July 15, 2014

Indonesia

Daily Focus Rising Indonesia’s Tower

Market Index Last Trade

Chg (%)

MoM

YoY

5,021.1 1,063.7

-0.2 0.5

2.2 0.9

8.6 12.0

HANG SENG 23,346.7

0.5

-0.4

9.1

KOSPI FTSE

1,993.9 6,746.1

0.3 0.8

0.2 -1.3

6.3 2.2

17,055.4 4,440.4

0.7 0.6

1.0 2.4

9.6 22.6

JCI MSCI EM

DJIA NASDAQ Key Rates

MoM

YoY

Policy Rate 3yr

Last Trade Chg (bps) 7.50 7.57

0 1

0 17

150 14

10yr

8.16

7

14

-6

FX Last Trade

Chg (%)

MoM

YoY

11,665.00

0.7

-2.0

15.0

USD/KRW USD/JPY

1,018.35 101.54

-0.1 0.2

-0.2 -0.3

-9.2 1.7

USD/CNY

6.21

0.0

-0.3

1.1

Last Trade

Chg (%)

MoM

YoY

USD/IDR

Commodities WTI

100.9

0.1

-5.0

7.0

Gold Coal

1,307.2 69.6

-2.4 -0.8

2.8 -3.7

1.7 -8.9

815.0 138.8

-1.0 0.0

-3.8 -3.8

4.1 -23.0

Nickel Copper

19,350.0 7,122.5

-0.2 -0.5

7.1 7.0

43.3 3.0

Tin

22,132.0

0.1

-2.2

13.3

Palm Oil Rubber

A decade ago, the telecommunication industry’s rapid growth made telco companies expand their coverage and quality by building BTS (base transceiver station) towers. But nowadays, telco companies prefer to rent tower facilities from tower companies because of some advantage such as: 

No capital spending to build and maintain towers;



No headache in seeking the right spot and legal reviews.

In line with the above trends, telco companies are now trying to sell their towers. PT. XL Axiata (EXCL IJ) is currently trying to sell some of their 8000 towers. The proceeds from the sales will be used to deleverage their DER which reached 3.2x its equity as of 1Q14. We expect the company to repay their debt amounting to IDR 46.3tr on 1Q14 (short term debt of IDR16.6tr). ISAT IJ also plans to sell part of their 8000 towers next year. The tower sales by will bode well for tower companies in terms of fundamentals. The tower industry is quite attractive as we mention on our June Monthly Focus. There are five major telecommunication tower companies listed in Indonesia; Sarana Menara Nusantara (TOWR IJ), Tower Bersama Infrastructure (TBIG IJ), Inti Bangun Sejahtera (IBST IJ), Solusi Tunas Pratama (SUPR IJ), and Bali Towerindo Sentra (BALI IJ). The only companies with market capitalization of over IDR35tr are TBIG and TOWR. Over the last 4 years, TBIG sales and net profit grew at a compounded average of 59% and 56%, respectively, with a ROE more than 21%. As of 1Q14, the company’s sales grew 26.5% YoY, while its net profit grew 87% YoY. The company currently trades at 17.9x P/E, which is lower than its historical average of 24.5x. Betrand Raynaldi TBIG’s financial performances (IDRmn)

(%)

Sales

3,000,000

Net income

Return on Equity

80

JCI Index VS MSCI Emerging Markets (pt)

JCI MSCI EM

6,000

(pt)

70

2,500,000

60

1,200 2,000,000

5,000

1,000

4,000

800

50

1,500,000

40 30

1,000,000

3,000 01/13

10/13

600 07/14

20 500,000

10

0

0 2009

2010

2011

2012

Source: Company Data, Bloomberg, KDB Daewoo Securities Indonesia Research

2013

July 15, 2014

Indonesia Daily Focus

Local flashes

WIKA: Wijaya Karya Obtains New Contract Worth IDR 6.7 Trillion. PT Wijaya Karya Tbk (WIKA) managed to get a new contract worth IDR 6.7 trillion as of June 2014. This achievement is equivalent to 25.94% of full year’s target that amount IDR 25.83 trillion. From the official statement, Monday (7/14/2014), the company is targeting order book of IDR 49.97 trillion, or 28.56% higher than 2013’s target IDR 38.87 trillion. (Detik Finance) ENRG: Blok Malacca Strait Owned by ENRG Began to Produce Gas. Blok Malacca Strait PSC owned by PT Energi Mega Persada Tbk (ENRG) has been starting its gas production commercially with the capacity of 8.5 mmscfd. Energi Mega Persada own 60.49% of its block. The company supplies gas to BOB PT Bumi Siak Pusako – PT Pertamina Hulu Energi (BOB). (Bisnis Indonesia) TAXI: Express Transindo Use 98.39% of IPO Funds. PT Express Transindo Tbk (TAXI) already used 98.39% from initial public offerings (initial public offering / IPO) funds. Financial Director Express Transindo Utama David Santoso said the company raised IDR 455.54 billion from IPO on October 22, 2012. Some funds, IDR 46.15 billion used to finance the public offering, so that the net proceed is IDR 399.39 billion. (Bisnis Indonesia) CPGT: Cipaganti Targets 5%-10% Profit from Lebaran Moment. Although it was hit by legal issues, PT Cipaganti Citra Garaha Tbk still confident that company can get more profit at the Lebaran moment. This travel management company believes the problems that occur in Koperasi Cipaganti Karya Guna Persada (KCKGP) didn’t affect its travel business. Toto Moeljono, Corporate Secretary Cipaganti Citra Graha believe, consumers have begun to understand if the problem in KCKGP is different with Cipaganti. (Kontan) SMGR: Semen Indonesia’s Sales Up 4.5%. During January-May 2014, sales of PT Semen Indonesia (Persero) Tbk grow by 4.5%, higher than the national cement sales growth that only 3.7%. Corporate Secretary PT Semen Indonesia Agung Wiharto said, the company's sales during the period January-May 2014 recorded at 10.46 million tons, compared with 10.01 million tons in the same period in 2013. (Berita Satu) PJAA: Ancol Build World Class Recreation Park. PT Pembangunan Jaya Ancol Tbk (PJAA) will be involved in the construction 4 of 17 artificial islands in Teluk Jakarta, through a process of reclamation area development program launched by Jakarta Provincial Government and the central government. "Ancol assigned to work on four islands, namely the island of I, J, K, L, said Managing Director Pembangunan Jaya Ancol Gatot Setyowaluyo. (Detik Finance) ASII: Astra Seeks Port and Power Plant Projects. PT Astra International Tbk (ASII) continues in seeking opportunities in order to expand its business in infrastructure sector. If there is a good prospect, company wouldn't hesitate in flushing money for acquisition. "We are still in seeking power plant project, port, and for toll road maybe we'll focus in existing project," Tira Ardianti, Head of Investor Relations Department ASII said several time ago. (Kontan)

KDB Daewoo Securities Indonesia Research

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July 15, 2014

Indonesia Daily Focus

Technical analysis Recommendation

Trading Buy

Target price Stop-loss Close

5,096 5,009 5.021

Indicator

Investor sentiment

Stoch

NM

MACD

UP UP DN

PSAR Volume

GC = Golden-cross

AC = Accumulation

DC = Dead-cross

Dis = Distribution

UP = Up

OB = Overbought

DN = Down

OS = Oversold

NM = Normal

Political uncertainties related to the presidential election are expected to linger until the official announcement on July 22. However, we believe risks are less likely to turn the market sour and highlight the risk of low exposures to the market. Daily chart In our view, price correction will be extended during today's trading session. On figure 1, we notice that technical indicators are signaling positive trends. MACD and PSAR indicators are signaling that JCI is still in an upward trend. We believe price should stay above the psychological support level of 5,000. 60 minutes chart We consider the current price correction to be a healthy correction and thus we expect closing of the price gap in the near horizon. Sentiment is weak, however, at the same time we see potential for the market heading in line with the green arrow.

Chart 1. Daily chart

Chart 2. 60 minutes chart

Source: HOTS, KDB Daewoo Securities Indonesia Research

Source: HOTS, KDB Daewoo Securities Indonesia Research

KDB Daewoo Securities Indonesia Research

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July 15, 2014

Indonesia Daily Focus

Chart 3. JCI Vs. USD/IDR

Chart 4. JCI performance (absolute vs. relative)

(pt)

(IDR)

JCI Composite Index (L)

5,250

12,250

USD/IDR (R)

(%, %p)

Absolute

10

Relative 9.1

8 12,000 5,000 11,750

6 4

2.3 2.4

2 11,500 4,750 11,250

1.8 0.9

0 -0.2

-2

-0.7

-4 4,500

11,000 4/14

5/14

6/14

-3.4

-6

7/14

1D

1W

1M

Source: Bloomberg, KDB Daewoo Securities Indonesia Research

Note: Relative to MSCI EM Index Source: Bloomberg, KDB Daewoo Securities Indonesia Research

Chart 5. Foreigner’s net purchase (EM)

Chart 6. Oil price

(USDmn) 1,000

1 Day

(pt)

5 Days

WTI

Brent

1Y

Dubai

110

849 800

731

600

105 447

400

306

215

200

100 32

46

17 0

13

2 2

-61

-200 Korea

95

Taiwan Indonesia Thailand Philippines India

4/14

5/14

6/14

7/14

th

Note: The latest figure for India is July 11 Source: Bloomberg, KDB Daewoo Securities Indonesia Research

Source: Bloomberg, KDB Daewoo Securities Indonesia Research

Chart 7. Non-ferrous metal price

Chart 8. Precious metal price

Copper

(pt)

Nickel

Tin

(pt)

125

110

115

105

105

100

95

95

85

Silver

Gold

Platinum

90 4/14

5/14

6/14

Source: Bloomberg, KDB Daewoo Securities Indonesia Research

KDB Daewoo Securities Indonesia Research

7/14

4/14

5/14

6/14

7/14

Source: Bloomberg, KDB Daewoo Securities Indonesia Research

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July 15, 2014

Indonesia Daily Focus

Table. Key valuation metrics Company Name

Ticker

Price

Market Cap

(IDR)

(IDRbn)

Price Performance (%)

1D

1W

1M

1Y

FY13

P/E(X)*

FY14

FY13

P/B(X)*

FY14

FY13

ROE(%)*

FY14

11,300 10,500 11,375 5,025 4,305 4,060

278,602 245,000 280,612 93,709 41,262 23,712

0.0 0.0 -1.1 -0.5 -0.1 0.5

1.8 8.5 11.5 5.8 2.7 -5.6

2.0 5.8 11.8 4.0 -0.3 -4.0

10.8 28.0 45.8 20.4 -23.8 -5.6

16.6 10.1 8.4 8.1 9.0 11.8

17.3 12.1 11.8 9.6 10.3 10.7

3.7 2.1 2.3 1.5 1.2 2.5

3.7 2.4 2.9 1.7 1.2 1.9

24.6 22.5 29.7 19.9 13.5 24.2

22.8 21.2 26.8 19.1 12.4 20.5

815 735 396 498 1,600

3,835 4,520 19,071 9,785 29,395

-2.4 -0.7 -2.0 0.0 2.9

8.7 1.4 7.3 4.4 2.9

16.4 2.1 5.6 6.6 1.6

-24.5 -23.4 25.7 -31.8 10.3

3.8 8.8 11.5 9.6 8.4

5.8 12.6 12.9 6.7 13.9

1.1 0.9 3.4 1.6 2.2

1.4 0.9 3.7 1.5 2.4

35.3 10.8 33.4 18.0 29.7

24.8 8.7 32.0 22.7 18.4

785 3,130 2,510 2,085 770

2,677 5,638 15,435 10,096 7,443

-0.6 0.3 1.8 0.2 0.0

5.4 7.6 8.2 11.5 10.8

-1.3 4.7 10.6 14.9 10.8

-28.0 7.0 26.8 61.6 4.1

8.8 6.7 17.0 13.4 10.6

14.7 12.6 22.0 19.0 17.9

2.3 1.8 3.3 2.8 1.6

3.3 3.0 4.1 4.3 2.7

27.5 29.9 20.6 23.1 16.8

25.1 23.4 19.1 23.0 16.0

7,050 1,700 5,125 30,400 10,025 1,130 29,625 885 52,750 1,315

61,902 79,688 8,508 231,952 58,455 8,018 26,495 15,178 101,496 6,656

-0.7 -2.0 -2.8 0.0 -0.5 -0.9 0.3 -1.7 0.5 -1.1

3.7 0.9 4.5 0.3 -0.5 -0.4 0.7 4.1 -1.0 -7.4

2.5 5.6 -5.1 2.0 -2.0 -8.9 1.4 2.9 -1.6 0.0

-1.4 15.6 -26.8 -4.3 -10.1 -11.7 15.2 19.6 15.7 -16.8

23.2 30.5 27.9 37.1 26.7 19.3 22.3 19.9 18.7 32.7

14.9 35.2 24.2 39.6 23.8 17.7 29.5 27.0 19.3 32.9

2.5 6.6 3.8 46.6 4.7 2.3 6.0 5.3 2.8 6.6

2.4 8.4 3.1 47.5 4.2 2.3 5.8 6.5 3.1 6.9

11.2 25.3 14.3 130.2 18.5 12.5 30.4 29.0 15.5 21.7

16.3 24.7 13.4 126.8 18.6 13.0 20.0 25.7 16.9 23.4

7,500 4,655 3,820

303,627 12,872 18,411

-0.7 -0.9 0.0

2.0 -5.0 0.1

1.4 -1.4 4.5

12.8 -13.0 1.9

14.2 25.4 16.4

14.4 14.0 13.6

3.3 2.3 2.0

3.2 2.0 1.8

25.0 9.6 14.6

22.6 15.4 13.9

263,088 46,726 20,459

1.4 2.3 -0.8

3.4 6.8 3.6

7.0 5.3 -4.3

11.2 16.5 -20.7

14.6 43.0 20.2

16.8 77.7 35.0

3.4 2.9 1.4

3.8 3.0 1.2

25.3 6.7 -16.0

23.7 3.9 2.6

BANKING Bank Central Asia Tbk PT Bank Mandiri Persero Tbk PT

BBCA BMRI

Bank Rakyat Indonesia Persero Tbk PT Bank Negara Indonesia Persero Tbk PT

BBRI BBNI

Bank Danamon Indonesia Tbk PT

BDMN

Bank Tabungan Pensiunan Nasional Tbk PT PROPERTY

BTPN

Surya Semesta Internusa Tbk PT Ciputra Property Tbk PT

SSIA CTRP

Pakuwon Jati Tbk PT

PWON

Alam Sutera Realty Tbk PT Bumi Serpong Damai PT

ASRI BSDE

CONSTRUCTION Total Bangun Persada Tbk PT

TOTL

Adhi Karya Persero Tbk PT Wijaya Karya Persero Tbk PT

ADHI WIKA

Pembangunan Perumahan Persero Tbk PT

PTPP

Waskita Karya Persero Tbk PT RETAIL & CONSUMER

WSKT

Indofood Sukses Makmur Tbk PT Kalbe Farma Tbk PT

INDF KLBF

Mitra Adiperkasa Tbk PT

MAPI

Unilever Indonesia Tbk PT Indofood CBP Sukses Makmur Tbk PT

UNVR ICBP

Ramayana Lestari Sentosa Tbk PT Mayora Indah Tbk PT

RALS MYOR

Ace Hardware Indonesia Tbk PT Gudang Garam Tbk PT

ACES GGRM

Nippon Indosari Corpindo Tbk PT

ROTI

AUTOMOTIVE Astra International Tbk PT

ASII

Indomobil Sukses Internasional Tbk PT Astra Otoparts Tbk PT

IMAS AUTO

TELECOMMUNICATION Telekomunikasi Indonesia Persero Tbk PT XL Axiata Tbk PT

TLKM EXCL

Indosat Tbk PT INFRASTRUCTURE

ISAT

2,610 5,475 3,765

Jasa Marga Persero Tbk PT Tower Bersama Infrastructure Tbk PT

JSMR TBIG

6,200 7,800

42,160 37,413

-1.6 0.0

3.3 0.3

3.8 3.0

0.0 52.9

24.0 22.3

26.2 25.1

3.5 7.0

4.1 6.6

14.9 31.3

15.7 29.6

Aneka Tambang Persero Tbk PT Timah Persero Tbk PT

ANTM TINS

Tambang Batubara Bukit Asam Persero Tbk CEMENT

PTBA

1,120 1,380 10,750

10,683 10,278 24,769

0.0 -1.1 0.0

-2.6 -0.7 0.9

-1.8 0.7 -1.4

-7.4 57.1 -12.2

24.9 15.6 12.4

33.2 13.5 13.2

0.8 1.6 3.0

0.8 1.8 2.9

3.2 10.9 23.0

3.0 13.9 22.2

Indocement Tunggal Prakarsa Tbk PT

INTP

Holcim Indonesia Tbk PT Semen Indonesia Persero Tbk PT

SMCB SMGR

25,625 2,750 16,650

94,332 21,073 98,760

-0.4 -0.9 0.0

9.6 5.6 10.1

3.1 8.1 7.9

13.4 2.8 11.0

14.7 18.3 15.6

17.3 17.3 16.8

3.2 2.0 4.0

3.6 2.2 4.1

23.7 11.1 28.1

22.1 13.0 25.7

MINING

Source: Bloomberg, KDB Daewoo Securities Indonesia Research *Note: Valuation metrics based on Bloomberg consensus estimates

KDB Daewoo Securities Indonesia Research

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July 15, 2014

Indonesia Daily Focus

Sector performance

Top 10 market cap performance

Name Agricultural Mining Basic-Industry Miscellaneous Industry Consumer Goods Property & Construction Infrastructure Finance Trade Composite

Index 2,266.0 1,308.2 552.2 1,308.2 2,043.0 443.8 1,112.0 679.4 899.6 5,021.1

Chg (%) -0.6 -0.6 -0.1 -0.6 -0.3 0.2 0.7 -0.4 -0.5 -0.2

Chg (%)

Close

1.4 0.9 2.3 1.0 2.9

2,610 5,700 5,475 23,725 1,600

Ticker KAEF IJ BSDE IJ EXCL IJ ADMF IJ WIKA IJ MYRX IJ SMSM IJ TLKM IJ PNLF IJ MNCN IJ

Price Market Cap (IDRbn) 1,130 6,276.0 1,600 29,395.0 5,475 46,726.3 11,600 11,600.0 2,510 15,434.6 620 8,810.6 4,850 6,982.4 2,610 263,088.0 243 7,002.7 2,665 37,790.6

Chg (%) 3.7 2.9 2.3 2.2 1.8 1.6 1.5 1.4 1.3 1.1

Source: Bloomberg

Top 5 leading movers

Top 5 lagging movers

Name TLKM PGAS EXCL UNTR BSDE

IJ IJ IJ IJ IJ

Name BBRI IJ ASII IJ SCMA IJ KLBF IJ LPPF IJ

Chg (%)

Close

-1.1 -0.7 -3.3 -2.0 -2.8

11,375 7,500 3,500 1,700 14,000

Source: Bloomberg

Economic Calendar Time

Currency

Detail

12:00am Tentative Tentative 4:00pm 4:00pm 7:30pm 7:30pm 7:30pm 7:30pm 9:00pm 9:00pm

EUR JPY JPY EUR EUR USD USD USD USD USD USD

ECB President Draghi Speaks Monetary Policy Statement BOJ Press Conference German ZEW Economic Sentiment ZEW Economic Sentiment Core Retail Sales m/m Retail Sales m/m Empire State Manufacturing Index Import Prices m/m Fed Chair Yellen Testifies Business Inventories m/m

Forecast

Previous

28.9 62.3 0.5% 0.6% 17.2 0.5%

29.8 58.4 0.1% 0.3% 19.3 0.1%

0.6%

0.6%

Note: Time is based on Indonesian local time Source: Forex Factory

Disclaimers This report is prepared strictly for private circulation only to clients of PT Daewoo Securities Indonesia (DWS). It is purposed only to person having professional experience in matters relating to investments. The information contained in this report has been taken from sources which we deem reliable. No warranty (express or implied) is made to the accuracy or completeness of the information. All opinions and estimates included in this report constitute our judgments as of this date, without regards to its fairness, and are subject to change without notice. However, none of DWS 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 DWS, 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 DWS, its affiliated companies or their respective employees or agents accepts liability for any errors, omissions or misstatements, negligent or otherwise, in the report and any liability in respect of the report or any inaccuracy therein or omission there from which might otherwise arise is hereby expresses disclaimed. This document is not an offer to sell or a solicitation to buy any securities. This firms and its affiliates and their officers and employees may have a position, make markets, act as principal or engage in transaction in securities or related investments of any company mentioned herein, may perform services for or solicit business from any company mentioned herein, and may have acted upon or used any of the recommendations herein before they have been provided to you. © PT Daewoo Securities Indonesia 2014.

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