KLBF s consolidated gross profit margin (GPM) 47.5% 48.0% 48.0% 46.5% 45.5% 44.5% *) indicative results

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1 Mimi Halimin To subscribe to our Daily Focus, please contact us at Market Index Last Trade Chg (%) MoM YoY JCI 6, MSCI Indonesia MSCI EM 1, HANG SENG 30, KOSPI 2, FTSE 7, DJIA 24, NASDAQ 7, Valuation 2018F P/E (x) P/B (x) ROE (%) JCI Key Rates Last Trade Chg (bps) MoM YoY BI 7-Day RR yr yr FX Last Trade Chg (%) MoM YoY USD/IDR 13, USD/KRW 1, USD/JPY USD/CNY Commodities Last Trade Chg (%) MoM YoY WTI Gold 1, Coal Palm Oil 2, Rubber Nickel 14, Copper Tin 21, KLBF s FY17 indicative review: As expected FY17 indicative results: Broadly in line According to unaudited results, KLBF booked FY17 revenue of IDR20.2tr (+4.3% YoY), achieving 98.4% of our forecast and 97.7% of the consensus. Sales at the nutritional (+8.7% YoY) and prescription pharmaceuticals (+5.0% YoY) divisions outpaced KLBF s overall consolidated net sales growth, while the distribution & logistics (+1.7% YoY) and consumer health (+0.4% YoY) divisions underperformed amid challenging market conditions. Management stated that FY17 revenue growth was driven by volume (no ASP changes). Meanwhile, gross profit margin slipped to 48.5% in FY17 (from 49.0% in FY16), while operating profit picked up 4.6% to IDR3.2tr (from IDR3.1tr in FY16), with OP margin remaining stable at 15.8% due to more effective marketing activities. KLBF booked FY17 net profit of IDR2.4tr (+3.5% YoY), reaching 99.8% of our estimate and 97.1% of the consensus. All in all, we believe the FY17 indicative results were broadly in line with our estimates. Short-term headwinds in pharmaceutical business KLBF s management revealed that many chemical pharmaceutical factories have been shut down in China due to new environmental regulations, causing an increase in raw material prices in January-February. We think this issue will likely weigh on margins at KLBF s prescription pharmaceuticals division this year. We have yet to factor this issue into our forecast. We note, however, that despite being a short-term headwind, this issue might prove beneficial to KLBF in the long run by reducing the number of smaller pharmaceutical producers. Maintain Trading Buy and TP of IDR1,870 We maintain our Trading Buy recommendation on KLBF with a target price of IDR1,870. KLBF s consolidated gross profit margin (GPM) 49.5% 48.5% 48.8% 49.0% 48.5% JCI Index VS MSCI Emerging Markets (pt) JCI MSCI EM 7,000 6,500 6,000 5,500 5,000 01/17 04/17 07/17 10/17 01/18 (pt) 1,250 1, % 48.0% 48.0% 46.5% 45.5% 44.5% 43.5% *) *) indicative results Source: Research

2 Local flash DILD: Intiland shoots 2018 marketing sales of IDR 3.3 trillion. PT Intiland Development Tbk (DILD) is optimistic that property business will be more enthusiastic this year. Evident from the company step in setting the target. This year, DILD targets marketing sales or marketing sales of IDR 3.3 trillion throughout The target grew 15% compared to the achievement of DILD marketing sales in 2017 amounting to IDR 2.93 trillion. (Kontan) PTBA: PTBA does not mind the price rule of DMO coal. Coal prices continue to climb risk of triggering electricity tariffs to rise. To anticipate this, the government is prepared to issue a beleid that regulates the selling price of coal for domestic purposes, especially for the purposes of Steam Power Plant (PLTU). The Ministry of Energy and Mineral Resources (ESDM) plans to issue a Decree of the Minister of Energy and Mineral Resources concerning the lower limit and the upper limit of the selling price of coal for the domestic market, aka domestic market obligation (DMO), Thursday (15/2). PLN proposes that the lower limit price is at USD 60 per ton, while the upper limit is at USD 70 per ton. PTBA President Director Arviyan Arifin admits that he does not mind the regulation. "We have no problem with this price restriction rule because we have to support fellow SOEs as a form of synergy," he said Wednesday (14/2). (Kontan) PSAB: J Resources will issue IDR 300 billion worth of MTN. PT J Resources Asia Pacific Tbk (PSAB) through its subsidiary, PT J Resources Nusantara, will issue medium term notes or medium term notes (MTN). Quoting the openness of Kustodian Sentral Efek Indonesia (KSEI), Wednesday (14/2), MTN IV J Resources Nusantara Phase I of 2018 has a principal value of IDR 300 billion. (Kontan) WEGE: Wika Building has a new contract of IDR 422 billion as of January PT Wijaya Karya Gedung Tbk (WEGE) posted a new contract per January 2018 of IDR billion. "The new contract is from three projects in Palembang, Semarang, and Pekalongan, "said WEGE Finance Director Abiprayadi Riyanto to Kontan.co.id, Wednesday (14/2). (Kontan) WINS: Private placement, Wintermar sets the price at IDR 350 per share. PT Wintermar Offshore Marine Tbk (WINS) issued 200 million new shares through additional capital without preemptive rights (PMTHMETD) aka private placement. Disclosure of information WINS, Wednesday (14/2), said, private placement action conducted by PT Wintermarjaya Lestari, which previously had 1.48 billion or % stake WINS. New shares with nominal value of IDR 100 per share are released at an exercise price of IDR 350 per share. (Kontan) ENRG: Mega Persada Energy Production in Bentu Block will double. PT Energi Mega Persada Tbk (ENRG) through its subsidiary, EMP Bentu Limited, has just obtained a gas sales contract for PT Pertamina. With the acquisition of the contract, the company's performance is expected to be boosted. Deputy President Director of ENRG Syailendra Bakrie said that in 2017, Bentu Block produces 7.9 million barrels of oil of equivalent per day (mboepd), equivalent to 28 percent of the company's total production of 27.8 mboepd. "This production is expected to double in 2019," Syailendra said, Wednesday (2/14). (Kontan) 2

3 Chart 1. JCI Vs. USD/IDR Chart 2. JCI performance (absolute vs. relative) (pt) JCI (L) USD/IDR (R) 6,800 (IDR) 13,800 (%, %p) 24 Absolute Relative ,600 13, ,400 6,200 6,000 5,800 5,600 5,400 11/15 12/13 1/10 2/7 13,600 13,500 13,400 13,300 13,200 13, D 1W 1M 1Y Source: Bloomberg, Note: Relative to MSCI EM Index Source: Bloomberg, Chart 3. Foreigner s net purchase (EM) (USDmn) ,000-1,500-2,000-2,500-3,000-3, ,128 Note: The latest figure for India are February 12 th, 2018 Source: Bloomberg, 1 Day 5 Days ,124 Korea Taiwan Indonesia ThailandPhilippines India Chart 4. Energy price (D-3M=100) 125 CPO WTI Coal /15 12/13 1/10 2/7 Source: Bloomberg, Chart 5. Non-ferrous metal price (D-3M=100) Copper Nickel Tin /17 12/17 01/18 02/18 Source: Bloomberg, Chart 6. Precious metal price (D-3M=100) Silver Gold Platinum /17 12/17 01/18 02/18 Source: Bloomberg, 3

4 Table. Key valuation metrics Company Name Ticker Price Market Cap Price Performance (%) P/E(X)* P/B(X)* ROE(%)* (IDR) (IDRbn) 1D 1W 1M 1Y FY18 FY19 FY18 FY19 FY18 FY19 Jakarta Composite Index JCI 6,594 7,360, FINANCIALS Bank Central Asia BBCA 23, , Bank Mandiri Persero BMRI 8, , Bank Rakyat Indonesia Persero BBRI 3, , Bank Negara Indonesia Persero BBNI 9, , Bank Tabungan Negara Persero BBTN 3,810 40, CONSUMER HM Sampoerna HMSP 4, , Gudang Garam GGRM 80, , Indofood CBP Sukses Makmur ICBP 8, , Indofood Sukses Makmur INDF 7,825 68, Kalbe Farma KLBF 1,620 75, Unilever Indonesia UNVR 54, , AGRICULTURAL Astra Agro Lestari AALI 13,400 25, PP London Sumatera Indonesia LSIP 1,350 9, Sawit Sumbermas Sarana SSMS 1,450 13, INFRASTRUCTURE XL Axiata EXCL 2,910 31, Jasa Marga JSMR 5,675 41, Perusahaan Gas Negara PGAS 2,500 60, Tower Bersama Infrastructure TBIG 5,850 26, Telekomunikasi Indonesia TLKM 4, , Soechi Lines SOCI 274 1, N/A N/A Garuda Indonesia GIAA 330 8, BASIC-INDUSTRIES Semen Indonesia SMGR 10,850 64, Charoen Pokphand Indonesia CPIN 3,390 55, Indocement Tunggal Prakarsa INTP 21,025 77, Japfa Comfeed Indonesia JPFA 1,575 17, MINING Indo Tambangraya Megah ITMG 29,175 32, Adaro Energy ADRO 2,440 78, Aneka Tambang ANTM , N/A Vale Indonesia INCO 3,630 36, N/A Tambang Batubara Bukit Asam PTBA 3,230 37, TRADE United Tractors UNTR 37, , AKR Corporindo AKRA 5,925 23, Global Mediacom BMTR 645 9, N/A N/A N/A N/A N/A N/A Matahari Department Store LPPF 10,375 30, Media Nusantara Citra MNCN 1,555 22, Matahari Putra Prima MPPA 460 2, N/A Surya Citra Media SCMA 2,770 40, Siloam International Hospital SILO 8,525 13, PROPERTY Bumi Serpong Damai BSDE 1,800 34, Adhi Karya ADHI 2,370 8, Alam Sutera Realty ASRI 382 7, Ciputra Development CTRA 1,300 24, Lippo Karawaci LPKR , Pembangunan Perumahan PTPP 3,000 18, Pakuwon Jati PWON , Summarecon Agung SMRA 1,125 16, Wijaya Karya WIKA 1,925 17, Waskita Karya WSKT 2,900 39, MISCELLANEOUS Astra International ASII 8, , Source: Bloomberg, *Note: Valuation metrics based on Bloomberg consensus estimates 4

5 Sector performance Top 10 market cap performance Name Index Chg (%) Ticker Price Market Cap (IDRbn) Chg (%) Agricultural 1, KRAS IJ , Mining 1, JKON IJ 530 8, Basic-Industry PGAS IJ , Miscellaneous Industry 1, TINS IJ , Consumer Goods 2, BRPT IJ , Property & Construction ABMM IJ , Infrastructure 1, PLIN IJ , Finance 1, KREN IJ 540 9, Trade SIDO IJ , Composite 6, GIAA IJ 330 8, Source: Bloomberg Top 5 leading movers Top 5 lagging movers Name Chg (%) Close Name Chg (%) Close ASII IJ 1.2 8,375 UNVR IJ ,500 HMSP IJ 0.6 4,880 BBRI IJ ,860 PGAS IJ 5.9 2,500 BBCA IJ ,700 SMGR IJ ,850 LPPF IJ ,375 INKP IJ 3.7 8,450 PNBN IJ ,390 Source: Bloomberg Economic Calendar Time Currency Detail Forecast Previous 6:50am JPY Core Machinery Orders m/m -1.9% 5.7% 7:00am AUD MI Inflation Expectations 3.7% All Day CNY Bank Holiday 7:30am AUD Employment Change 15.3K 34.7K 7:30am AUD Unemployment Rate 5.5% 5.5% 11:30am JPY Revised Industrial Production m/m 2.7% 2.7% 4:00pm EUR Italian Trade Balance 4.44B 4.83B 5:00pm EUR Trade Balance 22.4B 22.5B Tentative EUR Spanish 10-y Bond Auction :30pm CAD ADP Non-Farm Employment Change -7.1K 8:30pm USD PPI m/m 0.4% -0.1% 8:30pm USD Core PPI m/m 0.2% -0.1% 8:30pm USD Empire State Manufacturing Index :30pm USD Philly Fed Manufacturing Index :30pm USD Unemployment Claims 229K 221K 9:15pm USD Capacity Utilization Rate 78.0% 77.9% 9:15pm USD Industrial Production m/m 0.2% 0.9% 10:00pm USD NAHB Housing Market Index :30pm USD Natural Gas Storage -193B -119B Note: Time is based on Indonesian local time Source: Forex Factory 5

6 Disclaimers This report is prepared strictly for private circulation only to clients of PT. It is purposed only to person having professional experience in matters relating to investments. The information contained in this report has been taken from sources which we deem reliable. No warranty (express or implied) is made to the accuracy or completeness of the information. All opinions and estimates included in this report constitute our judgments as of this date, without regards to its fairness, and are subject to change without notice. However, none of and/or its affiliated companies and/or their respective employees and/or agents makes any representation or warranty (express or implied) or accepts any responsibility or liability as to, or in relation to, the accuracy or completeness of the information and opinions contained in this report or as to any information contained in this report or any other such information or opinions remaining unchanged after the issue thereof. We expressly disclaim any responsibility or liability (express or implied) of, its affiliated companies and their respective employees and agents whatsoever and howsoever arising (including, without limitation for any claims, proceedings, action, suits, losses, expenses, damages or costs) which may be brought against or suffered by any person as a results of acting in reliance upon the whole or any part of the contents of this report and neither Mirae Asset Sekuritas Indonesia, its affiliated companies or their respective employees or agents accepts liability for any errors, omissions or misstatements, negligent or otherwise, in the report and any liability in respect of the report or any inaccuracy therein or omission there from which might otherwise arise is hereby expresses disclaimed. This document is not an offer to sell or a solicitation to buy any securities. This firms and its affiliates and their officers and employees may have a position, make markets, act as principal or engage in transaction in securities or related investments of any company mentioned herein, may perform services for or solicit business from any company mentioned herein, and may have acted upon or used any of the recommendations herein before they have been provided to you. PT

Daily Focus. Indonesia. November 11, Astra Agro Lestari (AALI IJ): Not a pleasant year

Daily Focus. Indonesia. November 11, Astra Agro Lestari (AALI IJ): Not a pleasant year Indonesia Daily Focus Mimi Halimin +62-21-515-1140 mimi.halimin@dwsec-id.com To subscribe to our Daily Focus, please contact us at research@dwsec-id.com Market Index Last Trade Chg (%) MoM YoY JCI 4,451.1-1.1-2.0-10.6