) 17.76 3.77 0.88 7.01 8.47

CFF 1,055.96 433.34 957.90 1,372.46 1,983.69 EBITDA Margin(%) 32.68 21.55 16.75 15.58 16.77

NPM( %) 20.03 187.09 138.05 62.46 24.35

Net Cash Increase 56.07 (136.76) 3.50 92.78 (107.05) ROA (%) 2.05 12.51 8.45 3.54 0.91

Closing Balance 330.11 192.62 196.36 289.24 181.82 ROE (%) 2.57 15.72 10.48 4.79 1.13

Ratios

MNCS Company Update | MNC Sekuritas Research Division

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Disclaimer This research report has been issued by PT MNC Sekuritas, It may not be reproduced or further distributed or published, in whole or in part, for any purpose. PT MNC Sekuritas has based this document on information obtained from sources it believes to be reliable but which it has not independently verified; PT MNC Sekuritas makes no guarantee, representation or warranty and accepts no responsibility to liability as to its accuracy or completeness. Expression of opinion herein are those of the research department only and are subject to change without notice. This document is not and should not be construed as an offer or the solicitation of an offer to purchase or subscribe or sell any investment. PT MNC Sekuritas and its affiliates and/or their offices, director and employees may own or have positions in any investment mentioned herein or any investment related thereto and may from time to time add to or dispose of any such investment. PT MNC Sekuritas and its affiliates may act as market maker or have assumed an underwriting position in the securities of companies discusses herein (or investment related thereto) and may sell them to or buy them from customers on a principal basis and may also perform or seek to perform investment banking or underwriting services for or relating to those companies.

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MNC SEKURITAS RESEARCH TEAM

MNC Research Investment Ratings Guidance BUY : Share price may exceed 10% over the next 12 months

HOLD : Share price may fall within the range of +/- 10% of the next 12 months SELL : Share price may fall by more than 10% over the next 12 months

Not Rated : Stock is not within regular research coverage

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