INVESTOR DIGEST Digest/Investor...Dunhill Evoque is segmented as the most premium LTLN in BAT’s...

of 25Please see important disclosure at the back of this report

Latest 2019F

7-DRRR (%), eop 6.00 6.25

Inflation (YoY %) 2.57 3.80

US$ 1 = Rp, period avg 14,257 14,450

JCI Index 6,480.8 0.56%

Trading T/O ( Rp bn ) 6,190.0

Market Cap ( Rp tn ) 7,370.1

2019F 2020F

P/E (x) 17.3 15.9

P/BV (x) 2.6 2.4

EV/EBITDA (x) 13.8 13.1

Div. Yield (%) 2.4 2.6

Net Gearing (%) 14.5 0.0

ROE (%) 15.5 15.5

EPS growth (%) 10.6 8.9

EBITDA growth (%) 6.8 5.1

Earnings Yield (%) 5.8 6.3

* Aggregate of 75 companies in MS research universe,

representing 64.3%of JCI’s market capitalization

Economic Data

Stock Market Data (28 Mar 2019)

Market Data Summary*

Mar19 Inflation Preview: Annual Inflation to Ease Further Cigarette: Inside the Pack–Mar’19 Telecom: Broadband Barometer – March 2019 Ace Hardware Indonesia: In-line 4Q18 Despite Decelerating Profit Growth (ACES;

Rp1,840; Buy; TP: Rp1,700) Adhi Karya: 4Q18 Results - In-line with Ours, Below Consensus. (ADHI; Rp1,650; Buy;

TP: Rp2,035) Alam Sutera Realty: 2018 Results – In-line with Mansek’s Estimates, Below Consensus’

(ASRI; Rp314; Sell; TP: Rp280) Bank BNI: 2M19 Results - In line with Expectations (BBNI; Rp9,450; Neutral; TP:

Rp8,000) Bank BTN: FY18 Results – Lower Due to Additional Provisioning (BBTN; Rp2,510; Buy;

TP: Rp3,250) Bank BTN: 2M19 Results - Below Expectations (BBTN; Rp2,510; Buy; TP: Rp3,250) Bank Jabar: FY18 Results - In line with Expectations (BJBR; Rp2,010; Neutral; TP:

Rp1,900) Gudang Garam: EPS Miss in 4Q18; Expect Growth Reversals Ahead (GGRM; Rp84,250;

Buy; TP: Rp94,050) Indika Energy: FY18 Net Profit was Below Forecast (INDY; Rp1,890; Neutral; TP:

Rp2,100) Link Net: Earnings Miss in 4Q18; Competitiveness in Question (LINK; Rp4,500; Buy;

TP:Rp6,200) Mayora: 4Q18 Results - Weakening export, profit saved from A&P cut (MYOR;

Rp2,560; Neutral; TP: Rp2,550) Sarimelati Kencana: Strong revenue in 4Q18, NPAT came in-line (PZZA; Rp1,215; Buy;

TP: Rp1,400) Ramayana: Revenue missed street’s estimates, but profit beat (RALS; Rp1,780; Buy;

TP:Rp1,700) Sarana Menara Nusantara: One-off Drag in 4Q18 - Respectable FY18 Trends (TOWR;

Rp775; Buy; TP: Rp950) Surya Citra Media: Positive Earnings Growth Inflection in FY18 (SCMA; Rp1,650; Buy;

TP:Rp2,200) Market Recap March 29th 2019; JCI 6,480.79 points +36.05 pts (+0.56%), Valued

$428mn; Mkt Cap $504bn; USD/IDR 14,257

Mar19 Inflation Preview: Annual Inflation to Ease Further

Expecting a low inflation. We forecast the CPI to increase by 0.14% MoM in Mar19, translating into a lower annual inflation of 2.51% (vs. 2.57% in the previous month). Core inflation is expected to remain flat at 3.06% YoY. The data will be announced next Monday (04/01) and currently no consensus estimate is available.

HIGHLIGHT

ECONOMY

Equity Research | 29 March 2019 INVESTOR DIGEST

Equity Research | 29 March 2019

Page 2 of 25Please see important disclosure at the back of this report

Food prices have remained under control. The contribution of foodstuffs to inflation has only reached 0.04 ppt this month, based on our calculation. Besides the deflation of rice price amid the harvest period, the inflation of other goods, such as beef and chicken, were relatively manageable. We believe it was supported by the Government’s effort to manage the supply side inflation. Meanwhile, core inflation may have reached 3.06% YoY, unchanged compared to Feb19 as the exchange rate has been stable.

Rising inflation pressure pre-fasting period. The inflation trend has been very positive early 2019 (ytd inflation at 0.24% in 2M19 vs. same period last year at 0.79%). In fact, if our forecast comes out similar with the actual data, Mar19 annual inflation will be the lowest figure since Nov-09. The seasonal pressure will start to pick up heading toward the Muslim fasting period in early May19. However, in year on year terms, it should remain under control as volatility risk will be offset through government’s stabilization program. We maintain our inflation forecast at 3.8% in YE19, yet with deviation more on the downside.

MAR19 INFLATION PREVIEW

Feb-19 Mar-19

MS Forecast Market Consensus

Headline inflation (%, YoY) 2.57 2.51 -

Headline inflation (%, MoM) -0.08 0.14 -

Headline inflation (%, YtD) 0.24 0.38 -

Core inflation (%, YoY) 3.06 3.06 - Sources: CEIC, Mandiri Sekuritas estimate MAR19 FOOD PRICE DEVELOPMENT

Commodity CPI Weight (%)Mar-19

% MoM Contribution (ppt)

Rice 3.8 (0.51) (0.02)

Broiler chicken meat 1.2 (3.12) (0.04)

Beef 0.6 0.17 0.00

Broiler chicken egg 0.7 (2.89) (0.02)

Red onion 0.3 15.32 0.04

Garlic 0.2 17.75 0.03

Red chili 0.4 6.24 0.02

Chili pepper (Rawit) 0.1 13.54 0.02

Cooking oil 1.0 0.48 0.00

Total 8.22 0.04Sources: PIHPS, Mandiri Sekuritas Leo Rinaldy(+6221 5296 9406) [email protected] Aziza Nabila Amani (+6221 5296 9651) [email protected]

Cigarette: Inside the Pack–Mar’19

We encountered some new launches this month: 1) HMSP with its new Philip Morris Bold, its new re-branded U Bold, which is less profitable, as it is 13% cheaper and could potentially carry royalty charges if the brand does not belong to HMSP; 2) BAT with its new LTLN Dunhill Evoque with more premium pricing. Our survey also spots Japan Tobacco has discounted its products to Rp18K/pack for the next three months.

HMSP: Re-gaining presence with Philip Morris Bold. On March 6, HMSP re-branded Sampoerna U Bold into Philip Morris (PM) Bold with retail price of Rp12,000 for 12 sticks, a 13% drop from U Bold’s last price of ~Rp13,750. This makes PM Bold the cheapest in full-flavored segment at Rp1,000/stick, making it the least profitable brand within HMSP’s portfolio; we estimate its net revenue margin at c.13% (vs. c.23% for U Bold), excluding potential royalty charges if the brand does not belong to HMSP. PM Bold retails at 13-34% below Djarum’s Super MLD Black 12, HMSP’s Marlboro Filter Black (MFB) 12,

SECTOR



GGRM’s Surya 12, and International. HMSP reduced the nicotine/tar content from 32mg/2.1mg to 28mg/1.9mg, similar with the successful Marlboro Filter Black. To some extent, we also see the possibility of PM Bold disrupting GGRM’s GG Move given the pricing and packaging similarity. We understand HMSP sees the urge to increase volume traction for Sampoerna U, as the company has been losing market share from the high 5.9% in 3Q16 to 2.3% in 4Q18. Learning from MFB’s performance, the launch of affordable cigarettes with sophisticated packaging helped supporting HMSP’s market share loss from A Mild. MFB, however, contributes minimally to HMSP’s EPS, given the royalty charges, as the brand does not belong to HMSP; this could potentially be the same case with PM Bold.

BAT’s new Dunhill Evoque. BAT has strengthened its positioning in the low-tar low-nicotine (LTLN) segment through the recent introduction of Dunhill Evoque. The product is still not yet available at our surveyed outlets but already sold through BAT’s online store. Dunhill Evoque is segmented as the most premium LTLN in BAT’s portfolio with retail pricing of Rp25,000/20-stick or Rp1,250/stick; this is c.20%/5% above Lucky Strike Mild/Dunhill Mild. Our channel checks also suggest Dunhill Evoque will replace Dunhill Ultra, BAT’s SKM LTLN product that was just launched last year.

Industry pricing down 2.1% MoM. Japan Tobacco has recently discounted all of its SPM and SKM products to Rp18K/pack, bringing down the average retail price by 11.2% MoM. The discount will nonetheless be temporary for just three months.

OVERWEIGHT. We have Buy calls on HMSP and GGRM, yet prefer the latter for better risk/reward over the next 1 year. GGRM’s recent share price pullback, we think, was driven by expectations of lower-than-expected 4Q18 margin–we think this is not structural, as the very strong volume outperformance will structurally reverse YoY EPS decline (in 4Q18) to double-digit EPS growth within the next 1-2 quarters.

AVERAGE MOM RETAIL PRICE INCREASE (MARCH) YTD RETAIL PRICE INCREASE (UP TO MARCH)

-11.2%

-1.1%-0.3% -0.2%

0.1% 0.0%

-12.0%

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

Japan Tobacco

GGRM Djarum HMSP RMBA WIIM

-10.9%

-0.7%

0.3% 0.5% 0.2% 0.0%

-12.0%

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

Japan Tobacco

GGRM HMSP Djarum RMBA WIIM

Source: Mandiri Sekuritas survey Source: Mandiri Sekuritas survey

Adrian Joezer (+6221 5296 9415) [email protected] Riyanto Hartanto (+6221 5296 9488) [email protected] Lakshmi Rowter (+6221 5296 9549) [email protected]

Telecom: Broadband Barometer – March 2019

Telkomsel made selective price hikes this month and XL Axiata now pushes the more premium products to customers. Indosat and Hutch introduced additional product options to attract new customer engagements, while Smartfren kept prices flat. Also, new price hikes from smaller fixed broadband operators in place.

What’s new in March 2019? Telkomsel raised the prices of GigaMax packages by Rp10k this month, implying 3% - 20% MoM price increases. But, the operator kept the prices for all other packages unchanged this month. We also observe continued micro-targeting promotions by Telkomsel as the operator offers additional data allowances for Combo Vaganza packages purchased through electronic channels, such as the customers’ USSD menus and self-service app, as compared to through official customer service points.



Meanwhile, Indosat only made minor adjustment by lowering its ‘Unlimited +3GB’ combo price from Rp55k to Rp50k per month, down 10%. Though, we see this move as an effort to entice subscribers who already spend Rp25k-40k per month on Unlimited +1GB and Unlimited +2GB to now upgrade subscription tier a level or two above. Indosat made no changes to other packages, such as Yellow, Freedom Internet and Freedom Combo. We also observe wider difference between data combo prices offered in retail outlets and in self-service app and USSD menus, and no price changes on Yellow packages.

XL Axiata kept all prices unchanged, but there has been more branding and communication activities to push the more premium data combo packages i.e. XL Combo Prima (VIP) over the regular XL Combo Prima. The less premium packages, such as the Xtra Lite line-ups, are still available in the retail outlets, but are less so in the electronic channels.

Hutch introduced a number of new data packages under the the theme ‘Internet Never Dies’ and has shown better visibility in the retail outlets. We observe higher supply of Hutch’s products in the traditional retail outlets, indicating more re-stocking activities in 1Q19.

Lastly, Smartfren kept its prices unchanged, but maintained steady product supply and visibility this month.

Fixed broadband prices are still on the way up. The smaller operators, such as CBN and MyRepublic, responded positively to Telkom IndiHome’s and Link Net’s pricing moves as the former raised their subscription prices by 8%-28% this month. The decision to raise prices could potentially be driven by the higher bandwidth costs, which are partially linked to USD, and the better pricing environment in Greater Jakarta. Though, we caution that the rate of price increases in the past few quarters may have outpaced the household income growth, hence warranting risks of slower subs add and/or higher churn rate.

Maintain Neutral. There have been selective mobile price increases and pushes for more premium products in the market, indicating positive push to mobile revenue growth recovery in 1Q19. Meanwhile, IndiHome could maintain its pricing appeal as smaller operators followed suit with price increases this month. In overall, we still retain our Neutral rating on the sector, but reiterate our preference for the towercos given the favorable mobile capex cycle in 2019-21F and for XL Axiata given the company’s more favorable revenue mix and valuation.

MOBILE INTERNET PRICING UPDATE: FEBRUARY 2019 VS MARCH 2019

Price Band Ranking Market Telkomsel Indosat XL Axiata

Less than Rp50,000 per month

Indosat's Unlimited packages have strengthened its position as its select Unlimited package

has just decreased its price.

Average headline price decreased from Rp 11.9/MB in Feb-19 to Rp11.0/MB in Mar-

19, while Telkomsel’s premium increased from 9% in Feb-19

to 11% in Mar-19. It was driven mainly by select Simpati

Gigamax package movement to higher price band and the

additional Indosat Yellow product options.

Simpati GigaMax package that previously costs Rp49k/month now costs Rp59k/month and

has moved up the pricing tier; No price changes in other

packages.

Additional options under

Yellow line-ups.

No price changes.

Rp50,000 - 75,000 per month

Smartfren takes over pole position as Indosat's Unlimited package moved to lower price

band. Indosat trailed on second and third position

through Unlimited and Yellow packages

Average headline price increased from Rp 8.8/MB in

Feb-19 to Rp8.9/MB in Mar-19 due to selected product’s tier

upgrade. Meanwhile, Telkomsel’s premium

decreased quite significant from 123.6% in Feb-19 to

95.7% in Mar-19.

No price changes.

Additional options under

Yellow line-ups; 10%

price cut on Unlimited +

3GB package.

No price changes.

Rp75,000 - 100,000 per month

Smartfren and Indosat's unlimited packages still rank as the most affordable in the

market.

Average headline price decreased from Rp 7.3/MB in

Feb-19 to Rp7.1/MB in Mar-19 due to additional product

options from Indosat Yellow. Telkomsel’s premium slightly

increased from 193.2% in Feb-19 to 194.3% in Mar-19.

Simpati GigaMax package that previously costs Rp89k/month

now costs Rp99k/month, implying 11% hike; No price changes in other packages.

No change from Indosat.

No price changes.

Rp100,000 - 150,000 Indosat ranked as the most Average headline price Simpati GigaMax package that Additional No price



Price Band Ranking Market Telkomsel Indosat XL Axiata per month attractive in the market, as the

only operator offering unlimited data allowances in

the segment and through Yellow package. Hutch

followed through new Promo Data.

decreased from Rp 6.0/MB in Feb-19 to Rp5.7/MB in Mar-19

due to additional product options from Indosat Yellow.

Telkomsel’s premium increased from 175.6% in Feb-

19 to 210% in Mar-19.

previously costs Rp119k/month now costs

Rp129k/month, implying 8% hike; No price changes in other

packages.

options under Yellow line-

ups.

changes.

Rp150,000 - 200,000 per month

Hutch claimed the top position through PakeTri 4G On, left Indosat's Freedom

Combo and Smartfren's VEVO at second and third position.

Average headline price increased from Rp6.7/MB in

Feb-19 to Rp7.0/MB in Mar-19. Telkomsel’s premium

decreased from 149.7% in Feb-19 to 143.6% in Mar-19.

Simpati GigaMax package that previously costs

Rp169k/month now costs Rp179k/month, implying 6%

hike; No price changes in other packages.

No change from Indosat.

No price changes.

Source: Company Data, Mandiri Sekuritas Research estimates Kresna Hutabarat (+6221 5296 9542) [email protected] Henry Tedja (+6221 5296 9434) [email protected] Ace Hardware Indonesia: In-line 4Q18 Despite Decelerating Profit Growth (ACES; Rp1,840; Buy; TP: Rp1,700)

ACES booked Rp7.2tn of revenue in FY18 (+22% YoY), forming 101% to MANSEK’s and consensus’ estimates; 4Q18 revenue of 21% is stable compared to the 9M18 trend of 22%, thanks to its 12-19% YoY SSSG in 4Q18 and the 34 net store additions throughout FY18. Gross margin dipped slightly to 46.5% as the seasonality goes. However, EBIT of Rp1.1tn in 2018 missed estimates significantly, only forming 97%/93% of MANSEK/consensus’ FY18 estimates. This resulted in EBIT growth deceleration to 12.6% YoY in 4Q18, from 28% YoY in 9M18.

4Q18 NPAT of 9% YoY was also a significant deceleration from the 9M18 trend of 32% YoY; cumulatively, ACES booked NPAT at Rp965bn (+25% YoY), forming 100%/97% of MANSEK/consensus FY18 estimates.

Our call for ACES is under review.

ACES 4Q18

Rp bn 4Q18 3Q18 %qoq 4Q17 %yoy 12M18 12M17 %yoy%

Mansek % of Cons

Mansek ConsSeasona

lityNet Sales 2,076 1,779 17% 1,716 21% 7,240 5,939 22% 101% 101% 7,195 7,181 72%

Gross Profit 965 857 13% 801 20% 3,443 2,835 21% 101% 101% 3,414 3,407 72%

Operating Profit 308 290 6% 273 13% 1,072 869 23% 97% 93% 1,103 1,149 65%

Pretax 330 339 -3% 304 9% 1,203 955 26% 100% 98% 1,197 1,233 66%

Net Profit 267 271 -2% 245 9% 965 773 25% 100% 97% 969 994 66%

bps

change bps

changebps

change Gross margin 46.5% 48.2% (172) 46.7% (22) 47.6% 47.7% (17)

Operating margin 14.8% 16.3% (150) 15.9% (111) 14.8% 14.6% 18

Pretax margin 15.9% 19.1% (318) 17.7% (182) 16.6% 16.1% 53

Net margin 12.9% 15.3% (239) 14.3% (144) 13.3% 13.0% 31Source: Company, Mandiri Sekuritas

Lakshmi Rowter (+6221 5296 9549) [email protected]

Adhi Karya: 4Q18 Results - In-line with Ours, Below Consensus. (ADHI; Rp1,650; Buy; TP: Rp2,035)

Earnings came in-line with ours, below consensus. ADHI recorded 4Q18 earnings of Rp309bn (-0.6% yoy; +151.3% qoq), which leads to FY18 net profit of Rp644bn (+25% yoy) or 96%/80% achievement of our/consensus FY18 estimate respectively. Meanwhile, ADHI's FY18 core profit stood at Rp886bn (+7.9% yoy). On the top-line, the company booked 4Q18 revenues of Rp6.2tn (-3.4% yoy; +85.8% qoq) and FY18 revenues of Rp12.7tn (+3.3% yoy), below ours/consensus' target at 92%/86% respectively. We will provide more colour on ADHI's revenues after the full-formed note.

CORPORATE



Higher than expected margins. The company booked FY18 GPM at 16.0% (FY17: 13.6%), higher than our forecast of 13.0% and consensus at 14.6% as we suspect it was partially driven by higher-than-expected property segment. The solid GPM trickled down to OPM improvement as ADHI's FY18 OPM stood at 12.3% (FY17: 11.3%) despite higher opex to sales at 4.5% (FY17: 3.8%), while NPM reached 4.1% (FY17: 3.4%).

Balance sheet improvement and positive OCF. The company's net gearing improved to 80% (3Q18: 109.2%) driven by higher cash position at at Rp3.3tn (3Q18: Rp1.5tn) with total debt relatively flat at Rp8.3tn (3Q18: Rp8.2tn. Note that ADHI received the second payment of LRT Jabodebek of Rp2.5tn in 4Q18 based on LRT Jabodebek construction works from Oct'17 - Jun'18. Thus, it also translates to ADHI's positive operating cash flow in FY18 at Rp70.9bn (FY: Rp-3.2tn).

Maintain BUY. We retain our BUY recommendation with PT of Rp2,035. ADHI is currently trading at 7.3 P/E 2019F and 8.9 P/E 2020F. We think LRT project would still the main driver for ADHI's revenues in 2019, while there is a potential growth from TOD development. Key risks are delay in LRT project and property development.

ADHI 12M18 RESULTS

Rpbn 12M18 12M17 %yoy 4Q18 3Q18 %qoq 4Q17 %yoy FY18F % of ours

FY18C % of cons.

Revenue 15,655 15,156 3.3 6,223 3,349 85.8 6,441 -3.4 17,058 91.8 18,261 85.7

Gross profit 2,507 2,058 21.8 1,018 565 80.0 1,046 -2.7 2,214 113.2 2,672 93.8

Operating profit 1,933 1,708 13.2 829 471 76.3 943 -12.0 1,751 110.4 1,908 101.3

Pretax profit 1,168 957 22.0 494 241 105.1 496 -0.5 1,182 98.8 1,284 90.9

Net profit 644 515 25.0 309 123 151.3 310 -0.6 669 96.3 809 79.6

Gross margin (%) 16.0 13.6 16.4 16.9 16.2 13.0 14.6

Operating margin (%) 12.3 11.3 13.3 14.0 14.6 10.3 10.4

Pretax margin (%) 7.5 6.3 7.9 7.2 7.7 6.9 7.0

Net margin (%) 4.1 3.4 5.0 3.7 4.8 3.9 4.4

Edbert Surya (+6221 5296 9623) [email protected]

Alam Sutera Realty: 2018 Results – In-line with Mansek’s Estimates, Below Consensus’ (ASRI; Rp314; Sell; TP: Rp280)

Alam Sutera booked IDR4tn in 2018 full-year revenues, in-line with Mansek and consensus’ forecasts. 4Q18 revenue recognition had been weak and the company booked lower sequential margins during the quarter, but was well-accounted for as full-year results were within expectations.

Full-year margins were also in-line with Mansek’s forecasts, translating to bottom line of IDR970bn, albeit below consensus estimates.

IDRbn 4Q18 3Q18 QoQ % 4Q17 YoY% 9M18 2018 2017 YoY% 2018F FY18C% of

target% of cons

Revenue 772 1,006 -23% 747 3% 3,203 3,975 3,917 1% 3,849 3,807 103% 104%Gross profit 419 651 -36% 541 -22% 2,025 2,444 2,376 3% 2,355 2,357 104% 104%Operating profit 313 522 -40% 434 -28% 1,665 1,978 1,986 0% 1,937 1,730 102% 114%Pretax profit 371 168 121% 305 22% 784 1,155 1,576 -27% 1,116 1,199 103% 96%Net profit 331 122 172% 264 26% 639 970 1,380 -30% 942 1,074 103% 90% Gross margin 54% 65% 63% 61% 61% 61% 62%Operating margin 41% 52% 52% 50% 51% 50% 45%Pretax margin 48% 17% 24% 29% 40% 29% 31%Net margin 43% 12% 20% 24% 35% 24% 28%

Total debt 7,734 7,629Total equity 9,551 8,573Cash 459 718Net gearing 76.2% 80.6%

Robin Sutanto (+6221 5296 9572) [email protected]



Bank BNI: 2M19 Results - In line with Expectations (BBNI; Rp9,450; Neutral; TP: Rp8,000)

BBNI’s bank only net income stood at Rp2.3tn, +32% y-y, in 2M19, accounting for 13% of FY19 consensus and Mansek’s forecast. We estimate consolidated net income at Rp2.4tn, 14% of FY19 consensus and Mansek’s forecast – in line. Strong net profit growth was largely attributed to a significant decline in provision expense of -43% y-y. Meanwhile, PPOP declined 8% y-y on weak operating income growth of +1% y-y, coupled with opex growth of +13% y-y. Feb-19’s net profit was at Rp1.2tn, +12% m-m/+47% y-y, mostly attributed to a significant decline in provisioning of -61% y-y.

Loan growth +18% y-y/+1% m-m, deposit growth +12% y-y/+1% y-y. Deposit growth was driven by time deposits at +21% y-y, demand deposits at +6% y-y and saving deposits at +5% y-y, resulted in CASA ratio of 60% in Feb-19 compared to 63% in Feb-18. LDR stood at 91% in Feb-19 compared to 86% in Feb-18.

NIM declined to 4.7% in 2M19 from 5.5% in 2M18, driven by higher cost of fund, and a slightly lower asset yield. On a monthly basis, NIM declined slightly to 4.7% in Feb-19 from 4.8% in Jan-19, driven by asset yield reduction.

Cost to income ratio increased to 46% in 2M19 from 41% in 2M18. On a monthly basis, cost to income ratio also increased to 50% in Feb-19 from 42% in Jan-19.

Provisioning expenses declined -43%y-y to Rp1.2tn in 2M19. We estimate BBNI wrote off around Rp1.2tn of bad loans in 2M19 with the annualized cost of credit declined to 1.1% in 2M19 from 3.4% in 2M18. Provisioning to total loans also declined to 3.0% in Feb-19 from 3.7% in Feb-18.

Maintain Neutral with TP of Rp8,000 (under review). The stock is trading at 1.5x 2019 P/BV.

Income Statement (Rp bn)

Feb-18 Jan-19 Feb-19 %MoM %YoY 2M18 2M19 %YoY FY19F %ofFY19F

FY19 Cons

%ofFY19F

ConsNet interest income 2,620 2,628 2,483 (6) (5) 5,303 5,111 (4) 40,200 13

Non-interest income 612 1,082 928 (14) 52 1,741 2,010 15 15,095 13

Operating income 3,232 3,710 3,411 (8) 6 7,044 7,121 1 55,295 13 55,145 13

Provision expenses (1,151) (732) (451) (38) (61) (2,086) (1,182) (43) (8,417) 14

Operating expenses (1,337) (1,565) (1,720) 10 29 (2,896) (3,284) 13 (25,124) 13

Operating profit 744 1,414 1,240 (12) 67 2,062 2,654 29 21,753 12 21,956 12

PPOP 1,895 2,145 1,691 (21) (11) 4,148 3,836 (8) 30,170 13

Pre-tax profit 1,036 1,350 1,287 (5) 24 2,171 2,637 21 21,935 12 22,022 12

Net profit 824 1,083 1,209 12 47 1,735 2,292 32 17,418 13 17,417 13

Balance Sheet (Rp bn) Feb-18 Jan-19 Feb-19 %MoM %YoY

Gross loans 401,758 469,220 473,606 1 18

Demand deposits 137,366 144,219 146,129 1 6

Saving deposits 157,699 170,790 166,296 (3) 5

Time deposits 172,960 201,332 209,540 4 21

Total deposits 468,025 516,341 521,965 1 12

CASA to deposits (%) 63.0 61.0 59.9

Ratio (%) Feb-18 Jan-19 Feb-19 2M18 2M19

LDR 85.8 90.9 90.7 85.8 90.7

NIM 5.5 4.8 4.7 5.5 4.7

ROE 10.3 12.8 14.5 10.9 13.6

Cost to income 41.4 42.2 50.4 41.1 46.1

Cost of credit - net 3.4 1.9 1.1 3.1 1.5

Provisioning level 3.7 3.0 3.0 3.7 3.0

Tjandra Lienandjaja (+6221 5296 9617) [email protected]



Bank BTN: FY18 Results – Lower Due to Additional Provisioning (BBTN; Rp2,510; Buy; TP: Rp3,250)

Net profit of Rp2.81tr, -7% y-y, below expectations. BBTN recorded Rp2.8tr audited net profit in FY18, 12% below the Rp3.2tr recorded on the unaudited accounts. The main reason for the earning adjustment in on provisioning charges due to rising NPL as well as the preparation for the implementation of IFRS 9 in early 2020. PPOP still increased 11% y-y to Rp5.31tr with operating income (net interest income plus non-interest income) grew 11% y-y as well.

Loan growth at +19% y-y/+8% q-q. Similar to last quarter, loan growth was supported by subsidized housing loans, which grew +30% y-y, non-subsidized housing loans +12% y-y, construction loans at +12% y-y and commercial loans at +27% y-y. Subsidized housing loans now accounting for 41% of total loans, up from 38% a year ago while non-subsidized housing loans 33% from 35%. Construction loans and non-housing loans make up 12% and 10% each compared to 13% and 10% a year ago.

Deposit growth at +19% y-y/+18% q-q. Given the strong loan demand on lower cost housing, banks need to secure the funding during the tight liquidity situation in 2018. The collected more costly time deposits, which increased 34% y-y and now accounting for 57% of total deposits while current account and savings account increased +6% and 2% y-y, respectively. CASA now account for 43% of total deposits, down from 50% in Dec17. LDR improved to 103% from 113% in Sep18 but remained unchanged from a year ago.

NIM declined to 4.0% in 2018 from 4.5% in 2017 (bank’s calculation is 4.3% vs. 4.8%). BBTN had to offer high deposit rates to attract larger deposits in the last quarter of last year, given the tight liquidity in the system. At the same time, the portion of subsidized housing loans with the lower margin is rising. As a result, NIM was recorded at 4.0% in 4Q18 vs. 4.4% in 3Q18. The management expects to return their NIM back to 4.3% (4.0% based on our version) by end of the year through reduction in special deposit rates and more concentration on securing CASA through requirement for corporate to place their funds in BTN and from retail funding.

NPL increased to 2.82% from 2.65% in Sep18. Following the auditor’s review, they have to book higher NPL level and to book higher provisioning charges. Of the loan segments, most posted asset quality improvement except in construction and commercial loans. Most of the increase in these two segments NPL came from the sharia banking unit. Provisioning charges increased 94% to Rp1.71tr in 2018 with total write-off of around Rp0.8tr with cost of credit of 0.8% in 2018 vs. 0.5% in 2017. This improved the coverage ratio to 49% from 45% in 2017 and the bank will continue to increase this ratio up to 79% by end 2019 and 100% by 2020. Hence provisioning charges are expected at the range of Rp1.8-2.0tr for 2019. Special mention loans declined slightly to 8.5% in Dec18 from 8.8% in Dec17 while loans at risk increased to 15.4% from 14.5%.

2019 guidelines. Main target are: loan growth 13-15%, deposit growth 13-15% (more on CASA), LDR 105-107%, net profit growth +15%, NPL at 2.4%, NIM at 4.3%, ROE 16-18% and CAR 16-18%. The management indicated that the government’s financial holding company is to start in June, with BBTN to get the first priority for fresh capital injection from the holding company. Currently its total equity is Rp23.8tr with paid-up capital and premium to paid-up capital totaling Rp7.3tr with the plan for a rights issue in 2020. Prior to this, the bank will issue Rp3-5tr sub-debt and USD300m (senior) bonds in 2019. Going forward, BBTN will be the state bank that has more business for mortgage and property related business while the other three state banks will concentrate on other segments. We believe despite the weak results, the worst is over for the bank with upside earnings potential in the coming years. We hence maintain our positive stance on it while we still need to change our numbers.

Income Statement (Rp bn) 12M17 12M18 % YoY 4Q17 3Q18 4Q18 % YoY % QoQ FY18F

% of FY18F

FY18Cons

% of Cons

Net interest income 9,444 10,205 8 2,897 2,783 2,657 (8) (5) 10,176 100Non interest income 1,611 2,084 29 404 457 649 60 42 1,941 107

Fees & Commissions 893 1,044 17 277 264 301 9 14 1,060 99

Forex Income (0) (2) 281 0 2 (1) (600) (133) 1 (196)

Others 718 1,041 45 128 190 348 173 83 880 118

Operating income 11,055 12,289 11 3,301 3,239 3,306 0 2 12,117 101 12,526 98




12M17 12M18 % YoY 4Q17 3Q18 4Q18 % YoY % QoQ FY18F % of FY18F

FY18Cons

% of Cons

Provisioning expense (884) (1,714) 94 (287) (449) (848) 195 89 (1,040) 165

Operating expense (6,279) (6,981) 11 (1,709) (1,790) (1,670) (2) (7) (6,892) 101

Personnel Expenses (1,907) (2,474) 30 (383) (623) (539) 41 (13) (2,297) 108

Other Expenses (4,372) (4,507) 3 (1,327) (1,167) (1,131) (15) (3) (4,595) 98

Operating profit 3,892 3,594 (8) 1,304 1,001 789 (40) (21) 4,186 86 4,216 85PPOP 4,776 5,308 11 1,592 1,450 1,636 3 13 5,225 102Pre-tax profit 3,862 3,610 (7) 1,282 1,033 763 (40) (26) 4,198 86 4,153 87Net profit 3,027 2,808 (7) 1,022 812 572 (44) (30) 3,300 85 3,274 86

Balance Sheet (Rp bn)

Dec-17 Sep-18 Dec-18 % YoY % QoQ

Gross loan 198,991 220,077 237,758 19 8 Demand deposit 52,769 46,845 56,455 7 21

Saving deposit 38,840 39,797 39,117 1 (2)

Time deposit 101,339 108,406 134,692 33 24

Total deposit 192,949 195,048 230,264 19 18 CASA to deposits (%) 47.5 44.4 41.5

Ratio (%) 12M17 12M18 4Q17 3Q18 4Q18

CAR 18.9 18.2 18.9 18.0 18.2

Tier 1 CAR 16.0 16.0 16.0 15.6 16.0

LDR 103.1 103.3 103.1 112.8 103.3

NIM 4.46 4.03 5.06 4.44 3.98

ROE 15.1 12.4 19.4 14.2 9.7

NPL, cat.3-5 2.66 2.82 2.66 2.65 2.82

SML, cat. 2 8.8 8.5 8.8 10.3 8.5

Cost of credit 0.5 0.8 0.6 0.8 1.5

Loan loss coverage 45 49 45 46 49

Restructured Loan 6.6 8.9 6.6 8.0 8.9

Loan at risk 14.5 15.4 14.5 16.3 15.4

Cost to Income 56.8 56.8 51.8 55.2 50.5

Tjandra Lienandjaja (+6221 5296 9617) [email protected]

Bank BTN: 2M19 Results - Below Expectations (BBTN; Rp2,510; Buy; TP: Rp3,250)

BBTN recorded net income of Rp250bn, -35% y-y, net income in 2M19, accounting for 7% of FY19 consensus and 6% of Mansek’s current forecast – below expectations. Decline in bottom line growth was driven by a notable increase in provision expenses of +108% y-y, as the bank is preparing for IFRS 9 implementation early next year, as indicated during the analyst meeting today. Operating income grew a mere +1% y-y despite high loan growth and opex +4% y-y in 2M19, causing PPOP to decline -5% y-y. Feb-19’s net income totaled Rp158bn, +73% m-m/-12% y-y, driven by relatively weak operating income and high provisioning expenses.

Loan growth +21% y-y/+1% m-m, deposit growth +16% y-y/+1% m-m. Deposit growth was driven by time deposit at +28% y-y, followed by demand deposit at +4% y-y while saving deposit posted negative growth of -1% y-y. CASA ratio stood at 41% of total deposits in Feb-19 from 47% in Feb-18 while LDR stood at 109% in Feb-19 compared to 104% in Feb-18.

NIM weakened to 3.1% in 2M19 from 3.8% in 2M18 over increasing cost of funds, in particular the T/D which customers locked in for 2/3 months in Dec18. On a monthly basis, NIM has started to improve to 3.3% from 2.8% in Jan-19, as some of the high cost T/D have matured.



Provisioning expenses increased +108% y-y to Rp244bn in 2M19. Mansek estimates BTN to have written off Rp85bn of bad loans in 2M19. Annualized cost of credit increased to 0.5% in Feb-19 from 0.4% in Feb-18, while provisioning to total loans increased slightly to 1.3% in Feb-19 from 1.2% in Feb-18.

Cost to income ratio increased to 67% in Feb-19 from 65% in Feb-18. On a monthly basis, cost to income declined to 64% in Feb-19, from 70% in Jan-19.

Maintain Buy with TP Rp3,250 (under review) for the counter which is trading at 1.0x for 2019F P/BV.


Feb-18 Jan-19 Feb-19 %MoM %YoY 2M18 2M19 %YoY FY19F %of FY19F

FY19 Cons

%of FY19F

ConsNet interest income 739 661 761 15 3 1,514 1,421 (6) 12,574 11

Non interest income 103 254 87 (66) (16) 236 341 44 2,227 15

Operating income 842 915 848 (7) 1 1,750 1,762 1 14,801 12 14,209 12

Provision expenses (58) (151) (93) (38) 61 (117) (244) 108 (1,629) 15

Operating expenses (564) (641) (545) (15) (3) (1,144) (1,186) 4 (7,985) 15

Operating profit 220 123 209 71 (5) 489 332 (32) 5,187 6 4,476 7

PPOP 278 273 303 11 9 606 576 (5) 6,816 8

Pre-tax profit 228 117 202 73 (12) 493 318 (35) 5,195 6 4,456 7

Net profit 180 92 158 73 (12) 387 250 (35) 4,088 6 3,478 7

Balance Sheet (Rp bn) Feb-18 Jan-19 Feb-19 %MoM %YoY

Gross loans 197,445 235,086 237,983 1 21

Demand deposits 49,161 50,196 51,009 2 4

Saving deposits 38,860 36,375 38,295 5 (1)

Time deposits 101,242 131,175 129,966 (1) 28

Total deposits 189,263 217,745 219,270 1 16

CASA to deposits (%) 46.5 39.8 40.7

Ratio (%) Feb-18 Jan-19 Feb-19 2M18 2M19

LDR 104.3 108.0 108.5 104.3 108.5

NIM 3.8 2.8 3.3 3.8 3.1

ROE 9.9 4.5 7.8 10.6 6.2

Cost to income 67.0 70.1 64.3 65.4 67.3

Cost of credit - net 0.4 0.8 0.5 0.4 0.6

Provisioning level 1.2 1.3 1.3 1.2 1.3

Tjandra Lienandjaja (+6221 5296 9617) [email protected] Bank Jabar: FY18 Results - In line with Expectations (BJBR; Rp2,010; Neutral; TP: Rp1,900)

BJBR reported Rp1.5tn consolidated net income in 2018, +28%yoy, accounting for 102% of consensus’ and 94% of our expectations – in line. Bottom line growth was mostly supported by a decline in provision expenses of -34%yoy. PPOP grew +4%yoy, driven by operating income growth of +4%yoy, while opex grew +4%yoy. 4Q18’s net income totaled Rp208bn, +48%yoy/-53%qoq, supported by a flat opex growth.

Loan growth at +5%yoy/flat qoq, deposit grew flat yoy/-3% qoq. Deposit growth was driven by saving deposit at +16%yoy, while both time deposit and demand deposit grew slower at -3%yoy and -9%yoy, respectively. Decline in demand deposit was due to Government funds being draw down nearing year end. CASA stood at 46% in Dec-18, compared to 45% a year ago, while LDR stood at 92% in Dec-18 compared to 88% in Dec-17.



NIM weakened to 6.2% in 12M18, compared to 6.4% in 12M17 over a larger increase in cost of funds than in asset yield, while on a quarterly basis, NIM also declined to 6.2% in 4Q18 from 6.5% in 3Q18 due to the same reason.

Cost to income ratio stood at 66% in 12M18 compared to 65% in 12M17.

Bank only NPL increased slightly to 1.6% in Dec-18, from 1.5% in Dec-17. Moreover, provision expenses declined -34%yoy to Rp516bn in 12M18. We estimate BJBR wrote off approximately Rp1.4tn in 2018 compared to Rp529bn in 2017.

Maintain neutral with TP Rp1,900. The counter is trading at 1.5x PBV 2019F. More details to come after today’s analyst meeting.

Income Statement (Rp bn) 12M17 12M18 %YoY 4Q17 3Q18 4Q18 %YoY %QoQ FY18F %FY18F

FY18Cons

% of Cons

Net interest income

6,293 6,499 3 1,635 1,678 1,650 1 (2) 6,385 102

Non interest income 901 993 10 279 250 263 (6) 5 915 109

Fees &Commisions 48 54 12 20 19 18 (8) (1) 34 159

Forex Income 11 16 39 2 3 4 81 48 17 95

Others 842 924 10 256 229 240 (6) 5 864 107

Operating income 7,194 7,493 4 1,914 1,928 1,913 (0) (1) 7,300 103 7,739 97

Provision expense (782) (516) (34) (239) (114) (290) 22 155 (269) 192

Operating expense (4,701) (4,911) 4 (1,390) (1,189) (1,383) (0) 16 (4,807) 102

Personnel Expenses (2,251) (2,160) (4) (596) (526) (570) (4) 8 (2,194) 98

Other Expenses (2,450) (2,751) 12 (793) (663) (813) 3 23 (2,613) 105

Operating profit 1,711 2,065 21 285 625 240 (16) (62) 2,224 93 1,899 109

PPOP 2,493 2,581 4 524 739 530 1 (28) 2,493 104

Pre-tax profit 1,632 1,937 19 266 569 207 (22) (64) 2,200 88 1,964 99

Net profit 1,212 1,548 28 141 439 208 48 (53) 1,650 94 1,525 102

Balance Sheet (Rp bn) Dec-17 Sep-18 Dec-18 %YoY %QoQ

Gross loan 76,452 79,656 79,992 5 0

Demand deposit 20,309 27,221 18,449 (9) (32)

Saving deposit 18,619 17,883 21,601 16 21

Time deposit 48,272 44,363 46,954 (3) 6

Total deposit 87,200 89,467 87,003 (0) (3)

CASA to deposits (%)

44.6 50.4 46.0

Ratio (%) 12M17 12M18 4Q17 3Q18 4Q18

CAR 18.9 19.0 18.9 17.8 19.0

Tier 1 CAR 16.2 16.6 16.2 15.2 16.6

LDR 87.7 91.9 87.7 89.0 91.9

NIM 6.4 6.2 6.3 6.5 6.2

ROE 12.5 14.5 5.6 15.5 7.3NPL, cat.3-5 (bank only)

1.5 1.6

1.5 1.6 1.6

SML 2.3 2.6 2.3 3.1 2.6

Loan at Risk 4.0 4.4 4.0 4.9 4.4Loan loss coverage (bank only)

53 51

53 39 51

Cost to Income 65.3 65.6 72.6 61.7 72.3

Restructed Loans 0.2 0.1 0.2 0.1 0.1

Silvony Gathrie (+6221 5296 9544) [email protected]



Gudang Garam: EPS Miss in 4Q18; Expect Growth Reversals Ahead (GGRM; Rp84,250; Buy; TP: Rp94,050)

Absent of price increases contributed to the margin weakness in 4Q18 but translated into a stellar market share gain with volume growth acceleration to a staggering 13% YoY from just 6% in 9M18. We think volume growth strength should continue into 1Q19; the unusual 35% QoQ receivable days drop in 4Q18 indicates much healthier channel-stuffing in contrast to HMSP’s 50% QoQ receivable days increase. We think recent price weakness has partly priced in the weak 4Q18 margin. Retain our Buy call as we expect EPS growth reversals ahead.

4Q18: EPS miss, yet not structural given the strong volume beat. GGRM reported 2018 revenue/net profit of Rp95.7tn/Rp7.8tn in 2018, implying strong 15% revenue growth but flat EPS growth. Revenue came 3% ahead of our and consensus estimates, yet net profit was 3-4% short. 4Q18 revenue jumped 19% YoY, which was volume-driven as gross margin came modest at 19% only; explaining the 13% YoY earnings decline.

Key highlights: 1. Impressive c.13% volume growth in 4Q18. Gauging from the time-weighted ex-factory price movement, we

estimate that GGRM delivered c. 13%/8% YoY volume growth in 4Q18/12M18, improving further from c. 6% YoY in 9M18. This is far above its peers as HMSP earlier reported -0.1%/+0.2% YoY volume growth in 4Q18/12M18, despite having extended its receivable days by c.4 days QoQ to 12 days in end-4Q18. In contrary, GGRM’s receivable days declined by 35% lower QoQ, or 4 days shorter to c.6 days in 4Q18, indicating healthier channel-stuffing. HMSP also estimated industry volume growth of +0.9%/-0.1% YoY in the same period, which GGRM managed to beat. This volume strength also came despite the absence of last bite effect given no ASP hikes in 2019, which raises historical Q4 volume base.

2. Last stop before EPS recovery. GGRM expectedly booked weak EPS growth in 4Q18 given the absence of ASP adjustment compared to 4Q17; this is visible in the drop of gross margin to 19% (vs. 23.4% in 4Q17) and subsequently missed the street’s estimates. Nevertheless, this is not as bad as feared by the market given the exceptionally strong volume beat. Going forward, these figures serve as an easier base for future earnings growth, especially as the strong volume beat is a structural positive for GGRM.

3. Rp1.9trn higher Net Fixed Asset in 4Q18. Net Fixed Asset increased by Rp1.9trn to Rp22.8trn in 4Q18, from Rp20.8trn in 3Q18. While the long-form financials are not yet available, we think this could be related to the earlier announcement regarding the land purchases (related to the airport development) made on 4 December 2018, amounting to Rp1.1trn (51% paid through land transfer, rest in cash).

Buy rating with Rp94,050 price target. We think weak 4Q18 is just temporary and is not structural given the strong volume beat, which should continue into 1Q19. Lower receivable days also indicate a much healthier volume performance relative to HMSP. We expect GGRM to start raising prices again in mid-year onwards, which should catalyze its 2H19 earnings growth.

GGRM (Rp bn) 12M18 12M17 YoY 4Q18 4Q17 YoY 3Q18 QoQ % of Mansek

% of Consensus

Revenue 95,708 83,306 15% 25,818 21,783 19% 24,584 5.0% 103% 103%

Gross profit 18,644 18,222 2% 4,934 5,103 -3.3% 4,722 4.5% 96% 97%

EBIT 11,093 11,119 0% 2,891 3,396 -14.9% 3,252 -11.1% 95% 93%

Net interest income (678) (801) -15% (201) (222) -9.1% (180) 11.7%

Others 64 119 -46% 30 (12) -350.4% (61) -148.9%

Pretax profit 10,479 10,437 0% 2,719 3,162 -14.0% 3,011 -9.7% 96% 96%

Tax (2,686) (2,681) 0% (688) (826) -16.8% (805) -14.5%

Minority interests (1) (2) -27% (0) (2) -99.9% 0 -105.6%

Net profit 7,792 7,754 0% 2,031 2,334 -13.0% 2,206 -7.9% 96% 95%

Margins

Gross 19.5% 21.9% -2.4% 19.1% 23.4% -4.3% 19.2% -0.1%

EBIT 11.6% 13.3% -1.8% 11.2% 15.6% -4.4% 13.2% -2.0%

Net profit 8.1% 9.3% -1.2% 7.9% 10.7% -2.8% 9.0% -1.1%

Adrian Joezer (+6221 5296 9415) [email protected]



Indika Energy: FY18 Net Profit was Below Forecast (INDY; Rp1,890; Neutral; TP: Rp2,100)

2018 net profit was below forecast on weak 4Q18. INDY reported USD32mn net loss in 4Q18 (vs USD18mn net profit in 4Q17 and USD36mn in 3Q18), bringing FY18 net profit to USD 80mn, representing 57%/ of our/ consensus forecast. We believe weak 4Q18 was due to higher production cost (+24% qoq) while revenue grew by only 7%qoq, as a result, operating margin in 4Q18 declined to 7.0% from 19.2% in 3Q18. INDY also booked USD15mn of one-off adjustment on changes in fair value of contingency loan. FY18 revenue grew by 170% yoy to USD 2.9bn which we believe was caused by higher ASP and higher sales volume.

Maintain Neutral with Rp2,100 TP. INDY currently trades at 5.5x FY19F PE. we see risk to our earnings forecast this year as we expect higher production cost this year as a result of higher SR and softer outlook of lower quality coal price

in US$mn 4Q18 4Q17 %YoY 3Q18 %QoQ 12M18 12M17 %YoY FY18F % ours % to cons.

Revenue 782.4 404.1 94% 733.2 7% 2,963 1,099 170% 2,749 108% 105%

COGS (693.1) (367.5) 89% (559.1) 24% (2,322) (976) 138% (2,107) 110% 111%

Gross profit 89.3 36.6 144% 174.2 n/a 641 123 422% 642 100% 90%

Operating expenses (34.3) (31.9) 7% (33.3) 3% (133) (89) 50% (192) 69% 45%

Operating profit 55.0 4.7 1067% 140.9 n/a 508 34 1389% 450 113% 122%

Earnings before tax (13.1) 23.4 n/a 84.1 n/a 265 102 159% 236 113% 53%

Net profit (32.1) 18.1 n/a 35.9 n/a 80 102 n/a 141 57% 57%

Gross margin 11.4% 9.1% 23.8% 21.6% 11.2% 23.4%

Operating margin 7.0% 1.2% 19.2% 17.1% 3.1% 16.4%

Net margin n/a 4.5% 4.9% 2.7% 9.3% 5.1%

Effective tax rate n/a 22.7% 57.4% 69.8% 0.0% 40.0%

Ariyanto Kurniawan (+6221 5296 9682) [email protected]

Link Net: Earnings Miss in 4Q18; Competitiveness in Question (LINK; Rp4,500; Buy; TP:Rp6,200)

Link Net booked disappointing revenue and earnings growth trends due to one-off costs coming from related parties and unfavorable subscriber base trend in 4Q18. On full year basis, revenue and net profit missed consensus estimates by 1%-29%.

4Q18 Revenues of Rp934bn (+4.5% YoY, -1.6% QoQ) came below our forecast by 5.3%. Link Net lost 5k subscribers in 4Q18, versus additional 12k quarterly subs net add in 3Q18, due to one-off disconnection of 5k Bolt Home customers and reaction to price hikes done in 3Q18. Link Net added 55k new home passed in the quarter. On full year basis, revenues grew 9.7% YoY to Rp3.73tn and came 1.2%/1/4% below consensus and our expectations. Revenue growth rate of 9.7% is pale in comparison to ~15% growth rate in 2016-17 and the revenue growth slowdown can be attributed to the slower subscriber base add, despite continued homes passed addition over the past 3 years.

4Q18 EBITDA of Rp218bn (-58.2% YoY, -60.7% QoQ) came below our estimates by 63.3%. The EBITDA miss was driven by one-off write downs for Rp334bn related to Internux. The write downs comprised of Rp161bn Internux receivables write-off and Rp155bn Internux-related inventory write-off. Management commented that there will be no further Internux related provisions, going forwad. On normalizes basis, EBITDA should amount to Rp552bn in 4Q18, vs Rp555bn in 3Q18. On full-year basis, Link Net reported Rp1.86tn EBITDA, down 6.7% YoY and 15.5%/16.8% below consensus/our expectations. Though, the normalized FY18 EBITDA amounts to Rp2.20tn, or 10.0% higher than FY17 EBITDA.

4Q18 Net Loss of Rp27bn missed our expectation. D&A charges trended in-line with seasonality and our expectation in 4Q18. Non-operating trends were favorable too as the company booked Rp3bn non-operating gains in 4Q18. On full year basis, Link Net reported Rp789bn Net Profit, down 21.7% YoY and 29.1%/28.4% below consensus/our expectations. On normalized basis, we estimate Net Profit of Rp1.03tn in FY18, vs. Rp1.01tn in FY17.



Under Review. The subscriber loss trend in 4Q18 is perplexing and could indicate the company’s declining competitiveness. Negative reactions to price hikes could typically be mitigated through direct contract re-negotiation with customers within 1-2 month of disconnection, though at the expense of ARPU profile. We also do not see the wireless 4G LTE Internux/Bolt’s service discontinuation as strong enough drivers for average subscribers to disconnect fixed broadband services from Link Net, since Internux/Bolt’s services have always been positioned as complementary, not as core, offering within Link Net’s fixed broadband subscriptions. Despite the high probability of service re-connection and new subs addition from new homes passed from 1Q18 onwards, there is still limited visibility on sub growth traction so far, hence giving challenges to our long term thesis on the company’s potential to tap the growing broadband demand in Indonesia.

LINK NET: 4Q18 RESULTS

in Rp bn 4Q17 3Q18 4Q18 4Q18F YoY QoQvs

Mansek FY17 FY18 YoY% of

FY18F Mansek

% of FY18F

cons.

Broadband 496 528 532 549 7.2% 0.8% -3.2% 1,920 2,078 8.2%

Cable TV 323 340 340 356 5.3% 0.0% -4.4% 1,243 1,348 8.4%

Others 75 82 63 81 -16.8% -23.2% -22.9% 236 302 28.1%

Revenue 894 949 934 986 4.5% -1.6% -5.3% 3,399 3,728 9.7% 98.6% 98.8%

Direct costs 186 205 184 195 -1.1% -10.0% -5.6% 707 775 9.7%

Selling expenses 59 55 56 56 -5.4% 1.2% -0.6% 215 223 3.5%

G&A expenses 126 134 476 139 277.2% 254.5% 242.1% 481 870 80.7%

Operating expenses 371 394 716 390 92.7% 81.6% 83.3% 1,403 1,867 33.1%

EBITDA 522 555 218 595 -58.2% -60.7% -63.3% 1,996 1,861 -6.7% 83.2% 84.5%

% margin 58.5% 58.5% 23.4% 60.4% -3507 bps -3510 bps -3702 bps 58.7% 49.9% -880 bps

One-off adjustments - - 334 - N.A. N.A. N.A. - 334 N.A.

Normalized EBITDA 522 555 552 595 5.7% -0.5% -7.2% 1,996 2,195 10.0%

D&A 168 181 186 186 10.3% 2.3% -0.2% 644 719 11.6%

Operating profit 354 374 33 410 -90.7% -91.2% -92.0% 1,352 1,142 -15.5% 75.2% 76.2%


Non-operating items 1 (16) 3 (30) 122.7% n.a. -1166.2% (12) (22) 77.0%

Pretax profit 355 358 36 380 -90.0% -90.0% -90.6% 1,339 1,120 -16.3%


Taxes (88) (89) (62) (95) -29.4% -29.6% -34.2% (332) (332) -0.2%

% effective tax rate 24.9% 24.8% 175.2% 25.0% 15028 bps15037

bps15017

bps 24.8% 29.6% 479 bps

Minority interest 0 - - 0 n.a. n.a. n.a. 0 - N.A.

Net profit 267 269 (27) 285 n.a. n.a. n.a. 1,007 789 -21.7% 71.6% 70.9%

% margin 29.9% 28.3% -2.9% 28.9% -3274 bps -3121 bps -3178 bps 29.6% 21.2% -847 bps

Net profit (normalised) 264 269 224 290 -15.4% -16.8% -23.0% 1,005 1,034 2.9%


Operating Stats



in Rp bn 4Q17 3Q18 4Q18 4Q18F YoY QoQ vs Mansek

FY17 FY18 YoY% of

FY18F Mansek

% of FY18F

cons.

Homes passed ('000) 2,000 2,146 2,201 10.1% 2.6% 2,000 2,201 10.1%

Net Adds 56 70 55 174 201

Broadband subscribers ('000) 570 600 595 4.4% -0.8% 570 595 4.4%

Net Adds 9 6 (5) 49 -

Blended ARPU (Rp '000) 424 419 428 0.9% 2.1% 421 422 0.2%Source: Company Data, Mandiri Sekuritas Research estimates

Kresna Hutabarat (+6221 5296 9542) [email protected] Henry Tedja (+6221 5296 9434) [email protected] Mayora: 4Q18 Results - Weakening export, profit saved from A&P cut (MYOR; Rp2,560; Neutral; TP: Rp2,550)

MYOR booked Rp24tn of revenue in FY18 (+15.6% YoY), though a deceleration is apparent in 4Q18 with only 3% YoY (vs. 21% in 9M18) ; this achieves 98% of MANSEK’s FY18 estimates, and 100% of consensus’. EBIT/net profit in 4Q18 were up 14%/-7.5% YoY, where EBIT trends up from 2% in 9M18 while NPAT geared down from 19% YoY. Cumulatively, EBIT/NPAT formed 111%/104% of MANSEK’s estimates, and 101%/101% of consensus’. Stripping out the Rp130bn FX loss, core profit was up 11% YoY instead.

The deceleration in revenue was significantly driven by export sales, which dropped to -5% YoY from 29.7% in 9M18. Management has previously flagged that export sales to Philippines was troubled from logistics and port issues, while we understand competition within powdered coffee has also been tight. By product however, both confectioneries and coffee posted similar revenue trends of 2.2% and 3.9% YoY in 4Q18, respectively; domestic biscuit competition cannot be overlooked, as ICBP shared a similar view.

EBIT margin was up 950bps QoQ to 16.9%, MYOR’s all-time high; this resulted in 14% YoY EBIT growth despite the weak revenue trend. The QoQ drop in A&P to only 5% of revenue was the primary driver, on top of the more benign raw material costs especially within coffee whose gross margin was up 4.5ppt QoQ. Indeed, prices for coffee and white sugar were down c.16% and c.21% YoY in FY18. Gross margin in confectioneries was understandably flat, especially amidst the rising wheat prices throughout FY18.

We have a Neutral call on MYOR.

MYOR IJ (Rp bn) 12M18 12M17 % YoY 4Q18 4Q17 % YoY 3Q18 % QoQ % of

MANSEK% of

CONSNet sales 24,061 20,817 15.6% 6,711 6,518 3.0% 6,533 2.7% 98.0% 99.9%

Gross profit 6,397 4,975 28.6% 1,899 1,740 9.1% 1,717 10.5% 101.7% 102.1%

Operating profit 2,628 2,461 6.8% 1,135 993 14.3% 486 133.3% 111.5% 101.8%

Pretax profit 2,382 2,187 8.9% 874 920 -5.0% 496 76.2% 105.1% 103.1%

Net profit 1,716 1,594 7.6% 616 667 -7.5% 364 69.2% 103.8% 100.9%

Core profit 1,595 1,526 4.5% 715 644 11.1% 261 174.4% 117.1%

Gross margin 26.6% 23.9% 2.7% 28.3% 26.7% 1.6% 26.3% 2.0%

Operating margin 10.9% 11.8% -0.9% 16.9% 15.2% 1.7% 7.4% 9.5%

Pre-tax margin 9.9% 10.5% -0.6% 13.0% 14.1% -1.1% 7.6% 5.4%

Net margin 7.1% 7.7% -0.5% 9.2% 10.2% -1.0% 5.6% 3.6%



Segmental performance 12M18 12M17 % YoY 4Q18 4Q17 % YoY 3Q18 % QoQ % of

MANSEKSales by region

Domestic sales 12,964 11,321 14.5% 3,438 3,055 12.5% 3,561 -3.4%

Export sales 11,109 9,501 16.9% 3,276 3,464 -5.4% 2,979 10.0%

Confectioneries

Sales 12,432 11,024 12.8% 3,630 3,552 2.2% 3,389 7.1% 95.6%

Gross margin 23.9% 23.8% 0.1% 23.9% 25.2% -1.3% 24.0% -0.1%

EBIT margin 8.3% 10.0% -1.7% 12.5% 13.6% -1.2% 6.4% 6.1%

Coffee

Sales 11,628 9,792 18.8% 3,081 2,966 3.9% 3,144 -2.0% 100.6%

Gross margin 29.4% 24.0% 5.4% 33.2% 28.4% 4.8% 28.7% 4.5%

EBIT margin 13.7% 13.9% -0.2% 22.0% 17.2% 4.7% 8.6% 13.3%

Adrian Joezer (+6221 5296 9415) [email protected] Sarimelati Kencana: Strong revenue in 4Q18, NPAT came in-line (PZZA; Rp1,215; Buy; TP: Rp1,400)

PZZA posted 19% YoY revenue growth in 4Q18, an improvement from 17.9% in 9M18. This brings cumulative revenue to Rp3.5tn (+18% YoY), achieving 105% of MANSEK’s FY18 estimates, and 102% of consensus’. Subsequently gross profit/EBIT are up 18%/17% YoY in 4Q18, where both cumulatively formed 106%/100% of MANSEK’s FY18 estimates while EBIT formed 90% of consensus’, which expected meaningfully higher EBIT margin.

Interest cost was down 50% YoY as PZZA continues to pay down its debt; as of Dec’18, total debt stood at Rp221bn, lowering the DER to 19%. This raises FY18 NPAT to Rp173bn (+22% YoY), with 4Q18 NPAT accelerating to 25% YoY. This achieves 100%/105% of our and consensus’ estimates

We have a Buy call on PZZA. PZZA4Q18

Rp bn 4Q18 3Q18 %qoq 4Q17 %yoy 12M18 12M17 %yoy % Mansek

% of Cons

Mansek Cons Seasonality

Net Sales 999 854 17% 842 18.6% 3,574 3,027 18% 105% 102% 3,397 3,489 72%

Gross Profit 665 566 18% 562 18% 2,393 2,025 18% 106% n/a 2,255 n/a 72%

Operating Profit 87 22 291% 74 17% 216 175 23% 100% 90% 217 240 58%

EBITDA -249 64 -490% 115 -317% 0 326 -100% 0% 0% 386 375 65%

Pretax Profit 96 28 240% 76 25% 232 189 23% 101% 103% 231 225

Net Profit 71 20 258% 57 25% 173 141 22% 100% 105% 173 165 60%

bps

change bps

changebps

change Gross margin 66.5% 66.2% 33 66.7% (18) 67.0% 66.9% 4

Operating margin 8.7% 2.6% 609 8.8% (11) 6.0% 5.8% 24

Net margin 7.1% 2.3% 480 6.8% 36 4.8% 4.7% 17Source: Company, Mandiri Sekuritas estimates Lakshmi Rowter (+6221 5296 9549) [email protected]



Ramayana: Revenue missed street’s estimates, but profit beat (RALS; Rp1,780; Buy; TP:Rp1,700) RALS

Rp bn 4Q18 3Q18 %qoq 4Q17 %yoy 12M18 12M17 %yoy % Mansek

% of Cons

Seasonality

Net Sales 1,223 1,021 20 1,205 2 5,740 5,623 2.1 99 94 78

Gross Profit 502 451 11 480 5 2,507 2,212 13 108 114 80

Operating Profit 47 0 35064 5 821 608 356 71 122 110 102

Pretax Profit 66 33 101 37 76 717 467 54 118 106

Net Profit 60 41 45 39 54 587 407 44 115 102 91

ppt

change ppt

change ppt

change Gross margin 41.0 44.2 (3) 39.8 1 43.7 39.3 4.3

Operating margin 3.9 0.0 4 0.4 3 10.6 6.3 4.3

Pretax margin 5.4 3.2 2 3.1 2 12.5 8.3 4.2

Net margin 4.9 4.0 1 3.2 2 10.2 7.2 3.0 Source: Company, Mandiri Sekuritas estimates

Lakshmi Rowter (+6221 5296 9549) [email protected] Sarana Menara Nusantara: One-off Drag in 4Q18 - Respectable FY18 Trends (TOWR; Rp775; Buy; TP: Rp950)

4Q18 revenue and earnings trends were disrupted by Internux revenue de-recognition. On full year basis, SMN’s net profit came ~7% below consensus expectation, though revenues came ~1% above in FY18. Though, latest tower leases renewal announcement adds confidence on FY19’s earnings growth trajectory. Maintain BUY.

4Q18 Revenues of Rp1.52tn (+12.0% YoY, -1.1% QoQ) is 3.7% below our expectation. SMN booked 209 tenancy net adds and 203 tower net adds in 4Q18, but booked 8.0% QoQ decline in effective ARPT, from Rp17.1mn/month in 3Q18 to Rp15.7mn/month – likely due to Internux revenue de-recognition and full-year normalization. Tenancy ratio was stable on QoQ basis at 1.62x in 4Q18 , but down on YoY basis vs. 1.68x in 4Q17. To note, Internux’s site leases formed 3.4% of SMN’s total site leases in FY18 and the company has entered ‘payment suspension’ period as of 17 Sept 2018. On full-year basis, SMN booked Rp5.87tn revenues in FY18, up 9.9% YoY. SMN’s FY18 revenues beat consensus expectation by 1.3%, but ran below our expectation by 1.0%. SMN also announced the renewal and extension of >9,000 tower leases coming due over the next four years, putting total contracted revenue from all business lines higher from Rp26.1tn to Rp43.1tn through 2032.

4Q18 EBITDA of Rp1.25tn (+5.7% YoY, -3.2% QoQ) is 5.7% below our expectation. COGS came higher than expected in 4Q18 as SMN booked marked increases in Transponder Rentals, Electricity, and Link Rentals. Though, Selling and G&A expenses trended in-line with seasonality and our expectation. EBITDA margin closed at 82.3%, down 491bps YoY/179bps QoQ, as SMN booked higher revenue mix from non-tower rental businesses. On full year basis, SMN booked Rp4.93tn EBITDA in FY18, up 7.1% YoY. SMN’s FY18 EBITDA was relatively in-line with consensus expectation, but 1.5% below our expectation. EBITDA margin is also lower by 220bps YoY, closed at 84.0% in FY18. COGS grew 54.1% YoY due to additional cost run-rate from KIN and the lower EBITDA margin coming from the growing fiber and MWIFO business.

4Q18 Net Profit of Rp494bn (+4.3% YoY, -21.1% QoQ) is 23.1% below our expectation. D&A charges ran flattish on QoQ basis, but Non-Operating Expenses about doubled on QoQ basis. Effective tax rate also increased to 25.8% in 4Q18, vs. 25.0% in 3Q18. On full year basis, SMN reported Rp2.20tn Net Profit in FY18, up 4.8% YoY. To note, SMN managed to recover Rp199bn of allowance for impairment losses in FY18 (vs. allowance impairment balance of Rp228bn in FY17-end). Hence, on normalized basis, we estimate net profit decline of 4.1%, from Rp2.28tn in FY17 to Rp2.19tn in FY18.



Maintain Buy. Revenue and earnings trends in 4Q18 were dragged by Internux revenue de-recognition and higher COGS. However, the renewed and higher mobile capex commitment, especially from the top 4 mobile network operators, could help SMN deliver high single-digit revenue growth in FY19. At 2.1x net debt-to-EBITDA today, SMN also has enough leverage room to pursue additional inorganic growth in 2019-21F. Hence, we retain our BUY rating on SMN – the stock now trades at 9.0x/8.5x EV/EBITDA ‘19F/’20F and offers 3.0% dividend yield. More details to follow after the company’s earnings call on Monday, 1 April 2019, at 7PM JKT time.

TOWR: 4Q18 RESULTS

in Rp bn 4Q17 3Q18 4Q18 4Q18F YoY QoQ vs Mansek's

FY17 FY18 YoY vs FY18F Mansek

vs FY18F Consensus

Tower rentals 1,258 1,436 1,331 1,442 5.8% -7.3% -7.7% 4,999 5,339 6.8%

VSAT rentals 53 76 88 79 65.7% 15.7% 11.9% 210 293 39.4%

MWIFO rentals 49 28 103 60 112.7% 268.4% 71.4% 128 236 83.9%

Repeater rentals 0 - 0 - n.a. n.a. n.a. 0 0 n.a.

Revenues 1,360 1,540 1,523 1,581 12.0% -1.1% -3.7% 5,338 5,868 9.9% 99.0% 101.3%

COGS 69 112 136 114 96.8% 21.8% 19.4% 277 428 54.1%

D&A 231 313 312 325 35.1% -0.5% -4.2% 895 1,114 24.5%

Gross profit 1,060 1,115 1,075 1,142 1.4% -3.6% -5.9% 4,166 4,326 3.8%

% margin 77.9% 72.4% 70.6% 72.2% -736 bps -182 bps 294 bps 78.0% 73.7% -432 bps

Selling expense 19 29 27 28 41.1% -6.6% -3.2% 80 109 35.9%

G&A 86 105 107 110 24.1% 1.9% -3.3% 376 399 6.0% Operating Expenses 105 134 134 139 27.2% 0.0% -3.2% 457 509 11.3%

EBITDA 1,185 1,295 1,252 1,328 5.7% -3.2% -5.7% 4,604 4,932 7.1% 98.5% 99.6%


EBITDA less net interest expense 1,045 1,043 1,003 1,115 -4.0% -3.8% -10.0% 3,984 4,093 2.7%

Operating Income 955 981 941 1,003 -1.5% -4.1% -6.2% 3,709 3,817 2.9% 98.4% 97.8%


Other Income (Expenses)

(310) (146) (274) (160) -11.5% 88.5% 71.3% (906) (866) -4.4%

PBT 644 836 666 843 3.4% -20.3% -21.0% 2,803 2,952 5.3%

% margin 47.4% 54.2% 43.7% 53.3% -364 bps-1049

bps -134 bps 52.5% 50.3% -221 bps

Income Tax (171) (209) (172) (200) 0.6% -17.7% -14.1% (703) (752) 6.9%

% effective tax rate -26.5% -25.0% -25.8% -23.8% 70 bps -80 bps -141 bps -25.1% -25.5% -39 bps

Minority Interest (0) (0) 0 (0) n.a. n.a. n.a. (0) (0) -61.5%

PATAMI 473 626 494 642 4.3% -21.1% -23.1% 2,100 2,200 4.8% 93.7% 93.1%

% margin 34.8% 40.7% 32.4% 40.6% -237 bps -821 bps -176 bps 39.3% 37.5% -185 bps Source: Company Data, Mandiri Sekuritas Research estimates Kresna Hutabarat (+6221 5296 9542) [email protected]



Surya Citra Media: Positive Earnings Growth Inflection in FY18 (SCMA; Rp1,650; Buy; TP:Rp2,200)

SCM booked 11.5% YoY net profit growth in FY18, a positive reversal from negative net profit trends in FY16-17. SCM’s profit recovery was driven by record high audience shares and better content monetization strategies. New digital investments plan could better position SCM for long term growth too. Maintain BUY.

4Q18 Revenues of Rp1.21tn (+17.3% YoY, -8.4% QoQ) came relatively in-line with our expectation. The strong YoY revenue growth in 4Q18 was supported by the 747bps YoY/307bps QOQ all time audience share gains. On full year basis, SCM booked Rp5.00tn revenues in FY18, up 12.3% YoY and the highest ever recorded. SCM outperformed the rest of the industry on revenue growth due to one-off Asian Games revenues and record high audience shares during the year. SCM’s FY18 revenues beat consensus estimate by 1.2%, but came in-line with our estimate.

4Q18 Operating Profit of Rp386bn (+33.8% YoY, -19.4% QoQ) was relatively in-line with our expectation. Program and Broadcasting expenses grew 14.3% YoY, mainly to support the strong audience share performance and to cover the additional sports programming line-ups. On full year basis, SCM booked Rp1.94tn operating profit in FY18, up 9.0% YoY. Successful programming strategy helped achieve revenue growth outperformance in FY18 and covered the additional G&A costs during the year. SCM’s FY18 Operating Profit missed consensus estimate by 5.9%, but came in-line with our estimate.

4Q18 Net Profit of Rp296bn (+24.4% YoY, -14.2% QoQ) came 4.9% below our estimate. The net profit miss was mainly due to the share of loss from associated companies; we expected Rp11bn share of profit in 4Q18. Interest income rose quite sharply on QoQ basis, but was offset by the increase in other non-operating expenses in 4Q18. On full year basis, SCM booked Rp1.48tn Net Profit in FY18, up 11.5% YoY. SCM’s FY18 Net Profit missed consensus estimates by 2.4%, but came relatively in-line with our estimate.

Maintain Buy. SCM managed to capitalize record high audience shares in FY18 and could be expected to deliver higher dividend payments this year. Recent plan to add digital investments could help better content monetization as such investments would add new airing windows to SCM, in our view. While this new strategic digital turn could bring short-term cost pressures, it has become a case of survival to adapt to the changing viewership behavior in the internet era. We retain our BUY rating on SCMA; the stock trades at 14.8x/13.6 PER ‘18F/’19F and offers 5.0% dividend yield – at around negative 1 standard deviation below its long term average of 19x PER.

SCMA: 4Q18 RESULTS

in Rp bn 4Q17 3Q18 4Q18 4Q18F YoY QoQvs

Mansek FY17 FY18 YoY% of

FY18 Cons.

% of FY18

Mansek

Revenues 1,029 1,317 1,206 1,184 17.3% -8.4% 1.9% 4,454 5,002 12.3% 101.2% 100.4%

Program and broadcasting expenses

484 632 553 553 14.3% -12.4% -0.1% 1,835 2,157 17.6%

Gross Profit 545 685 653 631 19.9% -4.7% 3.5% 2,619 2,845 8.6%

% Margin 52.9% 52.0% 54.1% 53.3% 119 bps 210 bps 88 bps 58.8% 56.9% -194 bps

Operating expense 256 207 267 244 4.2% 29.3% 9.7% 840 906 7.9%

Operating profit 288 479 386 387 33.8% -19.4% -0.3% 1,779 1,939 9.0% 94.1% 99.9%

% Margin 28.0% 36.3% 32.0% 32.7% 396 bps -436 bps -70 bps 40.0% 38.8% -119 bps

Interest income 7 4 13 2 87.5% 208.3% 594.1% 15 25 66.5%

Interest expense (3) (1) (1) (2) -77.7% 10.8% -76.2% (16) (3) -81.9%Share of profit (loss) of associated companies

11 2 (4) 11 n.a. n.a. n.a. 11 9 n.a.



in Rp bn 4Q17 3Q18 4Q18 4Q18F YoY QoQ vs Mansek

FY17 FY18 YoY% of

FY18 Cons.

% of FY18

MansekExtraordinary items 0 0 (4) 0 n.a. n.a. n.a. 2 - n.a.

Others (10) 0 (3) (0) -67.2% n.a. n.a. (9) (1) -89.2%Total other income ( losses) 6 7 1 11 17.8% -83.0% -89.2% 3 30 n.a.

Pretax profit 295 485 387 398 31.3% -20.3% -2.7% 1,782 1,969 10.5%

Tax expense (77) (132) (101) (104) 32.3% -23.4% -2.8% (464) (494) 6.4%

% Tax rate 26.0% 27.3% 26.2% 26.3% 20 bps -105 bps -3 bps 26.1% 25.1% -97 bps

PAT 218 353 285 293 31.0% -19.1% -2.7% 1,318 1,475 11.9%

% margin 21.2% 26.8% 23.7% 24.8% 248 bps -314 bps -110 bps 29.6% 29.5% -10 bps

Minority interest (20) 8 (10) (18) -151.9% 24.0% n.a. (14) (10) -29.1%

Net profit 238 345 296 311 24.4% -14.2% -4.9% 1,331 1,485 11.5% 97.6% 99.0%

% margin 23.1% 26.2% 24.5% 26.2% 140 bps -165 bps -173 bps 29.9% 29.7% -21 bps

Operating Stats

All Time Audience Share % SCTV 13.0% 17.4% 16.4% 333 bps -103 bps 14.7% 17.1% 239 bps

Indosiar 14.0% 14.1% 18.2% 413 bps 410 bps 12.5% 15.8% 327 bps

Total 27.1% 31.5% 34.5% 747 bps 307 bps 27.2% 32.9% 566 bps

Prime Time Audience Share % SCTV 18.4% 20.4% 19.2% 80 bps -113 bps 16.4% 19.1% 268 bps

Indosiar 11.7% 14.9% 13.8% 213 bps -110 bps 12.3% 15.8% 349 bps

Total 30.1% 35.3% 33.0% 293 bps -223 bps 28.7% 34.8% 617 bpsSource: Company Data, Mandiri Sekuritas Research estimates Kresna Hutabarat (+6221 5296 9542) [email protected] Market Recap March 29th 2019; JCI 6,480.79 points +36.05 pts (+0.56%), Valued $428mn; Mkt Cap $504bn; USD/IDR 14,257

TOP TURNOVER: BBRO TLKM BBCA BMRI JPFA WSKT ASII WIKA BRPT BBNI ICBP UNTR GGRM INDF (35%)

ADVANCING SECTOR: financial+1.2%; construction+1%; cement+0.8%; consumer+0.5%; plantation+0.2%; property & mining flat

DECLINING SECTOR: auto-1.1%; telco flat

Indo share markets were painted with uncertainties on Thursday as recession concerns sent bond yields spiraling lower across the globe, overwhelming central bank efforts to calm frayed nerves. A Reuters report that the US and China had made progress in all areas in trade talks had little obvious impact since sticking points still remained and there was no definite timetable for a deal. IDR fell for a second day as a rally in developed-market bonds leads investors to sell emerging-market assets. The IDR slid even as the central bank said it was buying govt bonds to stabilize the currency. IDR weakened 0.4% to 14257 after gaining 0.2% on Wed. Global funds sold a net $29.9MN of local stocks on March 27th,

MARKET



according to stock exchange data. The share prices of poultry stocks plunged after the govt maintained DOC prices at IDR 11000 per kg for seven month in a row while the cost for DOC is around IDR 19,500 per kg: JPFA-9.3% CPIN-5.6% MAIN-7.2%. Palm oil futures resumed their decline given a drop in crude oil prices and weakness in other markets hurt sentiment. The Jakarta Agri sub-index was among the smallest gainers of the day. Losses in Dalian palm olein and soybean oil also weighed on palm futures. The market will focus on full-month export data as well as crude palm oil output estimates from growers, as there is uncertainty over demand from key buyers. Palm oil for June delivery on Bursa Malaysia Derivatives falls as much as 1.4% to 2106 ringgit/ton; fell four out of past five days. Refined palm oil for May on Dalian Commodity Exchange -1.2% to 4396 yuan/ton; soybean oil for May -1% to 5,426 yuan. With China’s coal futures hold retreat as more miners lift output, the Jakarta Mining sub index was in injury. Thermal coal for May delivery was up 0.2% to close at 594.2 yuan/ton on Zhengzhou Commodity Exchange after -0.7% previous day. Prices at major producing regions are under pressure as miners in Shaanxi’s Yulin ramp up production. Newcastle coal rose 0.4% to $89.20/ton on ICE Futures on Wednesday, extending rebound from lowest since July 2017. While, coking coal for May ends little changed at 1228.5 yuan/ton on Dalian Commodity Exchange. Australian coking coal unchanged at $198/ton on Singapore Exchange on Wed. Market turnover (excluding $14MN URBN; $11MN CARS; $4.7MN FILM; $4.7MN BIPI crossing) returned to normal average of $428MN. Foreign participants reduced to 28% and came up better buyer for 11%. Losers and gainers almost even out.

Global bond yields continued to spiral lower in Asia on Thursday as recession fears fed expectations of more policy easing by major central banks, though some share markets in the region did manage to steady after an early sell off. Sterling was also hit by a bout of Brexit blues after a round of votes in the UK parliament failed to produce any new plan to manage its divorce from the EU. Worries that the inversion of the US Treasury curve signaled a future recession only deepened as 10-year yields fell to a fresh 15-month low at 2.34%. The latest lunge lower was led by German bunds where 10-year yields dived deeper into negative territory after ECB President Mario Draghi said a hike in interest rates could be further delayed. Plans to mitigate the side-effects of negative interest rates could also be considered, suggesting the central bank was preparing for an extended period below zero. That shift came hot on the heels of a dovish surprise on Wed from the Reserve Bank of New Zealand, which abandoned its neutral bias to say the next rate move would likely be down.

Sales Team +6221 527 5375

AKRA obtains rights to distribute aviation fuel The license is temporary. AKRA will carry out the distribution in Morowali in Central Sulawesi through its JV with BP Indonesia. (Kontan) Sarana Menara Nusantara (TOWR) announced its tower renewal contracts Sarana Menara Nusantara (TOWR) has announced the renewal and extension contracts of more than 9,000 tower sites, which will be expired in the next 4 years. The company has signed master umbrella agreement with two operators to renew the contracts. Adam GIfari, Deputy CEO of SMN, also stated that the renewal will extend the average length of contract to 7.5 years and adjust the rent rate to inflation rate. (Kontan) Visi Telekomunikasi Infrastructure book Net Loss of Rp27.7bn in 2018 Visi Telekomunikasi Infrastructure (GOLD), subsidiary of Tower Bersama Infrastructure (TBIG), recorded net attributable loss to parent entity as much as Rp27.7bn in 2018 though booked revenue growth by 29.37% YoY to Rp34.6bn. To note, by the end of 2018 the company has 340 of towers in Java, Sumatera, Bali, Sulawesi, and Kalimantan. (Bisnis)

FROM THE PRESS



Indices and Fund Flows Currencies and Bonds Major Commodities

Indices Last Chg (%) YTD Chg (%)

Currency Last Chg (%) YTD Chg (%)

Last Chg (%) YTD Chg (%)

JCI 6,480.8 +0.6 +4.6 Rp/US$ 14,254 -0.12 +1.1 Oil spot (US$/bl) 59.30 -0.2 +30.6

Dow Jones 25,717.5 +0.4 +10.2 US$/EUR 1.122 -0.20 +2.2 Nickel spot (US$/mt) 12,796 -1.4 +20.7

Nikkei 21,033.8 -1.6 +5.1 YEN/US$ 110.63 +0.11 -0.8 Gold spot (US$/oz) 1,290 -1.5 +0.6

Hang Seng 28,775.2 +0.2 +11.3 SGD/US$ 1.357 +0.08 +0.5 Tin 3-month (US$/mt) 21,420 +0.3 +10.0

STI 3,203.6 +0.2 +4.4 CPO futures (Ringgit/ton) 2,120 -0.8 -0.0

Ishares indo 25.7 +1.2 +3.6 Coal (US$/ton) 93.0 -0.6 -8.9

Rubber forward (US¢/kg) 165.0 -1.4 +11.1

Foreign Fund Flows (US$mn)

Last Chg YTD Chg

Gov. Bond Yield

Last Chg

(bps)

YTD Chg

(bps)

Soybean oil (US$/100gallons)

28.63 -0.7 +3.9

Equity Flow +21.5 +786 5Yr 7.16 +7 -75 Baltic Dry Index 692.0 +0.0 -45.6

Bonds Flow +91.1 +4,565 10Yr 7.67 +4 -36



Equity Valuation Price Price % of Mkt Cap Net Profit PER (x) P/BV (x) EV/EBITDA (x) EPS Growth Div.Yield

Code Rating (Rp) Target PT (Rp Bn) 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020

MANSEK universe 6,481 7,000 8.0 4,742,475 273,274 297,726 17.3 15.9 2.6 2.4 13.8 13.1 10.6% 8.9% 2.4% 2.6%

Financials 1,639,617 108,997 122,912 15.0 13.3 2.3 2.1 0.0 0.0 15.0% 12.8% 2.0% 2.4%

BBCA Neutral 27,450 24,500 (10.7) 676,780 28,938 33,056 23.4 20.5 4.0 3.5 N.A. N.A. 14.2% 14.2% 1.0% 1.3%

BBNI Neutral 9,450 8,000 (15.3) 176,230 17,418 19,587 10.1 9.0 1.5 1.4 N.A. N.A. 11.1% 12.5% 2.7% 3.1%

BBRI Buy 4,100 4,300 4.9 505,524 36,812 42,560 13.7 11.9 2.5 2.3 N.A. N.A. 13.8% 15.6% 3.2% 3.6%

BBTN Buy 2,510 3,250 29.5 26,581 4,088 4,882 6.5 5.4 1.0 0.9 N.A. N.A. 23.9% 19.4% 2.5% 2.5%

BDMN Neutral 9,225 9,000 (2.4) 88,418 5,804 4,758 15.2 18.6 1.9 1.8 N.A. N.A. 43.3% -18.0% 1.4% 1.4%

BJBR Neutral 2,010 1,900 (5.5) 20,213 1,627 1,749 12.4 11.6 1.5 1.5 N.A. N.A. -3.5% 7.5% 4.5% 4.4%

BJTM Neutral 655 655 0.0 9,771 1,275 1,302 7.7 7.5 1.1 1.0 N.A. N.A. 3.5% 2.1% 6.9% 7.2%

BNGA Neutral 1,070 1,350 26.2 26,891 3,946 4,261 6.8 6.3 0.6 0.6 N.A. N.A. 13.3% 8.0% 2.6% 2.9%

BNLI Neutral 970 465 (52.1) 27,201 1,081 1,409 25.2 19.3 1.2 1.1 N.A. N.A. 69.0% 30.3% 0.0% 0.0%

BTPN Neutral 3,630 4,000 10.2 21,200 2,426 2,787 8.7 7.6 1.1 1.0 N.A. N.A. 15.3% 14.9% 3.5% 4.0%

PNBN Buy 1,395 1,500 7.5 33,602 2,914 3,358 11.5 10.0 0.8 0.8 N.A. N.A. 8.8% 15.3% 0.0% 0.0%

BTPS Buy 2,230 2,250 0.9 17,179 1,224 1,547 14.0 11.1 3.3 2.7 N.A. N.A. 31.0% 26.4% 0.0% 1.4%

BFIN Buy 670 1,000 49.3 10,026 1,445 1,655 6.9 6.1 1.6 1.4 N.A. N.A. 7.3% 14.5% 7.4% 7.9%

Construction & materials 286,747 15,612 18,861 18.4 15.2 2.0 1.8 10.5 9.7 0.2% 20.8% 1.4% 1.6%

INTP Buy 21,900 23,500 7.3 80,619 1,868 2,478 43.2 32.5 3.3 3.1 23.0 18.3 65.5% 32.7% 0.5% 0.8%

SMGR Buy 13,900 16,800 20.9 82,448 2,459 4,767 33.5 17.3 2.6 2.3 12.7 9.1 -6.0% 93.9% 1.0% 1.3%

ADHI Buy 1,650 2,035 23.3 5,875 800 741 7.3 7.9 0.8 0.8 4.8 4.4 19.6% -7.3% 2.3% 2.7%

PTPP Buy 2,100 3,085 46.9 13,020 1,733 2,126 7.5 6.1 0.9 0.8 4.3 3.8 17.5% 22.7% 3.4% 4.0%

WIKA Buy 2,170 2,455 13.1 19,444 1,873 1,999 10.4 9.7 1.3 1.1 6.5 6.4 19.6% 6.7% 1.9% 2.1%

WSKT Buy 2,000 2,280 14.00 26,762 3,504 3,051 7.6 8.8 1.3 1.2 9.6 10.4 -24.8% -12.9% 2.6% 2.3%

WTON Buy 625 700 12.0 5,447 525 608 10.4 9.0 1.6 1.4 5.7 4.9 8.0% 15.7% 2.7% 2.9%

WSBP Buy 398 480 20.6 10,492 1,268 1,409 8.3 7.4 1.3 1.1 5.0 4.4 15.1% 11.1% 5.2% 6.0%

JSMR Buy 5,875 5,600 (4.7) 42,640 1,583 1,683 26.9 25.3 2.4 2.3 14.2 15.5 -15.9% 6.3% 0.9% 0.7%

Consumer staples 1,287,224 46,276 50,135 27.8 25.7 6.9 6.3 17.7 16.4 7.1% 8.3% 2.4% 2.5%

ICBP Buy 9,275 10,550 13.7 108,164 4,512 4,613 24.0 23.4 4.4 4.1 15.3 15.0 5.9% 2.2% 2.0% 2.1%

INDF Buy 6,575 9,950 51.3 57,728 4,005 3,958 14.4 14.6 1.7 1.6 7.2 7.2 4.2% -1.2% 3.3% 3.5%

MYOR Neutral 2,560 2,550 (0.4) 57,239 1,882 2,061 30.4 27.8 6.0 5.2 15.6 14.2 13.9% 9.5% 1.0% 1.1%

UNVR Neutral 49,225 43,100 (12.4) 375,587 7,560 8,123 49.7 46.2 62.3 57.0 34.4 31.9 -17.0% 7.4% 2.4% 2.0%

GGRM Buy 84,250 94,050 11.6 162,104 9,609 10,519 16.9 15.4 3.0 2.6 11.2 10.1 18.5% 9.5% 1.4% 1.4%

HMSP Buy 3,780 4,000 5.8 439,682 15,337 17,177 28.7 25.6 11.8 11.1 21.1 18.9 16.9% 12.0% 2.9% 3.4%

KLBF Neutral 1,530 1,700 11.1 71,719 2,631 2,856 27.3 25.1 4.4 4.0 17.2 15.7 7.5% 8.6% 1.6% 1.8%

SIDO Buy 1,000 1,050 5.0 15,000 739 827 20.3 18.1 4.6 4.0 14.7 13.0 11.4% 11.9% 3.9% 4.3%

Healthcare 44,374 911 1,018 48.7 43.6 3.6 3.4 16.2 14.1 6.5% 11.8% 0.2% 0.2%

MIKA Buy 1,935 2,200 13.7 28,156 703 743 40.1 37.9 7.0 6.4 28.4 26.4 3.6% 5.8% 0.0% 0.0%

SILO Buy 3,760 4,300 14.4 6,110 39 46 156.6 132.8 1.0 1.0 5.7 4.9 41.1% 18.0% 0.0% 0.0%

HEAL Buy 3,400 4,500 32.4 10,108 169 228 59.8 44.3 5.4 5.0 15.6 12.5 13.6% 35.1% 0.7% 0.8%

Consumer discretionary 401,368 31,826 32,463 12.6 12.4 2.1 2.0 9.2 9.2 12.8% 2.0% 3.4% 3.8%

ACES Buy 1,840 1,700 (7.6) 31,556 1,113 1,232 28.3 25.6 6.4 5.6 21.9 19.7 14.8% 10.6% 1.2% 1.4%

LPPF Buy 4,040 7,500 85.6 11,788 2,092 2,278 5.6 5.2 3.4 2.7 2.8 2.3 48.9% 8.9% 8.3% 12.4%

MAPI Buy 990 1,100 11.1 16,434 815 815 20.2 20.2 3.2 2.9 8.2 8.0 13.4% 0.0% 0.7% 0.7%

MPPA Sell 272 250 (8.1) 1,463 -335 -462 -4.4 -3.2 0.8 1.1 19.3 47.3 -20.3% -37.9% -5.7% -6.9%

RALS Buy 1,780 1,700 (4.5) 12,631 558 626 22.6 20.2 3.1 2.9 15.2 13.8 9.2% 12.2% 2.4% 2.7%

ASII Buy 7,125 8,650 21.4 288,445 23,941 24,095 12.0 12.0 1.9 1.8 9.5 9.8 10.5% 0.6% 3.4% 3.7%

SCMA Buy 1,650 2,200 33.3 24,125 1,628 1,773 14.8 13.6 5.3 4.9 10.4 9.7 8.5% 8.9% 5.4% 5.9%

MNCN Buy 760 1,250 64.5 9,745 1,586 1,610 6.1 6.1 0.9 0.9 4.1 3.9 15.3% 1.5% 6.5% 6.6%

MSIN Buy 290 570 96.6 1,509 229 257 6.6 5.9 1.1 1.0 3.4 2.8 27.2% 12.1% 7.6% 8.5%

PZZA Buy 1,215 1,400 15.2 3,672 199 239 18.4 15.4 2.8 2.4 8.7 7.7 24.2% 20.0% 0.0% 0.0%

Commodities 339,654 34,601 34,131 9.7 9.9 1.3 1.2 4.5 4.3 2.3% -1.5% 4.1% 4.0%

AALI Buy 11,325 14,200 25.4 21,797 1,817 1,968 12.0 11.1 1.1 1.0 4.7 3.9 16.6% 8.3% 2.9% 3.3%

LSIP Buy 1,065 1,450 36.2 7,266 650 665 11.2 10.9 0.8 0.8 3.8 3.5 11.4% 2.3% 3.2% 3.6%

SSMS Neutral 1,070 1,300 21.5 10,192 1,158 1,263 8.8 8.1 1.8 1.6 5.4 4.7 27.0% 9.1% 2.7% 3.4%

BWPT Neutral 160 195 21.9 5,044 -67 -189 -74.8 -26.7 0.9 0.9 7.9 7.0 70.0% -180.3% 0.0% 0.0%

UNTR Buy 27,125 35,000 29.0 101,180 11,287 10,698 9.0 9.5 1.6 1.5 4.4 4.5 1.4% -5.2% 3.3% 3.2%



Price Price % of Mkt Cap Net Profit PER (x) P/BV (x) EV/EBITDA (x) EPS Growth Div.Yield

Code Rating (Rp) Target PT (Rp Bn) 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020

ADRO* Neutral 1,350 1,540 14.1 43,181 395 370 7.5 8.0 0.8 0.7 3.6 3.3 -5.4% -6.5% 5.3% 4.7%

HRUM* Neutral 1,440 2,000 38.9 3,698 32 26 7.9 9.8 0.7 0.7 0.1 -0.2 -9.9% -19.0% 6.9% 5.6%

INDY* Neutral 1,890 2,100 11.1 9,847 122 115 5.5 5.9 0.6 0.5 2.0 1.6 -13.5% -5.6% 4.5% 4.3%

ITMG* Buy 23,850 33,400 40.0 26,153 225 224 8.0 8.0 1.8 1.7 3.3 3.3 -13.7% -0.6% 10.7% 10.6%

PTBA Neutral 4,170 4,000 (4.1) 48,049 4,194 3,665 10.5 12.0 2.7 2.5 8.1 8.3 -16.5% -12.6% 4.4% 3.8%

ANTM Buy 880 1,200 36.3 21,147 1,230 1,423 17.2 14.9 1.0 1.0 9.3 8.3 40.7% 15.7% 2.0% 2.4%

INCO* Buy 3,330 5,000 50.2 33,088 124 169 18.4 13.5 1.2 1.1 6.2 5.0 76.9% 36.5% 1.6% 2.2%

TINS Buy 1,210 2,200 81.8 9,012 1,262 1,492 7.1 6.0 1.2 1.0 4.2 3.7 137.4% 18.3% 4.9% 5.8%

Property & Industrial Estate 120,563 8,720 9,656 13.8 12.5 1.3 1.2 10.6 10.1 3.8% 10.7% 1.0% 1.0%

ASRI Sell 314 280 (10.8) 6,170 997 1,578 6.2 3.9 0.6 0.5 7.1 5.6 5.8% 58.3% 0.6% 0.6%

BSDE Neutral 1,415 1,450 2.5 27,234 1,972 2,043 13.8 13.3 0.9 0.9 11.9 12.3 10.0% 3.6% 0.0% 0.0%

CTRA Buy 995 1,450 45.7 18,468 981 1,039 18.8 17.8 1.2 1.2 12.0 11.6 -14.0% 5.9% 1.0% 0.8%

JRPT Buy 600 980 63.3 8,250 1,005 919 8.2 9.0 1.2 1.1 7.2 7.7 5.7% -8.6% 3.4% 2.4%

PWON Neutral 700 680 (2.9) 33,712 2,399 2,426 14.1 13.9 2.3 2.0 10.3 10.3 4.8% 1.2% 0.9% 0.9%

SMRA Buy 960 1,200 25.0 13,850 313 486 44.3 28.5 2.0 1.9 13.4 11.5 -1.8% 55.3% 0.5% 0.5%

DMAS Buy 218 250 14.7 10,507 631 650 16.6 16.2 1.4 1.3 15.6 15.1 12.0% 3.0% 3.0% 3.1%

BEST Buy 246 320 30.1 2,373 422 516 5.6 4.6 0.5 0.5 6.2 5.5 3.9% 22.3% 3.6% 4.3%

Telco 498,227 20,644 22,516 24.1 22.1 3.4 3.3 6.8 6.4 19.3% 9.1% 3.4% 3.5%

EXCL Buy 2,670 3,100 16.1 28,537 25 335 1,142.7 85.3 1.6 1.5 5.5 5.1 N/M 1240.2% 0.0% 0.0%

TLKM Neutral 3,890 3,800 (2.3) 385,352 18,948 19,871 20.3 19.4 3.8 3.6 6.9 6.5 3.5% 4.9% 3.7% 3.9%

ISAT Neutral 2,560 2,800 9.4 13,911 -2,810 -2,598 -5.0 -5.4 1.6 2.3 5.3 4.9 -37.5% 7.6% 0.0% 0.0%

LINK Buy 4,500 6,200 37.8 13,300 1,209 1,328 11.0 10.0 2.4 2.2 5.2 4.7 9.7% 9.9% 4.5% 5.0%

TBIG Buy 3,960 5,700 43.9 17,591 908 1,113 19.4 15.8 5.2 4.7 10.1 9.5 1.8% 22.5% 4.3% 4.3%

TOWR Buy 775 950 22.6 39,536 2,364 2,467 16.7 16.0 4.2 3.7 9.0 8.5 0.7% 4.4% 3.0% 3.0%

Chemical 51,848 1,993 1,957 26.0 26.5 2.6 2.4 7.7 7.5 25.7% -1.8% 0.0% 0.0%

AGII Buy 565 770 36.2 1,733 110 138 15.7 12.6 0.5 0.5 6.1 5.6 13.2% 25.0% 0.0% 0.0%

BRPT* Neutral 3,590 2,640 (26.5) 50,116 129 125 26.6 27.5 3.1 2.7 7.8 7.6 25.4% -3.4% 0.0% 0.0%

Airlines 7,228 516 652 14.0 11.1 1.4 1.2 8.1 6.7 17.2% 26.4% 0.0% 0.0%

GMFI* Buy 256 310 21.3 7,228 35 45 14.0 11.1 1.4 1.2 8.1 6.7 16.2% 26.4% 0.0% 0.0%

Oil and Gas 56,968 2,618 2,797 21.8 20.4 1.2 1.1 6.7 6.3 14.7% 6.8% 1.6% 1.8%

PGAS* Buy 2,350 3,150 34.0 56,968 180 192 21.8 20.4 1.2 1.1 6.7 6.3 13.7% 6.8% 1.6% 1.8%

Transportation 8,657 560 630 15.5 13.7 1.6 1.4 6.6 6.1 17.0% 12.6% 1.9% 2.2%

BIRD Buy 3,460 3,700 6.9 8,657 560 630 15.5 13.7 1.6 1.4 6.6 6.1 17.0% 12.6% 1.9% 2.2%

Note: - *) net profit in USD mn - U/R means Under Review - n/a means Not Available - N/M means Not Meaningful - N.A means Not Applicable

Mandiri Sekuritas A subsidiary of PT Bank Mandiri (Persero) Tbk Menara Mandiri Tower I, 25th floor, Jl. Jend. Sudirman Kav. 54 – 55, Jakarta 12190, Indonesia

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Adrian Joezer Head of Equity Research, Strategy, Consumer [email protected] +6221 5296 9415 Tjandra Lienandjaja Deputy Head of Equity Research, Banking [email protected] +6221 5296 9617 Ariyanto Kurniawan Automotive, Coal, Chemical [email protected] +6221 5296 9682 Kresna Hutabarat Telecom, Media [email protected] +6221 5296 9542 Priscilla Thany Banking, Building Material [email protected] +6221 5296 9569 Lakshmi Rowter Healthcare, Consumer [email protected] +6221 5296 9549 Robin Sutanto Property [email protected] +6221 5296 9572 Edbert Surya Construction, Transportation [email protected] +6221 5296 9623 Silvony Gathrie Research Assistant [email protected] +6221 5296 9544 Riyanto Hartanto Research Assistant [email protected] +6221 5296 9488 Henry Tedja Research Assistant [email protected] +6221 5296 9434 Ryan Winipta Research Assistant [email protected] +6221 5296 9510 Leo Putera Rinaldy Chief Economist [email protected] +6221 5296 9406 Aziza Nabila Amani Economist [email protected] +6221 5296 9651 Silva Halim Head Institutional Equities [email protected] +6221 527 5375 Andrew Handaya Institutional Sales [email protected] +6221 527 5375 Feliciana Ramonda Institutional Sales [email protected] +6221 527 5375 Henry Pranoto Institutional Sales [email protected] +6221 527 5375 Kevin Giarto Institutional Sales [email protected] +6221 527 5375 Sharon Anastasia Tjahjadi Institutional Sales [email protected] +6221 527 5375 Talitha Medha Anindya Institutional Sales [email protected] +6221 527 5375 Kusnadi Widjaja Equity Dealing [email protected] +6221 527 5375 Edwin Pradana Setiadi Equity Dealing [email protected] +6221 527 5375 Jane Theodoven Sukardi Equity Dealing [email protected] +6221 527 5375 Michael Taarea Equity Dealing [email protected] +6221 527 5375 Andreas M. Gunawidjaja Head Retail Equities [email protected] +6221 526 9693 Boy Triyono Jakarta [email protected] +6221 526 5678 Dhanan Febrie Handita Bandung [email protected] +6222 426 5088 Yogiswara Perdana Yogyakarta [email protected] +62274 560 596 Widodo Solo [email protected] +62271 788 9290 Linawati Surabaya [email protected] +6231 535 7218 Ruwie Medan [email protected] +6261 8050 1825 Aidil Idham Palembang [email protected] +62711 319 900 Yuri Ariadi Pontianak [email protected] +62561 582 293

INVESTMENT RATINGS: Indicators of expected total return (price appreciation plus dividend yield) within the 12-month period from the date of the last published report, are: Buy (15% or higher), Neutral (-15% to15%) and Sell (-15% or lower). DISCLAIMER: This report is issued by PT. Mandiri Sekuritas, a member of the Indonesia Stock Exchanges (IDX) and Mandiri Sekuritas is registered and supervised by the Financial Services Authority (OJK). Although the contents of this document may represent the opinion of PT. Mandiri Sekuritas, deriving its judgement from materials and sources believed to be reliable, PT. Mandiri Sekuritas or any other company in the Mandiri Group cannot guara

INVESTOR DIGEST Digest/Investor...Dunhill Evoque is segmented as the most premium LTLN in BAT’s...

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