Danareksa Snapshot. From Today s Headlines: (please see our analysts comment inside) From IDX: Wednesday, June 11, 2014

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Bernard Bond
6 years ago
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Danareksa Snapshot Wednesday, June 11, 2014 From Research: Company Visit: Bank Danamon (BDMN IJ. Rp 4,250. Not rated) BDMN s loans grew at softer figure of 15.

1 Danareksa Snapshot Wednesday, June 11, 2014 From Research: Company Visit: Bank Danamon (BDMN IJ. Rp 4,250. Not rated) BDMN s loans grew at softer figure of 15.6% YoY in March 2014 still with mass market as the significant contributor to loans portfolio as of March 2014 (52.0% proportion). Additionally, the management opted to focus on managing assets quality as shown by its flattish gross NPLs figure at 1.9% as of March Going forward, BDMN aims loans growth driver should be coming from outer Java. While for its ADMF, the management acknowledge that the market for new 2-wheelers and 4-wheelers already packed hence it enter used cars market as this sub-segment offer thicker margin compared to new vehicles financing. From Today s Headlines: (please see our analysts comment inside) Semen Indonesia Provides Rp3.5tn Loan to Subsidiary (ID) Cement Sales: Legislation Election Effect Fade, consumption improved (BI) PTPP Completes Acquisition of PT Prima Jasa Aldodua (IDN) TBIG prepare for Capex Rp 2.5tn (BI) From IDX: Cash Announcement Code Ex-Date Date Payable Amount (Rp) MAPI 13-Jun-14 2-Jul KLBF 13-Jun-14 2-Jul LSIP 16-Jun-14 3-Jul INTP 19-Jun-14 8-Jul SIMP 27-Jun Jul Source: Stockwatch Key Index Close Chg Ytd Vol (%) (%) (US$ m) Asean - 5 Indonesia 4, Thailand 1, ,002 Philippines 6,778 (0.4) Malaysia 1, Singapore 3,294 (0.3) Regional China 2, (3.0) 8,863 Hong Kong 23, ,804 Japan 14,995 (0.9) (8.0) 10,448 Korea 2, ,494 Taiwan 9, ,450 India 25, NASDAQ 4, ,061 Dow Jones 16, ,610 Currency and Interest Rate Rate w-w m-m ytd (%) (%) (%) Rupiah (Rp/1US$) 11,815 (0.0) (2.5) 2.9 SBI rate (%) (0.1) 10-y Govt Indo bond (0.0) Unit Hard Commodities Price d-d m-m ytd (%) (%) (%) Coal US$/ton 72 n/a (4.5) (14.6) Gold US$/toz 1, (2.2) 4.5 Nickel US$/mt.ton 18,693 (0.7) (5.9) 35.1 Tin US$/mt.ton 22,840 (1.8) (1.9) 2.3 Unit Soft Commodities Price d-d m-m ytd (%) (%) (%) Cocoa US$/mt.ton 3, Corn US$/mt.ton 175 (1.1) (10.1) 9.7 Crude Oil US$/barrel 110 (0.4) 1.5 (1.2) Palm oil MYR/mt.ton 2,409 (0.2) (8.3) (6.4) Rubber USd/kg (4.8) (29.2) Pulp US$/tonne 925 n/a Coffee US$/60kg bag 105 (0.1) (7.5) 6.7 Sugar US$/MT (1.9) 2.6 Wheat US$/mt.ton 221 (1.8) (16.8) (2.5) Source: Bloomberg See important disclosure on the back of this report

2 PT Danareksa Sekuritas Jl. Medan Merdeka Selatan No. 14 Jakarta Indonesia Tel (62 21) , Fax (62 21) Our Research team and sector coverage: Agriculture: Helmy Kristanto - helmyk@danareksa.com; (62-21) Automotive: Helmy Kristanto - helmyk@danareksa.com; (62-21) Auto Component: Joko Sogie - jokos@danareksa.com; (62-21) ext.3512 Banking: Eka Savitri - ekas@danareksa.com; (62-21) ext Cement: Helmy Kristanto - helmyk@danareksa.com; (62-21) Coal: Stefanus Darmagiri stefanus.darmagiri@danareksa.com; (62-21) ext.3520 Construction: Joko Sogie - jokos@danareksa.com; (62-21) ext.3512 Consumer: Helmy Kristanto - helmyk@danareksa.com; (62-21) Heavy Equipment: Stefanus Darmagiri stefanus.darmagiri@danareksa.com; (62-21) ext.3520 Media: Lucky Ariesandi, CFA lucky.ariesandi@danareksa.com; (62-21) ext.3530 Metal Mining: Stefanus Darmagiri stefanus.darmagiri@danareksa.com; (62-21) ext.3520 Pharmaceutical: Helmy Kristanto - helmyk@danareksa.com; (62-21) Property: Anindya Saraswati - anindyas@danareksa.com; (62-21) ext Retail: Anindya Saraswati - anindyas@danareksa.com; (62-21) ext Strategy: Helmy Kristanto - helmyk@danareksa.com; (62-21) Telecommunication: Lucky Ariesandi, CFA lucky.ariesandi@danareksa.com; (62-21) ext.3530 Utilities: Helmy Kristanto - helmyk@danareksa.com; (62-21) Technical Analyst: Lucky Bayu Purnomo luckyb@danareksa.com; (62-21) ext.3508 Research Associate: Armando Marulitua armandom@danareksa.com; (62-21) ext.3503 Our Sales team: Ermawati A. Erman - ermawatiae@danareksa.com; (62 21) ext Asfarita Andalusia - asfarita@danareksa.com; (62 21) ext Kemal A. Uno - kemal@danareksa.com; (62 21) ext Novrita E. Putrianti - novrita@danareksa.com; (62 21) ext Ehrliech Suhartono - ehrliech@danareksa.com; (62 21) ext Yunita L. Nababan - yunita@danareksa.com; (62 21) ext Bram Taarea bramt@danareksa.com; (62 21) ext Martin Joshua - martinjs@danareksa.com; (62 21) ext Yofi Lasini - yofil@danareksa.com; (62 21) ext. 3133

3 Bank Danamon (BDMN IJ. Not rated) Softer loans growth while focus more into assets quality BDMN s loans grew at softer figure of 15.6% YoY in March 2014 still with mass market as the significant contributor to loans portfolio as of March 2014 (52.0% proportion). Additionally, the management opted to focus on managing assets quality as shown by its flattish gross NPLs figure at 1.9% as of March Going forward, BDMN aims loans growth driver should be coming from outer Java. While for its ADMF, the management acknowledge that the market for new 2-wheelers and 4-wheelers already packed hence it enter used cars market as this sub-segment offer thicker margin compared to new vehicles financing. Explore more funding options Meanwhile in the funding side, BDMN continuously obtains more funding towards long term ones to better match the maturity profile of its assets, of which usually ranged between three until five years. This long term funding can be obtained with competitive rate at % p.a. Such figure we believe is relatively reasonable as TD rate also continue to show upward trend since 2H13 yet with shorter tenor (average one year tenor at max). At the same time, deposits structure also experienced lower CASA proportion to 42.0% as of March 2014 from 47.0% as of March Hence, blended CoF hiked up to 5.2% in 1Q14. Challenge on its profitability As a result from higher TD contribution to its deposits structure while at the same time the management only reprice its lending rate for new loans, NIM compression is inevitable. In 1Q14, NIM squeezed to 8.6%, fell by 150 bps compared to 1Q13 s figure. However, we believe NIM will likely to be maintained above 8.0% level as its business model more into mass market segment which provides thicker margin compared to other segments. Apart from that, operating expenses remains a challenge as BDMN had around 70K permanent employees. The management emphasized to improve efficiency and bring down its CIR to below 50% ideal level by centralized procurement process and offering cross-selling products with the subsidiaries. Yet we believe this target will only be achievable in medium term. All in all, we still view BDMN has more challenges to cope with, either from competition side or internal aspect. Exhibit 1. Profit and loss (Rp bn) 1Q13 1Q14 YoY % 4Q13 1Q14 QoQ % Net interest income 3,334 3, ,427 3,334 (2.7) PPOP 2,148 2,022 (5.9) 2,170 2,148 (1.0) Profit before tax 1,378 1,195 (13.3) 1,419 1,378 (2.9) Net profit 1, (12.9) 1,035 1,005 (2.9) Source: Company

Exhibit 2. Balance sheet (Rp bn) Mar 13 Dec 13 Mar 14 YoY % QoQ % Assets 153,785 184,237 185,920 20.9 0.

7) Other funding 25,038 29,052 27,029 8.0 (7.0) Source: Company Exhibit 3. Key ratios (%) Mar 13 Dec 13 Mar 14 NPL 2.

4 Exhibit 2. Balance sheet (Rp bn) Mar 13 Dec 13 Mar 14 YoY % QoQ % Assets 153, , , Loans 117, , , CASA 41,785 53,185 46, (12.1) Deposits 114, , , (0.7) Other funding 25,038 29,052 27, (7.0) Source: Company Exhibit 3. Key ratios (%) Mar 13 Dec 13 Mar 14 NPL LDR CAR NIM CoF CIR RoAE Source: Company Exhibit 4. NIM compression due to higher increase in blended CoF Source: Company Analyst Eka Savitri Equity Research PT Danareksa Sekuritas Jl. Medan Merdeka Selatan No. 14 Jakarta Indonesia : : ekas@danareksa.com

5 Semen Indonesia Provides Rp3.5tn Loan to Subsidiary (ID) SMGR Rp3.5tn provides loan facility to its subsidiary, PT Semen Gresik to finance the construction of a new plant in Rembang, Central Java. The groundbreaking is targeted on June 16, 2014 with target completion in 3Q16. The loan rate is average TD3M+3.5% with eight years tenor. Cement Sales: Legislation Election Effect Fade, consumption improved (BI) Following a drop on April 2014, the national cement sales rebounded in May. Cement sales reach the figure above 5 million tonnes for the first time this year. According to ASI, sales in May may give confidence that the target growth of cement could reach 5% by the end of the year. National cement sales during January-May 2014 was million tons, up 3.7% compared to the same period in 2013 which is million tonnes. May sales growth in Sumatra reached 5.5%, while in Java increased by 8.2%, Kalimantan up 21%, Sulawesi up 16%, Nusa Tenggara down 13.4% and Papua down 9.3%. PTPP Completes Acquisition of PT Prima Jasa Aldodua (IDN) PTPP takes over 99% ownership of a heavy equipment company, named PT Prima Jasa Aldodua (PJA) for Rp44bn. The transaction has completed by sealing a sale purchase agreement on June 6, 2014 between PTPP and YKKPP. PJA runs the business of procuring heavy and medium equipment to support PTPP s construction activities. TBIG prepare for Capex Rp 2.5tn (BI) PT Tower Bersama Infrastructure Tbk. (TBIG) budgeted Rp 2.5tn to build 3,300 tenants and towers for this year. TBIG has three sources of funding, loan program with limit of USD 2mn that already used USD 1,12mn from September 2010 to December 2013, sustainable public offering through the issuance of sustainable obligation II Tower Bersama Infrastructure targeted worth Rp 500mn to Rp 1tn, and issuing of global bonds worth USD 500mn. Up till March 31, 2014, company has 17,222 tenants and 10,572 telecommunication site. In the interest of timeliness, this product was not edited

6 Equity Valuation Rating Price (Rp) Price Mkt Cap Net profit, Rp bn EPS (Rp) EPS Growth PER (x) EV / EBITDA (x) PBV (x) Net Gearing ROE Target Rp Bn Danareksa Universe 2,788, , , , % 14% Auto 315,525 19,901 23,468 28, % 22% Astra International BUY 7,400 8, ,578 19,417 21,600 26, % 24% Gajah Tunggal BUY 1,910 2,550 6, ,455 1, % -3% Multistrada HOLD , % 80% Selamat Sempurna BUY 4,540 4,350 6, % 20% Banks 863,810 64,296 72,268 81, % 13% BCA HOLD 11,250 10, ,369 14,254 15,741 17, % 13% NA NA NA 22.6 BNI BUY 4,865 5,400 90,726 9,058 10,319 11, % 14% NA NA NA 20.0 BRI BUY 10,225 10, ,242 21,218 23,830 26, ,080 12% 12% NA NA NA 27.2 Bank Tabungan Negara BUY 1,015 1,400 10,724 1,562 1,794 2, % 15% NA NA NA 14.7 Bank Mandiri BUY 9,975 10, ,750 18,204 20,584 23, ,001 13% 13% NA NA NA 21.8 Cement 196,827 11,334 11,294 11, % 0% Holcim HOLD 2,520 2,300 19, ,274 1, % 15% Indocement HOLD 23,650 21,300 87,061 5,012 4,839 5,215 1,362 1,315 1,417-3% 8% net cash 21.1 Semen Indonesia BUY 15,250 17,500 90,456 5,370 5,180 4, % -10% Construction 81,083 3,244 3,896 4, % 15% Jasa Marga BUY 5,975 7,100 40,630 1,336 1,643 1, % 10% Wijaya Karya HOLD 2,220 2,400 13, % 21% Pembangunan Perumahan BUY 1,750 1,750 8, % 15% Adhi Karya HOLD 2,890 1,830 5, % 16% Waskita Karya HOLD , % 11% net cash 14.8 Wika Beton BUY , % 31% net cash 21.2 Consumer 438,041 12,342 14,833 16, % 12% Indofood CBP BUY 10,200 13,050 59,476 2,225 2,949 3, % 25% net cash 21.7 Indofood HOLD 6,850 7,050 60,146 2,504 3,191 3, % 6% Kalbe Farma HOLD 1,670 1,350 78,281 1,922 2,471 2, % 17% net cash 24.3 Unilever HOLD 30,200 28, ,426 5,353 5,775 6, % 5% Nippon Indosari Corpindo BUY 1,295 1,400 6, % 31% Mandom BUY 15,700 13,600 3, ,075 12% 20% Heavy Equipment 88,510 5,116 5,730 6,601 1,119 1,254 1,444 12% 15% Hexindo Adiperkasa HOLD 3,790 3,175 3, % 9% United Tractors BUY 22,875 23,300 85,327 4,834 5,382 6,220 1,296 1,443 1,667 11% 16% net cash 15.6 Mining 165,061 8,400 11,464 13, % 22% Adaro Energy BUY 1,300 1,220 41,582 2,370 3,167 3, % 2% Timah BUY 1,360 1,575 10, % 13% net cash 12.4 Vale Indonesia BUY 3,830 4,500 38, ,009 1, % 23% Aneka Tambang HOLD 1,150 1,000 10, ,063 2, % 115% Bukit Asam HOLD 11,125 11,050 25,633 1,826 2,113 2, ,126 16% 23% net cash 23.3 Indo Tambangraya Megah HOLD 28,500 30,000 32,203 2,373 2,863 3,281 2,100 2,534 2,904 21% 15% net cash 25.9 Harum Energy HOLD 2,400 2,850 6, % 4% net cash 15.9 Plantation 83,325 3,210 5,089 6, % 21% Astra Agro Lestari HOLD 26,650 24,700 41,967 1,834 2,527 2,918 1,165 1,604 1,853 38% 15% net cash 25.0 Sampoerna Agro BUY 2,305 2,200 4, % 51% BW Plantation BUY 1,305 1,380 5, % 54% PP London Sumatra BUY 2,215 2,130 15, % 5% net cash 13.8 Salim Ivomas Pratama BUY 1, , , % 29% Property 68,494 5,905 6,043 6, % 11% Alam Sutera BUY ,196 1,286 1,658 1, % 14% Bumi Serpong Damai BUY 1,580 1,960 29,028 2,432 1,896 1, % 5% net cash 15.4 Metropolitan Land BUY , % 24% Surya Semesta Internusa BUY , % 4% net cash 28.9 Lippo Karawaci BUY 1,030 1,040 23,770 1,228 1,368 1, % 17% Telco 322,392 12,456 15,757 18, % 20% XL Axiata SELL 5,425 3,900 46,300 1,033 (430) (50) % -279% (107.7) Indosat BUY 3,970 4,920 21,573 (2,782) (512) % 24% Telkom BUY 2,525 2, ,520 14,205 15,459 17, % 8% net cash 23.5 Utility 132,722 7,713 9,219 8, % -7% PGN BUY 5,475 6, ,722 7,713 9,219 8, % -7% net cash 31.4 Retail 32,527 1,176 1,404 1, % 21% Mitra Adi Perkasa HOLD 5,375 6,350 8, % 26% Ramayana HOLD 1,260 1,240 8, % 20% net cash 14.4 Ace Hardware HOLD , % 18% net cash 23.2

The leaders on Danareksa coverage Price as on Code 10-Jun-14 9-Jun-14 Chg, % w-w, % m-m, % YTD, % Rating XL Axiata EXCL 5,425 5,200 4.3 4.3 7.4 4.3 SELL Kalbe Farma KLBF 1,670 1,605 4.0 5.7 7.1 33.

7 The leaders on Danareksa coverage Price as on Code 10-Jun-14 9-Jun-14 Chg, % w-w, % m-m, % YTD, % Rating XL Axiata EXCL 5,425 5, SELL Kalbe Farma KLBF 1,670 1, HOLD Bank Rakyat Indonesia BBRI 10,225 9, (1.2) BUY Multistrada Arah Sarana MASA (4.5) (2.9) (23.1) HOLD Waskita Karya WSKT (2.2) (13.5) 65.4 HOLD Mandom TCID 15,700 15, BUY Nippon Indosari Corpindo ROTI 1,295 1, (1.5) BUY Bank Tabungan Negara BBTN 1, (3.8) (9.8) 16.7 BUY Astra International ASII 7,400 7, (1.0) 8.8 BUY Bank Negara Indonesia BBNI 4,865 4, (0.8) BUY Sources: Bloomberg The laggards on Danareksa coverage Price as on Code 10-Jun-14 9-Jun-14 Chg, % w-w, % m-m, % YTD, % Rating Surya Semesta Internusa SSIA (2.1) (0.7) (10.8) 25.9 BUY Vale Indonesia INCO 3,830 3,855 (0.6) (2.9) (6.8) 44.5 BUY Harum Energy HRUM 2,400 2,415 (0.6) (2.8) 9.8 (12.7) HOLD Sampoerna Agro SGRO 2,305 2,310 (0.2) (3.8) (1.5) 15.3 BUY Hexindo Adiperkasa HEXA 3,790 3, (1.3) 17.5 HOLD Timah TINS 1,360 1,360 - (4.9) (9.6) 25.8 BUY Indo Tambangraya Megah ITMG 28,500 28,500 - (5.0) HOLD Alam Sutera ASRI (5.3) (11.7) 8.8 BUY Metropolitan Land MTLA (7.5) 10.5 BUY Lippo Karawaci LPKR 1,030 1, (2.8) 13.2 BUY Sources: Bloomberg

8 Disclaimer The information contained in this report has been taken from sources which we deem reliable. However, none of P.T. Danareksa Sekuritas 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 P.T. Danareksa Sekuritas, 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 P.T. Danareksa Sekuritas, its affiliated companies or their respective employees or agents accepts liability for any errors, omissions or mis-statements, negligent or otherwise, in the report and any liability in respect of the report or any inaccuracy therein or omission therefrom which might otherwise arise is hereby expresses disclaimed. The information contained in this report is not be taken as any recommendation made by P.T. Danareksa Sekuritas or any other person to enter into any agreement with regard to any investment mentioned in this document. This report is prepared for general circulation. It does not have regards to the specific person who may receive this report. In considering any investments you should make your own independent assessment and seek your own professional financial and legal advice.

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