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Equity Research

Tuesday, February 09, 2016

Danareksa Sekuritas – Equity Research

FROM EQUITY RESEARCH

JPFA: Food for thought (JPFA IJ. Non Rated) Japfa is the second-largest poultry company in Indonesia with a 25% share in Day Old Chicks (DOC) production and a 22% share in animal feed. The latter accounts for a hefty 45% of the company’s revenues, and with relatively stable margins (using the cost plus method), we believe this business can help sustain Japfa’s earnings going forward. On the flip side, the DOC business carries more risks. This is because the pricing of DOC and broilers is determined by market equilibrium and price volatility can be high when equilibrium in this highly fragmented market is disturbed. As such, we take a cautious stance on the poultry industry, even while noting that continuation of Indonesia’s consumer staples story should benefit this business. Our main concern is the poultry industry’s relatively weak pricing power. In Japfa’s case, we believe that diversification into beef and aquaculture (shrimp and fish) - as well as vaccines – may help the company to face this challenge. At the current share price, JPFA trades at FY16 P/E of 17.1x, a discount to the sector’s 20.9x.

MARKET NEWS

*Analysts’ comment inside

BBRI aims Rp 11tn up to end of the year (BI) BMRI sees mortgages to grow by 6% (BI) Ciputra and Mitsui to push the property sales (DI) Ministry of Public Work (PUPR) will submit an additional budget of

Rp10-15tn (ID) Sritex obtain the military uniform procurement contracts from UAE (ID) TAXI targets Rp1tn revenue by end of 2016 (ID)

Previous Reports:

BBTN: Above Consensus Estimates-Snapshot20160205 BBRI: Slightly above expectation-Snapshot20160204 UNVR: Staying ahead-Snapshot20160203 Healthcare: Finding a new balance, FY15 Result-Snapshot20160202 HEXA: Dragged down by heavy equipment sales volume, Bank Mandiri

– FY15 unaudited result-Snapshot20160201 TINS: Refined tin demand to remain weak-Snapshot20160129

IDX ANNOUNCEMENT Corp Action

Code Action Date Time (WIB)

ALKA EGM 12-Feb-16 16

SIPD EGM 15-Feb-16 --.--

BKSW AGM 16-Feb-16 --.--

Source: KSEI

MORNING HIGHLIGHT

Key Index

Close

Chg Ytd Vol

(%) (%) (US$ m)

Asean - 5

Indonesia 4,799 2.9 4.5 570

Thailand 1,308 0.1 1.5 760

Philippines 6,765 1.7 (2.7) 150

Malaysia 1,662 0.3 (1.8) 501

Singapore 2,623 2.5 (9.0) 870

Regional

China 2,763 (0.6) (21.9) 40,768

Hong Kong 19,288 0.5 (12.0) 7,159

Japan 17,004 1.1 (10.7) 14,482

Korea 1,918 0.1 (2.2) 4,363

Taiwan 8,063 (0.8) (3.3) 2,327

India 24,287 (1.3) (7.0) 364

NASDAQ 4,284 (1.8) (14.5) 108,713

Dow Jones 16,027 (1.1) (8.0) 12,320

Currency and Interest Rate

Rate

w-w m-m ytd

(%) (%) (%)

Rupiah Rp/1US$ 13,597 0.3 2.3 1.4

SBI rate % 6.65 (0.4) (0.5) (0.6)

10y Gov Indo bond 8.02 (0.2) (0.8) (0.7)

Hard Commodities

Unit Price

d-d m-m ytd

(%) (%) (%)

Coal US$/ton 52 (0.2) 2.5 1.8

Gold US$/toz 1,193 0.3 8.0 12.4

Nickel US$/mt.ton 8,122 (4.5) (4.3) (7.5)

Tin US$/mt.ton 15,202 1.1 7.1 4.2

Soft Commodities

Unit Price

d-d m-m ytd

(%) (%) (%)

Cocoa US$/mt.ton 2,846 0.6 (8.7) (12.9)

Corn US$/mt.ton 137 (0.9) 2.3 2.5

Crude Oil US$/barrel 30 1.5 (9.1) (18.6)

Palm oil MYR/mt.ton 2,392 0.3 8.6 8.7

Rubber US$/mt ton 109 (0.5) 0.6 (7.7)

Pulp US$/tonne 793 N/A (1.3) (1.3)

Coffee US$/60kgbag 100 0.0 3.9 5.6

Sugar US$/MT 402 1.6 (4.2) (4.7)

Wheat US$/ton 125 (1.8) (4.2) (2.4)

Source: Bloomberg

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Equity Research



PT Danareksa Sekuritas

Jl. Medan Merdeka Selatan No. 14 Jakarta 10110 Indonesia Tel (62 21) 29 555 888 Fax (62 21) 350 1709

Equity Research Team

Sales team

[email protected] (62-21) 2955 5831 Auto, Coal, Heavy Equipment, Metal

Stefanus Darmagiri

[email protected] (62-21) 2955 5817 Pharmaceutical, Construction

Armando Marulitua

[email protected] (62-21) 2955 5820 Property, Retail

Anindya Saraswati

[email protected] (62-21) 2955 5824 Consumer

Puti Adani

[email protected] (62-21) 29555 888 ext.3504 Cement

Antonia Febe Hartono

[email protected] (62 21) 29555 888 ext. 3151

Ermawati A. Erman


Novrita E. Putrianti


Ehrliech Suhartono


Yunita L. Nababan


Martin Joshua


Laksmita Armandani


Muhammad Hardiansyah


Tuty Sutopo


Upik Yuzarni


Kevin Giarto

[email protected] (62-21) 2955 5616 Strategy, Banking

A. Indrajatri Suwono, CFA

[email protected] (62-21) 29555 888 ext.3508 Consumer, Tobacco

Natalia Sutanto

Tuesday, 09 February 2016

POULTRY/NOT RATED

Japfa Comfeed Indonesia Food for thought Japfa is the second-largest poultry company in Indonesia with a 25% share in Day Old Chicks (DOC) production and a 22% share in animal feed. The latter accounts for a hefty 45% of the company’s revenues, and with relatively stable margins (using the cost plus method), we believe this business can help sustain Japfa’s earnings going forward. On the flip side, the DOC business carries more risks. This is because the pricing of DOC and broilers is determined by market equilibrium and price volatility can be high when equilibrium in this highly fragmented market is disturbed. As such, we take a cautious stance on the poultry industry, even while noting that continuation of Indonesia’s consumer staples story should benefit this business. Our main concern is the poultry industry’s relatively weak pricing power. In Japfa’s case, we believe that diversification into beef and aquaculture (shrimp and fish) - as well as vaccines – may help the company to face this challenge. At the current share price, JPFA trades at FY16 P/E of 17.1x, a discount to the sector’s 20.9x.

A leading, integrated poultry company JPFA is the second-largest player in the animal feed and DOC market with total annual capacity of 4.3mn tonnes and 763mn chicks, respectively. Its strong position is reflected in the fact that the combined market share of JPFA and its main rival Charoen Pokphand exceeds 50%. While JPFA focuses on three animal protein products (chicken, beef and shrimp & fish, poultry nonetheless continues to dominate revenues at around 86-88% while beef and shrimp & fish only contribute less than 10% each. In the poultry business, JPFA benefits from the vertical integration of its large scale businesses. Upstream, the company caters to farmers with its animal feed for DOC, besides also providing technical training and supervision, as well as helping to find buyers for the living stocks. In the processed foods business, JPFA markets its products through modern retailers as well as via direct marketing to large fast food chains in Indonesia. At the same time, it is worth noting that Japfa is currently the only poultry company in Indonesia that has facilities to undertake research on viruses and produce autogenous vaccines – which have also been exported to several countries. DOC and broiler prices trending higher post culling Oversupply was the main problem in the poultry industry in 2014-15. According to the Ministry of Agriculture, the production of broiler chickens reached 60mn/week in August 2014, exceeding the demand of 42mn/week and therefore putting broiler and DOC prices under pressure. As a result, broiler and DOC prices sank to below Rp14,000 and Rp1,000, respectively. To resolve this problem, the government and 13 companies operating in the poultry industry agreed to cull a total of 6mn parent stocks (representing 20-23% oversupply in Indonesia) in September 2015, in a bid to stabilize prices. Consequently, the monthly prices of live birds and DOCs have trended higher in the last four months from October 2015 to January 2016. To avoid oversupply in the future, the government will prohibit poultry companies from importing Great Grand Parent (GGP) stocks as well as reduce the import quota of Grand Parent (GP) stocks. Assuming all parties comply with the regulation, these policies should resolve the oversupply problem in the coming years in our view. Long-term growth of 5-10% can be expected By the end of September 2015, animal feed contributed 45% to JPFA’s revenues, followed by commercial farm and consumer products (30%) and DOC (9%). The remaining business (fish, shrimp and cattle) provided a total contribution of 16%. In terms of margins, animal feed provided the highest operating margin of 9.6%, thanks to its cost plus method in determining pricing. Commercial farm and consumer products gave operating margins of 4%. The solid profitability of animal feed and consumer products helped lift Japfa’s operating margin to 5.5% in 9M15 from 5.4% in 9M14. Nonetheless, high forex losses led to a 9M15 net loss of Rp102bn. This year, the company foresees flat growth with 5-10% growth in the following years as the country’s GDP per capita rises by a similar magnitude.

2011 2012 2013 2014 9M15 Revenue (Rp bn) 15,633 17,833 21,412 24,459 18,736 EBITDA (Rp bn) 1,350 2,017 2,241 1,919 1,431 EBITDA growth (%) (23.0) 49.4 11.1 (14.4) Na Net profit (Rp bn) 617 992 595 332 (147) EPS (Rp) 60 94 56 31 Na

EPS growth (%) (36.0) 58.5 (40.8) (44.2) Na P/E (x) 13.3 8.4 14.1 25.3 Na Net debt/equity (%) 70.7 81.1 111.8 122.3 138.8

NOT RATED

JPFA IJ/ JPFA.JK

Last Price, Rp 755

No. of shares (bn) 10.7

Market Cap, Rp bn 8,049 (US$ mn) 587

3M T/O, US$mn 0.49

Relative to JCI

Market Recommendation

Natalia Sutanto [email protected] (62-21) 29555 888 ext.3508

-50

-40

-30

-20

-10

0

10

-

100

200

300

400

500

600

700

800

900

Ap

r-1

5

May

-15

Jun

-15

Jul-

15

Au

g-1

5

Sep

-15

Oct

-15

No

v-1

5

Dec

-15

Jan

-16

JPFA (LHS) Relative to JCI (RHS)

(Rp) (%)

5

4

0

Buy

Hold

Sell

Danareksa research reports are also available at Reuters Multex and First Call Direct and Bloomberg.

9 February 2016 Japfa Comfeed Indonesia

2

Exhibit 1. Peer Comparison

Market Cap P/E Earnings growth Operating margin ROE Rp tn 2016 2017 2016 2017 2016 2017 2016 2017

JPFA 8.2 17.1 12.2 1163% 51% 5.2% 5.1% 6.6% 9.8% MAIN 3.1 15.5 10.4 1580% 84% 7.4% 8.4% 9.6% 16.1% CPIN 60.3 21.7 17.3 25% 24% 12.2% 12.4% 19.8% 21.1% Sector

20.9 16.5 223% 29% 11.2% 11.4% 17.9% 19.6%

Source: Bloomberg

Exhibit 2. 9M15 revenue contribution per segment Exhibit 3. FY14 revenue contribution per segment

Source: Company Source: Company

Exhibit 4. Indonesia animal feed production capacity Exhibit 5. Indonesia DOC capacity share

Source; Japfa Annual report, Frost and Sullivan (2014) Source; Japfa Annual report, Frost and Sullivan (2014)

*exclude aqua feed

Exhibit 6. DOC monthly price Exhibit 7. Livebirds monthly prices

Source: Company Source: Company

9 February 2016 Japfa Comfeed Indonesia

3

Exhibit 8. Integrated Poultry Company

Source: Company

Equity Research



BBRI aims Rp 11tn up to end of the year (BI)

Bank Rakyat Indonesia (BBRI) aiming fee based income amounting to Rp11 tn until the end of this year. In 2015, the BBRI

recorded a fee based income amounted Rp7.4tn, up 21.15% yoy compared to fee based revenue in 2014 amounted to Rp6.1tn.

To achieve this target, BBRI has prepared to support data communication networks by launching satellite named BRIsat in June

2016.

BMRI sees mortgages to grow by 6% (BI)

Bank Mandiri (BBRI) sees its mortgages lending to grow by 5-6% this year. In 2015, the mortgage portfolio reached Rp30.6tn

BMRI, grew 2.1% on the achievement of 2014. To achieve target growth rate, BMRI will issue various promotional packages to

welcome the Chinese New Year include (i) 9.25% fixed rate for 3 years, (ii) 9.75% fixed rate for 5 years. This program will be

given to applications lodged between 1 February 2016-31 March 2016 for the first and second home owners.

CTRA and Mitsui to push the property sales (ID)

Ciputra Development (CTRA) through its subsidiary Ciputra Residence in collaboration with Mitsui Fudosan Residential, is

targeting sales worth Rp200 bn from the multiyear projects Ecopolis Citra Raya Tangerang. Currently, the development progress

of in the area of 53.57ha has reached 10%. Apart from housing, Ciputra-Mitsui also cooperating in the development of

apartment projects in Citra Garden, where the housing and apartment projects estimated to worth Rp2 tn of investment. 2016

CTRA targeting marketing sales to reach Rp 10tn, up 8.7% yoy.

PUPR will submit an additional budget of Rp10-15tn (ID)

The Ministry of Public Works and Housing (PUPR) plans to propose an additional budget in the proposed revised budget (APBN-

P) 2016 with an amount of Rp10-15tn. This additional budget will be used to finance land acquisition for toll road and to build

Asian Games infrastructure 2018. According to the PUPR Minister, the current land acquisition budget for the Trans-Java is still

fall short Rp4tn, while Trans-Sumatra Rp3.5tn.

SRIL obtain the military uniform procurement contracts from UAE (ID)

Sri Rejeki Isman (SRIL) awarded the contract for the procurement of military uniforms of United Arab Emirates (UAE) as much as

150k pieces, but have not been able to elaborate further on the contract’s value. Previously, SRIL targeting its uniform exports

business to reach US$ 10-15mn in 2016, which will be aimed to Cambodia, Hong Kong, Spain, Peru, and France. 2016, SRIL will

focus on the expansion of the production capacity from 120mn into 240mn.

TAXI targets Rp1tn revenue by end of 2016 (ID)

Express Transindo Utama (TAXI) targets FY16 revenue of Rp1tn, which would be achieved by increasing the occupancy to 80-90%

from 70% last year. The president director of TAXI stated that the company will launch the mobile application in March 2016, to

support higher occupancy while continue adding new car as well as rejuvenating old cars. TAXI has budgeted Rp200-300bn

capex this year.

MARKET NEWS

Price Mkt Cap

Target Rp Bn 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2015

Danareksa Universe 2,860,705 175,906 189,144 273.5 294.1 -1% 8% 16.3 15.1 13.2 12.6 2.6 2.3 16.8

Auto 278,767 16,781 19,189 307.4 351.5 -15% 14% 16.6 14.5 11.8 10.8 2.0 1.8 12.7

Astra International HOLD 6,650 6,700 269,216 16,050 18,063 396 446 370 412 -16% 13% 16.8 14.9 12.4 11.3 2.1 1.9 34.1 12.9

Gajah Tunggal BUY 483 1,500 1,683 266 633 76 182 140 127 -1% 138% 6.3 2.7 4.1 4.0 0.3 0.2 95.0 4.4

Selamat Sempurna BUY 4,215 5,300 6,068 465 493 323 342 332 352 19% 6% 13.1 12.3 7.9 7.3 4.2 3.5 net cash 36.0

Banks 1,001,347 73,678 79,865 683.9 741.3 -1% 8% 13.6 12.5 2.4 2.1 19.0

BCA BUY 13,425 15,425 330,994 18,062 19,792 724 794 724 794 8% 10% 18.5 16.9 NA NA 3.7 3.1 NA 21.4

BNI BUY 5,275 5,850 98,372 7,506 8,596 402 461 402 461 -30% 15% 13.1 11.4 NA NA 1.5 1.4 NA 12.1

BRI BUY 12,300 13,400 303,431 24,352 25,863 987 1,048 987 1,048 0% 6% 12.5 11.7 NA NA 2.6 2.2 NA 23.0

Bank Tabungan Negara BUY 1,400 1,450 14,815 1,588 1,964 151 187 151 187 42% 24% 9.2 7.5 NA NA 1.1 1.0 NA 12.4

Bank Mandiri BUY 10,350 11,450 241,500 20,144 21,413 863 918 863 918 1% 6% 12.0 11.3 NA NA 2.0 1.8 NA 18.2

Bank Tabungan Pensiunan BUY 2,095 4,500 12,235 2,026 2,237 347 383 347 383 8% 10% 6.0 5.5 NA NA 0.9 0.8 NA 15.8

Cement 136,913 9,522 9,566 991 995 -13% 0% 14.4 14.3 9.0 8.7 2.5 2.3 17.6

Indocement HOLD 19,750 21,000 72,704 4,915 4,919 1,335 1,336 1,305 1,306 -9% 0% 14.8 14.8 9.2 8.9 2.5 2.3 net cash 16.9

Semen Indonesia BUY 10,825 12,300 64,209 4,608 4,648 777 784 761 767 -17% 1% 13.9 13.8 8.8 8.6 2.5 2.3 5.1 18.4

Construction 117,967 4,375 5,514 100 126 19% 26% 27.0 21.4 12.7 10.6 3.1 2.7 13.8

Jasa Marga BUY 5,950 8,000 40,460 1,531 1,779 480 614 513 657 19% 28% 12.4 9.7 13.6 12.0 3.2 2.9 95.8 12.8

Wijaya Karya HOLD 2,675 2,900 16,449 584 741 95 120 100 126 -5% 27% 28.1 22.2 11.6 9.3 3.0 2.6 28.8 11.1

Pembangunan Perumahan BUY 3,915 4,700 18,958 635 857 131 177 138 185 19% 35% 29.9 22.1 11.5 9.3 5.1 3.6 25.6 20.9

Adhi Karya BUY 2,645 2,750 9,418 397 556 111 156 123 169 22% 40% 23.7 16.9 9.0 8.3 1.9 1.8 net cash 12.1

Waskita Karya BUY 1,785 2,150 24,227 833 1,089 61 80 61 80 19% 31% 29.1 22.2 15.6 11.7 2.7 2.5 net cash 14.2

Wika Beton HOLD 970 1,350 8,454 396 491 45 56 46 57 32% 24% 21.4 17.2 11.2 9.0 3.4 2.9 net cash 17.1

Consumer 474,329 13,419 14,186 488 516 7% 6% 35.3 33.4 20.9 19.8 8.3 7.0 25.9

Indofood CBP BUY 16,600 13,800 96,794 3,033 3,308 520 567 520 567 16% 9% 31.9 29.3 22.3 21.0 6.1 5.5 net cash 20.3

Indofood BUY 6,575 7,100 57,731 3,704 4,059 422 462 563 610 -5% 10% 15.6 14.2 7.1 6.8 2.1 1.9 19.5 13.8

Unilever BUY 40,600 42,000 309,778 5,889 6,234 772 817 772 817 3% 6% 52.6 49.7 36.2 34.5 30.3 18.9 net cash 80.4

Nippon Indosari Corpindo BUY 1,355 1,680 6,859 266 309 53 61 53 61 41% 16% 25.8 22.2 14.6 11.8 5.7 4.7 59.5 24.7

Mandom BUY 15,750 21,170 3,167 526 276 2,618 1,375 279 1,373 202% -47% 6.0 11.5 6.7 5.8 1.9 1.8 net cash 35.7

Healthcare 111,919 2,981 3,387 211 266 20% 26% 37.5 33.0 23.6 20.2 6.4 5.8 18.6

Kalbe Farma HOLD 1,355 1,355 63,516 2,040 2,274 44 49 43 49 -1% 12% 31.1 27.9 20.3 17.7 6.1 5.5 net cash 20.6

Kimia Farma BUY 1,125 1,200 6,248 259 303 47 55 42 47 12% 17% 23.9 20.5 16.0 13.8 3.3 2.9 0.7 13.9

Siloam Hospital HOLD 8,900 10,500 10,289 93 134 80 116 84 127 49% 44% 110.7 77.0 20.1 15.5 5.9 5.5 16.1 5.5

Mitra Keluarga BUY 2,190 2,995 31,866 589 676 40 46 40 45 14% 15% 54.1 47.2 48.3 41.0 9.6 8.6 net cash 22.9

Heavy Equipment 65,560 6,331 6,015 1,385 1,316 14% -5% 10.4 10.9 4.3 4.0 1.6 1.4 15.9

Hexindo Adiperkasa HOLD 1,225 1,300 1,029 220 260 262 309 238 273 13% 18% 4.7 4.0 2.0 1.2 0.4 0.4 net cash 8.0

United Tractors HOLD 17,300 18,500 64,531 6,111 5,756 1,638 1,543 1,638 1,543 14% -6% 10.6 11.2 4.4 4.1 1.7 1.5 net cash 16.5

Mining 64,550 6,032 4,691 76 59 -25% -22% 10.7 13.8 3.6 4.1 0.6 0.6 6.0

Adaro Energy BUY 640 750 20,471 2,249 1,577 70 49 70 49 9% -30% 9.1 13.0 3.6 3.7 0.5 0.5 32.0 6.4

Timah HOLD 540 570 4,022 101 180 14 24 14 24 -84% 78% 39.8 22.3 7.5 6.1 0.8 0.7 34.7 1.8

Vale Indonesia BUY 1,445 3,700 14,358 887 1,090 89 110 89 110 -56% 23% 16.2 13.2 4.3 4.0 0.6 0.6 net cash 4.1

Aneka Tambang BUY 342 472 8,219 (706) (293) (74) (31) (74) (31) -5% -59% (4.6) (11.1) 13.7 12.3 0.5 0.5 13.3 -4.9

Bukit Asam BUY 4,510 7,800 10,392 1,970 1,445 906 665 906 665 -2% -27% 5.0 6.8 3.4 4.6 1.1 1.0 net cash 21.4

Indo Tambangraya Megah HOLD 4,790 7,300 5,412 1,504 814 1,331 720 1,331 720 -28% -46% 3.6 6.6 0.6 0.8 0.5 0.5 net cash 14.1

Harum Energy HOLD 620 790 1,676 28 (123) 10 (45) 10 (45) 471% -540% 60.1 (13.7) 5.0- 11.1 0.4 0.5 net cash 0.8

Plantation 45,645 5,510 5,938 211 227 11% 8% 8.3 7.7 4.6 4.1 1.2 1.1 14.9

Astra Agro Lestari BUY 17,075 27,100 26,889 2,770 2,832 1,759 1,798 1,759 1,798 4% 2% 9.7 9.5 5.8 5.3 2.3 2.1 net cash 24.5

Sampoerna Agro BUY 1,850 2,600 3,497 464 550 245 291 253 299 18% 19% 7.5 6.4 4.9 4.2 1.0 0.9 31.8 14.5

PP London Sumatra HOLD 1,460 2,090 9,961 1,055 1,133 155 166 155 166 8% 7% 9.4 8.8 4.7 3.9 1.3 1.2 net cash 13.9

Salim Ivomas Pratama BUY 335 850 5,298 1,221 1,423 77 90 87 98 33% 17% 4.3 3.7 3.0 2.6 0.3 0.3 37.6 8.2

Property 92,733 8,896 10,205 87 99 -10% 15% 10.4 9.1 9.3 8.1 1.8 1.6 18.8

Alam Sutera BUY 333 700 6,543 1,254 1,516 64 77 73 85 15% 21% 5.2 4.3 6.2 5.1 0.9 0.8 75.3 18.9

Bumi Serpong Damai BUY 1,770 2,100 34,067 2,369 2,617 135 150 140 156 -36% 10% 13.1 11.8 11.4 10.1 2.3 2.0 net cash 16.6

Metropolitan Land BUY 194 620 1,485 290 322 38 43 38 43 14% 11% 5.1 4.6 4.1 3.8 0.7 0.6 27.7 14.2

Surya Semesta Internusa HOLD 620 1,040 2,917 464 415 99 88 103 93 32% -11% 6.3 7.0 2.5 2.5 1.0 0.9 net cash 16.9

Lippo Karawaci BUY 1,015 1,200 23,424 1,565 1,763 72 82 58 64 -38% 13% 14.0 12.4 10.8 9.3 1.5 1.3 27.3 10.1

PP Properti BUY 184 242 2,584 1,626 1,963 21 26 22 28 172% 27% 9.0 7.1 6.2 5.8 1.2 1.0 8.8 100.6

Summarecon BUY 1,505 2,045 21,712 1,327 1,609 92 111 92 111 -5% 21% 16.4 13.5 12.1 10.0 4.4 3.5 57.1 29.6

Telco & Infrastructure 499,328 19,313 22,528 141 165 28% 17% 25.9 22.2 7.3 6.7 4.1 3.8 17.0

XL Axiata BUY 4,040 4,710 34,507 356 680 42 80 42 80 -140% 91% 96.7 50.7 6.3 5.7 2.4 2.3 120.7 2.5

Indosat BUY 5,425 4,200 29,479 312 588 57 108 38 89 -152% 89% 94.5 50.1 4.5 4.1 1.8 1.8 132.4 2.0

Telkom HOLD 3,500 3,050 352,800 15,554 16,458 158 168 158 168 6% 6% 22.1 20.9 7.1 6.6 4.8 4.5 net cash 22.1

Sarana Menara Nusantara BUY 4,395 4,600 44,842 1,585 2,040 155 200 158 202 89% 29% 28.3 22.0 13.5 11.3 7.3 5.7 108.8 29.2

Tower Bersama HOLD 6,100 8,600 29,259 1,528 2,387 300 429 300 429 9% 43% 20.3 14.2 12.3 9.8 2.5 2.1 129.0 19.3

MNC Sky Vision HOLD 1,195 1,230 8,441 (22) 375 (3) 53 (2) 1 -86% -1776% (377.7) 22.5 8.7 7.6 5.2 4.2 162.0 -1.4

Tranportation 14,950 1,253 1,554 501 621 62% 24% 11.9 9.6 6.8 5.5 3.4 2.7 32.4

Blue Bird BUY 5,975 12,200 14,950 1,253 1,554 501 621 488 608 62% 24% 11.9 9.6 6.8 5.5 3.4 2.7 43.9 32.4

Utility 58,786 11,088 10,313 457 425 3% -7% 5.3 5.7 3.6 3.9 1.4 1.3 28.7

PGN BUY 2,425 6,650 58,786 11,088 10,313 457 425 5,775 5,313 3% -7% 5.3 5.7 3.6 3.9 1.4 1.3 net cash 28.7

Retail 24,782 961 1,135 37 44 -2% 18% 25.8 21.8 11.0 9.7 2.7 2.5 11.0

Mitra Adi Perkasa BUY 3,600 4,650 5,976 161 275 97 166 107 175 117% 71% 37.1 21.7 7.1 6.1 1.9 1.8 72.4 5.6

Ramayana SELL 620 660 4,400 243 255 34 36 34 36 -31% 5% 18.1 17.3 8.6 7.9 1.3 1.3 net cash 7.2

Ace Hardware HOLD 840 745 14,406 557 604 32 35 31 34 0% 9% 25.9 23.8 18.1 16.4 5.5 4.9 net cash 22.4

Core EPS (Rp)Equity

Valuation Rating Price (Rp)

Net profit, Rp bn EPS (Rp) Net Gearing ROE EPS Growth PER (x) EV / EBITDA (x) PBV (x)

Equity Research



LEADERS Price as on

Code 5-Feb-2016 4-Feb-2016 Chg, % w-w, % m-m, % YTD, % Rating

Bank Rakyat Indonesia BBRI 12,300 11,400 7.9 9.6 6.0 7.7 BUY

Bank Mandiri BMRI 10,350 9,600 7.8 7.8 11.6 11.9 BUY

Indofood CBP ICBP 16,600 15,450 7.4 14.9 17.9 23.2 BUY

Sarana Menara Nusantara TOWR 4,395 4,100 7.2 (2.2) (9.4) (7.5) BUY

Bank Negara Indonesia BBNI 5,275 4,950 6.6 7.4 5.5 5.7 BUY

Summarecon SMRA 1,505 1,420 6.0 4.2 (6.5) (8.8) BUY

Ace Hardware ACES 840 795 5.7 5.0 12.8 1.8 HOLD

Astra International ASII 6,650 6,325 5.1 3.1 9.9 10.8 HOLD

Telkom TLKM 3,500 3,350 4.5 4.8 11.3 12.7 HOLD

Bumi Serpong Damai BSDE 1,770 1,695 4.4 2.3 (3.5) (1.7) BUY

Sources: Bloomberg

LAGGARDS Price as on

Code 5-Feb-2016 4-Feb-2016 Chg, % w-w, % m-m, % YTD, % Rating

Indosat ISAT 5,425 5,550 (2.3) (0.9) 2.4 (1.4) BUY

Pembangunan Perumahan PTPP 3,915 4,000 (2.1) 0.4 (0.9) 1.0 BUY

Aneka Tambang ANTM 342 349 (2.0) 4.0 14.4 8.9 BUY

Selamat Sempurna SMSM 4,215 4,300 (2.0) (1.5) (9.2) (11.4) BUY

XL Axiata EXCL 4,040 4,095 (1.3) 9.9 14.3 10.7 BUY

Timah TINS 540 545 (0.9) 3.8 13.4 6.9 HOLD

Kimia Farma KAEF 1,125 1,135 (0.9) 7.1 25.0 29.3 BUY

MNC Sky Vision MSKY 1,195 1,205 (0.8) - (7.0) (10.5) HOLD

Gajah Tunggal GJTL 483 486 (0.6) (4.4) (8.9) (8.9) BUY

Adhi Karya ADHI 2,645 2,660 (0.6) 3.7 15.3 23.6 BUY

Sources: Bloomberg

COVERAGE PERFORMANCE

Equity Research



WEEKLY LEADERS

Price as on

Code 5-Feb-2016 29-Jan-2015 w-w, % m-m, % YTD, % Rating

Adaro Energy ADRO 640 525 21.9 29.8 24.3 BUY

Indofood CBP ICBP 16,600 14,450 14.9 17.9 23.2 BUY

Unilever UNVR 40,600 36,700 10.6 12.2 9.7 BUY

XL Axiata EXCL 4,040 3,675 9.9 14.3 10.7 BUY

Bank Rakyat Indonesia BBRI 12,300 11,225 9.6 6.0 7.7 BUY

Bank Mandiri BMRI 10,350 9,600 7.8 11.6 11.9 BUY

Bank Negara Indonesia BBNI 5,275 4,910 7.4 5.5 5.7 BUY

Kimia Farma KAEF 1,125 1,050 7.1 25.0 29.3 BUY

Indofood INDF 6,575 6,200 6.0 15.9 27.1 BUY

Ace Hardware ACES 840 800 5.0 12.8 1.8 HOLD

Sources: Bloomberg

WEEKLY LAGGARDS

Price as on

Code 5-Feb-2016 29-Jan-2015 w-w, % m-m, % YTD, % Rating

Metropolitan Land MTLA 194 205 (5.4) (6.7) (9.8) BUY

Surya Semesta Internusa SSIA 620 650 (4.6) (8.1) (13.3) HOLD

Wijaya Karya WIKA 2,675 2,800 (4.5) (6.5) 1.3 HOLD

Gajah Tunggal GJTL 483 505 (4.4) (8.9) (8.9) BUY

Mitra Adi Perkasa MAPI 3,600 3,745 (3.9) (10.9) (5.1) BUY

Lippo Karawaci LPKR 1,015 1,055 (3.8) (1.9) (1.9) BUY

Mandom TCID 15,750 16,300 (3.4) (4.5) (4.5) BUY

Tower Bersama TBIG 6,100 6,300 (3.2) 8.0 3.8 HOLD

Bank Tabungan Pensiunan

Nasional BTPN 2,095 2,150 (2.6) (12.7) (12.7) BUY

Sarana Menara Nusantara TOWR 4,395 4,495 (2.2) (9.4) (7.5) BUY

Sources: Bloomberg

WEEKLY COVERAGE PERFORMANCE

Equity Research



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