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Strategy | 12 June 2014| THE BOTTOM LINE

STRATEGY
Strategy Update | 11 January 2015

2016 : the Year of Overcoming Challenges

Mandiri Sekuritas Analyst


John Rachmat
+6221 5296 9542
john.rachmat@mandirisek.co.id

2016: a year of challenges. Continued slow down in Chinas economy may bring further
yuan devaluation. Low oil price, crash in junk bond market and a surprise pace in Fed
Funds Rate rise may spark a capital flight out of emerging markets. Yet we expect JCI to
end 2016 strongly on a pick up of consumer and private investments spending.

UNDERWEIGHT

FIGURE 1. THE BOTTOM LINE MARKET OUTLOOK FOR 2016


6,000
5,500
Mar-13
4,545

5,000

7.8%

HMSP

91,000

36.0

12.1%

MIKA

2,210

42.4

29.7%

SILO

9,450

77.3

49.1%

BSDE

1,765

10.6

23.0%

WSKT

1,685

23.4

8.3%

3,000

JCI

JCI Fcast by Mansek

2,500

Dec-16

18.5

Dec-16
5,000

Aug-16
4,250

Aug-16

54,500

Dec-13
4,000

Apr-16

GGRM

Oct-13
4,000

3,500

Jan-16
Oct-15 4,500
4,500

Dec-15

-10.0%

Jul-15
5,000
Dec-15
4,700 May-16
4,500

Aug-15

6.0

Apr-15

6,725

Dec-14

LPCK

4,000

Aug-14

33.5%

Apr-14

7.7

Dec-13

4,935

Aug-13

BBNI

4,500

Apr-13

16.1%

Dec-12

16.2

Apr-12

3,060

Dec-11

TLKM

Feb-15
5,100
Oct-14
4,800

Sep-11

2016F
EPS Gr.

May-11

PE

Jan-11

Last Price
(Rp)

Aug-12

TOP PICKS

As of: 11January 2016

Dec-14
Aug-14 5,200
Apr-14 5,200
4,800

Source: Bloomberg, Mandiri Sekuritas

A stream of positive catalyts cuts in


fuel price and BI rate, passage of the new
Tax Amnesty Law should help maintain
the Jakarta Composite Index (JCI) around
the 4,500 level from Jan to May 2016.
We expect mid-year correction on the
back of continued slow down in Chinas
economy and Yuans depreciation,
further crash in Chinas bourses, rising
debt defaults due to low oil price and a
faster than expected pace of Fed Funds
Rate increases that might goad outflows
from emerging markets. Pressures on the
JCI would also come from disappointing
4Q15 and 1Q16 earnings performance.
We expect the JCI to slide to 4,250 by
August on the back of all these global
pressures and weak domestic earnings.

Overcoming challenges by year end as


we expect recovery in both consumer
spending (thanks to the impact of cuts in
fuel prices and stable inflation generally)
and private sector investment spending
(thanks to a clear shift in government
policy stance towards reliance on market
mechanism). After serial earnings
disappointments in 2013, 2014 and 2015,
we expect 2016 to see a substantive
turn-around driven by recovery in these
key economic factors, closing the year
with the JCI at 5,000.
Top Picks we recommend continued
defensive stance, but with a few stocks
that might benefit from faster economic
recovery TLKM, HMSP, GGRM, MIKA,
SILO, BBNI, WSKT, LPCK and BSDE.

Please see important disclosure at the back of this report

Strategy | 11 January 2016

Table of Contents
Market Outlook and Mansek Top Picks ........................................................ 3
We expect the first eight months of 2016 to be a highly volatile period. Positive
domestic news would probably be overwhelmed by major negative global
themes, but we expect the JCI to close the year strongly once clear signs of a
recovery in consumer and private investments spending emerge. .......................................... 3

Global Pressures on Indonesian Equities ................................................... 12


Global factors in our opinion will exert strong downward pressures on the JCI in
mid 2016 : continued slow-down in Chinas economy and Yuan depreciation,
oil bond defaults and capital flight out of emerging markets. Corporate
earnings would also likely to disappoint in 4Q15 and 1Q16.................................................... 12

2016 : The REAL Saviour ............................................................................. 28


We see two drivers for recovery towards the end of 2016: strong pick up in
household consumption and in private investment spending, on the back of
potential further cuts in fuel price, and a shift towards a pro-business stance in
government policy. We expect signs of this recovery to emerge in 3Q16. ........................... 28

Riches in Indonesian Equities How ? ........................................................ 33


In Dec 2012, the first issue of The Bottom Line was published. To celebrate, we
review here those factors that had been proven successful in helping investors
to profit from investing in Indonesian equities. The conclusion is that Asset
Allocation is key whilst Buy and Hold often brings excessive pain. ................................... 33

2016 : Sectoral Outlook .............................................................................. 45


Appendix 1. Earnings Performance 2012-15 ............................................. 58
Appendix 2. 12m Roll Fwd PER and Correlation......................................... 60
Appendix 3. Mandiri Sekuritas Earnings Guide ......................................... 86

Please see important disclosure at the back of this report

Page 2 of 88

Strategy | 11 January 2016

Market Outlook and Mansek Top Picks


We expect the first eight months of 2016 to be a highly volatile period. Positive
domestic news would probably be overwhelmed by major negative global
themes, but we expect the JCI to close the year strongly once clear signs of a
recovery in consumer and private investments spending emerge.
2016 : The Year of Overcoming Challenges
The Bottom Line expects the Jakarta Composite Index (JCI) to close 2016 at 5,000 level,
just under 9% appreciation from its 2015 ending level of 4,593. Yet the stock market is
likely to go through severe gyration on the way there. See Figure 2.
FIGURE 2. THE BOTTOM LINE MARKET OUTLOOK FOR 2016
6,000

Dec-14
Aug-14 5,200
Apr-14 5,200
4,800

5,500
Mar-13
4,545

5,000

Feb-15
5,100
Oct-14
4,800

4,500
4,000
Oct-13
4,000

3,500
3,000

Dec-13
4,000

JCI

Jul-15
5,000
Dec-15
4,700 May-16
4,500
Jan-16
Oct-15 4,500
4,500

Dec-16
5,000

Aug-16
4,250

JCI Fcast by Mansek

Dec-16

Aug-16

Apr-16

Dec-15

Aug-15

Apr-15

Dec-14

Aug-14

Apr-14

Dec-13

Aug-13

Apr-13

Dec-12

Aug-12

Apr-12

Dec-11

Sep-11

Jan-11

May-11

2,500

Source: Bloomberg, Mandiri Sekuritas

A series of positive catalysts emerging in early 2016 should help maintain the JCI
gyrating around the 4,500 level:

Cut in subsidised fuel price (done already on 5th Jan 2016), and

Cut in the benchmark BI rate (we expect two rounds of 25 bps each in Q1
2016), and

Tax Amnesty Law to be passed by the Parliament (likely by Feb 2016).

The cuts in subsidised fuel prices (by 4.7% to Rp 7,050 per litre for gasoline and by
15.6% to Rp 5,650 per litre for diesel fuel sold in Jawa, Madura and Bali slightly lower
percentage cuts for fuel sold outside these areas) should reduce inflation by 0.2 to 0.3
ppt in our economists estimation. The Bottom Line believes the Government enjoys a
significant scope to cut these prices further assuming crude oil price of USD 35 per
barrell and an average exchange rate of Rp 14,000 per USD, the economic price of
premium (the name by which subsidised gasoline is known in Indonesia) is Rp 5,900 per
litre, some 16.3% lower than the new price applied on 5th Jan 2016.
The soothing effect that cuts in fuel prices will have on inflation also reinforces our
economists expectation that the central bank would cut its benchmark BI rate twice by
25 bps each before the Q1 2016 ends. The combined effect of these fuel price and
interest rates cuts on the economy should be strongly positive, in our view, and so our
economists project real GDPgrowth accelerating to 5% in 2016 (vs 4.7% in 2015).
Please see important disclosure at the back of this report

Page 3 of 88

Strategy | 11 January 2016

The passage of a new Tax Amnesty Law is critical to the JCI, in our opinion. The property
sector, for example, had suffered terribly in 2015 our property analysts estimate that
almost all property firms in Mansek Universe would post lower marketing sales than the
original company guidance issued at the beginning of 2015. (The sole exception is
Lippo Cikarang, thanks to strong sales in its Orange County project in Cikarang.) See
Figure 3. We ascribe this development to the fact that property transactions attracted
heightened scrutiny from the tax authorities in 2015. Without passage of the new Tax
Amnesty Laws, therefore, the property sector is likely to remain moribund in 2016.
FIGURE 3. FULL YEAR 2015 MARKETINGSALES (MGMT TARGET AND MANSEK ESTIMATES)

12,000

Rp bn

10,000
8,000
6,000
4,000
2,000
0
APLN

CTRA

SMRA

LPCK

BSDE

Company guidance at begining of year

PWON

MDLN

JRPT

Mansek estimate

Source: Company, Mandiri Sekuritas

In addition, efforts to raise tax revenue in 2016 would be boosted, as income that had
for decades been evading taxation in the past would now be subject to taxation. The
fact that the tax payers full assets and income would be legalized would also remove
peoples fear of the tax effect of purchasing big-ticket assets such as properties, motor
vehicles and others. This in turn would help spark growth in household consumption.
The combined effect of these positive catalysts should maintain the JCI oscillating
around the 4,500 level in the early part of 2016 in our estimate. However, if not all of
these positive catalysts get delivered (Bank Indonesia now sound more cautious about
cutting the BI rate in the face of the Chinese Yuan depreciation, and internal strife
within GOLKAR, the political party with the second largest number of Parliamentary
seats, may delay the passage of the Tax Amnesty Laws), then the sharp correction in the
Jakarta Composite Index may well start earlier and go deeper than our current
projection here.
Two key factors in our opinion will deliver a sustainable recovery in equity valuation :
recovery in consumer spending, and recovery in private sector investment spending.
We believe the sharp drop in crude oil price will result in WTI and Brent trading within
the USD 25 to 35 per bbl band for most of 2016 (see the next section for a fuller
discussion). This should allow the Indonesian government to cut the subsidised fuel
price further, as we noted earlier. We expect the impact to be seen with household
consumption spending accelerating from the normal 5% YoY growth starting in 3Q16.
The Indonesian government has also adopted market-friendly policies in recent months
which should prompt the private sector to grow their investment spending. While the
bulk of the effect would probably materialise towards the end of 2016, we believe some
signs of this recovery in private investment spending should emerge starting in 3Q16.
Hence we expect signs of economic improvement in August would mark the turnaround in the Jakarta Composite Index, allowing a strong close for the year.
Please see important disclosure at the back of this report

Page 4 of 88

Strategy | 11 January 2016

Mansek Top Picks


While we do expect the JCI to close 2016 with a 9% appreciation, we design our current
Top Picks to withstand the severe gyration that we expect to dominate in the first eight
months of this year. Hence our Top Picks consist of mostly defensive names (continuing
our current holding of TLKM, GGRM and BBNI and adding HMSP, MIKA and SILO), but
also a few property and construction counters that should benefit whenever the JCI
enjoys moments of rebounds (LPCK, BSDE and WSKT).
FIGURE 4. MANSEK TOP BUY PORTFOLIO
Ticker

Company's Name

Stock
Price
11-Jan-16

Starting
Stock
Price (Rp)

Changes

Mkt. Cap
(USDmn)

PER
2016F
(x)

2016 EPS
Growth
Fcast

Target
Price
(Rp)

3,060
4,935

3,105
4,990

-1.4%
-1.1%

21,598.8
6,649.2

16.2
7.7

16.1%
33.5%

3,225
5,900

6,725
54,500

7,250
55,000

-7.2%
-0.9%

338.2
7,576.2

6.0
18.5

-10.0%
7.8%

13,500
56,000

TLKM
BBNI

Telekomunikasi Indonesia
Bank Negara Indonesia

LPCK
GGRM

Lippo Cikarang
Gudang Garam

SMRA
PWON

Summarecon Agung (dropped)


Pakuwon Jati (dropped)

1,565
464

1,650
496

-5.2%
-6.5%

1,631.0
1,614.5

19.9
9.9

-3.9%
32.2%

1,600
620

SOCI
LSIP

Soechi Lines (dropped)


London Sumatra Plantations (dropped)

490
1,235

475
1,320

3.2%
-6.4%

249.9
608.8

4.6
5.5

10.5%
10.8%

810
2,700

MPPA
HMSP

Matahari Putra Prima (dropped)


HM Sampoerna (addition)

1,675

1,825
91,000

-8.2%

650.8
30,590.0

24.6
36.0

14.0%
12.1%

2,175
111,000

MIKA
SILO

Mitra Keluarga Karyasehat (addition)


Siloam International Hospitals (addition)

2,210
9,450

2,323.3
789.3

42.4
77.3

29.7%
49.1%

3,400
11,000

BSDE
WSKT

Bumi Serpong Damai (addition)


Waskita Karya (addition)

1,765
1,685

2,342.8
1,652.9

10.6
23.4

23.0%
8.3%

2,400
1,900

MANSEK TOP BUY PORTFOLIO


Jakarta Composite Index

962.4
4,465.5

1,000.0
4,593.0

(-3.8% from 30 December 2015)


(-2.8% from 30 December 2015)

Source: Mandiri Sekuritas estimates, Bloomberg

FIGURE 5. MANSEK TOP BUY PORTFOLIO, DEC14 DEC15

FIGURE 6. MANSEK TOP BUY PORTFOLIO, DEC 2015 - NOW


1,010

1,100
1,050

1,000

1,000
950
878.7

900
850

804.2

800

990
980
972.2

970

750

JCI

700

JCI

Mansek Portfolio

Mansek Portfolio

962.4

960

650
600

Source: Mandiri Sekuritas estimates, Bloomberg

Please see important disclosure at the back of this report

11-Jan

8-Jan

7-Jan

6-Jan

5-Jan

4-Jan

1-Jan

Dec-15

Nov-15

Oct-15

Sep-15

Aug-15

Jul-15

Jun-15

May-15

Apr-15

Mar-15

Feb-15

Jan-15

950

Source: Mandiri Sekuritas estimates, Bloomberg

Page 5 of 88

Strategy | 11 January 2016

HM Sampoerna: The Pack Leader (HMSP; Buy; TP:Rp111,000)


By Matthew Wibowo
FIGURE 7. FINANCIAL SUMMARY
YE Dec (Rp Bn)

2013A

2014A

2015F

2016F

2017F

EBITDA
Net Profit

14,807
10,818

14,235
10,181

14,337
10,484

15,043
11,751

17,265
13,210

Fully-Diluted EPS (Rp)


Fully-Diluted EPS Gr. (%)

2,325.2
8.8

2,188.2
(5.9)

2,253.3
3.0

2,525.6
12.1

2,839.1
12.4

P/E Ratio (x)


EV/EBITDA (x)

39.1
28.7

41.6
29.9

40.4
29.5

36.0
28.1

32.1
24.5

P/B Ratio (x)


Dividend Yield (%)

29.9
2.3

31.4
2.5

12.2
2.4

11.7
2.4

11.2
2.7

ROAE (%)

78.8

73.6

43.5

33.1

35.7

Source : Company, Mandiri Sekuritas estimates

HM Sampoerna (HMSP IJ)s sizable exposure in growing mild cigs segment, coupled
with their ability to sustain/improve their high-base market share are key competitive
advantages, in our view. Its dominant market share and excellent management team
justify premium valuation. Buy with TP of Rp111k/sh. BUY.
Mild is the future. Mild cigs are estimated to deliver faster volume growth than other
cigs segments on the back of rising middle class, hence affordability, prestige, and
health becoming the key issues here. Historical data has shown a substantial volume
improvement in mild segment during the past 10 years, representing about 42% of
total national cigs sales volume in 2014 (from 16% in 2005). HMSPs A Mild brand has
first-mover advantage in this segment, which commands the single largest market
share of 14% from total Indo cigs market.
The ability to sustain/improve market share. We like the companys ability to gain
c.10% market share in the past 10 years despite burgeoning new comers offering
cheaper products in the market. Their A Mild market share has continued to grow to
15% in Sep15, from 14.1% in Sep13.
Excise tax in favor of SKT? Under Jokowi's era, we believe excise tax will likely be in
favor of hand-rolled (SKT) products given their focus on employment and economic
growth. Based on the latest excise tax details for 2016, the highest increase of c.16% is
for Tier 1 machine-made (SKM) and white cigs (SPM), while only 10-11% hike for Tier 1
hand-rolled (SKT). The excise tax will be applicable to HMSP at c.15% which we are
positive can be fully passed on to the consumers.
Its a Buy. We have buy call on HMSP with TP of Rp111k/sh based on 39x 2017 EPS as
we see that the company will continue to be the market leader for cigarettes in the
country. Note that Unilever as a dominant player in home personal care segment
(coupled with stable margin and superior return) has been trading at c.110% average
premium to consumer sector since 2008.

Please see important disclosure at the back of this report

Page 6 of 88

Strategy | 11 January 2016

FIGURE 8. MARKET SHARES


90%

FIGURE 9. PROFITABILITY COMPARISONS VERSUS PEERS


(9M15)
Gross margin

80%

80%

Op margin

35.0%

70%

29.8%

60%

30.0%

50%

25.0%

30%

20.7%

35%

40%
21%

20%

17%

20.0%

10%
0%
SPM
Marlboro

15.9%

15.0%

13%
6%

SKT Dji Sam SKT Kretek


Soe

24.0%

SKM LTLN SKM LTLN U


SKM
Sampoerna
Brand
Magnum
A

Source: Company

12.7%
9.7%

10.0%
5.0%
0.0%
HMSP

GGRM

WIIM

Source: Company

Mitra Keluarga Karyasehat: Solid Hospital Operator (MIKA; Buy;


TP:Rp3,400)
By Matthew Wibowo
FIGURE 10. FINANCIAL SUMMARY
YE Dec (Rp Bn)

2013A

2014A

2015F

2016F

2017F

EBITDA

543

615

739

874

1,035

Net Profit
Fully-Diluted EPS (Rp)

399
27.4

517
35.5

584
40.1

758
52.1

886
60.9

Fully-Diluted EPS Gr. (%)


P/E Ratio (x)

38.0
80.7

29.7
62.2

13.0
55.0

29.7
42.4

17.0
36.3

EV/EBITDA (x)
P/B Ratio (x)

57.4
19.0

50.8
18.5

40.6
9.9

34.1
8.7

28.7
7.6

Dividend Yield (%)


ROAE (%)

0.0
26.7

0.0
30.1

0.9
23.4

0.9
21.8

1.2
22.3

Source : Company, Mandiri Sekuritas estimates

PT Mitra Keluarga Karyasehat (MIKA), is the largest private hospital operator in


Indonesia by patient volume. It offers sustainable earnings growth potential given
underserved market, coupled with excellent return on the back of its operational
efficiency and fast maturing stage of their new hospitals. We have BUY
recommendation with TP of Rp3,400/sh.
Vast growth opportunity in underserved market. We expect MIKA to see revenue
growth of 15.6% CAGR 2014-17F supported by 14.9%-16.0% of inpatient revenue and
outpatient revenue growth respectively during similar period. Key growth drivers
include: 1) new hospital and operational bed capacity expansion, 2) expectation of
faster patient turnover, and 3) higher revenue base per patient. As part of Kalbe group,
we view that MIKA's expansion plan (1 in 2016F and 2 in 2017F) is feasible and the
delivery is expected to be on schedule. MIKAs ROIC stood at 58.8% in FY2014, the
highest among hospital players.
High margin performance. We expect NPAT to grow at 19.7% CAGR 2014-17F with
gross margin improving to 46.1% in 2016F. MIKAs management pursues higher
operational cost efficiency in the existing hospitals which will come from 1)
standardizing the procurement of drugs, medical supplies, and equipment across all
hospitals, 2) reducing the number of products used in operations, 3) maintaining
number of suppliers to increase bargaining power, 4) integrating end-to-end hospital
information system.
Please see important disclosure at the back of this report

Page 7 of 88

Strategy | 11 January 2016

A cash rich company. MIKA has no debt currently and its FCFF grew by 35% CAGR to
Rp478bn in FY2014, which will be sufficient to support its hospital expansion plans
onward. Assuming US$10-15mn of investment cost to build a new hospital, MIKA has
the capability to build one-to-two hospitals annually given its Rp2.4tr net cash position
and Rp832bn operating cash inflow as per 2016F.
A buy call. We have TP of Rp3,400/sh based on 45x EV/EBITDA 2017F. Risks include
declining patient volume due to BPJS and delay in the execution of new hospitals.
FIGURE 11. EBITDA AND NET MARGIN PERFORMANCE

FIGURE 12. SALES BREAKDOWN BY TYPE OF SERVICES


100%

(%)
40.0

80%

32.0
60%

24.0
40%

16.0
20%

8.0

Net Margin

Source: Company, Mandiri Sekuritas estimates

Drugs & Medical supplies


Inpatient accomodation
Others
Source: Company

9M15

6M15

3M15

12M14

12M13

2017F

2016F

2015F

2014

2013

2012

2011

EBITDA Margin

12M12

12M11

0%

Medical support services


Operating rooms

Siloam International Hospitals: Expansion Mode (SILO; Buy; TP:Rp11,000)


By Matthew Wibowo
FIGURE 13. FINANCIAL SUMMARY
YE Dec (Rp Bn)

2013A

2014A

2015F

2016F

2017F

EBITDA

303

487

558

773

1,096

Net Profit
Fully-Diluted EPS (Rp)

50
43.1

63
54.1

95
82.0

141
122.3

245
211.8

(1.2)
219.1

25.5
174.6

51.6
115.2

49.1
77.3

73.2
44.6

35.9
6.8

22.8
6.6

20.2
6.3

14.8
5.8

10.5
5.2

0.0
5.4

0.0
3.8

0.1
5.6

0.1
7.8

0.1
12.3

Fully-Diluted EPS Gr. (%)


P/E Ratio (x)
EV/EBITDA (x)
P/B Ratio (x)
Dividend Yield (%)
ROAE (%)

Source : Company, Mandiri Sekuritas estimates

Siloam International Hospitals (SILO), established in 1996, is a subsidiary of Lippo


Karawaci group (LPKR). We expect SILO to see a robust earnings growth on the back of
aggressive hospital expansion plans, building strong footprints in the country, albeit
execution risk remains. Buy with TP of Rp11,000/sh.
Strong revenue growth potential. We expect SILO to book strong revenue growth of
22.8% CAGR 2014-2017F and NPAT growth of 57.6% CAGR during similar period.
Growth catalysts lie on the management's capability to deliver its aggressive hospital
network expansions, higher revenue per patient, and maturing existing hospital
profiles. Additionally we view SILO's outstanding track record as the largest private
healthcare provider with 20 operational hospitals and 2,578 operating beds across 15
cities in Indonesia should help to increase patient volume in line with its participation in
BPJS program.
Please see important disclosure at the back of this report

Page 8 of 88

Strategy | 11 January 2016

Short-term margin pressure, yet long-term dominance. In the short-term, SILO is


likely to experience a hike in operating expenses, yet will dominate the market in the
longer-term assuming good expansion execution. Note that SILO has an aggressive
expansion target of 50 hospitals by 2017F. Among the listed private hospital operators
in Indonesia, SILO reported the highest increase in SG&A at 46.0% CAGR 2012-14 versus
SAMEs 24% CAGR and MIKAs 18% CAGR during similar period. We estimate gross
margin to decline to 28.0% in 2015F before increasing to 28.6% in 2016F driven by
maturing existing hospital profiles.
Still need third party funding. SILO has net gearing of 10% with gross debt of
Rp450bn in FY2014 to support four new hospital developments during the year. Its
FCFF stood at negative (-Rp155bn) in the same period. We expect the companys FCFF
to be at negative in the next three years given its aggressive expansion phase.
Maintain Buy, TP Rp11,000. We derived our TP of Rp11,000/sh based on 12X
EV/EBITDA 2017F. Key risks in the business include delay in the execution of new
hospitals, sustainability payment from BPJS Kesehatan, and limited supply of medical
personnel in the industry.
FIGURE 14. EBITDA AND NET MARGIN PERFORMANCE

FIGURE 15. SALES BREAKDOWN BY TYPE OF SERVICES


100%

(%)

(%)

35.0

4.0

30.0

80%
60%

3.0

25.0

40%

2017F

2016F

2015F

2014

2013

2012

2011

EBITDA margin

Net Profit margin

Source: Company, Mandiri Sekuritas estimates

Please see important disclosure at the back of this report

Medical Support Services


Inpatient accomodation
Others

3Q15

2Q15

1Q15

4Q14

3Q14

0%

2Q14

1.0

5.0

1Q14

10.0

20%

4Q13

2.0

15.0

4Q12

20.0

Drugs & Medical Supplies


Operating rooms

Source: Company

Page 9 of 88

Strategy | 11 January 2016

Bumi Serpong Damai: Attractive valuation (BSDE; Buy; TP:Rp2,400)


By Liliana Susanti
FIGURE 16. FINANCIAL SUMMARY
YE Dec (Rp Bn)

2013A

2014A

2015F

2016F

2017F

EBITDA
Net Profit

2,910
2,691

2,632
3,821

3,333
2,499

3,676
3,073

3,981
3,532

Fully-Diluted EPS (Rp)


Fully-Diluted EPS Gr. (%)

146.5
109.3

208.0
42.0

136.0
(34.6)

167.2
23.0

192.2
15.0

12.0
12.2

8.5
14.0

13.0
9.9

10.6
8.2

9.2
6.9

3.2
0.8

2.1
0.9

1.7
2.9

1.5
1.9

1.4
2.4

29.7

29.8

14.7

15.5

15.7

P/E Ratio (x)


EV/EBITDA (x)
P/B Ratio (x)
Dividend Yield (%)
ROAE (%)

Source : Company, Mandiri Sekuritas estimates

AEON success could provide a boost to its commercial and residential estate. We
think that there is a potential for BSD City to become a commercial hub. With the
success of AEON mall, BSD City could boost its commercial land sales. With landbank
limitation in Alam Sutera and Summarecon Serpong, these companies could not serve
landed residential market under Rp2bn. BSDE still can launch landed residential
property priced under Rp2bn per unit.
Plenty of projects ready to launch. BSDE has plenty of new projects that could be
launched once the market improves. These include Aerium condominium at Permata
Buana, Tanjung Barat project near Lenteng Agung, project in Benowo, potential mixedused development projects in Surabaya. These projects could contribute up to Rp4-5tn
of marketing sales per annum.
Attractive valuation. BSDE is trading at FY16F P/E of 11x and 61% discount to NAV.
The company is trading at a discount compared to average big cap property companies
P/E of 14x. We maintain Buy on BSDE with PT of Rp2,200.
FIGURE 17. STEADY MARKETING SALES

FIGURE 18. MARKETING SALES BREAKDOWN


Kota Wisata
Cibubur; 6%

Grand Wisata
Bekasi; 7%
Taman Permata
Buana; 1%
Others; 5%

BSD City
Serpong; 59%

Nava Park; 6%
Aerium Taman
Permata Buana;
0%
Rasuna
Epicentrum;
10%

Kalimantan
projects; 6%

Source: Company, Mandiri Sekuritas estimates

Please see important disclosure at the back of this report

Source: Company

Page 10 of 88

Strategy | 11 January 2016

Waskita Karya: Exceeding Expectations (WSKT; Buy; TP:Rp1,900)


By Aditya Sastrawinata
FIGURE 19. FINANCIAL SUMMARY
YE Dec (Rp Bn)

2013A

2014A

2015F

2016F

2017F

EBITDA
Net Profit

666
368

832
502

1,538
751

1,790
977

1,937
1,034

Fully-Diluted EPS (Rp)


Fully-Diluted EPS Gr. (%)

38.2
44.9

52.1
36.3

66.5
27.7

72.0
8.3

76.2
5.8

P/E Ratio (x)


EV/EBITDA (x)

44.1
25.1

32.4
21.3

25.3
12.8

23.4
13.1

22.1
11.1

6.7
0.1

5.9
0.7

2.1
0.5

2.3
0.0

2.1
0.0

16.6

19.3

12.9

10.4

9.9

P/B Ratio (x)


Dividend Yield (%)
ROAE (%)

Source : Company, Mandiri Sekuritas estimates

The new big boy in town. Waskita is now the largest construction company by market
capitalization and equity at Rp22.7tn and Rp8.7tn respectively thanks to their successful
rights issue back in June 2015. They enjoy a first-movers-advantage of already receiving
the Government Equity Injection (PMN) because the PMN of WIKA and PTPP is currently
clouded by political uncertainties in the parliament. This extra capital can now be
utilized to take on large infrastructure projects and establish a lead in orderbook among
their peers.
Strong contract achievement. As of 11M15, WSKT leads the industry with Rp27.9tn
new contracts (+78% YoY) or 93% of their full year target. Notable projects include the
500kV electricity transmission project in Sumatra (Rp6.7tn), Solo-Kertosono toll road
(Rp5.5tn), and Bakaheuni-Terbanggi toll road (Rp2.4tn). The company guides a new
contract target of Rp40tn (+33% YoY) for 2016 of which Rp20tn is from toll road
projects, Rp10tn from government (including Rp7tn from LRT project in Palembang),
and Rp10tn from SOEs and private combined. We deem this as a realistic target given
that many of the toll road projects are self-owned while the LRT was a direct
appointment by the President.
Expect consensus to gradually upgrade earnings. We believe the abundant projects
won by Waskita in 2H15 have not been fully priced in by the market. As such, we
foresee analysts to revise their earnings and target price upwards in the near future.
WSKT is our top pick within the Construction sector with a TP of Rp1,900 by valuing
the construction segment at 23x P/E16F and the toll road segment using DCF with a
WACC of 10.8%. Key risk is cash flow management. Many of WSKTs projects are
turnkey-based which means that cash will only be transferred once the project is fully
completed.
FIGURE 20. NEW CONTRACTS COMPARISON VERSUS PEERS
Rp bn

FIGURE 21. PROFITABILITY COMPARISON VERSUS PEERS


9M15
Rp bn
16.0%

30,000

13.4%

14.0%

25,000

12.0%
20,000

10.0%

15,000

12.1%

12.1%

9.9%

8.0%
6.0%

10,000

4.0%
5,000

4.8%

4.3%

4.5%

2.5%

2.0%

0.0%
ADHI

PTPP
2013

WIKA
2014

11M15

Source: Company

Please see important disclosure at the back of this report

WSKT

ADHI

PTPP
Gross Margin

WIKA

WSKT

Net Margin

Source: Company, Mandiri Sekuritas estimates

Page 11 of 88

Strategy | 11 January 2016

Global Pressures on Indonesian Equities


Global factors in our opinion will exert strong downward pressures on the JCI in
mid 2016 : continued slow-down in Chinas economy and Yuan depreciation, oil
bond defaults and capital flight out of emerging markets. Corporate earnings
would also likely to disappoint in 4Q15 and 1Q16.
All eyes on Chinas economy
Stock markets world-wide opened 2016 with a tremble, thanks to the steep drop in the
Chinese equity bourses. Clearly the health of Chinas economy has an outsized effect on
global equities. Unfortunately the outlook is not encouraging, in our opinion, and we
expect more pain in the form of continued slow down in Chinas economy, continued
depreciation of the Chinese Yuan. All these open up a significant downside potential on
China equities and the JCI in our estimation.
FIGURE 22. CHINA'S ECONOMIC GROWTH

18

China, real GDP (%, yoy)

16
14
12
10
8
6
4
2
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015

Source: CEIC

Since peaking at 14.9% in Q2 2007, Chinas economic growth has been steadily slowing
down to 6.9% in Q3 2015. See Figure 22. More importantly in our view, both the
Chinese government and the market consensus expect it to slow down further in 2016.
The IMF, for example, expects Chinas economic growth to decelerate to 6.3% this year.
FIGURE 23. CHINA PMI

FIGURE 24. CHINA RETAIL & MANUFACTURING GROWTH

60

% YoY
35.0

55

30.0

50

25.0

Retail Sales (YoY)


Industrial Production (YoY)

20.0
45

15.0

40

10.0
Gov't

5.0

Source: Bloomberg

Please see important disclosure at the back of this report

Dec-15

Jan-15

Mar-14

May-13

Jul-12

Sep-11

Nov-10

Jan-10

Mar-09

May-08

Jul-07

Sep-06

Nov-05

Jan-05

35

0.0
1995
1996
1997
1998
1999
2000
2002
2003
2004
2005
2006
2007
2009
2010
2011
2012
2013
2014

Caixin

Source: Bloomberg

Page 12 of 88

Strategy | 11 January 2016

Leading indicators indicate further weakening. Chinas official Purchasing Managers


Index (PMI) reached 49.7 in Dec 2015 (vs 49.6 in Nov). PMI levels below 50 indicate
contraction. The private Caixin PMI, focusing on smaller and medium-sized companies,
fell to 48.2 in Dec 2015 (vs 48.6 in Nov), showing contraction for the tenth month. Data
suggested that client demand was weak both at home and abroad, the press release
said. See Figure 23.
FIGURE 25. CHINA'S SHARE OF WORLD CONSUMPTION OF VARIOUS COMMODITIES
Concrete
Alumunium

60%
54%
50%

Nickel
Coal
Copper

49%
48%
46%

Tin
Zinc
Steel

46%
45%

Lead
Cotton

40%
31%
0%

10%

20%

30%

40%

50%

60%

Soybean Oil
Rice
Soybean Meal
Gold
Corn
Wheat
Uranium
Oil
Sorghum
Palm Oil

70%

30%
30%
28%
23%
22%
17%
13%
12%
11%
10%
0%

5%

10%

15%

20%

25%

30%

35%

Source:
- World Bureau of Metal Statistics (first six month of 2015 fore refined metals, slab zinc)
- World Gold Council (2014 for gold)
- BP Statistical Review of World Energy 2015 (2014 for oil, natural gas)
- Metalytics via Morgan Stanley (2015 estimate for finished steel)
- U.S. Department of Agriculture (2013-14 season for others)

Why does Chinas economy matter to the global equity investors outside China ? China
is the worlds second largest economy, and has been a strong contributor to world
economic growth for a number of years. The countrys manufacturing sector has been a
huge buyer of raw materials and energy from countries such as Australia, Brazil, Chile,
Russia, Indonesia and Malaysia. China consumes, for example, 60% of global concrete
usage, 54% of world aluminium consumption, 50% of nickel, 49% of coal and so on. See
Figure 25. Hence we believe the slow down in Chinas economic growth is the reason
for the collapse in commodity prices, and so the continued subdued outlook for Chinas
economy in 2016 spells further pain for commodity producers.
FIGURE 26. INDONESIAN EXPORT 2014 (US$ BN)
Japan
13%

China
10%
Singapore
10%
United States
9%

Others
45%

FIGURE 27. GDP GROWTH EXPECTATION IN 2016


GDP YoY (%)
2014 GDP
(USD bn)
9M 2015
2016F
United States

17,348

2.1

2.8

China

10,357

6.9

6.3

Japan

4,602

1.0

1.0

India

2,051

7.4

7.5

South Korea

1,410

2.7

3.2

308

2.2

2.9

Singapore

India
7%

South Korea
6%

Source: CEIC

Please see important disclosure at the back of this report

Source: IMF

Page 13 of 88

Strategy | 11 January 2016

In addition, President Xi Jin Ping calls for rebalancing China growth towards services,
consumption and high-tech innovation over exports and manufacturing. Indeed while
industrial production growth continues to slump, retail sales are actually picking up.
See Figure 24 above. The days of China relying on its role as the world centre for mass
manufacturing are over in our opinion. Any hope for recovery in commodity prices in
the foreseeable future due to resurging Chinese demand is likely to be disappointed.
The continued slow down of Chinas economy is also bad news to Indonesias exports
prospects. Japan and China are Indonesias main exports partners see Figure 26. The
IMF is forecasting stagnating or slowing down growth in Japan and China for 2016
thus putting immediate pressure on Indonesias economy.
Therefore a continued slow down in Chinas economy will dampen Indonesias exports
through both lower commodity prices, and lower volume exported to China itself.

Significantly more pain still to come on Chinas stock indices


As if the direct impact from Chinas economic slow down is not enough, we also have to
contend with the impact of dropping equity valuation in China.
After a 30-50% rally in mid 2010, reflecting the strong recovery in Chinas real GDP
growth (from a low of 6.2% YoY in Q1 2009 to 12.2% YoY in Q1 2010) the Chinese equity
bourses spent the next four years moving generally sideways. See Figure 28 below. This
is entirely in line with the countrys economic development as its growth rates gently
decelerated throughout these times. However the Chinese bourses suddenly shot up
by 130% (Shenzen Composite Index) and by 160% (Shanghai Composite Index) from
June 2014 to their peaks in June 2015.
FIGURE 28. CHINA EQUITY INDICES IN RECENT TIMES

6,000
Shanghai

Shenzhen

5,000
4,000
3,000
2,000
1,000
0
Dec-09

Dec-10

Dec-11

Dec-12

Dec-13

Dec-14

Dec-15

Source: Bloomberg

We ascribe this huge stock market rally to a number of reasons, none of which however
has anything to do with an improving economy :
1. Surge in margin lending
Margin trading in equities only became legal in China in October 2011. It did not
immediately become popular because the requirements were pretty demanding at first
the customer must have had a registered account for 18 months, and deposit stocks
and cash to the value of at least CNY 500,000. The minimum length of account history
was shortened to 6 months in 2013 by CSRC (China Securities Regulatory Commission).
Please see important disclosure at the back of this report

Page 14 of 88

Strategy | 11 January 2016

FIGURE 29. CHINA MARGIN LENDING BALANCE

CNY bln
2,500
2,000
1,500
1,000
500

Dec-15

Sep-15

Jun-15

Mar-15

Dec-14

Sep-14

Jun-14

Mar-14

Dec-13

Sep-13

Jun-13

Mar-13

Dec-12

Sep-12

Source: Bloomberg

Online peer to peer (P2P) lending accounts changed this landscape. Investors can
borrow up to 5 times his collateral (vs 3x at stock-brokers traditional margin lending),
and some P2P online lenders required its investors to deposit CNY 2,000 only. In the
face of this competition, conventional stock brokers soon relaxed their own conditions,
and margin lending boomed.
Before long, China banks participated by treating margin loans made by stock brokers
to their customers as collateral for loans to the stock brokers themselves. The brokers
also turned to the stock markets to raise new equity Galaxy Securities, GF Securities
and Haitong Securities raised over USD10bn in China and Huatai Securities raised
USD4.5bn in Hong Kong in 2015, feeding more ammunition to this frenzy. Chinese
stock brokers are clear beneficiaries of this boom in margin lending, a business that
generated far greater profits than underwriting or financial advisory services. The
balance of outstanding margin loan shot up from CNY 392 billion in May 2014 to its
peak of CNY 2.27 trillion (USD365bn) in June 2015 almost a six-fold increase in one
year. See Figure 29 above.
2. Cuts in interest rates
The Peoples Bank of China has been aggressive in cutting interest rates beginning Nov
2014 after leaving them unchanged since Jun 2012. One-year deposit rate was cut
seven times from Nov 2014 to Oct 2015, halving it from the 3.0% level reached in Jun
2012 to 1.5% in Oct 2015. The one-year lending rate was also cut from the 6% level to
4.35% over the same period. See Figure 30. One of the effects of these interest rate cuts
is to make alternative investments to bank deposits more attractive to the Chinese
savers, helping to feed the frenzied entry into stock markets.
FIGURE 30. CHINA INTEREST RATES RECENT HISTORY
One Year
One Year
Deposite Rate
Lending Rate
June 2012
3.00%
6.00%
November 2014
2.75%
5.60%
February 2015
2.50%
5.35%
May 2015
2.25%
5.10%
June 2015
2.00%
4.85%
August 2015
1.75%
4.60%
October 2015
1.50%
4.35%
Source: Peoples Bank of China
Please see important disclosure at the back of this report

Page 15 of 88

Strategy | 11 January 2016

3. Steep rise in public participation


The number of new brokerage accounts opened in the first five months of 2015 jumped
to almost 18 million accounts, exceeding the total number of new brokerage accounts
opened in the previous four years, according to the Financial Times. In total there are
258 million accounts open on the Shanghai and Shenzhen stock exchanges as at Jun
2015, according to Credit Suisse, a greater number than most countries population.
This is entirely understandable. The Chinese household savings rate had doubled from
15% of disposable income in 1990 to about 30% in 2010, according to studies by the
Federal Reserve Bank of San Francisco. In recent times, the Chinese tend to invest their
excess savings into real estate. However, with bubbles in the housing markets starting
to be deflated by over building, the equity bull rally was just too irresistible in our view.
4. Shanghai Hong Kong Stock Connect
The Shanghai Hong Kong Stock Connect is a cross boundary investment channel that
links the Shanghai Stock Exchange to the Hong Kong Stock Exchange. It was launched
on 17th Nov 2014, allowing investors in both markets to trade shares directly in the
other bourse through their local brokers.
Through this investment channel Shanghai stocks attracted CNY121bn (USD19.7bn) in
inflows in its first year of operation, according to the Shanghai Stock Exchange. Hong
Kong stocks attracted CNY92.4bn in inflows over the same period, according to Hong
Kong Exchanges and Clearing Ltd (HKEx). While the flows were relatively modest to the
total trading volume, they nonetheless contributed to the 2014/15 rally.
Such a robust rally in the face of a slowing economy is unsustainable, in our view. Last
December, Chinas Ministry of Finance reported the latest data on state-owned firms
profitability. For the Jan Nov 2015 cumulative period, they posted CNY 2.04 tn
(approximately USD 316 bn), representing a -9.5% YoY decline. State owned financial
companies account for roughly a third of the cumulative profit decline. At the same
time, Chinas public and private sector debt have been growing at a fast pace.
According to BlackRock Investment Institute, outstanding loans to companies,
households and the public sector as a ratio to the countrys GDP have more than
doubled from 121% in 2000 to 282% in 2014. See Figure 31.
FIGURE 31. CHINA DEBT AS A SHARE OF GDP

158%
121%
8%

282%

Total

38%

Households

125%

Non-financial
corporate

65%

Financial
institutions
Government

20%
72%

83%
24%
7%
23%

42%

55%

2000

2007

2014

Source: BlackRock Investment Institute and McKinsey Global Institute, February 2015
Note; 2014 data are as of the second quarter

Please see important disclosure at the back of this report

Page 16 of 88

Strategy | 11 January 2016

China therefore needs to engineer a soft landing whereby falling profitability and
decelerating economic growth do not spark waves of debt defaults. Happily for the rest
of the world, Chinas financial system remains isolated. Hence even if a full-blown debt
crisis should develop in China, few global banks would be affected.

0
-1
-2
-3
-4
-5
-6
-7
-8
-9

Taiwan (TAIEX)

India (Nifty)

Japan (Nikkei)

Korea (Kospi)

Hongkong (HSI)

Philippin (PSEi)

Thailand (SET)

Malaysia (KLCI)

Singapore (STI)

Indonesia (JCI)

China (Shenzhen)

China (Shanghai)

FIGURE 32. DECLINES IN REGIONAL BOURSES WHEN CHINA INDICES DROPPED (JAN 2016)

4-Jan-16
7-Jan-16

Source: Bloomberg

All the same The Bottom Line views the 130-160% bull rally in the Shanghai and
Shenzhen stock markets from mid 2014 to mid 2015 in the face of an over-leveraged
corporate sector, declining profitability and slowing-down economy as total hubris. We
expect the China indices to return to their original starting point in June 2014 (2,048 for
the Shanghai Composite Index and 1,097 for the Shenzhen Composite Index) before
fair values are restored, implying another -34.5% and -44% decline in the Shanghai
and Shenzhen indices respectively.
Unfortunately the Chinese stock markets have a sizeable impact on other equity
bourses across the world. The first trading week of Jan 2016 saw two occasion when
trading was halted by the new circuit breaker system (Monday 4th Jan and Thursday 7th
Jan 2016). In each occasion stock markets in other countries also suffered, regardless of
their domestic consideration see Figure 32 for some examples. So were the Chinese
bourses to suffer 30%+ decline, it goes without saying that the Jakarta Composite Index
will come under severe pressure too.
Is that inevitable though ? Isnt Chinas authorities taking extreme measures to stop the
crash and stabilise the markets ? Indeed, here is a list of actions taken :

Freezing proposed IPOs (4th Jul 2015) to keep investors being focused on
buying stocks already listed in the markets;

Government sponsored stock purchases (early Jul 2015) China Securities


Finance (CSF) Corporation is lending CNY260bn (USD$42bn) to 21 brokerage
firms to purchase blue chip stocks. This figure is on top of the USD20bn that
the brokerage firms already vowed to buy.

Trading suspension (8th Jul 2015) The government allowed half of Chinas
stocks on the stock exchanges to halt trading activities. At least 1,430 out of
2,800 companies traded in the Shanghai and Shenzhen stock markets pulled
their shares out of the market.

Please see important disclosure at the back of this report

Page 17 of 88

Strategy | 11 January 2016

Announcement 18 (8th Jul 2015) Chinas stock regulator introduced


Announcement 18, threatening severe punishment for any senior managers
or shareholders with stakes of 5% or more from selling shares of a listed
company during the following six month period. This rule expired on 8th Jan
2016, and has now been replaced with a new rule that allows those major
shareholders to sell a maximum of 1% of total shares outstanding within the
next three months (meaning, until 8th April 2016).

Restriction on short selling (3rd Aug 2015) Under the old rules, investors are
able to go short in the morning and cover their shorts before the market close
the same day and lock in their profits. With the new regulation, investors
cannot cover their short position in the same day, but have to wait until the
next day at the earliest.

Persuasion (ongoing efforts) state-owned media were continuously


persuading the general public to keep on purchasing more stocks through
various campaigns.

Naturally if you halt trading, ban large shareholders from selling, and flood the market
with state-funded buy orders, a semblance of calm would descend into the markets.
This however is fake calmness, in our opinion. A frozen market will not be able to find its
natural bottom. The mispricing of equity values remains, and the double trading halts
in the first week of Jan 2016 show that when correction finally materialises, such market
intervention can cause investors to panic instead.
The anatomy of the China stock market crash reminds The Bottom Line of the dot com
bubble at the start of this century. If we super-impose the tech-heavy NASDAQ index
during the period 15th Apr 1999 to 29th Dec 2000 to the current Shanghai Composite
Index (1st Jul 2014 to now), the readers can see uncannily similar pattern. See Figure 33.
FIGURE 33. PATTERN OF A CRASH : SHANGHAI COMPOSITE INDEX VS NASDAQ INDEX

6,000
IRRATIONAL RALLY

CRASH REBOUND

FINAL
CRASH

5,000
Dec. 29, 2000
2,470.5
4,000
3,000
Jan. 7, 2016
3,125.0

2,000
Shanghai
1,000

Nasdaq

0
Source: Bloomberg

No, The Bottom Line is not proposing that history repeats itself exactly but the pattern
certainly does. The crisis consists of four elements : (a) the original massive rally that
lack fundamental justification, jolted by (b) severe crash, interrupted by (c) seemingly
convincing recovery (either stock brokers convince the world that all the bad news are
already in the price, and current valuation looks cheap compared to 3 months ago, or
the authorities step in and send you to jail for posting a sell order), but this fleeting joy
is then rudely broken up by (d) the final leg of the crash that bring valuation back all the
way to its starting point.

Please see important disclosure at the back of this report

Page 18 of 88

Strategy | 11 January 2016

And then there is the Chinese Yuan


The other mechanism by which a slowdown in Chinas economy might be impacting
Indonesias stock market is through its currency the Chinese Yuan (CNY).
FIGURE 34. USDCNY (DEC 2004 TO NOW)

8.5
8.0
7.5
7.0
6.5
6.0
5.5

Dec-12
Jun-13
Dec-13
Jun-14
Dec-14
Jun-15
Dec-15

Dec-07
Jun-08
Dec-08
Jun-09
Dec-09
Jun-10
Dec-10
Jun-11
Dec-11
Jun-12

Dec-04
Jun-05
Dec-05
Jun-06
Dec-06
Jun-07

5.0

Source: Bloomberg

The Chinese Yuan was pegged to the USD at CNY 8.30 per USD from 1997 to 2005, but
on 21st Jul 2005 the Peoples Bank of China (PBOC) released that peg and applied a
dirty float instead. Every morning the PBOC announced a daily midpoint exchange
rate, and forex brokers are allowed to trade the currency (the reference is the USDCNY
exchange rate) within a band surrounding this mid point. In the beginning, the trading
band was 0.3% (Jul 2005), and it was subsequently relaxed to 0.5% (May 2007), 1% (Apr
2012), and 2% (Mar 2014). On 24th Jul 2015, the PBOC announced that it would widen
the trading range further to 3%, but no timeline has been set.
FIGURE 35. CHINA EXPORTS VALUE (LHS) AND GROWTH (RHS)

US$ bn
250

60%

200

50%

150

40%
30%

100

20%
50

10%

0%

China Export

Nov-15

Sep-15

Jul-15

May-15

Mar-15

Jan-15

Nov-14

Sep-14

Jul-14

-20%

May-14

-100

Mar-14

-10%

Jan-14

-50

%YoY

Source: Bloomberg

Please see important disclosure at the back of this report

Page 19 of 88

Strategy | 11 January 2016

What spurred Chinas monetary authority to devalue the Yuan was its worsening export
performance. Throughout the first half of 2015, Chinas exports had been declining (the
exception was Feb 2015 due to base effect of a one-off weak showing in Feb 2014). In
Jul 2015 Chinas exports fell again, by -8.3% YoY when consensus expectation at the
time was for a -1.5% YoY decline only. See Figure 35.
So on 11th Aug 2015 the PBOC set a midpoint exchange rate that represented a 1.87%
devaluation, the biggest one-day change since 1993 at the time. This was followed the
next day by another 1.62% devaluation against the USD. Taken together this decision
represented the largest yuan depreciation for 20 years then. The PBOC also changed its
method to set the midpoint exchange rate which in essence let the free markets to
have more influence over the Yuan.
The impact on other emerging market currencies were well spread. Whereas developed
economies currencies such as the Japanese Yen and Euro appreciated against the US
dollars over this two day period (10th to 12th Aug 2015), emerging market currencies
such as the Indonesian rupiah, Malaysian ringgit, Brazilian real, South African rand and
Thai bath depreciated significantly, as did the currencies of the Asian Tigers such as
Korean won and Singapore dollars. See Figure 36.
FIGURE 36. IMPACT OF YUAN DEVALUATION ON REGIONAL CURRENCIES (1012 AUG 2015)
0.0%
-0.5%
-0.6%

-1.0%
-1.2%

-1.2%

USDSGD

-1.5%

USDBRL

-0.8%

-2.7%

-2.3%

-2.3%

USDMYR

-2.8%

USDIDR

-3.0%

USDCNY

-2.5%

USDKRW

-2.0%

USDTHB

USDZAR

-3.5%

Source: Bloomberg

Why should there be such a strong impact ?


One of the key reasons is beggar thy neighbour. China and other economies export to
many similar destination. Figure 37 lists out the top 19 destination for Chinas exports,
the value of Chinas exports in 2014 to these destination and the values of a selection of
other countries exports to the same destination. We record the 2014 exports value for
the other (non China) countries in this Table only if those destination happen to be
included in the other non-China countries Top 20 export destination also.
So what Figure 37 below shows is that of Chinas 19 top export destination, between
11-15 of them are also among the Top 20 export destination for Brazil, South Korea,
Thailand, Singapore, Malaysia and Indonesia. China is competing with these other
countries for much the same export markets. Hence, the Chinese Yuans depreciation
would give Chinas products a pricing edge hence the term beggar thy neighbour as
what China gains from the depreciation of its currency comes out of its neighbours loss
in market share. To prevent this outcome, the other countries currencies need to
depreciate too and the financial markets, being always forward-looking, pre-empted
this eventuality by promptly depreciating most other emerging market currencies.

Please see important disclosure at the back of this report

Page 20 of 88

Strategy | 11 January 2016

FIGURE 37. TOP 20 EXPORTS DESTINATION FOR CHINA AND OTHER REGIONAL ECONOMIES (2014)
No

Destination Country

Exporting Countries
China

Brazil

South Korea

Thailand

Singapore

Malaysia

Indonesia

27.1

70.6

19.7

24.2

24.0

16.6

11.3

45.1

12.6

2.8

25.3

16.7

21.8

23.1

United States

397.1

Hong Kong

363.1

3.3

27.3

Japan

149.4

6.7

32.2

South Korea

100.3

3.8

4.5

16.7

8.6

10.6

Germany

72.7

6.6

4.5

5.4

5.5

2.8

Netherlands

64.9

13.0

4.6

7.3

7.2

4.0

Vietnam

63.7

7.9

12.9

7.9

United Kingdom

57.1

3.8

22.3

India

54.2

4.8

12.8

10

Russian Federation

53.7

3.8

10.1

11

Singapore

48.9

23.9

12

Malaysia

46.4

7.6

13

Australia

39.1

10.3

14

Indonesia

39.1

11.4

15

United Arab Emirates

39.0

16

Brazil

34.9

17

Thailand

34.3

7.6

18

Mexico

32.3

3.7

10.8

19

Canada

30.0
40.6
11

20
China
Total Match with China's
Export Destination

9.7

2.4
11.1

33.3

9.7

12.2

10.4

16.8

49.0

12.7

9.7

10.1

15.5

9.3

5.0

9.7

38.4

9.5

3.6

6.1

3.6

12.3

15

145.3

25.1

51.5

28.2

17.6

14

15

14

15

13

2.5

8.9
5.8

Source: World Integrated Trade Solution, World Bank

What then should investors expect of the Chinese Yuans outlook ?


We sense that the authorities favour further depreciation. An influential government
economist interviewed by Reuters suggested that the Yuan should be allowed to
depreciate by another 10-15% against the USD over an unspecified time frame (Reuters,
Pressure on China central bank for bigger yuan depreciation, 7th Jan 2016). The main
motivation for such a move is that letting the Yuan depreciate could help cushion many
of Chinas debt-laden companies as the government pushes supply-side reforms.
In addition, currency depreciation can be used as an alternative to monetary and fiscal
policy. Given that the Chinese government has tried fiscal stimulus (USD586bn
following the 2008 global credit crisis, mostly in infrastructure spending) and monetary
loosening (six interest rate cuts starting in Nov 2014) without achieving a sustainable
turn-around in its decelerating economic growth, the addition of currency depreciation
as a policy option must look attractive in our opinion.
Lastly, China is also aiming to let the Yuan move more flexibly in line with market forces
to add legitimacy to its recent inclusion in the IMFs special drawing rights (SDR)
currency basket, a key asset in terms of international reserves.
Yet allowing the Yuan to depreciate too fast would create market panic. The PBOC did
use its huge forex reserves to slow down the pace. The central bank datas published on
7th Jan 2016 show that its forex reserves fell by USD512.66bn in 2015 to USD3.33tn.
They dropped by USD107.9bn in Dec 2015 alone, ironically a bigger amount than
Indonesias entire forex reserves as at the end of 2015 (USD105.93bn).
Overall though, The Bottom Line believes there is a significant risk that the Chinese
Yuan would could continue depreciating gradually over 2016. At some point we expect
this trend to put substantial selling pressure on other emerging market currencies,
including the Indonesian rupiah, and hence on the Jakarta Composite Index.

Please see important disclosure at the back of this report

Page 21 of 88

Strategy | 11 January 2016

Flight to Safety : Oil Glut and the Emerging Markets


The crude oil crash offers another dimension of risk to the Indonesian equities.
Brent and WTI price went from USD 115 and USD 107 per bbl respectively in June 2014
to the USD 33 per bbl level today. See Figure 38.
FIGURE 38. CRUDE OIL PRICE

USD/barrel
160
WTI Crude Oil

140

Brent Crude Oil

120
100
80

Brent
33.55

60
40

WTI
33.16

20

2015

2013

2012

2010

2008

2006

2004

2002

2001

1999

1997

1995

1993

1991

1990

Source: Bloomberg

The crash happens because Saudi Arabia, the worlds top crude oil exporter, launched a
price war starting in mid 2014 by keeping its production level abnormally high to drive
certain key competitors (particularly the US shale oil drillers) out of business, in our
opinion. The same applies to the refining sector Saudi Arabia has been flooding the
market with refined fuel and decimating oil refining margins world-wide.
Will this continue ?
FIGURE 39. COST OF PRODUCING OIL (USD PER BBL)

Brazil
Canada
USA
Venezuela
Russia
Iran
UAE
Capital Expenditure

Iraq
Saudi Arabia

Operational Expenditure

Kuwait
$0

$10

$20

$30

$40

$50

Source: Rystad Energy

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Page 22 of 88

Strategy | 11 January 2016

It will, if we follow the rationale of Saudis decision. Kuwait and Saudi Arabia are the
worlds cheapest producer of crude oil, with production cost of USD 8.50 and USD 9.90
per bbl respectively in 2015, according to the oil and gas data intelligence and
consulting firm Rystad Energy. By contrast in the US oil production cost on average USD
36.20 per bbl, and in Canada they cost USD 41.00 per bbl. See Figure 39. Hence by
driving crude oil price below USD 35 per bbl and keeping it there for considerable
period, there is every reason to expect many US shale oil producers would fold.
But low oil price hurts all oil producers, Saudi Arabia included. Can it continue to bear
the pain ?
The answer is No to the oil bulls. Oil producers have an incentive to produce as much
as possible, rather than cut production, in order to make up for the lower prices. Indeed
US shale oil producers, as well as other non OPEC producers such as Russia, Brazil and
Norway have all increased production as the price war intensifies. This was achieved
through an impressive array of efficiency drives: thousands of workers laid off, focusing
rigs on the biggest gushers only (in the process idling more than 60% of rigs in the US)
and fracking faster by applying cutting-edge technology. Meanwhile the IMF predicted
earlier last year that the Saudi government budget deficit would reach USD140bn (or
21.6% of GDP) in 2015. So the oil bulls argue that the Saudis would blink first and start
cutting their oil production, and thus ending the price war and sending oil price back
up, later in 2016.
FIGURE 40. SAUDI ARABIAN GOVERNMENT BUDGET BALANCE

600

40%
Budget balance (SAR bn)

30%

400

% of GDP (RHS)

20%
200

10%

0%
-10%

(200)

-20%
(400)

-30%

(600)

2015

2013

2011

2009

2007

2005

2003

2001

1999

1997

1995

1993

1991

-40%

Source: Bloomberg

We do not share this view we think the WTI and Brent would be trading within the
USD 25 to 35 per bbl band for most of 2016.
Our reason is that we believe Saudi Arabia is well positioned to withstand the fiscal
pain, and has taken step to fortify its resilience. The Saudi government announced in
late Dec 2015 that it estimated its budget deficit to reach 367 billion riyals (USD98bn),
or 16% of GDP in 2015 far lower than IMFs USD140bn and 21.6% of GDP forecast (also
lower than 20% of GDP concensus forecast in Bloomberg). See Figure 40. Its 2016 state
budget plans to slash government spending by 840 billion riyals, mostly by cutting
energy subsidies. Its 2016 government budget deficit is projected to narrow to 326.2
billion riyals, or 10.8% of GDP according to estimates by Abu Dhabi Commercial Bank.

Please see important disclosure at the back of this report

Page 23 of 88

Strategy | 11 January 2016

So the Saudis appear well aware of the costs of the price war, and have taken painful
steps to deal with them. Most importantly, the subsidy cuts had not sparked any social
unrest, signalling a good chance that the budget targets would be met in 2016.
In fact, IMFs World Economic and Financial Survey (published on 15th Oct 2015)
studies this issue of how much fiscal space oil-exporting countries have, comparing
the size of governments financial assets (also referred to as fiscal buffers) with the
government budget deficits. It concludes that Saudi Arabias fiscal buffer can last five
years whereas Kuwait, Qatar and the United Arab Emirates can last more then 20 years.
Please note the IMF study arrives at this conclusion using assumption about 2015 deficit
which has now proved too pessimistic so the real resilience of Saudis finances may
well be significantly more than just five years. Therefore The Bottom Line sees little
reason why the Saudis should blink and end the price war in 2016.
Finally, the crude oil inventory in the US remains at elevated level see Figure 41. All
these evidence indicate to us that oil price would remain depressed in 2016.
FIGURE 41. US CRUDE OIL INVENTORY

FIGURE 42. HIGH YIELD BOND AND HIGH YIELD ENERGY


BOND INDICES

mn barrels
500

460

450

440

140

450

130

430
400

120

420

110

410

350

400

100

390

Source: Bloomberg

Barclays High Yield Bond Index (LHS)

90

Bloomberg USD High Yield Corporate Bond Index Energy (RHS)


Dec-15

Dec-15

Oct-15

Nov-15

Sep-15

Sep-15

Jul-15

Aug-15

Jul-15

Jun-15

May-15

Apr-15

May-15

Mar-15

Mar-15

Jan-15

80
Dec-14

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

370
2002

200

2001

380
2000

250

Feb-15

300

Source: Bloomberg

As a result, the high yield bond markets are plummeting now to levels not seen since
2009. See Figure 42. Investors are reminded that a lot of high yield (junk) bonds had
been issued in recent years, taking advantage of the low interest rate environment, and
that sustained low levels of oil price may result in a wave of debt defaults by energy
companies. Many oil companies had hedged their crude oil selling price until summer
2016 at prices much higher than the current level, according to Babson Capital
Management, an investor in high yield bonds. Once that hedge protection expires, the
risk of waves of debt default would become prominent in our view. Indeed Standard &
Poors Rating Service warned last Dec 2015 that a stunning 50% of energy junk bonds
are distressed (meaning, they are at risk of default).
Focused Credit, a bond fund managed by Third Avenue, announced in Dec 2015 that it
was blocking its investors from redeeming their investments. The fund would be
wound down, its assets had lost two-third of its value in seven months to USD788mn
when the announcement came. Another bond fund, Lucidus Capital Partners, has
liquidated its entire portfolio and announced in mid Dec 2015 that it would return its
USD900mn asset under management to its investors. The Bottom Line believes this is
just the beginning.

Please see important disclosure at the back of this report

Page 24 of 88

Strategy | 11 January 2016

FIGURE 43. MSCI EMERGING MARKETS INDEX VS S&P 500 INDEX RELATIVE
180
160
140

162.5

120
110
99.3
100

120
100
80
60
40
20
0

90
69.0
S&P 500

MSCI EM

80

83.0

70
S&P 500

MSCI EM
Dec-15

Nov-15

Oct-15

Sep-15

Aug-15

Jul-15

Jun-15

May-15

Apr-15

Mar-15

Feb-15

Jan-15

Dec-14

Dec-15

Jun-15

Dec-14

Jun-14

Dec-13

Jun-13

Dec-12

Jun-12

Dec-11

Jun-11

Dec-10

60

Source: Bloomberg

The danger with this crash in the high yield bond market is that it might spark a general
flight to quality. Should investors start to cast their wary eyes and ask what other asset
classes might follow the path of the high yield bonds, we fear that emerging markets
might be that next target.
Indeed, similar to the high yield bond market (whose performance has not been too
healthy even before this still-developing crash), emerging market as an asset class has
badly under-performed US equities. Figure 43 show that the MSCI Emerging Markets
Index under perform the S&P 500 index both in the one-year time frame (down 17% vs
S&P 500s 0.7% decline) as well as in the five-year time frame (down 31% vs S&P 500s
62.5% appreciation in value).

A faster than expected pace of FFR increases


This flight to quality scenario actually faces another risk that might exacerbate its
effect, namely the risk of a faster pace of Fed Funds Rate (FFR) increases than what the
markets expect.
During the run up to the first increase in the benchmark Fed Funds Rate in nine years
last Dec 2015, the capital markets were very focused not only on the possible rate rise
(which was universally expected to materialise) but also on the Feds statement of how
it sees the possible pace of future increases.
Therefore when the Federal Open Market Committee, the arm of the US Federal
Reserves that determines the course of monetary policy, finally decided to lift the
benchmark Fed Funds Rate on 16th Dec 2015 by 25 bps to 0.25-0.50%, capital markets
world-wide felt a great relief that its accompanying statement gave out a dovish tone,
describing its plan to raise the Fed Funds Rate at a "gradual" pace. This choice of word is
considered significantly more dovish than "measured pace", an expression that had
appeared in the past. On the day of that announcement, the American stock indices
closed strongly - NASDAQ and Russell 2000 went up by over 1.5%, the S&P 500 by
1.45% and the DJIA by 1.28%.
However, there is a major difference between what the FOMC and the capital markets
understand as "gradual". The dot plot, part of the FOMCs Summary of Economic
Projections released along with the policy decision statement, shows where each
member of the FOMC thinks the Fed Funds Rate should be at the end of the year for the
next few years and in the longer run. The dot plot released in Dec 2015 suggests that
median estimates for Fed fund rates in 2016 lie between 1.25% and 1.50%. This implies
there will likely be four rate hikes in 2016, of 25 bps each. See Figure 44.

Please see important disclosure at the back of this report

Page 25 of 88

Strategy | 11 January 2016

FIGURE 44. FED FUNDS RATE FORECAST BY FOMC MEMBERS (AS AT DEC 2015)

Source: The US Federal Reserves

The futures market begs to disagree. It has only priced in two rate hikes (25 bps each)
with Jun and Dec 2016 (or Feb 2017) being considered most likely months for these
raises. See Figure 45.
FIGURE 45. FED FUNDS RATE IMPLIED FORECAST BY THE FUTURES MARKET (8 JANUARY 2016)
Probability
of hike

Probability
of cut

0% 0.25%

0.25% 0.5%

0.5% 0.75%

0.75% 1.0%

1% 1.25%

1.25% 1.5%

1.5% 1.75%

27-Jan-16

0.0%

8.0%

8.0%

92.0%

0.0%

0.0%

0.0%

0.0%

0.0%

16-Mar-16

40.5%

4.5%

4.5%

55.0%

40.5%

0.0%

0.0%

0.0%

0.0%

27-Apr-16

46.0%

4.0%

4.0%

50.0%

41.9%

4.0%

0.0%

0.0%

0.0%

15-Jun-16

62.0%

2.7%

2.7%

35.3%

44.5%

16.2%

1.3%

0.0%

0.0%

27-Jul-16

66.2%

2.4%

2.4%

31.4%

43.4%

19.6%

3.1%

0.2%

0.0%

21-Sep-16

75.0%

1.7%

1.7%

23.3%

40.0%

26.2%

7.7%

1.0%

0.0%

2-Nov-16

78.8%

1.4%

1.4%

19.7%

37.3%

28.5%

10.8%

2.1%

0.2%

14-Dec-16

84.7%

1.0%

1.0%

14.3%

32.1%

31.1%

16.0%

4.6%

0.8%

1-Feb-17

87.5%

0.8%

0.8%

11.7%

28.5%

31.2%

19.0%

6.9%

1.5%

Source: Bloomberg

So while both the capital markets and the Federal Reserves use the word gradual, they
seem to mean different things. Of course, as the Fed has repeatedly said, its decision on
further rate rises will depend on how the economic data evolves. We do not rate this
risk too highly, but it is not impossible either that the American economy would grow
more strongly in 2016 than current market expectation.

Corporate earnings need to start delivering


However, if all the risks that Indonesian equity values face today relate to global issues,
then their intrinsic values that are independent of these global themes would make the
JCI an absolute bargain.
Alas no such easy killing is available here. Indonesias corporate earnings also need to
start delivering or else. Figure 46 shows how the Jakarta Composite Indexs valuation
stacks against other regional indices, in terms of 12-month trailing PE ratio. In fact at
25.7x, the JCI is markedly more expensive than most other indices bar the Shenzhen
Composite Index.

Please see important disclosure at the back of this report

Page 26 of 88

Strategy | 11 January 2016

FIGURE 46. 12-MONTH TRAILING PE RATIOS OF REGIONAL INDICES

PE (x)
50

45.4

40
25.7
16.4

16.5

17.6

17.8

Thailand (SET)

Malaysia (KLCI)

USA (S&P 500)

India (Sensex)

13.8

19.3

China (Shanghai)

12.8

Korea (Kospi)

20

Singapore (STI)

30

10

China (Shenzhen)

Indonesia (JCI)

Source: Bloomberg

This reflects the fact that Indonesias corporate earnings performance has been poor in
2013, 2014 and again in 2015.
Please refer to Appendix 1 on p.58-59. What we did here is that we took note of 2012
EPS consensus forecasts as at Dec 2011 (for companies in Mansek Universe and a few
others that we include in this analysis for their trading liquidity). We then compare
these with the actual EPS performance in 2012, noting the over- or under-performance
of each company. At the bottom of the Table, we aggregate these figures to give the
readers a sense of how the Indonesian market had performed as a whole against the
concensus forecast in that year. We do the same analysis for 2013 and 2014. For 2015, as
the Full Year results have not been announced yet, we compare the projected EPS
growth instead. So we take the concensus 2015 forecast as at Dec 2014, and we work
out what % EPS growth in 2015 are implied by comparing it to the actual EPS result in
2014. We then compare these implied EPS growth expectation with the actual year-onyear EPS growth delivered at the 9M 2015 stage.
The results are not pretty. 2012 was the last year when the actual performance beat the
consensus forecasts. 2013, 2014 and 9M15 had been disappointing and disappointing
in a big way.
To look at this from a different angle, we note how many companies in this analysis
managed to beat market expectation. In 2012, 94.3% of companies in this survey did
better than consensus expectation. In 2013, the number slumped to just 37.3%. In 2014
it deteriorated further to 28.4%. And by the time we came to the 9M15 period, only
22.1% of the companies in our survey managed to beat the Streets expectation.
Hence the JCIs high trailing PER shown in Figure 46 above shows that current valuation
already prices in quite an aggressive expectation that 2016 will witness substantially
stronger earnings performance than in the past three years.
Given the preponderance of global issues that might put equity values world-wide at
risk today, Indonesian equity is not cheaply valued in our opinion. This underlies our
reason for keeping our Underweight rating for the market and maintaining a largely
defensive posture in Mansek Top Picks.

Please see important disclosure at the back of this report

Page 27 of 88

Strategy | 11 January 2016

2016 : The REAL Saviour


We see two drivers for recovery towards the end of 2016: strong pick up in
household consumption and in private investment spending, on the back of
potential further cuts in fuel price, and a shift towards a pro-business stance in
government policy. We expect signs of this recovery to emerge in 3Q16.
Fuel-driven recovery in household consumption
Household consumption is the largest element of Indonesias economy, accounting for
55% of its real GDP in 2014. The precipitous drop in global crude oil price, if translated
into the subsidised fuel price in Indonesia, should therefore have a significant effect on
consumer purchasing power, and on household consumption eventually. We estimate
that the economic price of the subsidised RON 88 (also called premium in Indonesia)
should be Rp 6,400 and Rp 5,900 per litre respectively assuming Brent crude oil price
of USD 40 and 35 per barrel respectively. This represents a scope for 9 to 16% further
reduction from the current level of Rp 7,050 per litre respectively. See Figure 47.
FIGURE 47. SIMULATION OF ECONOMIC PRICE OF SUBSIDISED GASOLINE ASSUMING DIFFERENT BRENT PRICE LEVELS
Simulation of Brent Price to Indonesia's retail fuel price (RON 88)

1,610

Economic price
before tax
(Rp/liter)
11,098

Economic
price after tax
(Rp/liter)
12,491

9,027

1,610

10,637

11,984

8,566

1,610

10,176

11,476

14,000

8,105

1,610

9,715

10,969

81.6

14,000

7,182

1,610

8,792

9,954

70

76.3

14,000

6,721

1,610

8,331

9,447

65

71.1

14,000

6,260

1,610

7,870

8,940

60

65.9

14,000

5,799

1,610

7,409

8,432

55

60.6

14,000

5,337

1,610

6,947

7,925

50

55.4

14,000

4,876

1,610

6,486

7,418

10

45

50.1

14,000

4,415

1,610

6,025

6,910

11

40

44.9

14,000

3,954

1,610

5,564

6,403

12

35

39.7

14,000

3,493

1,610

5,103

5,896

13

30

34.4

14,000

3,031

1,610

4,641

5,388

Brent price
(USD/bbl)

MOPS
(USD/bbl)

Rupiah/US$

MOPS
(Rp/liter)

Distribution & other costs


+ margin (Rp/liter)

100

107.8

14,000

9,488

95

102.5

14,000

90

97.3

14,000

85

92.0

75

No

Source: Mandiri Sekuritas estimates

Presently our economic team is forecasting a 5.0% real GDP growth in 2016, driven
among others by a 5.0% growth in household consumption. As the readers can see
from Figure 48, growth in Indonesias household consumption has been decelerating
since 2012. In our economists estimation, if the subsidised fuel price is cut to Rp 5,900
per litre, the impact would be to boost consumer spending to 5.2% growth rate this
year. We expect signs of this recovery to be seen by 3Q16, helping the JCI to start
appreciating around Aug 2016 when 3Q16 economic data would be released.
FIGURE 48. INDONESIA REAL GDP GROWTH BY EXPENDITURE
%, yoy

2011

2012

2013

2014

1Q15

2Q15

3Q15

2015F

2016F

Real GDP

6.17

6.03

5.58

5.02

4.72

4.67

4.73

4.7

5.0

Household

5.05

5.49

5.38

5.14

5.01

4.97

4.96

5.0

5.0

Govt spending

5.52

4.53

6.93

1.98

2.65

2.13

6.56

5.0

5.5

Investment

8.86

9.13

5.28

4.12

4.37

3.69

4.62

4.0

5.8

Exports

14.8

1.61

4.17

1.02

-1.04

-0.09

-0.69

0.0

1.3

Import

15

1.86

2.19

-2.38

-6.98

-6.11

-1.0

2.2

Source: BPS, Mandiri Sekuritas

Please see important disclosure at the back of this report

Page 28 of 88

Strategy | 11 January 2016

Pro-market policies should revive private investments


Numerous economists and strategists have developed almost a fetish adulation of
public sector infrastructure spending, in our opinion. The governments realized capital
spending in 2015 was Rp213.3tn, or just 77% of the budget target of Rp276tn. This has
a direct impact on the Construction and other sectors. Of the five listed Construction
counters in Mansek Universe, only Waskita Karya managed to meet its 2015 target for
new orders during the year. The other firms posted strong growth YoY, but significantly
missing the ebullient targets issued in the beginning of 2015. See Figure 49.
FIGURE 49. NEW CONTRACTS TARGET VS REALIZATION (11M15)
Target (Rp tn)

11M15 Realization (Rp tn)

ADHI

15.2

11.1

% YoY
Growth
76%

PTPP

27.0

21.0

31%

78%

WIKA*

31.6

25.3

26%

80%

WSKT

22.7

27.9

78%

123%

4.0

3.5

35%

88%

Company

WTON*

% of Target
73%

*= 12M15 Realization
Source: Company

After such big misses last year, one would think that brokers would be more
circumspect in forming their expectation for 2016. This is not the case, however. The
Bottom Line believes that such high expectation might contribute to selling pressures
on the JCI in early 2016 if earnings performance in 1Q16 fail to reflect the positive
benefits of this supposed robust growth in public sector capital spending.
However the private sector forms the bulk (almost 70%) of the nation's infrastructure
investments in the governments original plans. Unfortunately, for much of 2015 policy
actions by the government had not been conducive for private investments in our
opinion. These include :

instructing the management of Semen Indonesia (SMGR) to cut its selling


prices by 5% (Jan 2015), and

cajoling the CEOs of Bank Mandiri (BMRI), Bank Rakyat Indonesia (BBRI), Bank
Nasional Indonesia (BBNI) and Bank Tabungan Negara (BBTN) to lower their
credit interest rates (Feb 2015), and

publicly musing about scenarios of 10-40% price cuts by Perusahaan Gas


Negara (PGAS) and how they will benefit the economy (Apr 2015), and

floating the ideas of imposing maximum retail prices on essential goods, and

instructing all state-owned enterprises which consume steel to buy them from
Krakatau Steel (May 2015), and

ordering toll road operators to cut their tariffs by 25-35% during the period 10
days prior to and 5 days after 2015 Lebaran (Jun 2015), and

banning the sales of beverages with alcohol content of less than 5% in mini
mart or retail shops (Jan 2015), and

calling on rice millers and traders to put public good above profits (Sep 2015).

The direct impact is negative. Gross fixed capital formation (GCFC), composed of both
public and private sector investment spending, grew by 3.7% to 4.6% YoY only
throughout the first nine months of 2015. See Figure 48. In early 2015, when our
economists were still forecasting real GDP growth of 5.3%, this was based on GCFC
growth of 6.2%. No mystery that the final economic growth in 2015 is likely to be nearer
4.7%. Likewise Foreign Direct Investments actually declined in 9M15. See Figure 50.

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Strategy | 11 January 2016

FIGURE 50. FOREIGN DIRECT INVESTMENTS INTO INDONESIA


Sector
TOTAL

USD mn

YoY Growth (%)

9M2012

9M2013

9M2014

9M2015

9M2013

9M2014

9M2015

18,252

21,203

21,745

21,337

16.2

2.6

-1.9

4,481

5,093

5,500

4,592

13.7

8.0

-16.5

Primary Sector
Food Crops & Plantation

1,272

990

1,623

1,421

-22.1

63.9

-12.4

Mining

3,157

4,061

3,793

3,089

28.6

-6.6

-18.6

Others

52

43

85

82

-18.1

98.8

-3.2

Secondary Sector

8,594

12,429

10,150

8,522

44.6

-18.3

-16.0

Food & Beverage

1,149

1,487

2,547

1,156

29.4

71.3

-54.6

Chemical & Pharmaceutical

2,477

2,562

1,978

1,477

3.4

-22.8

-25.3

Metal, Machinery & Electronic

1,284

2,633

1,543

2,099

105.0

-41.4

36.1

Automotive

1,308

2,791

1,602

1,482

113.4

-42.6

-7.5

Others

2,376

2,956

2,480

2,308

24.4

-16.1

-6.9

Tertiary Sector

5,177

3,681

6,095

8,224

-28.9

65.6

34.9

Electricity, Gas & Water

1,072

757

684

1,636

-29.4

-9.6

139.0
49.1

Construction
Transport & Communication
Real Estate
Others

196

521

618

921

165.9

18.5

1,873

887

2,804

2,816

-52.6

216.0

0.4

328

492

806

1,481

49.8

63.8

83.8

1,708

1,024

1,184

1,369

-40.1

15.6

15.7

Source: CEIC

Happily government actions in the recent past have reflected a major shift towards free
market mechanism. For example :

Jasa Marga was due to raise its tariffs in a number of toll roads in Oct 2015, as
stipulated by its contracts. Initially Director General of Bina Marga (Ministry of
Public Works and Public Housing) Hediyanto W. Husaini announced that this
would be delayed to Jan 2016, due to weak economic condition. In the end
the tariffs were raised on 1st Nov 2015.

The price of natural gas supplies to manufacturers in Indonesia would be cut


by USD 1 to 2 per mmbtu, starting from 1st Jan 2016. Whereas in the earlier part
of 2015, the government was publicly musing that PGAS would be asked to
bear the costs of these price cuts, this would now be borne by the government
by reducing the governments royalty entitlements (Oct 2015).

The government launched Kartu Indonesia Sehat (KIS or Indonesias Health


Card) in Mar 2015, aimed at the low income patients in particular. In the past,
one might expect the drug manufacturers to be instructed to cut their generic
drug prices, but the government has instead made use of market mechanism
by raising the maximum foreign ownership of pharmaceutical manufacturers
from 85% to 100%, and to offer various tax incentives for investors to produce
active pharmaceutical ingredients (API) in Indonesia. At the moment, Indonesia
still imports 90% of its APIs needs, according to Minister of Industry Saleh
Husin, as quoted by Bisnis Indonesia (Jan 2016).

This shift towards market mechanism rather than government diktat would, in our view,
remind investors world-wide about the attractiveness of Indonesia as destination for
investments. Indonesia is the fourth most populous country in the world. See Figure 51.

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Strategy | 11 January 2016

FIGURE 51. 15 COUNTRIES WITH THE BIGGEST POPULATION (2014)

mn person
1,600
1,368
1,400
1,276
1,200
1,000
800

200

252 203
186 174 158 146
127 120 99

91

88

Ethiopia

319

400

Vietnam

600

87

Egypt

Philippines

Mexico

Japan

Russia

Bangladesh

Nigeria

Pakistan

Brazil

Indonesia

US

India

China

Source: IMF

Indonesia has a much lower dependency ratio (a measure of productive part of the
population, taking the ratio of those NOT in the labour force to those currently working)
compared to developed economies such as the US or Japan. See Figure 52.
FIGURE 52. DEPENDENCY RATIO (%)
China

India

Indonesia

Japan

US

Malaysia

Philippine

Singapore

Thailand

Viet Nam

1950

61

68

75

67

53

85

89

75

83

56

1955

71

72

73

63

60

88

96

77

81

66

1960

77

77

76

55

64

96

100

83

85

80

1965

80

81

81

46

63

98

102

86

89

95

1970

78

79

83

44

59

93

96

73

90

96

1975

77

76

81

46

52

85

91

59

85

91

1980

67

74

78

46

47

74

87

47

76

84

1985

55

73

72

44

46

72

83

42

63

79

1990

50

71

65

40

48

69

79

37

53

75

1995

51

69

60

44

53

65

75

40

49

71

2000

48

65

54

47

51

59

72

40

45

60

2005

42

60

51

51

50

58

68

39

44

50

2010

39

56

49

56

50

54

64

36

42

42

2015

40

52

46

63

52

51

60

36

41

41

2020

44

49

44

67

55

50

57

41

42

42

2025

46

47

43

69

58

51

56

51

45

42

2030

49

45

44

71

61

52

55

61

49

43

2035

54

44

47

76

62

53

54

71

54

45

2040

59

44

50

86

62

53

52

76

58

49

2045

61

45

53

92

62

53

52

79

62

54

2050

63

47

56

96

63

54

51

81

65

61

Source: UN Population

In many countries, large productive segment of the population does not necessarily
imply good economic potential, if in fact they live in penury. Not so in Indonesia its
size of the middle income has grown from 38% in 2003 to 62% of the population in
2013, according to the World Bank. See Figure 53.

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Strategy | 11 January 2016

FIGURE 53. CONSUMER CLASS BASED ON CONSUMPTION/DAY

120%
0%

0%

0%

57%

62%

43%

37%

100%
38%

80%
60%
40%

62%
20%
0%
2003

2010
Middle

Low

2013
High

Source: World Bank

In short, many facets of Indonesias demographic and population levels and growth are
highly attractive to potential investors in our opinion. This has the real potential of
being turned into a massive engine of economic growth. The ratio of GCFC to real GDP
has been hovering between 30 to 33% level only since 2008. Yet during the heyday of
Soehartos years, it passed the 35% level for a number of years and touched just under
40% in late 1996. See Figure 54.
FIGURE 54. REAL GROSS FIXED CAPITAL FORMATION TO REAL GDP RATIO

45.0%
Real GFCF to real GDP

40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%

Sep-15

Mar-14

Sep-12

Mar-11

Sep-09

Mar-08

Sep-06

Mar-05

Sep-03

Mar-02

Sep-00

Mar-99

Sep-97

Mar-96

Sep-94

Mar-93

0.0%

Source: CEIC, Mandiri Sekuritas estimate

Our economists had estimated that if Indonesia succeeds to raise its GCFC to real GDP
ratio to 38% in 2017, somewhat below the maximum ratio delivered in history, that
would imply that real investment spending would grow by 24% YoY. That would be a
massive improvement compared to the 4 to 5% growth level witnessed in recent years.
Even if Indonesia delivers a fraction of that potential, the impact on the economy would
remain immense. In our opinion, with a pro-market policy attitude by the government,
there is little reason why Indonesias investment potential should not be realised soon.

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Strategy | 11 January 2016

Riches in Indonesian Equities How ?


In Dec 2012, the first issue of The Bottom Line was published. To celebrate, we
review here those factors that had been proven successful in helping investors
to profit from investing in Indonesian equities. The conclusion is that Asset
Allocation is key whilst Buy and Hold often brings excessive pain.
The Long Term Performance
Over the long term, there is no question that investing in Indonesian equities generates
significant gains. Figure 55 below shows the relative performance of Indonesian
equities over the medium term a 10-year period from Dec 2005 to Dec 2015. Rp 100
invested in the Jakarta Composite Index (JCI) at the end of Dec 2005 would grow into
Rp 395 by Dec 2015, almost a quadrupling in just 10 years equivalent to a 14.6% CAGR
(compounded annual growth rate). This is ignoring dividend income completely.
FIGURE 55. THE JCI VS S&P 500 VS RUPIAH 3-MONTH FIXED DEPOSIT OVER 10 YEARS

500
450
JCI
395.0

400
350
300
250

FD int Rate
213.3
S&P 500
163.7

200
150
100

S&P 500

JCI

Dec-15

May-15

Oct-14

Mar-14

Aug-13

Jan-13

Jun-12

Nov-11

Apr-11

Sep-10

Feb-10

Jul-09

Dec-08

May-08

Oct-07

Mar-07

Aug-06

Jan-06

50
0

Fixed Deposite Int.Rate

Source: Bloomberg, Mandiri Sekuritas

If we compare this equity performance to investing in rupiah Fixed Deposit, the relative
superiority of equities is pronounced. Putting Rp 100 in 3-month rupiah fixed deposit at
the end of Dec 2005, and rolling it over (with accrued interest being fully re-invested)
every 3 months, would grow into Rp 213.3 more than doubling over 10 years or
equivalent to an annualised return of 7.9% CAGR. Looking strictly at the CAGR, investing
in shares outperformed holding cash in fixed deposit by an average of 6.7% a year. Of
course, this pronounced outperfornance comes at the cost of significantly higher risks,
but there is no disputing that equity investing delivers significantly higher returns than
holding cash over the medium term.
Interestingly in our opinion, the Indonesian equities also outperformed US equities.
Investing USD 100 at the end of Dec 2005 in S&P 500, the main index for US equities,
would grow into USD 163.7 by 2015 a 64% appreciation over 10 years equivalent to
5.3% CAGR. Not a bad return but clearly outshined by the 14.6% CAGR delivered by
Indonesian equities over the same medium-term period. See Figure 55 above.
The same conclusion would be reached if we consider an even longer horizon the 23
years period from the end of Dec 1992 to Dec 2015. Putting USD 100 into American
equities (represented by the S&P 500 index) at the end of 1992 would grow into $490 in
Dec 2015, a five-fold appreciation equivalent to an annualised return of 7.3% CAGR.

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Strategy | 11 January 2016

By contrast, putting Rp 100 into the Jakarta Composite Index at the end of 1992 would
transform into Rp 1,856.6 this is over 18-fold appreciation in value over 23 years, or
equivalent to an annualised return of 13.5% CAGR. Please see Figure 56.
FIGURE 56. 23-YEAR RELATIVE PERFORMANCE OFJCI VS S&P 500 (IN LOCAL CURRENCIES)

2,500
2,200

JCI
1,856.6

1,900
1,600
1,300
1,000
700

S&P500
490.0

400

-200

1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015

100

S&P 500

JCI

Source: Bloomberg, Mandiri Sekuritas

All the above equity returns statistics account for stock price movements only we do
not include dividends income, much less dividends income re-invested. Hence the total
returns performance in equity investing would be much stronger than depicted above.

The Key to Success in investing in Indonesian Equities


The discerning readers might suspect that these performances appear too good to be
true. The catch is that those are the JCIs returns in rupiah terms. Obviously the rupiah in
2015 has a very different value to the rupiah in 1992 and, indeed, if we convert the JCIs
showing into dollar terms, then over the past 23 years it has grown by 166%, equivalent
to an annualised return of 4.3% only. The US-based investors would have been better
advised to stay at home and reap S&P 500s 7.3% annualised return over the past 23
years instead. See Figure 57 below.
FIGURE 57. RELATIVE PERFORMANCE OFJCI VS S&P 500 (IN DOLLAR TERMS)

600
S&P500
490.0

500
400
300

JCI
265.7

200
100

1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015

S&P 500

JCI in USD

Source: Bloomberg, Mandiri Sekuritas

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Strategy | 11 January 2016

So what is the key to success in investing in Indonesian equities ?


It is simple, in our opinion Avoid the Crash!
There are not that many stock market crashes during the modern history of Indonesian
equities. If we define a stock market crash as the relevant Index falling by over 15%
(from top to bottom during the period), then the JCI had witnessed only 13 crashes over
the span of the last 23 years (1992 2015). This is on average less than once every two
years, not an impossibly high frequency in our opinion eventhough distressingly they
occur more often in the last 13 years than in the first 10 years. Figure 58 below lists the
starting and ending dates for these 13 crashes, the dates when the JCI recovered back
to its starting point before the crash, and how long the recovery took (from the start of
the crash to the time when it broke even again).
FIGURE 58. JCI CRASHES, THEIR MAGNITUDE AND % OF LIQUID STOCKS UNAFFECTED

7-Apr-15

28-Sep-15

-25.4%

81

% of
Declining
Liquid
Stock
95%

20-May-13

27-Aug-13

-23.9%

94

91%

3-Sep-14

1-Aug-11

4-Oct-11

-22.0%

80

96%

3-Apr-12

8.2

30-Apr-10

25-May-10

-15.4%

57

96%

14-Jul-10

2.5
27.2

Crashes Period

JCI chg

No of
Liquid
Stock

Date of
Break Even

Period to
Break Even
(months)

15.7

9-Jan-08

28-Oct-08

-60.7%

71

93%

5-Apr-10

24-Jul-07

16-Aug-07

-20.5%

55

100%

2-Oct-07

2.3

11-May-06

14-Jun-06

-20.5%

33

100%

10-Oct-06

5.1

3-Aug-05

29-Aug-05

-16.6%

34

94%

4-Jan-06

5.1

27-Apr-04

17-May-04

-18.3%

20

100%

21-Sep-04

4.9
79.2

8-Jul-97

21-Sep-98

-65.0%

42

93%

9-Jan-04

24-Apr-96

15-Aug-96

-16.0%

22

100%

5-Dec-96

7.5

5-Jan-94

18-Apr-95

-32%

N/A

N/A

15-Apr-96

27.7

19-Jun-92

21-Dec-92

-18%

N/A

N/A

26-May-93

11.4

Source: Bloomberg, Mandiri Sekuritas

However the key observation are that each stock market crash inflicted a deep wound
(the average decline is -27.3%, and on two occasion the JCI fell by more than -60%), and
that the recovery period is usually quite long (the average is 16.4 months, and on four
occasion the JCI needed more than one year to return to its pre-crash level). Clearly a
Buy and Hold investment strategy (i.e. once you pick a quality stock, hold on to it
through thick and thin) would not only inflict a painful damage to the investors wealth
during a stock market crash but would also require a very long time, on average, just to
return to point zero again. See Figure 58 above.
Here is another key observation diversification within Indonesia would not help. At
the start of each of these 13 stock market crashes, we listed the stocks that had had
average daily trading values in excess of USD1mn over the past 6 months prior to that
day these we define as liquid stocks. We then asked how many of these liquid stocks
managed to stay above water (i.e. avoid decline in their stock price) during the
subsequent crash. Figure 58 above gives this shocking answer : in all of Indonesias
stock market crashes, at least 91% of liquid stocks would lose value. In four occasion,
ALL liquid stocks lost value over the crash period.
Furthermore, success does not repeat itself in Indonesias stock market crashes. Figure
59 below shows those liquid stocks that had managed to stay above water during each
of the JCIs 13 crashes over the past 23 years. NOT one stock managed to repeat its
success. Each stock in this list appeared exactly once only. In addition, this list of
winners consists of both companies with fundamentals that, we argue, are generally
recognised as respectable (SMGR, LPBN, PTBA, BNII, GGRM, UNVR, AALI, TBIG, MPPA,
MIKA, AKRA) as well as those that are not. Fundamentals alone, therefore, do not offer
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Page 35 of 88

Strategy | 11 January 2016

guidance. If your probability of success is less than 9%, and fundamental analysis
appears to make no difference, then we argue that stock picking skills would have been
practically powerless to help investors to avoid damage during crashes.
FIGURE 59. LIQUID STOCKS THAT ROSE IN VALUE DURING CRASHES
Crash Period
Neutral-Or-Positively-performing Stocks
7-Apr-15
28-Sep-15 MIKA (16%), AKRA (5%), BCIP (4%), SRIL (67%)
TRAM (3%), NOBU (28%), SUGI (2%), AALI (5%), MYRX (8%), TBIG
20-May-13
27-Aug-13
(2%), CMNP (72%), MPPA (6%)
1-Aug-11
4-Oct-11 TRAM (17%), STAR (46%)
30-Apr-10
25-May-10 GGRM (15%), UNVR (5%)
9-Jan-08
28-Oct-08 BNII (33%), BAEK (46%), COWL (2%), IIKP (147%), MIRA (55%)
24-Jul-07
16-Aug-07 11-May-06
14-Jun-06 3-Aug-05
29-Aug-05 LPBN (1%), PTBA (5%)
27-Apr-04
17-May-04 8-Jul-97
21-Sep-98 SMGR (32%)
24-Apr-96
15-Aug-96 Source: Bloomberg (figures in bracket show their stock price movement during the crash period)

Indeed if we disect the composition of equity risks :


TOTAL RISKS

MARKET RISKS

NON MARKET RISKS

Then it is obvious that diversification within one market can only eliminate non market
risks (i.e. risks that are specific to individual companies), but it will do nothing to reduce
market risks.

How to Avoid the Negative Impact of Stock Market Crashes


So how do we avoid the damaging impact of stock market crashes ?
The answer, in our opinion, is Asset Allocation. This is not a new idea. Back in 1986, a
seminal paper by Gary Brinson, Randolph Hood and Gilbert Beebower (Determinants
of Portfolio Performance) studied the quarterly performance of 91 large pension funds
over the 1974-1983 period. It concludes that 93.6% of the variation of their portfolio
performance could be attributed to asset allocation. Stock picking and market timing
account for 4.2% and 1.7% respectively of the variability of their portfolio performance.
FIGURE 60. SOURCES OF PORTFOLIO PERFORMANCE VARIABILITY

Stock Pick
4.2%
Asset
Allocation
93.6%

Timing
1.7%
Others
0.5%

Source: Brinson, Hood, Beebower,"Determinants of Portfolio Performance", Financial Analysis Journal,


1986

Please see important disclosure at the back of this report

Page 36 of 88

Strategy | 11 January 2016

For equity funds, this answer may appear a non solution as they cannot hold other asset
classes such as government bonds or corporate bonds (the major common alternatives
to holding equities). Here is one good news : holding bonds in Indonesia would not
help anyway. Figure 61 below shows that in every equity crash period where
government bonds were actively traded (we use the Indonesian Government
benchmark 10-year bonds as a proxy), the bond yields actually went up (meaning, the
bond lost value as bond yield and price are inversely related). Hence holding bonds
would not help investors avoiding the negative impact of equity crashes.
FIGURE 61. JCI, 10YR GOVT BOND YIELD & USDIDR IN CRASHES
Start Date

End Date

19-Jun-92

JCI INDEX

10yr Govt Bond Yield

Start Value

End Value

Chg

21-Dec-92

331.1

270.5

5-Jan-94

18-Apr-95

612.9

24-Apr-96

15-Aug-96

8-Jul-97

21-Sep-98

Start Value

End Value

USDIDR
Chg

Start Value

End Value

Chg

-18.3%

2,030

2,064

1.7%

415.0

-32.3%

2,105

2,226

5.7%

630.2

532.4

-15.5%

2,326

2,341

0.6%

740.8

256.8

-65.3%

2,433

11,100

356.2%

27-Apr-04

17-May-04

818.2

668.5

-18.3%

11.2

11.8

59

8,625

9,010

4.5%

3-Aug-05

29-Aug-05

1,192.2

994.8

-16.6%

11.7

13.7

201

9,755

10,775

10.5%

11-May-06

14-Jun-06

1,553.1

1,234.2

-20.5%

11.6

13.1

145

8,703

9,475

8.9%

24-Jul-07

16-Aug-07

2,401.1

1,908.6

-20.5%

9.0

9.6

65

9,088

9,550

5.1%

9-Jan-08

28-Oct-08

2,830.3

1,111.4

-60.7%

9.9

21.0

1,106

9,440

11,050

17.1%

30-Apr-10

25-May-10

2,971.3

2,514.1

-15.4%

8.6

9.3

69

9,013

9,405

4.3%

1-Aug-11

4-Oct-11

4,193.4

3,269.5

-22.0%

7.0

7.6

69

8,464

8,920

5.4%

20-May-13

27-Aug-13

5,215.0

3,967.8

-23.9%

5.6

8.7

314

9,758

11,358

16.4%

7-Apr-15

28-Sep-15

5,523.3

4,120.5

-25.4%

9.7

234

12,997

14,741

13.4%

7.3

Source: Bloomberg, Mandiri Sekuritas

However Figure 61 above also demonstrates one asset class that always appreciates in
value whenever the Indonesian stock market crashes the USD (against the rupiah). It
shows why holding Indonesian equities throughout crash periods is doubly hurtful to
foreign investors not only do they suffer the loss in equity value, but they also suffer
from holding assets in a depreciating currency. So the answer to foreign investors is
clear in our opinion do not hold Indonesian equities during crash periods. While
Indonesia-specific equity funds cannot hold the USD, they can hold rupiah cash as an
alternative asset class.
The next question, of course, is how to recognise an incoming stock market crash ?
This cannot be done consistently, according to the Efficient Market Hypothesis. This
theory (dating back to Eugene Famas seminal paper Efficient Capital Markets: A
Review of Theory and Empirical Work, Journal of Finance, 1970) asserts that stock
markets are efficient in reflecting information about individual stocks and about the
stock market as a whole. Therefore market prices are unbiased estimates of the true
value of investments meaning, market prices may not be equal to the true values at all
times, but the errors themselves are unbiased there is an equal chance that stocks are
under- or over-valued. This theory therefore asserts that no groups of investors should
be able to identify under- or over-valued stocks consistently using any investment
strategy. Trying to identify an incoming stock market crash is therefore futile, it says.
In our opinion, this theory is just plain wrong. In the coming sections, The Bottom Line
presents three different methods (seasonality, trend analysis and The Bottom Line itself)
to avoid the negative impact of stock market crashes. Contrary to the Efficient Market
Hypothesis, all three methods deliver track records of excess returns.

Please see important disclosure at the back of this report

Page 37 of 88

Strategy | 11 January 2016

Seasonality in JCI returns


No, The Bottom Line has not turned into a star gazer who embraces numerology or the
zodiacs or any other astrological methods. Yet we will show here that paying attention
to the seasonality of JCI returns would bring excess returns to ones portfolios.
Lets show the results Figure 62 below reveals that Rp 100 invested in the JCI at the
end of 1992 would bring over 18-fold appreciation 23 years later, but the same Rp 100
invested in our Best 8 Months strategy would return almost 40-fold appreciation over
the same period. This demonstrates longevity an investment strategy that delivers
returns more than double what the stock market generates over a 23-year period is
unlikely to be a flash in the pan.
FIGURE 62. JCI VS BEST 8 MONTHS

4,500.0
JCI

4,000.0

Best 8 Months
3,961.5

Best 8 Months

3,500.0
3,000.0
2,500.0
2,000.0
1,500.0

JCI
1,837.5

1,000.0
500.0

1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015

0.0

Source: Bloomberg, Mandiri Sekuritas

In addition to long term outperformance, The Bottom Line believes it is also important
to examine periodic performance. Figure 63 below shows the difference between the
annual returns of JCI and those of the Best 8 Months strategy.
FIGURE 63. OVER/UNDER PERFORMANCE BEST 8 MONTHS VS JCI

60%
40%
20%
0%
-20%
-40%

1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015

-60%

Source: Bloomberg, Mandiri Sekuritas

Please see important disclosure at the back of this report

Page 38 of 88

Strategy | 11 January 2016

The Best 8 Months strategy delivered stronger returns than the JCI in 12 years out of
the 23 years in this review (1992 2015 period) not an overwhelming (52%) winning
percentages but realistic.
FIGURE 64. JCI MONTHLY CHANGE (STDEV, MAX & MIN)

40.0%
30.0%
20.0%
10.0%
0.0%
-10.0%
-20.0%
-30.0%
-40.0%
Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov Dec

Source: Bloomberg, Mandiri Sekuritas

So how does this work ?


We observe that JCI returns are not distributed evenly across all months. Figure 64 is a
box plot depicting the maximum and minimum returns (the top and the bottom of the
wicks) in each month over the past 23 years (1992-2015), and the standard deviation
(the box shows 1 standard deviation from the average) in each month. The point of
this chart is to give the readers a quick visual representation of the monthly distribution
of JCI returns. We can easily see, for example, that the months August, October,
November and April tend to be highly volatile months whereas February and December
are low volatility months. Such variation in both returns and volatility suggests that
incorporating them in our analysis should help deliver superior performance.
Figure 65 overleaf gives greater details. Our Best 8 Months strategy basically holds the
JCI in all those months where the probability of positive return is greater than 60% (Dec
to Jun, seven months in all) and we add October because it has the second highest
median returns after December. In the remaining four months (Jul, Aug, Sep and Nov)
we hold 100% cash. The returns are calculated purely on stock price returns we do
not account for dividends income or interest income.
Why should this work ? The Bottom Line believes there are logical explanation for this
seasonality that would ensure its longevity. The month of December has the highest
probability of positive returns AND the highest average and median returns; most likely
because the investing community has a tendency to be overly bullish when looking at
the outlook of the coming year. The month of August, by contrast, has both the lowest
probability of positive returns AND the lowest average and median returns. We believe
August is the month when investors wake up to the fact that the unfolding reality has
proven much less beautiful than the dream in the previous December. (The second
quarter economic data are typically announced in early August.) We postulate that in
years where the political development (as in 2014) or economic development (as in
2009 and 2010) prove encouraging, JCI returns in August tend to be positive. Hence as
long as these tendency persist, this seasonality pattern is likely to persist too.

Please see important disclosure at the back of this report

Page 39 of 88

Strategy | 11 January 2016

FIGURE 65. JCI MONTHLY RETURNS


Year
Jan
Feb
Mar
1993
2.1%
7.2%
3.5%
1994
0.6%
-7.7%
-9.9%
1995
-7.6%
4.6%
-5.5%
1996
12.6%
1.2%
0.1%
1997
8.4%
2.1%
-6.1%
1998
21.0%
-0.7%
12.2%
1999
3.5%
-3.8%
-0.6%
2000
-6.0%
-9.4%
1.2%
2001
2.2%
0.6%
-11.0%
2002
15.2%
0.4%
6.3%
2003
-8.6%
2.8%
-0.3%
2004
8.8%
1.1%
-3.3%
2005
4.5%
2.7%
0.6%
2006
6.0%
-0.1%
7.5%
2007
-2.7%
-0.9%
5.2%
2008
-4.3%
3.6%
-10.1%
2009
-1.7%
-3.5%
11.6%
2010
3.0%
-2.4%
9.0%
2011
-7.9%
1.8%
6.0%
2012
3.1%
1.1%
3.4%
2013
3.2%
7.7%
3.0%
2014
3.4%
4.6%
3.2%
2015
1.2%
3.0%
1.3%
Avg
2.6%
0.7%
1.2%
Median
2.6%
1.1%
1.4%
STDev
7.4%
4.1%
6.5%
Prob of
69.6%
65.2%
65.2%
+return
Source: Bloomberg, Mandiri Sekuritas

Apr
1.1%
-6.1%
-2.8%
6.5%
-1.5%
-15.0%
25.8%
-9.7%
-6.0%
10.9%
13.3%
6.5%
-4.7%
10.7%
9.2%
-5.8%
20.1%
7.0%
3.8%
1.4%
1.9%
1.5%
-7.8%
2.6%
1.6%
9.7%
60.9%

May
8.8%
8.5%
14.1%
-1.0%
6.7%
-8.6%
18.2%
-13.7%
13.3%
-0.6%
9.7%
-6.5%
5.7%
-9.2%
4.3%
6.1%
11.3%
-5.9%
0.5%
-8.3%
0.7%
1.1%
2.6%
2.5%
2.1%
8.4%
65.2%

Jun
4.9%
-8.9%
3.5%
-3.8%
4.1%
6.1%
13.1%
13.4%
7.8%
-4.9%
2.2%
0.0%
3.1%
-1.5%
2.6%
-3.9%
5.7%
4.2%
1.3%
3.2%
-4.9%
-0.3%
-5.9%
1.8%
2.4%
5.7%
60.9%

Jul
-0.5%
-1.4%
4.0%
-9.8%
-0.5%
8.0%
-9.7%
-4.4%
1.5%
-8.2%
0.5%
3.4%
5.3%
3.2%
9.8%
-1.9%
14.6%
5.3%
6.2%
4.7%
-4.3%
4.3%
-2.2%
1.2%
1.5%
6.1%
56.5%

Aug
17.0%
13.1%
-2.2%
2.2%
-31.5%
-28.9%
-5.2%
-5.2%
-1.9%
-4.3%
4.3%
-0.3%
-11.2%
5.9%
-6.6%
-6.0%
0.8%
0.4%
-7.0%
-2.0%
-9.0%
0.9%
-6.1%
-3.6%
-2.1%
10.7%
34.8%

Sep
0.6%
-2.4%
-1.5%
4.8%
10.7%
-19.4%
-3.4%
-9.7%
-9.9%
-5.5%
12.8%
8.7%
2.8%
7.2%
7.5%
-15.4%
5.4%
13.6%
-7.6%
5.0%
2.9%
0.0%
-6.3%
0.0%
1.1%
8.8%
56.5%

Oct
11.0%
5.1%
-1.0%
-1.0%
-8.5%
8.9%
8.4%
-3.8%
-2.2%
-12.0%
4.7%
4.9%
-1.2%
3.1%
12.0%
-31.4%
-4.0%
3.8%
6.8%
2.1%
4.5%
-0.9%
5.5%
0.6%
2.6%
9.2%
56.5%

Nov
11.3%
-7.8%
-1.4%
7.9%
-19.7%
28.4%
-1.7%
5.9%
-0.9%
5.8%
-1.4%
13.6%
2.9%
8.6%
1.7%
-1.2%
2.0%
-2.9%
-2.0%
-1.7%
-5.6%
1.2%
0.2%
1.9%
0.5%
9.0%
47.8%

Dec
13.5%
-2.7%
6.7%
4.0%
0.0%
3.0%
16.0%
-3.0%
3.1%
8.8%
12.1%
2.3%
6.0%
5.0%
2.1%
9.2%
4.9%
4.9%
2.9%
0.9%
0.4%
1.5%
3.3%
4.6%
3.2%
4.8%
91.3%

The trend is your friend


The second method we present utilises that famous, almost ancient, adage in stock
market investing and trading that no doubt readers of The Bottom Line have come
across.
There are numerous different methodologies to identifty when a trend starts, when it
ends, when it takes a breather and so on. Our aim however is to use a simple method to
demonstrate that it is entirely possible to avoid the worst impact of market crashes, and
to do this consistently over long periods thus proving Efficient Market Hypothesis
wrong.
In this spirit of simplicity we choose the Simple Moving Average 50-Days (refer here as
MA 50). When the JCI penetrates from below the MA 50 to above it, we buy the JCI and
hold it as long as the JCI trades above its MA 50 line. The moment the JCI penetrates
down from above the MA 50 to below it, we sell JCI and hold 100% cash as long as the
JCI trades below its MA 50 line. We choose this particular indicator because MA 50 is
easily (and often freely) available, and we consider it a good compromise between
minimising time lags (which would arise with longer moving averages such as MA 100
or MA 200) and frequent whipsaws (which would arise with MA 10 or MA 20).
The results are shown in Figure 66 overleaf. A buy and hold strategy in the JCI would
have returned more than 18-fold gain from end Dec 1992 to end Dec 2015. By contrast,
applying the MA 50 strategy described above would have increased your portfolio
value by more than 123 times.

Please see important disclosure at the back of this report

Page 40 of 88

Strategy | 11 January 2016

FIGURE 66. JCI VS MA50

16,000
JCI
14,000

12,368.3

JCI > MA 50
12,000
10,000
8,000
6,000
4,000
1,818.4
2,000

1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015

Source: Bloomberg, Mandiri Sekuritas

As in our previous analysis of JCI returns seasonality, The Bottom Line also examines the
annual returns of JCI and those of this MA 50 strategy. Figure 67 below shows that the
MA 50 strategy delivers stronger returns than the JCI in 13 of the past 23 years (19922015). Again the percentage of winning (56.5%) is not overwhelming, but it is realistic
and sufficient to deliver a consistent outsized performance against a buy and hold
strategy.
FIGURE 67. OVER/UNDER PERFORMANCE MA50 VS JCI

50%
40%
30%
20%
10%
0%
-10%
-20%

1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015

-30%

Source: Bloomberg, Mandiri Sekuritas

Before readers of The Bottom Line jump straight away into employing this strategy,
please be mindful that it has several weaknesses too (chief of which is that it does not
work well in sideways market). Looking at Figure 67 again, note that this MA 50
strategy would have under performed the JCI in five of the past seven years (2009, 2010,
2011, 2012 and 2014). Few fund managers would probably be able to retain their
customers after such showing eventhough, at the other side of the coin, this MA 50
strategy would have beaten the JCI hands down over the last three years (2013-15).

Please see important disclosure at the back of this report

Page 41 of 88

Strategy | 11 January 2016

FIGURE 68. JCI VS MA50 (END 1992 1998)

FIGURE 69. JCI VS MA50 (END 1998 TO NOW)

700
600

2,500

591.5

JC I

JC I

JC I > MA 50

JC I > MA 50

2,000

2,125.8

500
1,500

400
300

1,000

1,153.9

160.9

200

500
100
0

Source: Bloomberg, Mandiri Sekuritas

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1998

1997

1996

1995

1994

1993

1992

Source: Bloomberg, Mandiri Sekuritas

The Bottom Line


Finally, while seasonality and trend analysis do bring consistent excess returns over a
buy and hold strategy, the readers would probably prefer a more fundamentallyoriented strategy. This, of course, is what The Bottom Line and other strategists offer to
the investing community. Judging from the results so far (see Figure 70), we believe we
could say the Efficient Market Hypothesis is mistaken in asserting that it is impossible to
identify under- or over-valuation of the stock market consistently.
FIGURE 70. THE BOTTOM LINE MARKET OUTLOOK FOR 2016
6,000

Dec-14
Aug-14 5,200
Apr-14 5,200
4,800

5,500
Mar-13
4,545

5,000

Feb-15
5,100
Oct-14
4,800

4,500
4,000
Oct-13
4,000

3,500
3,000

Dec-13
4,000

JCI

Jul-15
5,000
Dec-15
4,700 May-16
4,500
Jan-16
Oct-15 4,500
4,500

Dec-16
5,000

Aug-16
4,250

JCI Fcast by Mansek

Dec-16

Aug-16

Apr-16

Dec-15

Aug-15

Apr-15

Dec-14

Aug-14

Apr-14

Dec-13

Aug-13

Apr-13

Dec-12

Aug-12

Apr-12

Dec-11

Sep-11

May-11

Jan-11

2,500

Source: Bloomberg, Mandiri Sekuritas

The Role of Correlation


We shall end our discussion with a brief mention of correlation. One of the suggested
method to avoid the negative impact of a stock market crash is to hold stocks with low
betas in other words, stocks with low correlation to the Index. Unfortunately, stock
correlation are not fixed; they oscillate all the time. Appendix 2 shows how the 50-day
correlation of each stocks in Mansek Universe gyrate. We shade the areas of crashes to
show that correlation swing between low and high numbers during such period.
Figure 71 shows a summary of the average 50-day correlation, their maximum and
minimum values from the respective IPO dates till 6th Jan 2016 for all stocks in the
Mansek Universe. Correlation is a highly attractive statistical concept in theory, but due
to its gyration we find it difficult to define an effective way to use it.
Please see important disclosure at the back of this report

Page 42 of 88

Strategy | 11 January 2016

FIGURE 71. CORRELATION BEETWEN JCI VS MANSEK UNIVERSE (RESPECTIVE IPO DATES TO JAN 6, 2016)
Ticker

Company Name

Mkt Cap (USDmn)

Avg Daily (USD)

Average

Minimum

Maximum

BMRI
TLKM

Bank Mandiri Persero

15,716.9

15,630,682.1

0.71

0.13

0.95

Telekomunikasi Indonesia Persero

23,600.6

15,262,650.4

0.69

0.17

0.94

BBRI

Bank Rakyat Indonesia Persero

20,482.1

20,395,765.2

0.68

0.09

0.94

ASII

Astra International

17,717.6

14,292,253.1

0.63

-0.13

0.90

BBCA

Bank Central Asia

23,445.4

13,782,885.6

0.62

0.07

0.90

WSKT

Waskita Karya Persero

1,652.4

3,485,971.9

0.58

0.20

0.81

WTON

Wijaya Karya Beton

568.2

1,312,143.0

0.55

0.06

0.83

INDF

Indofood Sukses Makmur

3,668.8

3,387,033.6

0.55

0.07

0.89

PTBA

Tambang Batubara Bukit Asam Persero

748.6

2,122,414.9

0.54

-0.06

0.91

BBTN

Bank Tabungan Negara Persero

1,036.8

1,493,792.6

0.54

-0.03

0.91

JSMR

Jasa Marga Persero

2,816.8

2,255,936.8

0.54

0.19

0.85

GGRM

Gudang Garam

7,589.1

3,443,586.1

0.53

-0.09

0.87

ADRO

Adaro Energy

1,152.1

2,014,462.0

0.53

-0.01

0.89

BSDE

Bumi Serpong Damai

2,551.3

1,983,105.6

0.52

-0.17

0.86

ANTM

Aneka Tambang Persero

519.4

2,537,139.6

0.52

-0.09

0.91

ADHI

Adhi Karya Persero

568.2

4,702,675.2

0.52

-0.11

0.89

WIKA

Wijaya Karya Persero

1,264.8

2,405,683.2

0.52

-0.06

0.86

ISAT

Indosat

2,104.1

184,810.3

0.51

-0.13

0.90

PGAS

Perusahaan Gas Negara Persero

4,706.5

7,124,908.3

0.51

-0.01

0.89

AALI

Astra Agro Lestari

1,897.4

1,938,840.4

0.51

0.03

0.91

BBNI

Bank Negara Indonesia Persero

6,784.5

10,921,494.0

0.51

-0.19

0.94

ASRI

Alam Sutera Realty

481.3

2,371,416.1

0.51

-0.09

0.81

UNTR

United Tractors

4,494.4

4,089,747.1

0.50

-0.32

0.91

BJBR

BPD Jawa Barat Dan Banten

537.9

585,617.1

0.50

0.15

0.93

ITMG

Indo Tambangraya Megah

474.2

787,893.7

0.49

-0.09

0.91

DMAS

Puradelta Lestari

SMGR

Semen Indonesia Persero

BBKP

Bank Bukopin Tbk

INTP

Indocement Tunggal Prakarsa

TINS

Timah Persero

PTPP

722.2

162,428.0

0.48

0.11

0.63

4,892.7

4,287,106.4

0.48

-0.19

0.86

448.4

180,712.4

0.48

0.00

0.86

5,807.9

3,034,550.4

0.47

-0.25

0.90

257.0

292,367.0

0.47

-0.09

0.90

Pembangunan Perumahan Persero

1,351.8

1,840,140.8

0.46

-0.12

0.83

ICBP

Indofood CBP Sukses Makmur

5,828.4

1,810,401.1

0.46

0.06

0.82

NRCA

Nusa Raya Cipta

118.7

162,587.2

0.45

0.03

0.79

SGRO

Sampoerna Agro PT

232.1

165,946.2

0.45

-0.06

0.88

KLBF

Kalbe Farma

4,643.3

4,737,565.8

0.45

-0.19

0.84

BEST

Bekasi Fajar Industrial Estate

208.5

580,565.8

0.44

-0.14

0.76

APLN

Agung Podomoro Land

482.9

307,937.7

0.44

0.00

0.84

LSIP

PP London Sumatra Indonesia

621.8

1,852,767.5

0.44

-0.06

0.90

MNCN

Media Nusantara Citra

1,810.1

1,002,632.9

0.42

-0.21

0.86

CTRS

Ciputra Surya

319.9

68,529.4

0.42

-0.31

0.88

CTRA

Ciputra Development

1,584.9

1,040,601.5

0.42

-0.12

0.87

BDMN

Bank Danamon Indonesia

2,244.1

592,921.2

0.42

-0.40

0.88

PNBN

Bank Pan Indonesia

1,344.9

92,859.9

0.42

-0.33

0.90

SMCB

Holcim Indonesia

549.3

81,402.7

0.41

-0.27

0.92

ERAA

Erajaya Swasembada

0.71

HMSP

HM Sampoerna

RALS

Ramayana Lestari Sentosa

WIIM

Wismilak Inti Makmur

HRUM

Harum Energy

KIJA

Kawasan Industri Jababeka

INCO

Vale Indonesia

BJTM

BPD Jawa Timur

121.2

339,054.7

0.41

-0.10

31,658.4

3,922,042.0

0.41

-0.19

0.87

327.2

141,584.0

0.41

-0.21

0.79

62.8

13,515.1

0.39

-0.01

0.82

135.4

47,471.2

0.38

-0.09

0.86
0.91

360.2

623,834.5

0.38

-0.31

1,102.4

1,557,276.4

0.38

-0.33

0.89

471.8

110,546.0

0.38

-0.01

0.72

SIDO

Industri Jamu Dan Farmasi Sido Muncul

567.3

184,864.8

0.37

0.17

0.57

MYOR

Mayora Indah

1,804.0

58,960.1

0.35

-0.21

0.83

BMTR

Global Mediacom

1,048.5

694,769.6

0.35

-0.23

0.85

Please see important disclosure at the back of this report

Page 43 of 88

Strategy | 11 January 2016

Ticker

Company Name

MLPL

Multipolar

Mkt Cap (USDmn)

Avg Daily (USD)

Average

Minimum

Maximum

176.9

169,572.2

0.35

-0.38

0.91

MPPA

Matahari Putra Prima

681.9

1,019,594.1

0.35

-0.26

0.82

MAPI

Mitra Adiperkasa

477.2

411,847.0

0.34

-0.06

0.79

BWPT

Eagle High Plantations

315.7

1,076,358.5

0.34

-0.18

0.74

MPMX

Mitra Pinasthika Mustika

152.7

42,259.3

0.34

-0.04

0.67

CPIN

Charoen Pokphand Indonesia

3,414.0

1,260,376.7

0.34

-0.28

0.89

TSPC

Tempo Scan Pacific

565.7

62,631.0

0.33

-0.27

0.86

UNVR

Unilever Indonesia

20,571.5

4,460,087.3

0.32

-0.37

0.85

TELE

Tiphone Mobile Indonesia

364.2

193,638.6

0.31

-0.13

0.61

SSIA

Surya Semesta Internusa

0.83

SMRA

Summarecon Agung

GIAA

Garuda Indonesia Persero

LPKR

Lippo Karawaci

BKSL

Sentul City

249.1

845,860.0

0.31

-0.35

1,652.5

2,837,909.5

0.31

-0.37

0.84

587.0

451,956.7

0.31

-0.12

0.67

1,695.8

5,403,325.2

0.31

-0.40

0.85

146.8

289,049.4

0.31

-0.42

0.81

2,264.4

739,328.7

0.30

-0.23

0.84

360.7

1,099,951.0

0.30

-0.52

0.86

81.5

344,121.2

0.30

-0.06

0.82
0.58

EXCL

XL Axiata

DILD

Intiland Development

CSAP

Catur Sentosa Adiprana

LINK

Link Net

854.9

433,200.7

0.29

-0.03

SSMS

Sawit Sumbermas Sarana

1,238.6

8,161,708.3

0.28

-0.06

0.53

JPFA

Japfa Comfeed Indonesia

468.5

140,335.3

0.28

-0.29

0.86

TBIG

Tower Bersama Infrastructure

1,978.3

1,439,233.8

0.28

-0.27

0.67

CFIN

Clipan Finance Indonesia

78.1

10,095.5

0.28

-0.30

0.83

PWON

Pakuwon Jati

1,689.6

2,097,251.2

0.28

-0.37

0.86

AKRA

AKR Corporindo

2,041.2

3,962,140.4

0.28

-0.36

0.86

MDLN

Modernland Realty

433.4

349,388.9

0.27

-0.40

0.84

ACST

Acset Indonusa

106.3

71,184.2

0.27

-0.15

0.64

HEXA

Hexindo Adiperkasa

74.4

5,410.4

0.26

-0.33

0.85

MIKA

Mitra Keluarga Karyasehat

2,321.9

4,268,226.5

0.26

-0.03

0.43

TAXI

Express Transindo Utama

17.3

573,942.0

0.26

-0.14

0.66

352.2

421,241.6

0.26

-0.29

0.82

30.4

46,475.6

0.26

-0.35

0.83

LPCK

Lippo Cikarang

DOID

Delta Dunia Makmur

MAIN

Malindo Feedmill

221.0

69,584.1

0.26

-0.19

0.86

AISA

Tiga Pilar Sejahtera Food Tbk

275.9

326,993.6

0.25

-0.28

0.81

BTPN

Bank Tabungan Pensiunan Nasional

SRIL

Sri Rejeki Isman

ACES

Ace Hardware Indonesia

SCMA

Surya Citra Media

SOCI

1,018.2

5,126.0

0.25

-0.23

0.79

530.4

4,708,686.9

0.24

-0.08

0.54

932.8

475,155.8

0.24

-0.26

0.67

3,470.8

1,482,820.6

0.21

-0.46

0.77

Soechi Lines

250.7

347,393.3

0.19

-0.10

0.41

ULTJ

Ultrajaya Milk Industry & Trading Co

792.8

7,380.6

0.18

-0.47

0.84

JRPT

Jaya Real Property

733.0

21,304.6

0.18

-0.48

0.75

ARNA

Arwana Citramulia

263.4

180,674.3

0.18

-0.37

0.67

VIVA

Visi Media Asia

284.7

207,642.4

0.15

-0.24

0.61

MYRX

Hanson International

714.5

5,874,106.7

0.12

-0.24

0.72

SILO

Siloam International Hospitals

782.9

3,361,012.9

0.12

-0.36

0.52

CASS

Cardig Aero Services

180.4

1,695.1

0.11

-0.32

0.57

IMAS

Indomobil Sukses Internasional

428.3

4,260.2

0.09

-0.41

0.77

LPPF

Matahari Department Store

3,594.6

4,430,507.3

0.06

-0.41

0.75

TOWR

Sarana Menara Nusantara

3,564.9

52,070.5

0.05

-0.26

0.50

Source: Bloomberg, Mandiri Sekuritas

Please see important disclosure at the back of this report

Page 44 of 88

Strategy | 11 January 2016

2016 : Sectoral Outlook


Banking: Preparing for worsening assets quality (Neutral)
By Tjandra Lienandjaja
FIGURE 72. VALUATION AND RECOMMENDATION
JCI
Code

Rating

Price
(Rp)

Price
Target

Banking
BBCA

Neutral

BBNI

PER (x)

P/BV (x)

Div.Yield

Mkt Cap
(Rpbn)

2015

2016

2015

2016

2015

2016

773,633

12.7

10.8

2.1

1.8

1.9%

1.9%

EPS Growth
2015

2016

ROE
2015

NPL
2016

2015

2016

-0.7% 17.0% 17.7% 18.1%

2.2%

2.1%

12,750

12,400

314,351

17.7

15.7

3.5

3.0

1.2%

1.5%

7.9%

12.6%

21.3%

20.6%

0.6%

0.6%

Buy

4,935

5,900

92,031

10.3

7.7

1.5

1.3

2.9%

1.9% -16.8%

33.5%

14.9%

17.5%

2.9%

2.8%

BBRI

Buy

11,375

11,500

280,612

11.7

10.5

2.5

2.1

2.1%

2.1%

-0.9%

11.6%

22.7%

21.5%

2.5%

2.4%

BBTN

Buy

1,310

1,500

13,844

7.3

5.6

1.0

0.9

1.6%

2.7%

69.5%

29.6%

14.5%

16.4%

3.2%

2.9%

BDMN

Neutral

2,900

3,150

27,795

10.7

7.9

0.8

0.7

2.8%

2.8%

-0.6%

36.2%

7.7%

9.9%

3.1%

2.9%

BJBR

Buy

770

1,100

7,466

5.9

4.9

1.0

0.9

9.7%

10.1%

12.7%

20.9%

17.2%

19.1%

3.3%

2.8%

BJTM

Neutral

446

400

6,587

6.5

5.7

1.0

0.9

9.0%

9.2%

8.1%

13.6%

16.3%

17.2%

3.6%

3.3%

BTPN

Neutral

2,350

3,000

13,725

7.8

7.1

1.0

0.9

0.0%

0.0%

-5.3%

10.8%

13.8%

13.3%

0.8%

0.8%

PNBN

Neutral

715

1,000

17,223

9.8

8.7

0.8

0.7

0.0%

0.0% -25.5%

13.0%

8.0%

8.3%

2.1%

2.1%

Source: Mandiri Sekuritas Estimates

3Q15 results summary Banks were still in the process of building up the provisioning
resulting to the average net earnings growth of -1% in 9M15. Average loan growth of
the banks we follow was 10.7% y-y with average LDR declined to 86.9% in September
2015 from 87.2% in September 2014. Average problem loans increased to 2.51% from
2.11% over the same period while restructured loans also rose to 3.21% from 1.97%
over the past one year.
Liquidity easing and rate cut the 89% industry LDR has led to the central banks
move to ease the monetary policy through the reduction of rupiah primary reserve
requirement to 7.5% from 8.0% starting 1 December 2015. We believe given the
expected manageable inflation there is room for the central bank to cut the BI rate by
50bps to 7.0% in 2016, which will eventually lead to declining lending rates.
Banks expected to see higher loan growth in 2016 2015 is expected to see 11-12%
loan growth, the second lowest after since the Asian Crisis in 1998. The industry
recorded 10.6% loan growth back in 2009 following the Global Financial Crisis
compared to the 20% CAGR during 1999-2014. Up to September, total loan growth is
11.1% y-y, which is adjustable to 7.9% y-y if it is adjusted to rupiah depreciation as 17%
of the loans are in foreign currencies. The banks monthly data to October shows
average loan growth of 10.7% y-y, similar level to the one recorded in September. Of
the usage, investment loans are likely to see the highest growth rate with consumption
loans the lowest given the weak purchasing power and the efforts from the tax office to
collect more tax. Despite -2% y-y growth on realized FDI the domestic investment still
shows 17% y-y growth rate which may trigger the 13% y-y growth in investment loans.
Going into 2016 banks are still cautious on the economic growth, however, we expect
slightly higher loan growth of 12-14% with improvement to be seen in the
consumption loans. The tax amnesty 2015-16 is anticipated to help support the
consumption goods sales such as housing and automotives.
However, problem loans are still rising - the industry NPL was at 2.71% in September
2015, up from 2.16% in December 2014 but it improved from 2.76% in August 2015. The
continued low economic growth and uncertain global outlook are expected to impact
the asset quality. We anticipate the industry NPL to increase towards the 3% level by
end 2015 and to peak in mid-2016 before seeing some improvement towards the end
of 2016 through loan restructuring, write offs and real asset quality improvement. The
rising problem loans have resulted in declining coverage ratio to 124% in September
Please see important disclosure at the back of this report

Page 45 of 88

Strategy | 11 January 2016

2015 from 137% in December 2014. This level is expected to remain stable in 2015 and
2016 with BBCA to see the steepest reduction in coverage ratio on their rising NPL of
more than 1% in 2016. The special mention loans (SML), or category 2 loans, have also
risen to average 5.81% in September from 4.15% in December 2014. The trend in SML
should be similar to the rising NPL. Banks are also active in restructuring the loans, even
prior to them becoming problem loans. As such, we have seen the restructured loans
rising to 3.2% of total loans in September 2015 from 2.1% in December 2014. Banks are
still actively doing loan restructuring, which will translate into higher portion of it.
Without this exercise the NPL level will even be higher than our expectation.
High net interest margin to build up provisioning despite the weak loan growth
and rising NPL, banks have seen improvement in net interest margin due to lower cost
of funds. The low demand on loans led to improvement in the banks liquidity and
hence they were able to lower the deposit rates, which help those with high portion of
time deposits and the large banks which used to attract large depositors given their
extra rates on the large deposits. All banks except BBNI and BJBR saw NIM improvement
between in 2015 so far. We expect NIM among our bank universe to average 6.5% in
2015, with an expected minor improvement in 2016. However, a lot of the strong NIM in
these years will be utilized to build up the provisioning.
Asset revaluation the government has issued the ruling on asset revaluation, in
which there is a 3% final income tax on the revalued assets if a company conducts the
revaluation by end December 2015, 4% by end June 2016 and 6% by end December
2016. Some banks, in particular the state banks, plans to use the opportunity to do asset
revaluation, which will increase their equity by around 10% and their CAR by 1.5-3%.
This will enable banks to have higher legal lending limit, which is needed to support the
large projects.
Maintain Neutral We maintain our Neutral stance on the sector, which is trading at
2.1x and 1.9x P/BV for 2015 and 2016. We keep BBRI as our top pick in the sector with
TP of Rp11,500 on the rising activities in the micro loans and declining cost of funds. We
also suggest BBTN with TP of Rp1,500 for its strong presence in housing activities with
the government support and improving asset quality. For smaller banks, we
recommend BJBR with TP of Rp1,100 for continued operating improvement following
the appointment of the new management team at end of 2014.
FIGURE 73. INDUSTRY LOAN, DEPOSIT GROWTH AND LDR

FIGURE 74. INDUSTRY LOAN, DEPOSIT GROWTH AND LDR

(%)
100

Source: Bank Indonesia, OJK, Mandiri Sekuritas

Please see important disclosure at the back of this report

LDR (RHS)

Working Capital
Consumption
Investment Growth (RHS)

Jan-15

(30.0)

Jan-14

(20.0)

40

Jan-13

(10.0)

500

Jan-12

50

Jan-11

1,000

Jan-10

1,500

Jan-09

10.0

60

Jan-08

20.0

2,000

Jan-07

30.0

2,500

Jan-06

3,000

Jan-05

40.0

80

Jan-04

50.0

3,500

Jan-03

4,000

70

Deposit growth (LHS)

(% y-y)
60.0

90

Dec-02
Aug-03
Apr-04
Dec-04
Aug-05
Apr-06
Dec-06
Aug-07
Apr-08
Dec-08
Aug-09
Apr-10
Dec-10
Aug-11
Apr-12
Dec-12
Aug-13
Apr-14
Dec-14
Aug-15

Loan growth (LHS)

(Rp tr)
4,500

Jan-02

(% y-y)
45
40
35
30
25
20
15
10
5
0

Investments
Working Capital Growth (RHS)
Consumption Growth (RHS)

Source: Bank Indonesia, OJK, Mandiri Sekuritas

Page 46 of 88

Strategy | 11 January 2016

FIGURE 75. INDUSTRY NPL AND SPECIAL MENTION

FIGURE 76. NET INTEREST MARGIN

NPL (LHS)
BI rate (RHS)

Dec-14

NPL (RHS)
Special mention (RHS)

Source: Bank Indonesia, OJK, Mandiri Sekuritas

Dec-14

Dec-13

2.0

Dec-12

Dec-11

20

Dec-10

4.0

Dec-09

Dec-08

40

Dec-07

6.0

Dec-03

Dec-13

60

Dec-12

8.0

Dec-11

Dec-10

80

Dec-09

10.0

Dec-08

10

Dec-07

100

Dec-06

12.0

Dec-06

(%)

12

Dec-05

(%)

Dec-04

(Rp tr)
120

Commercial Banks

State Owned banks

Forex Commercials banks

Regional Developments

Source: Bank Indonesia, OJK, Mandiri Sekuritas

Property: The year of expectation (Neutral)


By Liliana S Bambang
FIGURE 77. VALUATION AND RECOMMENDATION
Code

Rating

Price
(Rp)

Price
Target

Property

Mkt Cap
(Rp Bn)

Net Profit (Rpbn)

EPS Growth

PER (x)

2015

2016

2015

2016

2015

134,701

12,096

14,459

-11.2%

19.5%

11.1

EV/EBITDA (x)

2016

P/BV (x)

2015

2016

2015

9.3

8.5

7.5

Div.Yield

2016

2015

2016

1.9

1.6

0.5%

1.5%

APLN

Buy

319

420

6,540

1,031

1,236

32.5%

19.8%

6.3

5.3

7.2

7.3

0.9

0.8

2.4%

3.2%

ASRI

Buy

327

730

5,841

1,240

1,811

13.0%

46.0%

4.7

3.2

4.9

4.3

0.8

0.7

6.1%

9.0%

BSDE

Buy

1,765

2,400

32,426

2,499

3,073

-34.6%

23.0%

13.0

10.6

9.9

8.2

1.7

1.5

2.9%

1.9%

CTRA

Neutral

1,355

1,350

20,550

1,436

1,557

24.4%

8.4%

14.3

13.2

10.7

9.6

2.4

2.1

1.1%

1.4%

CTRS

Buy

2,155

3,600

4,264

643

490

9.9%

-23.8%

6.6

8.7

4.2

5.0

1.4

1.2

3.1%

3.5%

JRPT

Buy

700

1,350

9,625

877

1,117

21.5%

27.3%

11.0

8.6

9.4

7.1

2.5

2.0

1.1%

1.1%

LPCK

Buy

6,725

13,500

4,681

864

778

2.4%

-10.0%

5.4

6.0

4.3

5.0

1.3

1.1

0.0%

0.0%
0.0%

MDLN

Buy

467

680

5,853

610

996

-14.3%

63.3%

9.6

5.9

6.6

5.3

1.0

0.8

0.0%

PWON

Buy

464

620

22,346

1,714

2,266

-31.9%

32.2%

13.0

9.9

8.9

7.1

3.1

2.4

2.6%

1.8%

SMRA

Neutral

1,565

1,600

22,575

1,183

1,137

-15.4%

-3.9%

19.1

19.9

12.8

12.0

3.4

2.9

-8.2%

-1.2%

Source: Mandiri Sekuritas Estimates

Next year guidance are muted. Nearing the end of the year, the property companies
seem to be less optimistic about the coming year. Most companies are considering to
hold off new project launching, in particular apartments in Jakarta areas. The property
companies are also divided about the impact of tax amnesty. For next year, we think
that companies would at most guided flat marketing sales growth.
The year of positive sentiments. We think FY16F would be driven by 3 positive
catalysts: 1) decline of interest rate, 2) tax amnesty, 3) further loosening on LTV by the
Central Bank. However, marketing sales could remain weak in FY16F, as the full impacts
for tax amnesty possibly only occur in towards the end of the year. We expect property
developers which cater to middle-upper income to benefit the most from the tax
amnesty.
Top pick: PWON and BSDE. We think PWON is the one that benefit the most from tax
amnesty, as the company mainly caters to middle-up income. Additionally, the stock
has been a laggard in FY15, due to uncertainty over property taxes. With more certainty
on luxury taxes, we believe that PWON has a room for upside. Stock is currently trading
at 9.9x FY16F P/E and 55% discount to NAV. We also like BSDE, as the company
continues to serve demand for housing below Rp2bn per unit.
Please see important disclosure at the back of this report

Page 47 of 88

Strategy | 11 January 2016

Industrial Estate: Keeping a Low Profile (Overweight)


By Rizky Hidayat
FIGURE 78. VALUATION AND RECOMMENDATION
Code

Rating

Price
(Rp)

Price
Target

Industrial Estate

Mkt Cap
(Rp Bn)

Net Profit (Rpbn)

EPS Growth

PER (x)
2015

EV/EBITDA (x)

2016

P/BV (x)

Div.Yield

2015

2016

2015

2016

2015

2016

2015

2016

2015

2016

15,752

1,700

1,919

-4.0%

12.8%

9.3

8.2

6.7

6.6

1.1

1.0

2.6%

3.0%
3.7%

DMAS

Buy

205

270

9,881

1,016

1,222

5.4%

20.2%

9.7

8.1

7.4

5.9

1.2

1.1

3.1%

BEST

Neutral

277

410

2,672

211

222

-46.1%

5.4%

12.7

12.0

8.4

11.7

0.9

0.8

0.7%

0.4%

SSIA

Buy

680

1,100

3,200

473

474

13.9%

0.3%

6.8

6.7

5.2

5.6

1.1

0.9

2.6%

3.0%

Source: Mandiri Sekuritas Estimates

Land supply continues to be the issue for industrial estate players. Developers
prefer to remain conservative in terms of marketing sales target for 2016 as there are
still uncertainties regarding the countrys economy. However, they do note some
industrial land inquiry pick up after the announcement of the stimulus packages which
seems to be pro industrial estate. We view that industrial estate players will look more
at its land supply to determine their target. Thus, SSIA, BEST, and KIJA would likely aim
for more conservative target of 20-30ha. LPCK is a special case as it has the Delta Silicon
8 JV project, however, we view that the company will likely rely more on its residential
sales for 2016. MDLN and DMAS are the two estates with ample of land. MDLN has
already secured about 100ha sale to CPIN, so it may aim for a target of 140-150ha.
Meanwhile, DMAS claimed that it is more comfortable with marketing sales of about 5060ha for 2016. Due to the smaller land sales, we expect ASP growth to be the driver of
the marketing sales growth.
Looking at flat earnings for next year. In terms of earnings, we expect soft, nearly
flattish growth for next year due to the weak marketing sales in 2015. SSIA aims for flat
earnings growth for 2016 due to weak marketing sales and slower order book growth
under NRCA. We expect BEST to show benign growth on the top line while its bottom
line will still be subject to forex. DMAS is aiming for flat growth due to high base effect.
Top pick is DMAS. Improvement on the economy will be the key catalyst for industrial
estate for next year. Land acquisition will also be key as some of the developers are now
running out of land. Our top pick for the sector is DMAS with a Buy call and PT of Rp270.
DMAS has the most landbank, steady demand, and healthy balance sheet. SSIA is also
attractive in our view due to its cheap valuation of 78% discount to NAV and 6.0x FY16F
PE. However, we view the company to be lacking catalysts for now unless it manages to
secure larger landbank in Subang and new toll road contracts.

Please see important disclosure at the back of this report

Page 48 of 88

Strategy | 11 January 2016

Construction Sector Outlook (Overweight)


By Aditya Sastrawinata
FIGURE 79. VALUATION AND RECOMMENDATION
Code

Rating

Price
(Rp)

Price
Target

Construction

Mkt Cap
(Rp Bn)

Net Profit (Rpbn)

EPS Growth

PER (x)
2015

EV/EBITDA (x)

2016

P/BV (x)

Div.Yield

2015

2016

2015

2016

2015

2016

2015

2016

2015

2016

75,588

2,639

3,333

26.8%

14.2%

24.6

22.7

12.3

10.2

3.1

2.7

0.7%

0.5%

ADHI

Buy

2,325

2,880

8,279

400

498

6.0%

-26.7%

12.2

16.6

7.8

6.4

1.8

1.6

1.2%

1.4%

PTPP

Buy

3,900

4,560

18,886

714

845

34.3%

18.4%

26.4

22.3

10.5

8.2

6.1

3.7

0.6%

0.0%

WIKA

Neutral

2,835

3,000

17,309

596

746

-3.1%

25.2%

29.0

23.2

15.3

11.2

3.9

3.4

0.7%

1.0%

WSKT

Buy

1,685

1,900

22,878

751

977

27.7%

8.3%

25.3

23.4

12.8

13.1

2.1

2.3

0.5%

0.0%

WTON

Neutral

945

970

8,236

177

266

-49.4%

49.9%

46.5

31.0

21.8

16.7

3.7

3.4

1.2%

0.6%

Source: Mandiri Sekuritas Estimates

We expect an accelerated spending in 2016. Indonesias construction sector


experienced a slow start to 2015 due to the Presidential election and the merger
between the Ministry of Public Works and Public Housing (PUPERA). Although PUPERAs
spending is only 66.8% of their target as of 11M15, this is after a sharp turnaround in the
latter stages as they achieved a mere 15.5% as of 6M15 (see Figure 80). With the
elections and merger already completed, we believe the spending trend should be
more skewed towards the first half of the year. In addition to this, PUPERA has started to
hasten the tendering process for this years budget; as of 6 January 2016, Rp8.8tn of
construction work was already signed by PUPERA. If we apply the conventional 20%
down-payment given to contractors, this means we can assume that PUPERA have
already achieved c.1.7% fiscal realization in the first week of the year. This is positive
news for their budget spending remembering that only 0.2% fiscal realization was
achieved back in 1M15. We also believe the success of this ministry (the one with the
largest allocated budget) will set an example and put pressure on other ministries to
perform as well.
Gradually improving regulatory environment. Our channel checks reveal that the
new regulation regarding land acquisition has improved the speed and clarity of the
process. We view this as one of the more significant positives this year as uncertainty
over land clearance has always been a major cause of project delays. We are also seeing
progress in the number of high-profile Public-Private Partnership (PPP) projects which
we believe will push the reform for PPP regulations in the future. These projects include
the Trans Java Toll Road, the Jakarta Light Rail Transit (LRT), and the Jakarta - Bandung
High Speed Train (HST).
Fiscal decentralization will take time to reach full effect. The infrastructure spending
by local governments in the 2016 state budget is allocated an increase of 93% YoY from
Rp29.7tn to Rp57.2tn. We see this as one of the biggest short-term risk to infrastructure
spending in 2016 because historically the local government budget absorption
registered a budget surplus of 0.4% of GDP over the 2009-13 period. However, the
central government has set up a monitoring scheme whereby regions with ample
excess cash (low spending) in the deposit account will be given a non-cash transfer
instead until it improves. In any case, we believe it will take more than one year to fully
reverse the spending pattern of the local government but as the proverb goes the best
time to plant a tree was 20 years ago, the second best time is now.
WSKT as our top pick. The company has the largest and lowest leveraged equity base
in the industry at Rp8.7tn equity and 0.01x net gearing. With this supportive capital
structure, they are poised to take on large infrastructure projects and establish a lead in
orderbook among their peers. As of 11M15, they are leading the industry in terms of
new contract achievement and percentage growth with Rp27.9tn and +79% YoY.

Please see important disclosure at the back of this report

Page 49 of 88

Strategy | 11 January 2016

Dec
93.0

90

Budget

80

73.1

94.4

Realization

70

56.1

60

66.8
44.3

50
40

30.2
24.3

30

16.9

20
10

Nov

Oct

Sep

Aug

Jul

Jun

May

Apr

Mar

Feb

%
100

Jan

FIGURE 80. MINISTRY OF PUBLIC WORKS AND PUBLIC HOUSING BUDGET SPENDING

0.9

4.0

1.2

0
0.2

2.2

1.0

6.6

51.3
41.3

30.3

10.9

22.4
15.5

9.5

4.6

Source: Ministry of Public Housing and Public Works

Cement: Difficult year ahead (Underweight)


By Liliana S Bambang
FIGURE 81. VALUATION AND RECOMMENDATION
Code

Rating

Price
(Rp)

Price
Target

Building Materials

SMCB

Sell

INTP
SMGR

Mkt Cap
(Rp Bn)

Net Profit (Rpbn)

EPS Growth

2015

2016

2015

143,643

9,823

10,626

-14.6%
N/M

2016
8.2%

PER (x)
2015

EV/EBITDA (x)

2016

P/BV (x)

2015

2016

2015

Div.Yield

2016

2015

2016

14.6

13.5

9.3

8.4

2.4

2.2

5.5%

3.8%

N/M -258.1

18.2

10.8

7.1

0.9

0.8

2.7%

-0.1%

975

900

7,471

-29

410

Neutral

19,750

21,600

72,704

4,972

5,130

-5.7%

3.2%

14.6

14.2

9.9

9.1

2.9

2.8

6.8%

5.5%

Neutral

10,700

12,100

63,467

4,880

5,086

-12.3%

4.2%

13.0

12.5

8.5

8.1

2.4

2.1

4.4%

2.3%

Source: Mandiri Sekuritas Estimates

Oversupply in the coming years. There is plenty of new supply in FY15-16F, in


particular from the new players. We estimate the new supply in the next two years
would be 21mn MT (13% CAGR). We forecast industry utilization rate to decline from
88% in FY14 to 73% in FY16F. There is a risk on ASP, as we fear that the new players
would be aggressive in pricing to gain market share.
Stronger growth in FY16-17F? We expect stronger growth in FY16-17F of 5-9%
growth, in-line with our forecast for improving GDP growth in FY16F. We are more
upbeat on the potential of infrastructure rollout in FY16F due to: 1) the realization of
Jokowis massive infrastructure project, 2) benefit of the new land acquisition law
(which could be implemented in FY15) to bear fruit. Risk to our FY16-17F number is that
if the GDP growth is not achieved and if infrastructure spending fall short to
expectations due to below than expected tax revenue. Despite potential good growth
in the cement sales in FY16-17F, we are still Underweight in the cement sector, as we
are wary on the oversupply in the cement sector.
Underweight on the sector. On oversupply condition and weak demand, we are
underweight on the sector. Among the cement companies, we prefer to pick company
with strongest balance sheet. Hence, we prefer INTP. INTP has a solid net cash position
with potential cash dividend yield of 5.5%.

Please see important disclosure at the back of this report

Page 50 of 88

Strategy | 11 January 2016

Media: Hoping for the better (Neutral)


By Rizky Hidayat
FIGURE 82. VALUATION AND RECOMMENDATION
Code

Rating

Price
(Rp)

Price
Target

Media

Mkt Cap
(Rp Bn)

Net Profit (Rpbn)

EPS Growth

PER (x)
2015

EV/EBITDA (x)

2016

P/BV (x)

Div.Yield

2015

2016

2015

2016

2015

2016

2015

2016

2015

2016

68,674

3,037

3,753

-5.5%

23.6%

22.6

18.3

14.3

12.6

5.1

4.4

2.8%

2.4%

SCMA

Neutral

3,040

3,000

44,450

1,534

1,769

5.5%

15.3%

29.0

25.1

20.3

17.8

11.3

9.5

2.3%

2.4%

MNCN

Buy

1,645

2,200

24,224

1,503

1,984

-14.7%

32.0%

16.1

12.2

9.8

8.6

2.5

2.2

3.8%

2.5%

Source: Mandiri Sekuritas Estimates

Better TV ADEX growth in 2016? We expect 2015 to close with a national TV ADEX
growth of 8% yoy. For 2016, we expect TV ADEX to continue showing moderate growth
of roughly 9% yoy. Following our economists flat private consumption growth of 5.1%
yoy, we believe that TV ADEX follows closely on the growth of the national private
consumption. Based on our conversation with media companies, the local advertisers
are currently the ones supporting national ADEX as the multinational companies have
cut down their spending in 1H15. According to our channel check with local FMCG
companies, the industry is still spending money in advertisement and promotion but
more towards store discounts and online advertisements. Moreover, TV ads are
relatively more expensive compared to online ads. Thus, we still expect flat TV ADEX
growth going forward. Potential upside on ADEX will be fuel price cut if it happens next
year.
Possible room to grow rate card for selected networks. YTD rate card growth seems
to be flat with the exception of Indosiar and ANTV who showed 9.2% and 28.0% yoy
revenue growth respectively as of 9M15. We believe the growth is due to the strong
improvement in audience share and the low base effect. As ANTV catch up with its Tier
1 peers in terms of rate card, we believe that there is a possibility of rate card hike for
RCTI, ANTV, Indosiar, and MNC TV in 2016 given their solid audience share
performances. However, the slow ad demand may limit possible rate card hike if the
market remains weak next year. We expect rate card to grow in-line with the national TV
ADEX going forward.
RCTI and Indosiar performed well in audience shares. All-time audience share
competition remains tight. RCTI and SCTV continue tailing on each other. However,
RCTI seems to lead YTD with an audience share of 16.3% vs SCTV with 15.9%. ANTV
seems to start losing its steams due to RCTIs wide range of primetime dramas and
Indosiars variety shows. We think RCTI and Indosiar performed very well this year and
may see revenue growth in 2016 on the back of growing rate card.
Margin improvement ahead? As of 9M15, SCMA and MNCN recorded EBITDA margins
of 49% and 40% respectively. We believe that there is room for margin improvement for
each company. SCMA is planning to end its contract for the Barclays Premiere League
which we believe will decrease its program cost going forward. Meanwhile, MNCNs
new studios will also cut down some program cost.
Maintain Neutral on the sector. We like SCMA as it has stable earnings with Indosiar
strong performance in audience share and earnings growth. The company also has
clean balance sheet and ample of cash. We expect less negative surprises from SCMA.
We have a Neutral call on SCMA with PT of Rp3,000. We remain Neutral on SCMA as the
sector is lacking strong catalyst. Despite its large exposure to forex risk, MNCNs share
price is now trading at a very cheap valuation of 12.6x FY16F PE. Thus, we put a Buy call
on the counter at Rp2,200 PT.

Please see important disclosure at the back of this report

Page 51 of 88

Strategy | 11 January 2016

Retail: Rise and Fall (Neutral)


By Matthew Wibowo
FIGURE 83. VALUATION AND RECOMMENDATION
Code

Rating

Price
(Rp)

Price
Target

Retail

Mkt Cap
(Rp Bn)

Net Profit (Rpbn)

EPS Growth
2015

2016

PER (x)
2015

EV/EBITDA (x)

2016

P/BV (x)

Div.Yield

2015

2016

2015

2016

2015

2016

2015

2016

85,895

3,569

4,182

1.8%

17.2%

24.1

20.5

13.3

11.5

4.6

4.1

1.8%

2.0%
1.5%

ACES

Neutral

735

720

12,605

531

617

-3.3%

16.3%

23.8

20.4

14.8

12.8

4.6

4.0

1.1%

ERAA

Neutral

550

600

1,595

197

175

-7.0%

-11.1%

8.1

9.1

8.2

7.4

0.5

0.5

3.7%

3.3%

LPPF

Neutral

16,150

17,600

47,110

1,808

2,036

27.4%

12.6%

26.1

23.1

17.8

15.8

43.6

22.4

1.9%

2.2%

MAPI

Sell

3,860

2,700

6,408

34

179

-53.9%

431.2%

189.8

35.7

8.7

6.8

2.5

2.3

0.2%

0.1%

MPPA

Neutral

1,675

2,175

9,008

321

366

-42.0%

14.0%

28.0

24.6

12.0

10.6

3.0

2.8

1.8%

1.1%

RALS

Neutral

595

680

4,222

320

323

-9.9%

0.9%

13.2

13.1

7.6

6.9

1.2

1.2

4.1%

4.2%

TELE

Buy

705

1,040

4,948

359

486

5.0%

35.3%

13.8

10.2

9.1

8.1

1.8

1.6

2.5%

3.4%

Source: Mandiri Sekuritas Estimates

Short term pressure. We think retailers will have a challenging time until 1Q16 in
relation to tough macroeconomic condition. Further, exchange rate fluctuation will still
be a tough obstacle for MAPI, while ACES may be able to still survive with its existing
and cheaper inventory. Generally, in light of Christmas and Year End sales, retailers will
have their margins cut out again to accommodate for promotions and discounts for this
period.
Pickup in Consumer Confidence Index (CCI). CCI have picked up in the last 2 months
from a very low base in Sep15 of 97.5 back to a better psychological level (>100) of
103.7 in Nov15. This shows that Indonesian consumer is more optimists on the
economy outlook of the country; hence we can expect better spending going forward.
Looking for positive signs - 2Q16 is the mark. The first catalyst for FY16 should start
in 2Q16 with Lebaran effect boosting the sales. Next year, Lebaran will take place in
early July which means the shopping period should already take place in June. Thus,
mass retailers such as RALS and LPPF will have bigger portions of their FY16 revenue
and profit in 1H16. For other retailers, we believe despite not experiencing as big of an
impact as mass retailers, they will also have significant portions of sales during the
quarter.
Will tax amnesty come to the rescue? If tax amnesty works out as planned, then we
will see improvement in government spending in 2H16. Eventually, increase in
purchasing power and customer spending should not be just a headline anymore. At
the moment, we keep our view conservative on tax amnesty application to overall
economy.
TELE as our top pick. Our primary concern remains in the short term pressure
considering rising cost relating to weak currency and lower purchasing power
concerning to bleak macro outlook. Among retailers we believe TELE will have the best
performance considering its resilient business model and superior growth as a result of
Telkom's business initiatives.

Please see important disclosure at the back of this report

Page 52 of 88

Strategy | 11 January 2016

Consumer: Margin play (Neutral)


By Matthew Wibowo
FIGURE 84. VALUATION AND RECOMMENDATION
Code

Rating

Price
(Rp)

Price
Target

Consumer

Mkt Cap
(Rp Bn)

Net Profit (Rpbn)

EPS Growth
2015

2016

PER (x)
2015

EV/EBITDA (x)

2016

P/BV (x)

Div.Yield

2015

2016

2015

2016

2015

2016

2015

2016

960,679

29,560

32,415

3.5%

9.7%

32.5

29.6

20.3

19.2

7.5

7.0

2.2%

2.2%
1.9%

ICBP

Neutral

13,950

14,000

81,342

3,086

3,298

18.5%

6.9%

26.4

24.7

17.4

16.1

5.1

4.6

1.6%

INDF

Neutral

5,525

6,000

48,515

3,272

4,160

-15.8%

27.1%

14.8

11.7

8.4

7.8

1.8

1.6

4.0%

3.4%

MYOR

Sell

28,000

24,500

21,464

1,104

784

173.5%

-29.0%

19.4

27.4

12.1

13.2

4.3

3.8

0.4%

1.1%

ULTJ

Buy

3,710

5,100

10,722

402

511

43.8%

27.0%

26.7

21.0

14.3

11.4

4.1

3.5

0.4%

0.5%

UNVR

Neutral

35,325

41,000

269,530

5,808

6,051

1.2%

4.2%

46.4

44.5

33.2

32.4

57.7

54.9

2.1%

2.2%

GGRM

Buy

54,500

56,000

104,863

5,256

5,665

-2.1%

7.8%

20.0

18.5

11.8

11.1

2.9

2.6

1.8%

1.8%

HMSP

Buy

91,000 111,000

423,396

10,484

11,751

3.0%

12.1%

40.4

36.0

29.5

28.1

12.2

11.7

2.4%

2.4%

WIIM

Buy

848

148

195

44.0%

31.5%

5.7

4.3

3.8

2.6

0.9

0.8

5.2%

6.9%

404

840

Source: Mandiri Sekuritas Estimates

Decelerating top-line growth. We are seeing slower top-line growth across the board
in consumer space for 3Q15 on the back of seasonality factor coupled with soft
demand. On average consumer companies under our coverage posted 3.8% sales
growth in 3Q15, which were mainly driven by ASP adjustment as volume growth was
still considered weak.
Down-trading in tough times. Interestingly, we are also seeing down-trading trend in
some categories given tough macro environment. People are switching from powder
milk to sweetened condensed milk (SCM), cup noodle to pack noodle, and branded to
unbranded generic products. It seems that people are also delaying their consumption
until promotional period (for discretionary items), reducing consumption, and
switching to cheaper alternative.
Lower soft commodity prices provide margin cushion. Gross margin seems relatively
stable partly helped by the declining soft commodity prices trend. Soft commodity like
wheat, CPO and coffee prices dropped by 16%, 23% and 29% YTD respectively in 9M15.
Rupiah depreciation will likely to negatively impact companys profitability in 1Q16
given the fact that they are reluctant to further adjust prices in 4Q15.
2016 Outlook. We are in view that 2016 will be a challenging year for consumer
companies to sustain their profitability given the impact of weakening Rupiah. We
expect an average of 90bps contraction in Ebit margin as companies are focusing to
sustain their market share. In 2016, we expect consumer companies to be more
aggressive in advertising/promotional spending in attempt to sustain/grab market
share.
GGRM as our top pick. Lackluster earnings growth coupled with not-so-cheap
valuation warrant our Neutral call on Consumer sector. GGRM is our only key pick given
its minor exposure in US$, reasonable excise tax increase and undemanding valuation.

Please see important disclosure at the back of this report

Page 53 of 88

Strategy | 11 January 2016

Hospital: Caring for the Future (Overweight)


By Matthew Wibowo
FIGURE 85. VALUATION AND RECOMMENDATION
Code

Rating

Price
(Rp)

Price
Target

Hospital

Mkt Cap
(Rp Bn)

Net Profit (Rpbn)

EPS Growth

PER (x)
2015

EV/EBITDA (x)

2016

P/BV (x)

Div.Yield

2015

2016

2015

2016

2015

2016

2015

2016

2015

2016

43,082

679

899

17.2%

32.4%

63.5

47.9

31.8

25.0

8.6

7.7

0.7%

0.7%

MIKA

Buy

2,210

3,400

32,157

584

758

13.0%

29.7%

55.0

42.4

40.6

34.1

9.9

8.7

0.9%

0.9%

SILO

Buy

9,450

11,000

10,925

95

141

51.6%

49.1%

115.2

77.3

20.2

14.8

6.3

5.8

0.1%

0.1%

Source: Mandiri Sekuritas Estimates

Stronger healthcare spending expected. Healthcare spending in Indonesia was the


lowest among the regions at 3.1% of GDP in 2013 compared to average Asian regional
peers at 4.3%. We expect stronger healthcare spending in the next 3 years driven by
rising middle class and increasing universal healthcare (BPJS Kesehatan) coverage.
Aggressive hospital expansion target. Given underserved infrastructure, hospitals
aim to expand their coverage throughout Indonesia. MIKAs management targets to
add 6 new hospitals in selected Greater Jakarta and Surabaya regions within the next
three years while SILO plans to add 30 new hospitals throughout Indonesia during
similar period.
Sustainable double-digit EBITDA growth. We forecast SILO's revenue and EBITDA to
grow by 22.8%/59.6%CAGR in FY14-17F while MIKA by 15.6%/18.3% CAGR respectively
during similar period. MIKA is less aggressive but their new hospitals are expected to
have 3-6months of ramp-up period to EBITDA positive and one year net profit
breakeven compared to 3-4years for SILO. Hence, MIKA has higher earnings visibility
and greater return, in our view.
MIKA as our top pick. We view both SILO and MIKA carry a healthy balance sheet with
SILO's net gearing estimated at 24% in 2016F while MIKA is expected to be in net cash
position of Rp2.3tr (US$155mn). It is also worth to note that both companies have no
exposure towards USD loans, therefore limited impact from the exchange rate volatility.
We pick MIKA as our top pick for its dominant market share, strong pricing power,
feasible expansion plan, healthy balance sheet and strong cash flow generation.

Pharmaceutical: Survival of the healthiest(Neutral)


By Matthew Wibowo
FIGURE 86. VALUATION AND RECOMMENDATION
Code

Rating

Price
(Rp)

Price
Target

Pharmacheutical

Mkt Cap
(Rp Bn)

Net Profit (Rpbn)

EPS Growth
2016

PER (x)
2015

EV/EBITDA (x)

2016

P/BV (x)

Div.Yield

2015

2016

2015

2015

2016

2015

2016

2015

2016

80,500

3,028

3,281

-1.0%

8.3%

26.6

24.5

17.7

16.0

4.6

4.1

1.6%

1.6%

KLBF

Neutral

1,385

1,500

64,922

2,004

2,156

-3.0%

7.6%

32.4

30.1

20.9

19.1

6.1

5.4

1.3%

1.2%

SIDO

Neutral

515

550

7,725

440

490

5.9%

11.4%

17.6

15.8

11.6

9.9

2.9

2.6

2.7%

2.8%

TSPC

Neutral

1,745

2,100

7,853

585

635

1.0%

8.6%

13.4

12.4

9.1

8.2

1.8

1.6

3.7%

3.0%

Source: Mandiri Sekuritas Estimates

BPJS - JKN (Jaminan Kesehatan Nasional) pressure continues. We expect sales


migration towards unbranded generics (which deliver higher volume but at lower
profitability) to continue, tightening price competition under BPJS and lower
purchasing power under the current macroeconomic condition. With the Coordination
of Benefit (COB) yet to be resolved, we expect unbranded generics volume sales to
continue to dominate among the pharma segment.

Please see important disclosure at the back of this report

Page 54 of 88

Strategy | 11 January 2016

Macro play. On top of the BPJS pressure, pharmaceutical companies still need to face
the current macroeconomic condition with lower consumer purchasing power.
Customer downgraded their purchase of branded / licensed products into unbranded
generics for cheaper price; they also cut down spending on vitamins and supplements
in exchange for daily necessity.
Making medicine affordable for all. Government is planning to make the industry
more efficient by removing subsidy and protectionism. Hence, the current limit of
foreign investment of 85% to pharmaceutical can be increased to 100%. The purpose is
simply to make competition better and improve pricing strategy of the player,
benefiting customers with more affordable drugs.
A short term pain. In the short run, it is inevitable that margin would continue to be
suppressed on the back of higher than ever unbranded generics sales proportion
compared to licensed or branded generics drugs. As of example, KLBFs unbranded
generics drugs sales represent 14.6% of total sales in 9M15, recording the highest sales
proportion of unbranded generics in the last 3 years. Gross margin also declined in
3Q15 recording a 50bps decreased to 47.9%. We expect margin pressure to continue
due to change in product mix; this is in line with BPJS implementation which is
estimated to last until 2019.

Coal sector: searching for the bottom (Neutral)


By Ariyanto Kurniawan
FIGURE 87. VALUATION AND RECOMMENDATION
Code

Rating

Price
(Rp)

Price
Target

Coal

Mkt Cap
(Rp Bn)

Net Profit (Rpbn)

EPS Growth

2015

2016

2015

2016

33,985

6,178

6,926

-8.3%

12.1%

PER (x)
2015
5.4

EV/EBITDA (x)

2016

P/BV (x)
2016

Div.Yield

2015

2016

2015

2015

4.8

3.3

2.8

0.5

0.5

9.7% 10.8%

2016

ADRO*

Neutral

486

700

15,545

205

226

14.2%

10.3%

5.6

5.0

3.8

3.3

0.4

0.4

7.1%

HRUM*

Neutral

695

915

1,877

-4

-2

N/M

59.2%

-35.0

-84.6

2.4

2.0

0.5

0.5

0.0%

7.9%
0.0%

ITMG*

Neutral

5,675

8,300

6,412

113

125

-43.4%

10.4%

4.2

3.7

1.3

1.0

0.6

0.5

19.1%

21.4%

PTBA

Buy

4,405

10,000

10,151

1,938

2,141

-3.9%

10.5%

4.9

4.5

3.6

3.1

1.1

1.0

9.5%

10.5%

Source: Mandiri Sekuritas Estimates

Production risk to emerge next year. With coal price remain weak at below
US$55/ton, we see risk on production outlook in FY16F particularly for coal mine that
produces low quality coal or coal mine with high cost structure. ADRO and ITMG have
cut production outlook this year by up to 4% citing weak demand and we believe that
further production cut is expected if coal price remain low. We do not expect a sharp
recovery due to still weak demand outlook and industry overcapacity problem.
Multiple negative catalysts ahead. We reiterate our view that the coal sector remains
vulnerable to multiple negative catalysts from weak coal price. In addition to risk of
production and earnings downgrade by consensus, low coal price also leads further
reserves downgrade and asset impairment. UNTR has indicated the plan to announce
further asset impairment in 4Q15 due to weak coal price outlook. On top of UNTR, we
also see risk on asset impairment from ADRO due to their aggressive coal mine
acquisition in the past three years. Risk on coal reserves downgrade is higher on coal
producers with low reserves base such as HRUM and ITMG.
Lack of positive catalyst. While valuation has come down to close to the 2009 financial
crisis, we believe that the sector will trade at cheap valuation due to the lack of positive
catalyst. For the proxy to the sector, we prefer PTBA due to better production growth
outlook and greater exposure to growing domestic demand. We reiterate our Neutral
call for coal sector.

Please see important disclosure at the back of this report

Page 55 of 88

Strategy | 11 January 2016

FIGURE 88. QUARTERLY ASP

FIGURE 89. QUARTERLY CASH COST

US$/ton

US$/ton

90
80
70
60
50
40
30
20
10

60
50
40
30
20
10

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15
ITMG

ADRO

ITMG

PTBA

Source: Company

ADRO

PTBA

Source: Company

FIGURE 90. COAL PRICE IS AT HISTORICAL LOW

US$/ton
160
140
120
100
80
60
40
20

Dec-15

Jul-15

Feb-15

Oct-14

May-14

Dec-13

Jul-13

Mar-13

Oct-12

May-12

Dec-11

Aug-11

Mar-11

Oct-10

Jan-10

May-10

Source: Bloomberg

Telecom sector: Rosy outlook (Overweight)


By Ariyanto Kurniawan
FIGURE 91. VALUATION AND RECOMMENDATION
Code

Rating

Price
(Rp)

Price
Target

Telco

Mkt Cap
(Rp Bn)

Net Profit (Rpbn)

EPS Growth

PER (x)

2015

2016

2015

2016

2015

356,766

15,872

20,808

34.1%

31.9%

22.6

EV/EBITDA (x)

2016

P/BV (x)

2015

2016

2015

17.1

6.0

5.4

Div.Yield

2016

2015

2016

3.6

3.3

3.0%

3.6%

EXCL

Buy

3,385

4,000

28,882

-516

1,153

42.1%

N/M

-56.0

25.0

6.9

5.7

2.2

2.0

0.0%

0.8%

ISAT

U/R

5,325

U/R

28,936

441

1,147

N/M

237.1%

85.4

25.3

3.7

3.9

2.1

2.0

0.9%

1.5%

TLKM

Buy

3,060

3,225

298,949

15,947

18,508

8.9%

16.1%

18.7

16.2

6.4

5.6

4.1

3.7

3.5%

4.0%

Source: Mandiri Sekuritas Estimates

Monetizing data growth. After a long downtrend, data price finally picked up in 3Q15,
which should indicate that the era of cheap price is coming to an end. While we do not
expect an aggressive pick up in data price in the near term, we expect it to stabilize over
in the fourth quarter before a more meaningful pick up next year. Data traffic grew by
more than a double in 9M15 (ex EXCL) and we expect 30%p.a growth for the next three
years driven by higher smartphone penetration.
Please see important disclosure at the back of this report

Page 56 of 88

Strategy | 11 January 2016

Healthy growth on voice and SMS. Despite strong data adoption, the growth in
traditional services such as voice and SMS remain healthy due to successful clusterbased pricing, which allowed them to set different prices based on various factors
including local demand characteristic, network coverage, as well as level of
competition. TLKM still registered double digit growth on its voice and SMS while
EXCLs revenue in voice and SMS declined due to the change in strategy to focus on
higher quality customer which has led to the sharp drop in the subscriber base (30%yoy). Nevertheless, we expect a 3%CAGR decline in SMS over the next three years
due to higher smartphone adoption.
Prefer TLKM as the proxy to the sector. We like TLKM for its strong leadership in the
cellular business, strong cash flow, and healthy balance for network expansions and
dividend. Having the best 3G network, TLKM is the best positioned to ride growing
demand for data. It also has a healthy balance sheet to provide flexibility on capex to
develop network infrastructure and attractive dividend yield of 4% (70% payout ratio)
vs peers of 1-2%.
FIGURE 92. TLKM DATA TRAFFIC AND DATA YIELD

FIGURE 93. EXCL DATA TRAFFIC AND DATA YIELD

Pbyte

Rp/MB

1,000
900
800
700
600
500
400
300
200
100

180
160
140
120
100
80
60
40
20

2012

2013

2014
TLKM

2015F

2016F

2017F

2012

EXCL

Source: Company

Please see important disclosure at the back of this report

2013

2014
TLKM

2015F

2016F

2017F

EXCL

Source: Company

Page 57 of 88

Strategy | 11 January 2016

Appendix 1. Earnings Performance 2012-15


FIGURE 94. EPS FORECAST VS ACTUAL
Ticker

EPS gr

EPS

2015F

9M15A

2014F

2014A

Diff

2013F

2013A

Diff

2012F

2012A

Diff

AALI IJ

9.1%

-92.3%

1,523.2

1,589.9

4.4%

1,615.6

1,143.9

-29.2%

1,663.0

1,530.6

-8.0%

ACES IJ

18.3%

4.8%

30.9

32.4

5.1%

27.8

29.7

7.0%

18.0

25.0

38.6%

ADHI IJ

9.3%

36.0%

195.1

152.6

-21.8%

145.7

191.2

31.2%

101.4

99.7

-1.7%

ADRO IJ

25.0%

-18.2%

0.009

0.006

-37.8%

0.013

0.007

-43.8%

0.022

0.012

-45.0%

AISA IJ

39.2%

-6.1%

109.0

110.6

1.5%

76.0

106.1

39.6%

n/a

72.2

n/a

ANTM IJ

N/M

N/M

70.7

-68.0

-196.2%

98.9

36.1

-63.5%

150.6

263.8

75.1%

APLN IJ

16.5%

-24.4%

53.7

41.7

-22.3%

40.5

41.5

2.6%

32.4

39.6

22.2%

ASII IJ

11.9%

-17.3%

520.5

474.0

-8.9%

532.9

479.6

-10.0%

484.5

479.7

-1.0%

ASRI IJ

24.7%

-92.2%

83.4

55.9

-33.0%

69.5

44.6

-35.8%

44.7

61.2

36.9%

BBCA IJ

15.1%

9.5%

643.8

669.0

3.9%

554.2

578.6

4.4%

465.3

480.0

3.2%

BBNI IJ

4.9%

-21.1%

490.2

578.0

17.9%

408.5

485.5

18.9%

349.2

377.8

8.2%

BBRI IJ

10.8%

1.4%

891.1

982.7

10.3%

765.9

865.2

13.0%

630.1

778.9

23.6%

BBTN IJ

33.5%

61.1%

162.0

106.0

-34.6%

162.8

148.3

-8.9%

134.9

148.0

9.7%
-1.3%

BDMN IJ

39.7%

-10.0%

445.9

271.7

-39.1%

481.5

421.7

-12.4%

424.2

418.6

BEST IJ

46.9%

-76.9%

78.4

40.6

-48.3%

92.8

77.8

-16.2%

n/a

56.4

n/a

BJBR IJ

4.6%

20.7%

156.3

115.1

-26.4%

147.5

141.6

-4.0%

129.0

123.0

-4.7%

BJTM IJ

22.3%

-6.2%

65.7

63.0

-4.2%

64.0

55.3

-13.7%

n/a

56.0

n/a

BKSL IJ

252.9%

-643.3%

8.5

1.7

-80.0%

12.8

20.1

56.4%

5.0

7.0

40.8%

BSDE IJ

-35.3%

-48.2%

118.9

211.3

77.6%

76.4

153.8

101.2%

57.3

73.5

28.3%

BTPN IJ

32.0%

-3.3%

434.2

317.0

-27.0%

394.0

364.9

-7.4%

282.3

341.0

20.8%

BWPT IJ

151.6%

-108.9%

67.8

26.6

-60.8%

96.5

36.8

-61.8%

80.4

53.9

-32.9%

CPIN IJ

93.0%

-26.9%

224.9

107.0

-52.4%

211.1

154.3

-26.9%

161.4

164.0

1.6%

CTRA IJ

5.5%

6.0%

80.9

86.1

6.4%

46.4

63.7

37.3%

24.7

38.6

56.3%

CTRS IJ

71.4%

20.6%

21.8%

294.7

260.6

-11.6%

207.7

199.2

-4.1%

80.1

137.2

DMAS IJ

n/a

n/a

n/a

n/a

n/a

n/a

0.0

n/a

n/a

0.0

n/a

DYAN IJ

N/M

-416.7%

n/a

-3.0

n/a

n/a

12.5

n/a

n/a

22.0

n/a

ERAA IJ

51.6%

-8.1%

135.8

73.0

-46.3%

220.4

120.2

-45.4%

n/a

149.0

n/a

EXCL IJ

N/M

N/M

227.8

-105.0

-146.1%

416.3

121.0

-70.9%

427.5

324.3

-24.1%

14.4%

1.6%

2,530.6

2,790.0

10.2%

2,946.4

2,249.8

-23.6%

3,044.2

2,086.0

-31.5%

HEXA IJ

0.0%

-50.0%

0.033

0.020

-39.4%

0.077

0.030

-61.0%

0.070

0.080

14.3%

HMSP IJ

n/a

-0.8%

n/a

2,306.2

n/a

n/a

2,450.4

n/a

n/a

2,252.6

n/a

HRUM IJ

3900.0%

-94.8%

0.026

0.000

-99.2%

0.058

0.016

-73.3%

0.096

0.049

-49.3%

ICBP IJ

18.8%

16.4%

463.2

447.0

-3.5%

443.9

381.6

-14.0%

379.9

373.8

-1.6%

IMAS IJ

N/M

N/M

363.5

-46.4

-112.8%

410.4

192.6

-53.1%

473.4

289.9

-38.8%
-82.5%

GGRM IJ

INCO IJ

64.7%

-61.5%

0.011

0.017

54.5%

0.021

0.004

-81.0%

0.040

0.007

INDF IJ

23.5%

-45.1%

462.0

442.5

-4.2%

439.1

285.2

-35.1%

408.0

371.4

-9.0%

INTP IJ

6.9%

-13.7%

1,497.5

1,431.8

-4.4%

1,422.4

1,361.0

-4.3%

1,129.7

1,293.2

14.5%

ISAT IJ

N/M

N/M

150.2

-365.7

-343.5%

273.5

-512.0

-287.2%

299.6

69.0

-77.0%

ITMG IJ

-16.7%

-53.3%

0.226

0.180

-20.4%

0.346

0.204

-41.0%

0.531

0.380

-28.4%

JPFA IJ

153.3%

-145.2%

130.7

31.0

-76.3%

109.2

55.9

-48.7%

522.0

94.4

-81.9%

JRPT IJ

18.5%

28.3%

57.3

54.9

-4.2%

n/a

41.5

n/a

n/a

32.4

n/a

JSMR IJ

29.9%

-18.0%

277.9

206.4

-25.7%

285.5

151.1

-47.1%

242.4

235.9

-2.7%

KLBF IJ

24.1%

0.0%

50.3

44.0

-12.6%

41.4

41.0

-1.1%

37.7

37.0

-2.0%

LPCK IJ

-7.1%

7.4%

1,366.0

1,212.8

-11.2%

592.9

848.6

43.1%

554.0

584.8

5.6%

LPPF IJ

40.0%

30.2%

540.3

486.0

-10.1%

n/a

394.3

n/a

n/a

264.3

n/a

LSIP IJ

18.3%

-32.6%

130.3

134.0

2.8%

222.6

112.8

-49.3%

228.7

164.0

-28.3%

MAIN IJ

N/M

-433.3%

281.3

-48.0

-117.1%

242.6

142.3

-41.3%

140.0

178.6

27.6%

MAPI IJ

375.7%

-77.1%

283.6

45.0

-84.1%

344.5

197.5

-42.7%

246.4

260.7

5.8%

MDLN IJ

18.2%

-43.6%

76.9

56.8

-26.2%

28.3

195.6

592.5%

n/a

20.8

n/a

n/a

n/a

n/a

37.4

n/a

n/a

n/a

n/a

n/a

n/a

n/a

MIKA IJ

Please see important disclosure at the back of this report

Page 58 of 88

Strategy | 11 January 2016

Ticker
MNCN IJ

EPS gr

EPS

2015F

9M15A

2014F

2014A

Diff

2013F

2013A

Diff

2012F

2012A

Diff

26.4%

-53.8%

161.0

125.8

-21.9%

137.9

120.7

-12.4%

94.3

119.2

26.3%

MPPA IJ

-1.7%

-30.3%

86.0

103.0

19.8%

n/a

82.7

n/a

n/a

41.0

n/a

MYOR IJ

115.5%

248.4%

1,068.0

451.0

-57.8%

924.4

1,164.8

26.0%

715.5

815.8

14.0%

PGAS IJ

13.3%

3.5%

0.036

0.030

-16.7%

0.036

0.040

11.1%

0.031

0.037

18.4%

PNBN IJ

22.2%

-43.6%

106.3

97.8

-8.0%

109.2

93.8

-14.1%

72.8

87.5

20.1%

PTBA IJ

-3.8%

-4.3%

897.2

927.0

3.3%

1,292.4

822.4

-36.4%

1,789.8

1,262.0

-29.5%
-7.6%

PTPP IJ

31.1%

n/a

99.2

110.0

10.8%

75.5

87.0

15.2%

69.3

64.0

-18.3%

-11.2%

30.8

52.2

69.7%

17.4

23.5

35.0%

n/a

15.5

n/a

RALS IJ

17.4%

-9.6%

69.0

50.0

-27.5%

72.6

55.0

-24.2%

66.5

59.7

-10.2%

RANC IJ

50.0%

-160.8%

45.0

10.0

-77.8%

32.9

22.4

-31.8%

n/a

25.5

n/a

SCMA IJ

22.8%

3.8%

116.4

99.4

-14.6%

114.8

87.5

-23.7%

104.2

120.4

15.5%

SGRO IJ

25.2%

-37.4%

147.2

180.0

22.3%

258.7

63.0

-75.7%

313.8

174.0

-44.6%

SIDO IJ

16.0%

3.6%

n/a

27.7

n/a

n/a

27.1

n/a

n/a

n/a

n/a

SILO IJ

56.7%

29.6%

71.4

54.1

-24.2%

n/a

47.6

n/a

n/a

n/a

n/a

SMCB IJ

63.9%

-162.8%

143.6

87.0

-39.4%

188.7

124.2

-34.2%

144.6

176.2

21.8%

SMGR IJ

10.7%

-21.8%

1,012.8

938.0

-7.4%

955.9

905.4

-5.3%

767.3

817.0

6.5%

SMRA IJ

-8.2%

-7.5%

83.3

96.9

16.3%

50.7

76.4

50.8%

29.1

57.4

97.1%

SOCI IJ

2.9%

33.3%

n/a

0.0

n/a

n/a

n/a

n/a

n/a

n/a

n/a

SRIL IJ

-16.7%

72.9%

0.002

0.002

20.0%

n/a

0.002

n/a

n/a

0.002

n/a

SSIA IJ

6.1%

107.8%

164.9

88.9

-46.1%

174.4

147.4

-15.5%

46.0

150.3

226.8%

TAXI IJ

46.2%

-89.8%

78.9

55.0

-30.3%

n/a

61.7

n/a

n/a

53.5

n/a

TBIG IJ

43.6%

-29.6%

303.0

274.9

-9.3%

256.0

260.2

1.6%

164.2

180.8

10.1%

TELE IJ

28.0%

0.0%

69.0

50.0

-27.5%

63.0

54.6

-13.3%

n/a

38.3

n/a

TLKM IJ

13.4%

0.2%

161.3

149.8

-7.1%

145.4

147.4

1.4%

127.9

133.8

4.6%

TOWR IJ

76.6%

-45.1%

108.5

82.0

-24.4%

75.1

16.5

-78.0%

51.0

33.9

-33.4%

TSPC IJ

10.8%

-5.5%

199.8

129.0

-35.4%

163.6

141.0

-13.8%

130.4

139.5

7.0%

ULTJ IJ

84.7%

94.8%

n/a

98.0

n/a

n/a

112.6

n/a

n/a

122.0

n/a

7.9%

16.6%

1,462.2

1,440.0

-1.5%

1,563.4

1,296.0

-17.1%

1,791.0

1,549.0

-13.5%

PWON IJ

UNTR IJ
UNVR IJ

7.2%

3.2%

781.7

752.0

-3.8%

708.1

701.0

-1.0%

593.1

634.0

6.9%

WIIM IJ

12.2%

14.1%

68.5

53.4

-22.0%

n/a

62.9

n/a

n/a

n/a

n/a

WIKA IJ

35.3%

-2.6%

117.6

100.2

-14.8%

94.9

92.9

-2.1%

64.6

78.0

20.7%

WSKT IJ

3.2%

186.2%

41.4

50.6

22.1%

n/a

37.2

n/a

n/a

37.2

n/a

12.0%

-61.4%

n/a

40.2

n/a

n/a

n/a

n/a

n/a

n/a

n/a

WTON IJ
Avg Out /
(Under) Perf.
Prob of Out
Performance

22.1%

-27.1%

-10.0%

5.3%

28.4%

37.3%

94.3%

Source: Bloomberg, Mandiri Sekuritas

Please see important disclosure at the back of this report

Page 59 of 88

Dec-09

-0.50

-0.75

-1.00

Please see important disclosure at the back of this report

BBTN

12

0.50

10

0.25

0.00

-0.25

Dec-13

Dec-14

Dec-15

Dec-14

Jun-15

Dec-15

Dec-12

0.75

14

Jul-14

16

Jan-12

BBTN

Jan-14

1.00

Jan-11

Jul-13

Jan-10

Jan-13

Jan-09

10

Jul-12

12

Jan-08

BBRI

Feb-12

Jan-16

Jun-14

Nov-12

Apr-11

Sep-09

Feb-08

Jul-06

Dec-04

May-03

Oct-01

10

Jan-07

0.50

Aug-11

12

Mar-00

0.75

14

Jan-06

16

Feb-11

BBNI
Dec-15

Sep-14

Jun-13

Feb-12

Nov-10

Aug-09

Apr-08

Jan-07

Sep-05

Jun-04

Mar-03

Nov-01

Sep-98

10

Aug-00

Jan-16

Jun-15

Nov-14

15

Feb-97

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

20

Feb-05

-1.00

Apr-14

Sep-13

Feb-13

Jul-12

: PE ratio
: Mean PE ratio

Aug-10

-0.75

Jul-12

Dec-11

May-11

BBCA

Feb-04

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

-0.50

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PER 12m ROLLING FORWARD VS LONG TERM AVE.

Mar-10

Jan-16

Jul-15

Jan-15

Jul-14

Dec-13

Jun-13

PE (x)
18

Jul-12

PE (x)
14

Dec-12

Oct-10

Mar-10

Aug-09

PE (x)
18

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PE (x)
25

Jun-12

Dec-11

Jun-11

Dec-10

Jun-10

Jan-09

Strategy | 11 January 2016

Appendix 2. 12m Roll Fwd PER and Correlation


CORRELATION BEETWEN JCI VS MANSEK UNIVERSE
: 50D stock correlation to JCI
: Average 50D daily change correlation
: Period JCI lose more than 15%

1.00

BBCA

0.75

0.50

0.25

-0.25

0.00

-0.50

0
-0.75

-1.00

1.00

BBNI

0.25

-0.25
0.00

1.00

BBRI

0.75

0.50

8
0.25

-0.25
0.00

-0.50

-0.75

-1.00

Page 60 of 88

Please see important disclosure at the back of this report


BJTM
1.00

8
7

5
4

3
2

1
0

BTPN
1.00

16

10

0.25

-0.25

0.00

-0.50

-0.75

-1.00
0.75

0.50

0.25

-0.25
0.00

-0.50

-0.75

-1.00

Aug-04

Aug-02

Oct-00

Nov-98

Jan-97

Apr-10

BJTM

Sep-14

-1.00

Mar-15

-0.25

May-08

0.00

Mar-14

Nov-14

0.75

Jun-06

May-13

BJBR

Oct-13

Dec-15

Dec-15
Dec-15

Dec-15

Jan-14

Jul-15

Sep-15

May-15

Mar-12

Jun-15

Sep-14

Feb-15

Jan-14

12

Jun-13

0.75

Aug-14

0.50

BTPN

Oct-12

14

May-14

-0.75

Mar-12

Nov-12

Feb-14

1.00

Jul-11

-0.50

Jun-12

Oct-13

Dec-10

0.25

Jan-12

10

Jul-13

12

Apr-10

0.50

Aug-11

14

Apr-13

16

Sep-09

BJBR
Feb-95

2
0

Mar-11

6
4

Jan-13

10
8

Jan-09

12

Mar-93

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

16
14

Sep-10

Jan-16

Jul-15

Feb-15

Aug-14

Mar-14

Sep-13

Apr-13

BDMN

Sep-12

Jan-16

Sep-15

Jun-15

Feb-15

Nov-14

Jul-14

Apr-14

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PER 12m ROLLING FORWARD VS LONG TERM AVE.

May-08

Dec-15

May-15

Oct-14

Apr-14

Sep-13

Feb-13

PE (x)
18

Jul-12

PE (x)
10
9

Oct-12

May-12

Nov-11

Jun-11

Dec-10

Jul-10

PE (x)
18

Dec-13

Sep-13

May-13

Feb-13

Oct-12

Jul-12

PE (x)
20
18

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

Strategy | 11 January 2016

CORRELATION BEETWEN JCI VS MANSEK UNIVERSE

1.00

BDMN

0.75

0.50

0.25

-0.25

0.00

-0.50

-0.75

-1.00

Page 61 of 88

Please see important disclosure at the back of this report


-0.50

0
-0.75

CFIN

0
-1.00

1.00

0.50

0.25

-0.50

-0.75

CFIN

0.75

-0.25

0.00

-1.00

Jun-14
Mar-15
Dec-15

Dec-13
Dec-14
Dec-15

Mar-12

Jan-14

Dec-15

Feb-12

May-11

Aug-10

Aug-13

-0.25

Nov-12

Apr-10

0.00

Nov-12

Nov-11

0.50

May-08

0.75

Nov-10

0.25

BMRI

Jun-06

10

Nov-09

1.00

Aug-04

12

Oct-09

1.00

Nov-08

14

Dec-15

Jan-14

Mar-12

Apr-10

May-08

Jun-06

Aug-04

Aug-02

Oct-00

Nov-98

Jan-97

1.00

Aug-02

BMRI

Oct-07

Oct-00

Jan-09

0.00

Oct-06

Nov-98

0.25

Apr-08

Oct-05

10

Jan-97

BBKP
Feb-95

Jun-07

Oct-04

10

Feb-95

15

Mar-93

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

20

Sep-06

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

PNBN

Sep-03

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PER 12m ROLLING FORWARD VS LONG TERM AVE.

Mar-93

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

PE (x)
9

Jul-12

PE (x)
16

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PE (x)
12

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PE (x)
25

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

Strategy | 11 January 2016

CORRELATION BEETWEN JCI VS MANSEK UNIVERSE


PNBN

0.75

0.50

0.25

0.00

-0.25

-0.50

-0.75

-1.00

BBKP

0.75

0.50

-0.25

2
-0.50

-0.75

-1.00

Page 62 of 88

Please see important disclosure at the back of this report


ARNA
1.00

60

50
0.75

0.50

0.25

0.00

30

-0.25

20

-0.50

10

-0.75

-1.00

Mar-12
Jan-14
Dec-15

Aug-13

Oct-14

Dec-15

Apr-10

70

Jun-12

40

ARNA
May-08

Apr-11

Jun-06

10

Feb-10

15

Aug-04

20

Nov-08

1.00

Dec-15

Jan-14

Mar-12

Apr-10

May-08

Jun-06

Aug-04

Aug-02

1.00

Aug-02

SMGR
Dec-15

Jan-14

Mar-12

Apr-10

May-08

Jun-06

Aug-04

Aug-02

Oct-00

Nov-98

Jan-97

1.00

Sep-07

-0.75

Oct-00

Oct-00

-0.50

20

Jul-06

-0.25

40

Nov-98

60

Nov-98

0.00

Apr-05

80

Jan-97

100

Jan-97

120

Feb-04

SMCB
Feb-95

Feb-95

Feb-95

10

Nov-02

15

Mar-93

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

20

Mar-93

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

INTP

Mar-93

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PER 12m ROLLING FORWARD VS LONG TERM AVE.

Sep-01

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

PE (x)
80

Jul-12

PE (x)
25

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PE (x)
160

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PE (x)
25

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

Strategy | 11 January 2016

CORRELATION BEETWEN JCI VS MANSEK UNIVERSE


INTP

0.75

0.50

0.25

0.00

-0.25

-0.50

-0.75

-1.00

SMCB

140
0.75

0.50

0.25

-1.00

SMGR

0.75

0.50

0.25

-0.25
0.00

-0.50

-0.75

-1.00

Page 63 of 88

Please see important disclosure at the back of this report


WIKA
1.00

30

25

35
0.75

0.50

0.25

0.00

15

-0.25

10

-0.50

-0.75

-1.00

Jan-15
Jul-15
Jan-16

Aug-14

Apr-15

Dec-15

Aug-14

20

WIKA

Dec-13

Feb-14

10

Apr-13

15

Aug-13

20

Aug-12

25

Feb-13

1.00

Jan-12

PTPP
Jan-16

Jan-15

Jan-14

Feb-13

Feb-12

Mar-11

Mar-10

Apr-09

1.00

Aug-12

Jan-16

May-15

Sep-14

Jan-14

May-13

Sep-12

Jan-12

May-11

Sep-10

Feb-10

1.00

May-11

Apr-08

10

Mar-12

15

Sep-10

20

Apr-07

ADHI

Sep-11

-0.75

Jan-10

Jun-09

-0.50

May-06

10

Apr-11

15

May-09

0.25

Sep-08

30

May-05

0.50

Oct-10

35

Sep-08

25

Jan-08

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

40

Jun-04

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

JSMR

Apr-10

Dec-15

Jul-15

Jan-15

Jul-14

Jan-14

Jul-13

Jan-13

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PER 12m ROLLING FORWARD VS LONG TERM AVE.

Jan-08

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

PE (x)
40

Jul-12

PE (x)
30

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PE (x)
25

Jul-12

Jan-12

Aug-11

Feb-11

Aug-10

Feb-10

PE (x)
45

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

Strategy | 11 January 2016

CORRELATION BEETWEN JCI VS MANSEK UNIVERSE


JSMR

0.75

20
0.00

-0.25

-1.00

ADHI

0.75

0.50

0.25

0.00

-0.25

-0.50

-0.75

-1.00

PTPP

0.75

0.50

0.25

-0.25
0.00

5
-0.50

-0.75

-1.00

Page 64 of 88

Please see important disclosure at the back of this report


NRCA
1.00

20

15

10

NRCA

0.75

0.50

0.25

-0.25

0.00

-0.50

-0.75

-1.00

Dec-15

Oct-15

Aug-15

May-15

Jan-16

Oct-15

Aug-15

Jun-15

Mar-15

5
0

Mar-15

15
10

Jan-15

25
20

Jan-15

30

Nov-14

40
35

Nov-14

1.00

Jan-16

Nov-15

Oct-15

Aug-15

Jun-15

May-15

Mar-15

Feb-15

1.00

Sep-14

ACST
Dec-15

Oct-15

Jul-15

Apr-15

Jan-15

Oct-14

Aug-14

May-14

Feb-14

Nov-13

Aug-13

1.00

Sep-14

Dec-14

10

Jun-14

20

Jun-14

30

Nov-14

40

Apr-14

50

Apr-14

60

Sep-14

WTON

Jan-14

Jan-14

0.00

May-13

15

Aug-14

0.25

Nov-13

20

Nov-13

10

Mar-13

Dec-15

Sep-15

Jun-15

Mar-15

Dec-14

Sep-14

Jun-14

25

Jun-14

Jan-16

Nov-15

Sep-15

Aug-15

Jun-15

Apr-15

Feb-15

WSKT

Sep-13

Jan-16

Oct-15

Jul-15

May-15

Feb-15

Dec-14

Sep-14

Mar-14

Dec-13

Sep-13

Jun-13

Mar-13

Dec-12

PER 12m ROLLING FORWARD VS LONG TERM AVE.

Sep-13

Jan-16

Oct-15

Aug-15

May-15

Mar-15

Dec-14

PE (x)
25

Oct-14

PE (x)
50
45

Jan-15

Nov-14

Sep-14

Jul-14

Jun-14

Apr-14

PE (x)
70

Jul-14

Apr-14

Feb-14

Nov-13

Sep-13

Jun-13

PE (x)
30

Jul-14

May-14

Feb-14

Nov-13

Sep-13

Jun-13

Strategy | 11 January 2016

CORRELATION BEETWEN JCI VS MANSEK UNIVERSE


WSKT

0.75

0.50

-0.25

5
-0.50

-0.75

-1.00

WTON

0.75

0.50

0.25

0.00

-0.25

-0.50

-0.75

-1.00

ACST

0.75

0.50

0.25

-0.25
0.00

-0.50

-0.75

-1.00

Page 65 of 88

Please see important disclosure at the back of this report


-0.50

0
-0.75

APLN
1.00

16

14

0.50

12

10

0.25

-0.50

-0.75

Dec-15

10

APLN

0.75

-0.25

0.00

-1.00

Oct-15

-0.25

Jul-15

15

Jul-15

20

Feb-15

0.25

Apr-15

25

Oct-14

0.50

30

Jan-15

35

May-14

40

Oct-14

1.00

Nov-13

TAXI

Jul-14

Dec-15

Aug-15

Mar-15

Oct-14

Jun-14

Jan-14

Aug-13

-60

Jul-13

-20

Apr-13

1.00

Apr-14

0.00

Dec-15

Nov-15

Oct-15

Oct-15

Sep-15

Aug-15

Jul-15

Jun-15

May-15

May-15

1.00

Feb-13

Nov-12

0.25

Jan-14

20

Sep-12

40

Jun-12

GIAA

Oct-13

-0.75

Apr-12

Apr-15

-0.50

Feb-12

Jul-13

Nov-11

0.25

Mar-15

Sep-11

0.50

Apr-13

Jun-11

Feb-15

Jan-16

Dec-15

Oct-15

Sep-15

Aug-15

Jul-15

Apr-11

Jan-16

Aug-15

Mar-15

Oct-14

May-14

Dec-13

Jun-15

SOCI

Jan-13

Dec-15

Sep-15

Jun-15

Mar-15

Dec-14

Sep-14

Jul-13

May-15

Apr-15

Mar-15

Feb-15

Jan-15

Dec-14

PER 12m ROLLING FORWARD VS LONG TERM AVE.

Jan-11

Dec-15

Jul-15

Feb-15

Sep-14

Apr-14

Nov-13

Jun-14

PE (x)
45

Jun-13

PE (x)
18

Feb-13

Sep-12

May-12

Dec-11

Jul-11

Feb-11

PE (x)
60

Feb-14

Nov-13

Aug-13

May-13

Feb-13

Nov-12

PE (x)
9

Dec-12

Jul-12

Feb-12

Sep-11

Apr-11

Nov-10

Strategy | 11 January 2016

CORRELATION BEETWEN JCI VS MANSEK UNIVERSE


SOCI

0.75

4
0.00

-0.25

-1.00

GIAA

0.75

0.50

-0.25

-40
-0.50

-0.75

-1.00

TAXI

0.75

0.00

-1.00

Page 66 of 88

Please see important disclosure at the back of this report


CTRS
1.00

16

14

0.50

12

10

0.25

-0.50

-0.75

CTRS

0.75

-0.25

0.00

-1.00

May-12
Mar-14
Dec-15

Mar-13

Aug-14

Dec-15

Aug-10

Oct-11

Oct-08

10

Jun-10

15

Dec-06

20

Jan-09

25

Mar-05

30

Aug-07

1.00

-1.00

Jan-12

Jun-11

Oct-10

Feb-10

Sep-14
Apr-15
Dec-15

Oct-14
May-15
Dec-15

Jan-14

0.25

Feb-14

0.50

May-13

0.75

Jul-13

35

Sep-12

BSDE

Nov-12

Apr-12

Sep-11

1.00

May-03

CTRA
Jul-09

1.00

Mar-06

-0.75

Feb-11

Jul-01

-0.50

Oct-04

-0.25

10

Jun-10

15

Oct-99

0.00

Jun-03

20

Nov-09

25

Dec-97

30

Jan-02

BSDE
Nov-08

Apr-09

Mar-96

10

Aug-00

15

Mar-08

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

20

Aug-08

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

ASRI

Jun-94

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PER 12m ROLLING FORWARD VS LONG TERM AVE.

Apr-99

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

PE (x)
18

Jul-12

PE (x)
35

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PE (x)
40

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PE (x)
25

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

Strategy | 11 January 2016

CORRELATION BEETWEN JCI VS MANSEK UNIVERSE


ASRI

0.75

0.50

0.25

-0.25

0.00

-0.50

-0.75

-1.00

CTRA

0.75

0.50

0.25

0.00

-0.25

-0.50

-0.75

-1.00

Page 67 of 88

Please see important disclosure at the back of this report


PWON
1.00

30

25

20

15

10

0
0.75

0.50

0.25

-0.25

0.00

-0.50

-0.75

-1.00

Mar-12
Feb-14
Jan-16

Mar-12

Jan-14

Dec-15

May-10

PWON

Apr-10

Jun-08

20

May-08

0.00

Jul-06

30

Jun-06

0.25

Aug-04

1.00

Aug-04

40

Dec-15

Jun-14

Dec-12

Jun-11

Nov-09

May-08

Nov-06

May-05

Oct-03

1.00

Sep-02

50

Dec-15

Mar-14

May-12

Aug-10

Nov-08

Feb-07

Apr-05

Jul-03

Sep-01

Dec-99

Mar-98

1.00

Aug-02

MDLN

Oct-00

Oct-00

Apr-02

0.00

Dec-98

Nov-98

0.25

Oct-00

Jan-97

10

Jan-97

LPCK
Jun-96

Apr-99

Mar-95

10

Feb-95

15

Sep-94

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

20

Oct-97

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

JRPT

Apr-93

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PER 12m ROLLING FORWARD VS LONG TERM AVE.

Mar-93

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

PE (x)
35

Jul-12

PE (x)
60

Jan-12

Jun-11

Nov-10

Apr-10

Sep-09

Feb-09

PE (x)
12

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PE (x)
25

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

Strategy | 11 January 2016

CORRELATION BEETWEN JCI VS MANSEK UNIVERSE


JRPT

0.75

0.50

0.25

-0.25

0.00

-0.50

-0.75

-1.00

LPCK

0.75

0.50

-0.25

2
-0.50

-0.75

-1.00

MDLN

0.75

0.50

-0.25

10
-0.50

-0.75

-1.00

Page 68 of 88

Please see important disclosure at the back of this report


KIJA
1.00

40
35

30

25
20

15
10

5
0

0.25

-0.25

0.00

-0.50

-0.75

-1.00

Mar-12
Jan-14
Dec-15

Jun-12

Mar-14

Dec-15

Apr-10

0.50

Oct-10

0.75

May-08

KIJA

Jan-09

Jun-06

Apr-07

10

Aug-04

1.00

Jul-05

15

Dec-15

Jun-14

Dec-12

Jun-11

Dec-09

May-08

Nov-06

May-05

Oct-03

1.00

Aug-02

20

Dec-15

Jan-14

Mar-12

Apr-10

May-08

Jun-06

Aug-04

Aug-02

Oct-00

Nov-98

Jan-97

1.00

Oct-03

25

Oct-00

30

Feb-02

DILD
Apr-02

Nov-98

50

May-00

100

Oct-00

150

Jan-97

200

Aug-98

BKSL
Feb-95

Apr-99

10

Feb-95

15

Dec-96

20

Mar-93

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

25

Oct-97

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

SMRA

Mar-93

Dec-15

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PER 12m ROLLING FORWARD VS LONG TERM AVE.

Mar-95

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

PE (x)
50
45

Jul-12

PE (x)
35

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PE (x)
250

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PE (x)
30

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

Strategy | 11 January 2016

CORRELATION BEETWEN JCI VS MANSEK UNIVERSE


SMRA

0.75

0.50

0.25

-0.25

0.00

5
-0.50

-0.75

-1.00

BKSL

0.75

0.50

0.25

0.00

-0.25

-0.50

-0.75

-1.00

DILD

0.75

0.50

0.25

0.00

-0.25

-0.50

-0.75

-1.00

Page 69 of 88

Please see important disclosure at the back of this report


DMAS
1.00

8
7

5
4

3
2

1
0

Dec-15

Dec-15

10

5
-0.50

-0.75

-1.00

Aug-04

Mar-12
Jan-14
Dec-15

May-15
Sep-15
Dec-15

Apr-10

-0.25

Feb-15

0.00

Nov-15

15

May-08

0.50

Oct-14

0.75

Jun-06

0.25

BEST

Jul-14

20

Nov-15

25

Nov-15

1.00

Mar-14

BEST

Oct-15

-300

Aug-02

1.00

Dec-13

-100
-200

May-14

Oct-12

Mar-11

Jul-09

Dec-07

May-06

Sep-04

Feb-03

Jun-01

1.00

Oct-15

-0.25

Oct-00

0.00

100
0

Aug-13

200

Oct-15

0.25

Nov-98

400
300

May-13

600
500

Sep-15

MYRX
Nov-99

-0.75

Jan-97

Jan-13

-0.50

Sep-15

10

Apr-98

-0.25

Feb-95

0.00

15

Oct-12

20

Aug-15

25

Sep-96

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

30

Mar-93

Jan-16

Jul-15

Feb-15

Aug-14

Mar-14

Feb-13

Jul-12

Dec-11

LPKR

Jun-12

Dec-15

Sep-15

May-15

Jan-15

Oct-14

Sep-13

Apr-13

Oct-12

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PER 12m ROLLING FORWARD VS LONG TERM AVE.

Aug-15

Dec-15

Nov-15

Oct-15

Jun-14

Feb-14

PE (x)
30

Oct-13

May-12

Dec-11

Jun-11

Jan-11

Jul-10

PE (x)
40

Sep-15

PE (x)
10
9

Jul-13

Mar-13

Nov-12

Aug-12

Apr-12

PE (x)
700

Aug-15

Jul-15

Jun-15

May-15

Strategy | 11 January 2016

CORRELATION BEETWEN JCI VS MANSEK UNIVERSE


LPKR

35
0.75

0.50

0.25

-1.00

MYRX

0.75

0.50

-0.50

-0.75

-1.00

DMAS

0.75

0.50

0.25

-0.25

0.00

-0.50

-0.75

-1.00

Page 70 of 88

Please see important disclosure at the back of this report


30

25

20

15

10

INDF
1.00

25

20

15

10

0
-1.00

INDF

0.75

0.50

0.25

-0.25

0.00

-0.50

-0.75

-1.00

Aug-04

Mar-12
Jan-14
Dec-15

Feb-15
Jul-15
Dec-15

Jun-12

Mar-14

Dec-15

Apr-10

-0.75

Sep-14

-0.50

Aug-10

-0.25

May-08

0.00

Apr-14

0.25

Nov-08

0.50

Jun-06

0.75

Nov-13

ICBP

Feb-07

Jun-13

1.00

May-05

ICBP
Aug-02

1.00

Jan-13

Dec-15

Jun-14

Nov-12

May-11

Oct-09

Apr-08

Sep-06

Mar-05

Aug-03

Jan-02

1.00

Jul-03

Oct-00

10

Aug-12

15

Oct-01

20

Nov-98

25

Mar-12

30

Dec-99

GGRM
Jul-00

-0.75

Jan-97

Oct-11

-0.50

Mar-98

Dec-98

-0.25

Feb-95

0.00

May-11

Jul-96

10

Jun-97

Dec-15

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

12

Mar-93

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

SSIA

Dec-10

Dec-15

Jul-15

Feb-15

Sep-14

Apr-14

Oct-13

Jul-12

Jan-12

Jun-11

Nov-10

Apr-10

Sep-09

Feb-09

PER 12m ROLLING FORWARD VS LONG TERM AVE.

Sep-94

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

PE (x)
35

May-13

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PE (x)
16

Jul-12

PE (x)
30

Dec-12

Jul-12

Jan-12

Aug-11

Mar-11

Oct-10

PE (x)
35

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

Strategy | 11 January 2016

CORRELATION BEETWEN JCI VS MANSEK UNIVERSE


SSIA

14
0.75

0.50

0.25

-1.00

GGRM

0.75

0.50

0.25

0.00

-0.25

-0.50

-0.75

-1.00

Page 71 of 88

Please see important disclosure at the back of this report


HMSP
1.00

40
0.75

0.50

30

25

0.25

20

15

-0.25

0.00

10

-0.50

-0.75

-1.00

Mar-12
Jan-14
Dec-15

Mar-12

Jan-14

Dec-15

Apr-10

35

HMSP

Apr-10

May-08

20

May-08

0.00

Jun-06

30

Jun-06

0.25

Aug-04

1.00

Aug-04

40

Dec-15

Jan-14

Mar-12

Apr-10

May-08

Jun-06

Aug-04

Aug-02

Oct-00

1.00

Aug-02

50

Dec-15

Jan-14

Mar-12

Apr-10

May-08

Jun-06

Aug-04

Aug-02

Oct-00

Nov-98

Jan-97

1.00

Aug-02

UNVR

Oct-00

Oct-00

20

Nov-98

0.00

Nov-98

30

Nov-98

0.25

Jan-97

40

Jan-97

50

Jan-97

ULTJ
Feb-95

Feb-95

20

Feb-95

30

Feb-95

40

Mar-93

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

50

Mar-93

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

MYOR

Mar-93

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PER 12m ROLLING FORWARD VS LONG TERM AVE.

Mar-93

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

PE (x)
45

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PE (x)
60

Jul-12

PE (x)
60

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PE (x)
60

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

Strategy | 11 January 2016

CORRELATION BEETWEN JCI VS MANSEK UNIVERSE


MYOR

0.75

0.50

0.25

-0.25

0.00

10
-0.50

-0.75

-1.00

ULTJ

0.75

0.50

-0.25

10
-0.50

-0.75

-1.00

UNVR

0.75

0.50

-0.25

10
-0.50

-0.75

-1.00

Page 72 of 88

Please see important disclosure at the back of this report


SIDO
1.00

30

25

20

15

10

SIDO

0.75

0.50

0.25

-0.25

0.00

-0.50

-0.75

-1.00

Jan-14
Dec-15

Jan-16

-0.75

Nov-15

Mar-12

-0.50

Sep-15

10

Apr-10

15

Jul-15

0.25

May-08

25

May-15

0.50

30

Jun-06

35

Mar-15

40

Aug-04

1.00

Feb-15

KLBF
Dec-15

Jun-14

Dec-12

May-11

Nov-09

May-08

Oct-06

Apr-05

1.00

Aug-02

Dec-15

Oct-15

Jul-15

Apr-15

Jan-15

Oct-14

Aug-14

May-14

Feb-14

Nov-13

1.00

Dec-14

Sep-03

10

Oct-00

15

Oct-14

20

Mar-02

AISA

Nov-98

-0.75

Aug-14

Aug-13

-0.50

Sep-00

Jan-97

Jun-14

0.25

May-13

12

Mar-99

0.50

Feb-95

14

May-14

10

Mar-13

Dec-15

Sep-15

Jun-15

Mar-15

Dec-14

Sep-14

Jun-14

16

Aug-97

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

WIIM

Mar-93

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

Mar-14

Dec-13

Sep-13

Jun-13

Mar-13

Dec-12

PER 12m ROLLING FORWARD VS LONG TERM AVE.

Mar-14

Jan-16

Nov-15

Sep-15

Jul-15

Apr-15

Feb-15

PE (x)
35

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PE (x)
25

Dec-14

PE (x)
45

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PE (x)
18

Oct-14

Aug-14

Jun-14

Apr-14

Feb-14

Dec-13

Strategy | 11 January 2016

CORRELATION BEETWEN JCI VS MANSEK UNIVERSE


WIIM

0.75

-0.25

0.00

-1.00

AISA

0.75

0.50

0.25

0.00

-0.25

-0.50

-0.75

-1.00

KLBF

0.75

20
0.00

-0.25

-1.00

Page 73 of 88

Please see important disclosure at the back of this report


MNCN
1.00

30

25

20

15

10

0.50

0.25

-0.25

0.00

-0.50

-0.75

-1.00

Jan-16

Apr-15

Aug-14

Dec-15

Oct-15

Aug-15

Jun-15

0.75

Nov-13

MNCN
Apr-15

Mar-13

50

Feb-15

100

Jul-12

150

Dec-15

Dec-15

Nov-15

Nov-15

Oct-15

Oct-15

Sep-15

1.00

Dec-14

200

Dec-15

Mar-14

Jun-12

Aug-10

Nov-08

Feb-07

Apr-05

Jul-03

Sep-01

Dec-99

1.00

Nov-11

1.00

Oct-14

SILO

Mar-11

Aug-15

10

Aug-15

20

Aug-14

30

Jun-10

40

Jul-15

50

Jun-14

MIKA

Oct-09

-0.75

Mar-98

Jul-15

-0.50

Apr-14

10

Feb-09

-0.25

Jun-96

0.00

15

Jun-15

20

Jan-14

25

Aug-94

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

30

May-08

Jun-15

Dec-15

Nov-15

Oct-15

Sep-15

Jul-12

TSPC

Nov-13

Jan-16

Oct-15

Aug-15

Jun-15

Mar-15

Jan-15

Aug-15

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PER 12m ROLLING FORWARD VS LONG TERM AVE.

Sep-07

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Nov-14

PE (x)
250

Jul-12

PE (x)
35

Jul-15

Jun-15

May-15

Apr-15

Mar-15

PE (x)
70

Aug-14

Jun-14

Apr-14

Jan-14

Nov-13

Sep-13

PE (x)
40

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

Strategy | 11 January 2016

CORRELATION BEETWEN JCI VS MANSEK UNIVERSE


TSPC

35
0.75

0.50

0.25

-1.00

MIKA

60
0.75

0.50

0.25

0.00

-0.25

-0.50

-0.75

-1.00

SILO

0.75

0.50

0.25

0.00

-0.25

-0.50

-0.75

-1.00

Page 74 of 88

Please see important disclosure at the back of this report


VIVA
1.00

120

100

0
-0.75

ADRO

25

20

15

10

0
-1.00

1.00

ADRO

0.75

0.50

0.25

-0.25

0.00

-0.50

-0.75

-1.00

Oct-05

Aug-12
Apr-14
Dec-15

Apr-15
Aug-15
Dec-15

Oct-14

May-15

Dec-15

Dec-10

-0.50

20

Jan-15

-0.25

40

Mar-14

60

Mar-09

0.25

Sep-14

0.50

Jul-13

0.75

Jul-07

140

May-14

0.00

VIVA

Dec-12

80

Jan-14

May-12

20

Feb-04

1.00

Sep-13

0.00

Dec-15

Nov-14

Oct-13

Aug-12

Jul-11

Jun-10

May-09

Apr-08

Mar-07

Jan-06

1.00

Oct-11

30

Jun-02

0.25

May-13

40

Mar-11

50

Oct-00

BMTR

Jan-13

-0.75

Jul-10

Dec-04

-0.50

Feb-99

10

Sep-12

15

Dec-09

0.25

Oct-03

30

Jun-97

0.50

May-12

35

May-09

25

Sep-02

Dec-15

May-15

Oct-14

Apr-14

Sep-13

Feb-13

Jul-12

40

Sep-95

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

SCMA

Feb-12

Jan-16

Sep-15

May-15

Dec-14

Aug-14

Apr-14

Dec-13

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PER 12m ROLLING FORWARD VS LONG TERM AVE.

Sep-08

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

PE (x)
30

Jul-12

PE (x)
160

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PE (x)
60

Aug-13

Apr-13

Nov-12

Jul-12

Mar-12

Nov-11

PE (x)
45

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

Strategy | 11 January 2016

CORRELATION BEETWEN JCI VS MANSEK UNIVERSE


SCMA

0.75

20

-0.25

0.00

-1.00

BMTR

0.75

0.50

-0.25

10
-0.50

-0.75

-1.00

Page 75 of 88

Please see important disclosure at the back of this report


PGAS
1.00

20

15

0.00

-0.25

-0.50

-0.75

-1.00

-0.50

-0.75

-1.00

Jun-13

Jan-13

Aug-12

Mar-12

Dec-15
Dec-15

-1.00

Dec-15

-0.75

Jan-16

-0.50

Jul-15

-0.25

Apr-15

0.00

Nov-14

0.25

Jan-15

0.50

Feb-15

0.75

Sep-14

PTBA

Nov-13

Sep-14

-0.25

Jan-14

0.00

Apr-14

0.25

May-13

0.50

Nov-13

0.75

Sep-12

Jan-12

Jun-11

ITMG

Jan-14

Oct-12

0.25

Jan-13

0.50

Sep-11

0.75

Jan-12

10

PGAS
Sep-10

Feb-11

Aug-09

1.00

Feb-10

10

Oct-10

1.00

Jul-08

15

Oct-11

1.00

Feb-09

20

Jun-07

PTBA

Feb-08

Feb-10

May-06

10

Feb-07

15

Jul-09

20

May-05

ITMG

Feb-06

-0.25

May-11

100
80
60

Nov-08

0.25

Apr-04

140
120

Mar-05

Dec-10

Dec-15

Jul-15

Feb-15

Sep-14

Apr-14

Oct-13

May-13

40
20

Mar-08

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

HRUM

Mar-03

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

Dec-12

Jul-12

Jan-12

Aug-11

Mar-11

Oct-10

PER 12m ROLLING FORWARD VS LONG TERM AVE.

Mar-04

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

PE (x)
25

Jul-12

PE (x)
25

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PE (x)
25

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PE (x)
200
180
160

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

Strategy | 11 January 2016

CORRELATION BEETWEN JCI VS MANSEK UNIVERSE


HRUM

0.75

0.50

0.00

-0.50

-0.75

-1.00

Page 76 of 88

Please see important disclosure at the back of this report


INCO
1.00

60

50

40

30

20

10

0.50

0.25

-0.25

0.00

-0.50

-0.75

-1.00

Jan-13
Jul-14
Dec-15

Mar-12

Jan-14

Dec-15

Jul-11

0.75

Apr-10

INCO
Jan-10

10

May-08

20

Jul-08

1.00

Jun-06

ANTM

Jan-07

Jan-16

Oct-14

Aug-13

May-12

Mar-11

Jan-10

Nov-08

-160

Aug-04

-120
-140

Aug-07

1.00

Jul-05

-0.25

Jun-06

0.00

-80
-100

Jan-04

-60

Apr-05

0.25

Jul-02

-20
-40

Jan-04

20
0

Feb-01

DOID

Oct-02

Dec-15

Mar-14

Jun-12

Oct-10

Dec-08

Mar-07

Jun-05

Sep-03

Nov-01

Mar-00

Jun-98

Sep-96

Dec-94

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Aug-01

Dec-15

May-15

Oct-14

Apr-14

Sep-13

Feb-13

10

Aug-99

Feb-98

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

1.00

Aug-02

-1.00

Feb-13

Jul-12

Dec-11

15

Oct-00

-0.75

-40

Jul-12

Dec-11

May-11

20

Nov-98

-0.50

-30

Dec-11

May-11

Oct-10

25

Jan-97

-0.25

-20

May-11

Oct-10

Mar-10

AKRA

Feb-95

-10

Oct-10

Mar-10

Aug-09

Jan-09

PER 12m ROLLING FORWARD VS LONG TERM AVE.

Mar-93

Jan-16

Jun-15

Nov-14

Apr-14

PE (x)
70

Sep-13

0.00

Mar-10

Aug-09

PE (x)
40

Feb-13

Aug-09

Jan-09

PE (x)
35

Jul-12

Jan-09

PE (x)
40

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

Strategy | 11 January 2016

CORRELATION BEETWEN JCI VS MANSEK UNIVERSE


AKRA

30
0.75

0.50

0.25

-0.25

0.00

-0.50

-0.75

-1.00

DOID

0.75

0.50

-0.50

-0.75

-1.00

ANTM

30
0.75

0.50

0.25

Page 77 of 88

Please see important disclosure at the back of this report


25

0
-0.75

LPPF

30

25

20

15

10

0
-1.00

1.00

LPPF

0.75

0.50

0.25

-0.25

0.00

-0.50

-0.75

-1.00

Jan-12

Sep-14
Apr-15
Dec-15

May-15
Sep-15
Dec-15

Mar-12

Jan-14

Dec-15

Jan-14

-0.50

Jan-15

-0.25

10

Apr-10

15

May-13

0.25

Sep-14

0.50

May-08

0.75

Sep-12

35

May-14

0.00

ERAA

Jun-06

20

Jan-14

30

Aug-04

1.00

May-11

1.00

Sep-13

ERAA
May-14

Aug-12

Jan-11

May-09

Aug-07

Dec-05

Apr-04

Aug-02

Dec-00

Apr-99

1.00

Aug-02

-0.75

Sep-10

Jun-13

-0.50

Oct-00

-0.25

10

Jan-10

15

Feb-13

0.00

Nov-98

20

May-09

25

Oct-12

30

Jan-97

ACES
Aug-97

5
0

Sep-08

15
10

Jun-12

25
20

Feb-95

30

Jan-96

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

40
35

Jan-08

Dec-15

May-15

Oct-14

Apr-14

Sep-13

Feb-13

Jul-12

TINS

Feb-12

Dec-15

Aug-15

Apr-15

Dec-14

Aug-14

Apr-14

Dec-13

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PER 12m ROLLING FORWARD VS LONG TERM AVE.

Mar-93

Jan-16

Jun-15

Dec-14

Jun-14

Dec-13

Jun-13

PE (x)
35

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PE (x)
50
45

Dec-12

PE (x)
40

Aug-13

Apr-13

Dec-12

Aug-12

Apr-12

Dec-11

PE (x)
40

May-12

Nov-11

May-11

Nov-10

May-10

Oct-09

Strategy | 11 January 2016

CORRELATION BEETWEN JCI VS MANSEK UNIVERSE


TINS

0.75

0.50

0.25

-0.25

0.00

-0.50

-0.75

-1.00

ACES

35
0.75

0.50

0.25

-1.00

Page 78 of 88

Please see important disclosure at the back of this report


TELE
1.00

16
14

12

10
8

6
4

2
0

TELE

0.75

0.50

0.25

-0.25

0.00

-0.50

-0.75

-1.00

Dec-15

Dec-15

May-14

Sep-15

10

Oct-12

15

May-15

20

Mar-11

25

Jan-15

30

Aug-09

1.00

Sep-14

RALS

Dec-07

Dec-15

Jan-14

Mar-12

Apr-10

May-08

Jun-06

-0.75

Jun-14

Aug-04

10

May-06

-0.50

Feb-14

20

Aug-02

1.00

Sep-04

30

Feb-15

Mar-14

Apr-13

May-12

Jun-11

Jul-10

Aug-09

Sep-08

Oct-07

1.00

Oct-13

0.25

Oct-00

50

Feb-03

60

Jun-13

0.50

Nov-98

70

Jul-01

80

Feb-13

MPPA
Nov-06

-0.75

Jan-97

Dec-99

-0.50

20

Nov-12

40

Dec-05

-0.25

Feb-95

0.00

60

May-98

80

Jul-12

100

Jan-05

Dec-15

May-15

Oct-14

Apr-14

Sep-13

Feb-13

Jul-12

120

Mar-93

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

MAPI

Oct-96

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PER 12m ROLLING FORWARD VS LONG TERM AVE.

Mar-12

Jan-16

Sep-15

May-15

Jan-15

Sep-14

May-14

PE (x)
20
18

Jan-14

PE (x)
35

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PE (x)
90

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PE (x)
160

Sep-13

May-13

Jan-13

Sep-12

May-12

Jan-12

Strategy | 11 January 2016

CORRELATION BEETWEN JCI VS MANSEK UNIVERSE


MAPI

140
0.75

0.50

0.25

-1.00

MPPA

0.75

40
0.00

-0.25

-1.00

RALS

0.75

0.50

0.25

0.00

-0.25

-0.50

-0.75

-1.00

Page 79 of 88

Please see important disclosure at the back of this report


EXCL
1.00

40

20

-20

-60

0.25

-0.25

0.00

-40

-0.50

-0.75

-1.00

Mar-12
Jan-14
Dec-15

Apr-14

Mar-15

Jan-16

Apr-10

0.50

Jun-13

0.75

May-08

EXCL

Aug-12

Jun-06

40

Nov-11

0.00

Aug-04

1.00

Jan-11

60

Jan-16

May-15

Sep-14

Jan-14

May-13

Sep-12

Feb-12

Jun-11

Oct-10

1.00

Aug-02

0.25

Sep-15

May-15

Jan-15

Sep-14

May-14

Jan-14

Sep-13

May-13

Feb-13

Oct-12

1.00

Mar-10

80

Oct-00

100

Apr-09

MLPL
Feb-10

5
0

Nov-98

15
10

Jun-08

25
20

Jun-09

30

Jan-97

40
35

Aug-07

CSAP
Jun-12

Oct-08

Feb-95

10

Oct-06

15

Feb-12

Dec-15

Aug-15

Apr-15

Dec-14

Aug-14

Apr-14

Dec-13

20

Mar-08

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

CASS

Mar-93

Dec-15

May-15

Oct-14

Apr-14

Sep-13

Feb-13

Jul-12

Aug-13

Apr-13

Dec-12

Aug-12

Apr-12

Dec-11

PER 12m ROLLING FORWARD VS LONG TERM AVE.

Dec-05

Dec-15

May-15

Oct-14

Apr-14

Sep-13

Feb-13

PE (x)
60

Jul-12

PE (x)
120

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PE (x)
50
45

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PE (x)
25

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

Strategy | 11 January 2016

CORRELATION BEETWEN JCI VS MANSEK UNIVERSE


CASS

0.75

0.50

0.25

-0.25

0.00

-0.50

-0.75

-1.00

CSAP

0.75

0.50

0.25

0.00

-0.25

-0.50

-0.75

-1.00

MLPL

0.75

0.50

-0.25

20
-0.50

-0.75

-1.00

Page 80 of 88

Please see important disclosure at the back of this report


0

TBIG

30

25

0
-1.00

1.00

20

0.00

15

-0.25

10

-0.50

-0.75

TBIG

35
0.75

0.50

0.25

-1.00

Jan-06

May-04

Oct-15
Nov-15
Dec-15

Feb-15

Jul-15

Dec-15

Dec-15

Apr-14

Aug-12

Jan-11

-0.75

Aug-15

-0.50

Sep-14

-0.25

10

May-09

0.25

Jul-15

0.50

Apr-14

0.75

Aug-07

35

Jun-15

15

LINK

Nov-13

0.00

Apr-15

1.00

Jun-13

20

Aug-02

1.00

Mar-15

25

Dec-15

Mar-14

Jun-12

Oct-10

Jan-09

Mar-07

Jun-05

Sep-03

Dec-01

Mar-00

Jun-98

1.00

Jan-13

30

Jan-15

LINK

Aug-12

2
0

Jan-01

6
4

Dec-14

10
8

Mar-12

12

May-99

16
14

Nov-14

TLKM

Nov-11

-60

Sep-96

-20

Sep-97

Sep-14

20

Jun-11

Jan-95

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

40

Jan-96

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

ISAT

Aug-14

Jan-16

Nov-15

Oct-15

Aug-15

Jun-15

May-15

Mar-15

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PER 12m ROLLING FORWARD VS LONG TERM AVE.

Jan-11

Jan-16

Aug-15

Feb-15

Sep-14

Apr-14

Nov-13

PE (x)
40

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PE (x)
60

Jun-13

PE (x)
40

Jan-15

Dec-14

Oct-14

Sep-14

Jul-14

May-14

PE (x)
20
18

Dec-12

Jul-12

Feb-12

Sep-11

Apr-11

Oct-10

Strategy | 11 January 2016

CORRELATION BEETWEN JCI VS MANSEK UNIVERSE


ISAT

0.75

0.50

0.25

-0.25

0.00

-40
-0.50

-0.75

-1.00

TLKM

0.75

0.50

0.25

0.00

-0.25

-0.50

-0.75

-1.00

Page 81 of 88

Please see important disclosure at the back of this report


0

ASII

20

15

10

IMAS

100

50

-50

-100
1.00

-0.25

-0.50

-0.75

-1.00

1.00

IMAS

0.75

0.50

0.25

-0.25

0.00

-0.50

-0.75

-1.00

Feb-13

Sep-12

Mar-12

Jan-15
Jul-15
Dec-15

Aug-15
Oct-15
Dec-15

Mar-12
Jan-14
Dec-15

May-12

Mar-14

Aug-14

0.00

May-15

0.25

Apr-10

0.50

Jul-10

0.75

Feb-14

ASII

Mar-15

-1.00

May-08

-0.25

Sep-08

0.00

Aug-13

Jan-15

0.75

Jun-06

SRIL

Nov-06

-0.75

Oct-14

Aug-04

-0.50

Jan-05

Aug-14

1.00

Aug-02

Oct-11

1.00

Mar-03

0.25

Jun-14

10

Oct-00

12

May-01

0.50

Apr-14

14

Nov-98

16

Jul-99

SRIL
Apr-11

-0.75

Jan-14

Jan-97

-0.50

20

Sep-97

40

Nov-10

-0.25

Nov-13

0.00

60

Feb-95

80

Nov-95

100

May-10

Dec-15

Jul-15

Jan-15

Jul-14

Jan-14

Jul-13

120

Sep-13

Jan-16

Oct-15

Aug-15

May-15

Feb-15

Dec-14

TOWR

Mar-93

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jan-13

Aug-12

Feb-12

Aug-11

Feb-11

Aug-10

Mar-10

PER 12m ROLLING FORWARD VS LONG TERM AVE.

Jan-94

Dec-15

Jun-15

Nov-14

Apr-14

Sep-13

PE (x)
150

Mar-13

PE (x)
25

Sep-14

Jul-14

Apr-14

Feb-14

Nov-13

Aug-13

Jun-13

PE (x)
18

Jul-12

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PE (x)
160

Aug-12

Jan-12

Jul-11

Dec-10

May-10

Oct-09

Apr-09

Strategy | 11 January 2016

CORRELATION BEETWEN JCI VS MANSEK UNIVERSE


TOWR

140
0.75

0.50

0.25

-1.00

Page 82 of 88

Please see important disclosure at the back of this report


AALI
1.00

30

25
0.75

0.50

0.25

0.00

15

-0.25

10

-0.50

-0.75

-1.00

Mar-12
Jan-14
Dec-15

Dec-12

Jun-14

Dec-15

Apr-10

35

Jul-11

20

AALI
May-08

Jan-10

Jun-06

10

Jul-08

15

Aug-04

20

Jan-07

1.00

Dec-15

Mar-14

Jul-12

Oct-10

Feb-09

May-07

Aug-05

Nov-03

1.00

Aug-02

UNTR
Dec-15

Oct-15

Aug-15

May-15

Mar-15

Jan-15

Oct-14

Aug-14

Jun-14

Mar-14

Jan-14

1.00

Jul-05

Mar-02

10

Oct-00

0.00

Jan-04

15

Jun-00

0.25

Nov-98

20

Jul-02

25

Sep-98

HEXA

Jan-97

Feb-01

Oct-13

Jan-97

Feb-95

Aug-99

10

Aug-13

Jan-16

Oct-15

Jul-15

May-15

Feb-15

Dec-14

Sep-14

12

May-95

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

MPMX

Mar-93

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

Jun-14

Apr-14

Jan-14

Nov-13

Aug-13

May-13

PER 12m ROLLING FORWARD VS LONG TERM AVE.

Feb-98

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

PE (x)
40

Jul-12

PE (x)
25

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PE (x)
30

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PE (x)
14

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

Strategy | 11 January 2016

CORRELATION BEETWEN JCI VS MANSEK UNIVERSE


MPMX

0.75

0.50

0.25

-0.25

0.00

-0.50

-0.75

-1.00

HEXA

0.75

0.50

-0.25

5
-0.50

-0.75

-1.00

UNTR

0.75

0.50

0.25

0.00

-0.25

-0.50

-0.75

-1.00

Page 83 of 88

Please see important disclosure at the back of this report


SSMS
1.00

30

25

20

0.00

15

-0.25

10

-0.50

-0.75

Dec-15

Nov-15

Sep-15
Jul-15

Jan-15

20
0

SSMS

35
0.75

0.50

0.25

-1.00

Jul-14

60
40

Jul-15

100
80

Jan-14

120

May-15

160
140

Jul-13

1.00

Mar-15

BWPT

Jan-13

Dec-15

Apr-15

Aug-14

Nov-13

Mar-13

Jul-12

Nov-11

-0.75

Jan-15

Feb-11

1.00

Jul-12

Dec-15

May-14

Oct-12

Mar-11

Jul-09

Dec-07

May-06

Sep-04

Feb-03

Jun-01

Nov-99

1.00

Dec-14

-0.50

Jun-10

10

Jan-12

15

Oct-14

0.25

Oct-09

25

Jul-11

30

Aug-14

0.50

Jan-09

35

Jan-11

40

Jun-14

SGRO
Apr-98

May-08

Jul-10

10

Apr-14

15

Sep-96

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

20

Aug-07

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

LSIP

Jan-10

Jan-16

Jun-15

Dec-14

Jun-14

Dec-13

Jun-13

Dec-12

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PER 12m ROLLING FORWARD VS LONG TERM AVE.

Feb-14

Jan-16

Nov-15

Sep-15

Jul-15

May-15

Feb-15

PE (x)
40

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PE (x)
25

Dec-14

PE (x)
200
180

May-12

Nov-11

May-11

Nov-10

May-10

Oct-09

PE (x)
45

Oct-14

Aug-14

Jun-14

Apr-14

Feb-14

Dec-13

Strategy | 11 January 2016

CORRELATION BEETWEN JCI VS MANSEK UNIVERSE


LSIP

0.75

0.50

0.25

-0.25

0.00

-0.50

-0.75

-1.00

SGRO

0.75

20
0.00

-0.25

-1.00

BWPT

0.75

0.50

0.25

-0.25
0.00

-0.50

-0.75

-1.00

Page 84 of 88

Please see important disclosure at the back of this report


MAIN
1.00

80
60

40
20
0.25

0
0.00

-20
-40
-0.25

-60
-80

-100
0.75

0.50

-0.50

-0.75

-1.00

Mar-12
Jan-14
Dec-15

May-14
Mar-15
Dec-15

Apr-10

MAIN

Jul-13

-60

May-08

-40

Sep-12

-20

Jun-06

Dec-11

20

Aug-04

40

Mar-11

1.00

Aug-02

60

Dec-15

Jan-14

Mar-12

Apr-10

May-08

Jun-06

Aug-04

Aug-02

Oct-00

1.00

May-10

JPFA

Oct-00

-0.75

Jul-09

Nov-98

-0.50

Nov-98

10

Sep-08

15

Jan-97

0.25

Jan-97

25

Nov-07

30

Feb-95

0.50

Feb-95

35

Feb-07

40

Mar-93

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

CPIN

Mar-93

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

Jul-12

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PER 12m ROLLING FORWARD VS LONG TERM AVE.

Apr-06

Jan-16

Jun-15

Nov-14

Apr-14

Sep-13

Feb-13

PE (x)
100

Jul-12

PE (x)
80

Dec-11

May-11

Oct-10

Mar-10

Aug-09

Jan-09

PE (x)
45

Jan-12

Jun-11

Nov-10

Apr-10

Sep-09

Feb-09

Strategy | 11 January 2016

CORRELATION BEETWEN JCI VS MANSEK UNIVERSE


CPIN

0.75

20

-0.25

0.00

-1.00

JPFA

0.75

0.50

0.25

0.00

-0.25

-0.50

-0.75

-1.00

Page 85 of 88

Strategy | 11 January 2016

Appendix 3. Mandiri Sekuritas Earnings Guide


Net Profit

EPS Growth

Rating

Price
(Rp)

Price
Target

Mkt Cap
(USD mn)

2015

2016

Mandiri Universe

4,465

5,000

244,051

198,546

55,894

61,053

Code

Banking
BBCA

Neutral

BBNI

PER (x)

EV/EBITDA (x)

2015

2016

2015

2016

228,612

2.1%

14.8%

16.9

14.8

71,416

-0.7%

17.0%

12.7

10.8

2015

P/BV (x)

Div.Yield

2016

2015

2016

2015

2016

9.3

8.7

2.8

2.5

2.5%

2.5%

N.A.

N.A.

2.1

1.8

1.9%

1.9%

12,750

12,400

22,712

17,796

20,044

7.9%

12.6%

17.7

15.7

N.A.

N.A.

3.5

3.0

1.2%

1.5%

Buy

4,935

5,900

6,649

8,971

11,974

-16.8%

33.5%

10.3

7.7

N.A.

N.A.

1.5

1.3

2.9%

1.9%

BBRI

Buy

11,375

11,500

20,274

24,023

26,819

-0.9%

11.6%

11.7

10.5

N.A.

N.A.

2.5

2.1

2.1%

2.1%

BBTN

Buy

1,310

1,500

1,000

1,891

2,451

69.5%

29.6%

7.3

5.6

N.A.

N.A.

1.0

0.9

1.6%

2.7%

BDMN

Neutral

2,900

3,150

2,008

2,589

3,526

-0.6%

36.2%

10.7

7.9

N.A.

N.A.

0.8

0.7

2.8%

2.8%

BJBR

Buy

770

1,100

539

1,257

1,520

12.7%

20.9%

5.9

4.9

N.A.

N.A.

1.0

0.9

9.7%

10.1%

BJTM

Neutral

446

400

476

1,015

1,153

8.1%

13.6%

6.5

5.7

N.A.

N.A.

1.0

0.9

9.0%

9.2%

BTPN

Neutral

2,350

3,000

992

1,755

1,945

-5.3%

10.8%

7.8

7.1

N.A.

N.A.

1.0

0.9

0.0%

0.0%

PNBN

Neutral

715

1,000

1,244

1,755

1,983

-25.5%

13.0%

9.8

8.7

N.A.

N.A.

0.8

0.7

0.0%

0.0%

10,378

9,823

10,626

-14.6%

8.2%

14.6

13.5

9.3

8.4

2.4

2.2

5.5%

3.8%

975

900

540

-29

410

N/M

N/M

-258.1

18.2

10.8

7.1

0.9

0.8

2.7%

-0.1%
5.5%

Building Materials
SMCB

Sell

INTP

Neutral

19,750

21,600

5,253

4,972

5,130

-5.7%

3.2%

14.6

14.2

9.9

9.1

2.9

2.8

6.8%

SMGR

Neutral

10,700

12,100

4,585

4,880

5,086

-12.3%

4.2%

13.0

12.5

8.5

8.1

2.4

2.1

4.4%

2.3%

5,461

2,639

3,333

26.8%

14.2%

24.6

22.7

12.3

10.2

3.1

2.7

0.7%

0.5%

598

400

498

6.0%

-26.7%

12.2

16.6

7.8

6.4

1.8

1.6

1.2%

1.4%

Constructions
ADHI

Buy

2,325

2,880

PTPP

Buy

3,900

4,560

1,364

714

845

34.3%

18.4%

26.4

22.3

10.5

8.2

6.1

3.7

0.6%

0.0%

WIKA

Neutral

2,835

3,000

1,251

596

746

-3.1%

25.2%

29.0

23.2

15.3

11.2

3.9

3.4

0.7%

1.0%

WSKT

Buy

1,685

1,900

1,653

751

977

27.7%

8.3%

25.3

23.4

12.8

13.1

2.1

2.3

0.5%

0.0%

WTON

Neutral

945

970

595

177

266

-49.4%

49.9%

46.5

31.0

21.8

16.7

3.7

3.4

1.2%

0.6%

2,764

1,569

2,044

11.8%

30.2%

24.4

18.7

13.2

11.2

3.5

3.1

1.5%

1.6%

2,764

1,569

2,044

11.8%

30.2%

24.4

18.7

13.2

11.2

3.5

3.1

1.5%

1.6%

252

439

568

20.1%

29.3%

8.0

6.2

6.4

5.8

1.0

0.9

0.0%

0.0%

Toll road
JSMR

Buy

5,625

8,650

Rice Mill
AISA

Neutral

1,085

2,500

Consumer

252

439

568

11.9%

29.3%

8.0

6.2

6.4

5.8

1.0

0.9

0.0%

0.0%

69,408

29,560

32,415

3.5%

9.7%

32.5

29.6

20.3

19.2

7.5

7.0

2.2%

2.2%
1.9%

ICBP

Neutral

13,950

14,000

5,877

3,086

3,298

18.5%

6.9%

26.4

24.7

17.4

16.1

5.1

4.6

1.6%

INDF

Neutral

5,525

6,000

3,505

3,272

4,160

-15.8%

27.1%

14.8

11.7

8.4

7.8

1.8

1.6

4.0%

3.4%

MYOR

Sell

28,000

24,500

1,551

1,104

784

173.5%

-29.0%

19.4

27.4

12.1

13.2

4.3

3.8

0.4%

1.1%

ULTJ

Buy

3,710

5,100

775

402

511

43.8%

27.0%

26.7

21.0

14.3

11.4

4.1

3.5

0.4%

0.5%

UNVR

Neutral

35,325

41,000

19,473

5,808

6,051

1.2%

4.2%

46.4

44.5

33.2

32.4

57.7

54.9

2.1%

2.2%

GGRM

Buy

54,500

56,000

7,576

5,256

5,665

-2.1%

7.8%

20.0

18.5

11.8

11.1

2.9

2.6

1.8%

1.8%

HMSP

Buy

91,000

111,000

30,590

10,484

11,751

3.0%

12.1%

40.4

36.0

29.5

28.1

12.2

11.7

2.4%

2.4%

WIIM

Buy

404

840

Healthcare

61

148

195

44.0%

31.5%

5.7

4.3

3.8

2.6

0.9

0.8

5.2%

6.9%

5,816

3,028

3,281

-1.0%

8.3%

26.6

24.5

17.7

16.0

4.6

4.1

1.6%

1.6%
1.2%

KLBF

Neutral

1,385

1,500

4,691

2,004

2,156

-3.0%

7.6%

32.4

30.1

20.9

19.1

6.1

5.4

1.3%

SIDO

Neutral

515

550

558

440

490

5.9%

11.4%

17.6

15.8

11.6

9.9

2.9

2.6

2.7%

2.8%

TSPC

Neutral

1,745

2,100

567

585

635

1.0%

8.6%

13.4

12.4

9.1

8.2

1.8

1.6

3.7%

3.0%

3,113

679

899

17.2%

32.4%

63.5

47.9

31.8

25.0

8.6

7.7

0.7%

0.7%

MIKA

Buy

2,210

3,400

2,323

584

758

13.0%

29.7%

55.0

42.4

40.6

34.1

9.9

8.7

0.9%

0.9%

SILO

Buy

9,450

11,000

789

95

141

51.6%

49.1%

115.2

77.3

20.2

14.8

6.3

5.8

0.1%

0.1%

Hospital

Retail

6,206

3,569

4,182

1.8%

17.2%

24.1

20.5

13.3

11.5

4.6

4.1

1.8%

2.0%

ACES

Neutral

735

720

911

531

617

-3.3%

16.3%

23.8

20.4

14.8

12.8

4.6

4.0

1.1%

1.5%

ERAA

Neutral

550

600

115

197

175

-7.0%

-11.1%

8.1

9.1

8.2

7.4

0.5

0.5

3.7%

3.3%

LPPF

Neutral

16,150

17,600

3,404

1,808

2,036

27.4%

12.6%

26.1

23.1

17.8

15.8

43.6

22.4

1.9%

2.2%

MAPI

Sell

3,860

2,700

463

34

179

-53.9%

431.2%

189.8

35.7

8.7

6.8

2.5

2.3

0.2%

0.1%

MPPA

Neutral

1,675

2,175

651

321

366

-42.0%

14.0%

28.0

24.6

12.0

10.6

3.0

2.8

1.8%

1.1%

RALS

Neutral

595

680

305

320

323

-9.9%

0.9%

13.2

13.1

7.6

6.9

1.2

1.2

4.1%

4.2%

TELE

Buy

705

1,040

357

359

486

5.0%

35.3%

13.8

10.2

9.1

8.1

1.8

1.6

2.5%

3.4%

Automotive

17,837

18,146

20,760

-4.1%

11.9%

13.5

12.1

11.3

10.4

2.3

2.1

3.5%

3.6%

ASII

U/R

5,950

U/R

17,403

17,717

20,132

-7.0%

11.0%

13.5

12.2

11.1

10.3

2.3

2.1

3.6%

3.6%

IMAS

U/R

2,170

U/R

434

429

628

N/M

47.0%

14.2

9.7

14.6

14.2

1.0

0.9

1.4%

1.9%

4,347

8,021

6,110

40.3%

####

7.5

9.8

3.9

3.9

1.3

1.2

3.9%

3.0%

Heavy Equipment

Please see important disclosure at the back of this report

Page 86 of 88

Strategy | 11 January 2016

Net Profit

EPS Growth

PER (x)

EV/EBITDA (x)

P/BV (x)

Code

Rating

Price
(Rp)

Price
Target

Mkt Cap
(USD mn)

2015

2016

2015

2016

2015

2016

2015

2016

2015

HEXA*

Buy

1,130

4,250

69

28

45

26.4%

61.1%

2.5

1.6

1.6

0.9

0.3

UNTR

Sell

15,875

13,250

Plantation

Div.Yield

2016

2015

2016

0.3 10.9%

14.0%

4,278

7,469

5,461

39.1%

-26.9%

7.9

10.8

4.1

4.2

1.4

1.3

3.8%

2.8%

2,657

5,063

5,694

25.5%

12.5%

7.3

6.5

4.4

3.9

1.5

1.3

5.3%

6.6%

AALI

Buy

16,000

30,800

1,820

3,181

3,576

19.1%

12.4%

7.9

7.0

5.3

4.8

1.9

1.7

5.7%

6.8%

LSIP

Buy

1,235

2,700

609

1,378

1,528

38.9%

10.8%

6.1

5.5

2.4

1.9

1.0

0.9

4.7%

6.6%

SGRO

Buy

1,670

3,050

Property

228

503

590

36.1%

17.2%

6.3

5.4

3.8

3.0

1.0

0.8

4.1%

4.8%

9,732

12,096

14,459

-11.2%

19.5%

11.1

9.3

8.5

7.5

1.9

1.6

0.5%

1.5%

APLN

Buy

319

420

472

1,031

1,236

32.5%

19.8%

6.3

5.3

7.2

7.3

0.9

0.8

2.4%

3.2%

ASRI

Buy

327

730

422

1,240

1,811

13.0%

46.0%

4.7

3.2

4.9

4.3

0.8

0.7

6.1%

9.0%

BSDE

Buy

1,765

2,400

2,343

2,499

3,073

-34.6%

23.0%

13.0

10.6

9.9

8.2

1.7

1.5

2.9%

1.9%

CTRA

Neutral

1,355

1,350

1,485

1,436

1,557

24.4%

8.4%

14.3

13.2

10.7

9.6

2.4

2.1

1.1%

1.4%

CTRS

Buy

2,155

3,600

308

643

490

9.9%

-23.8%

6.6

8.7

4.2

5.0

1.4

1.2

3.1%

3.5%

JRPT

Buy

700

1,350

695

877

1,117

21.5%

27.3%

11.0

8.6

9.4

7.1

2.5

2.0

1.1%

1.1%

LPCK

Buy

6,725

13,500

338

864

778

2.4%

-10.0%

5.4

6.0

4.3

5.0

1.3

1.1

0.0%

0.0%

MDLN

Buy

467

680

423

610

996

-14.3%

63.3%

9.6

5.9

6.6

5.3

1.0

0.8

0.0%

0.0%

PWON

Buy

464

620

1,614

1,714

2,266

-31.9%

32.2%

13.0

9.9

8.9

7.1

3.1

2.4

2.6%

1.8%

SMRA

Neutral

1,565

1,600

1,631

1,183

1,137

-15.4%

-3.9%

19.1

19.9

12.8

12.0

3.4

2.9

-8.2%

-1.2%

Industrial

1,138

1,700

1,919

-4.0%

12.8%

9.3

8.2

6.7

6.6

1.1

1.0

2.6%

3.0%

DMAS

Buy

205

270

714

1,016

1,222

5.4%

20.2%

9.7

8.1

7.4

5.9

1.2

1.1

3.1%

3.7%

BEST

Neutral

277

410

193

211

222

-46.1%

5.4%

12.7

12.0

8.4

11.7

0.9

0.8

0.7%

0.4%

SSIA

Buy

680

1,100

231

473

474

13.9%

0.3%

6.8

6.7

5.2

5.6

1.1

0.9

2.6%

3.0%

3,982

4,336

5,846

54.2%

34.8%

12.7

9.4

8.5

6.8

2.6

2.1

1.5%

2.3%

CPIN

Buy

2,840

6,000

3,370

3,548

4,425

46.4%

24.7%

13.1

10.5

9.3

7.6

3.2

2.6

1.5%

2.1%

JPFA

Buy

605

1,600

459

591

1,047

77.9%

77.0%

10.7

6.1

6.7

5.5

1.2

1.0

1.8%

3.2%

MAIN

Sell

1,255

2,100

154

197

373

252.0%

89.8%

10.8

5.7

6.8

4.5

1.5

1.2

0.5%

1.8%

2,455

6,178

6,926

-8.3%

12.1%

5.4

4.8

3.3

2.8

0.5

0.5

9.7%

10.8%

Poultry

Coal
ADRO*

Neutral

486

700

1,123

205

226

14.2%

10.3%

5.6

5.0

3.8

3.3

0.4

0.4

7.1%

7.9%

HRUM*

Neutral

695

915

136

-4

-2

N/M

59.2%

-35.0

-84.6

2.4

2.0

0.5

0.5

0.0%

0.0%

ITMG*

Neutral

5,675

8,300

463

113

125

-43.4%

10.4%

4.2

3.7

1.3

1.0

0.6

0.5 19.1%

21.4%

PTBA

Buy

4,405

10,000

733

1,938

2,141

-3.9%

10.5%

4.9

4.5

3.6

3.1

1.1

1.0

9.5%

10.5%

4,344

7,021

7,202

-21.9%

2.6%

8.6

8.3

5.1

4.8

1.5

1.4

8.4%

6.1%

Sell

2,480

3,400

4,344

520

526

-28.0%

1.1%

8.6

8.3

5.1

4.8

1.5

1.4

8.4%

6.1%

250

649

728

57.1%

12.2%

5.3

4.8

6.0

5.2

0.9

0.8

2.6%

3.8%

Buy

490

810

250

48

53

24.9%

10.5%

5.3

4.8

6.0

5.2

0.9

0.8

2.6%

3.8%

1,253

853

1,931

-20.0%

97.4%

16.4

8.3

4.6

3.8

0.5

0.5

6.2%

6.3%

Oil & Gas


PGAS*
Shipping
SOCI*
Metal
ANTM

Neutral

303

500

209

-683

-220

11.9%

67.8%

-4.2

-13.1

12.4

10.0

0.3

0.3

0.0%

0.0%

INCO*

U/R

1,455

U/R

1,045

114

157

-23.5%

30.8%

8.3

6.2

3.0

2.4

0.6

0.5

7.4%

7.5%

25,776

15,872

20,808

34.1%

31.9%

22.6

17.1

6.0

5.4

3.6

3.3

3.0%

3.6%

EXCL

Buy

3,385

4,000

2,087

-516

1,153

42.1%

N/M

-56.0

25.0

6.9

5.7

2.2

2.0

0.0%

0.8%

ISAT

U/R

5,325

U/R

2,091

441

1,147

N/M

237.1%

85.4

25.3

3.7

3.9

2.1

2.0

0.9%

1.5%

TLKM

Buy

3,060

3,225

21,599

15,947

18,508

8.9%

16.1%

18.7

16.2

6.4

5.6

4.1

3.7

3.5%

4.0%

5,533

2,535

2,914

18.3%

14.9%

30.2

26.3

14.4

12.9

6.8

5.4

0.0%

0.0%

Telco

Tower
TBIG

Neutral

5,650

8,000

1,958

1,101

1,167

-15.4%

5.9%

24.6

23.2

13.8

13.0

5.3

4.3

0.0%

0.0%

TOWR

Buy

4,850

5,000

3,575

1,434

1,747

70.5%

21.9%

34.5

28.3

14.8

12.7

8.1

6.3

0.0%

0.0%

4,962

3,037

3,753

-5.5%

23.6%

22.6

18.3

14.3

12.6

5.1

4.4

2.8%

2.4%

SCMA

Neutral

3,040

3,000

3,211

1,534

1,769

5.5%

15.3%

29.0

25.1

20.3

17.8

11.3

9.5

2.3%

2.4%

MNCN

Buy

1,645

2,200

1,750

1,503

1,984

-14.7%

32.0%

16.1

12.2

9.8

8.6

2.5

2.2

3.8%

2.5%

493

679

799

22.0%

17.7%

10.0

8.5

6.5

5.8

1.8

1.5

0.0%

0.0%

Buy

367

375

493

50

58

12.4%

16.0%

10.0

8.5

6.5

5.8

1.8

1.5

0.0%

0.0%

Media

Textile
SRIL*

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
Source: Mandiri Sekuritas estiamte

Please see important disclosure at the back of this report

Page 87 of 88

Mandiri Sekuritas A subsidiary of PT Bank Mandiri (Persero) Tbk


Plaza Mandiri 28th Floor, Jl. Jend. Gatot Subroto Kav. 36 - 38, Jakarta 12190, Indonesia
General: +62 21 526 3445, Fax : +62 21 527 5711 (Equity Research), +62 21 527 5374 (Equity Sales)

RESEARCH
John Rachmat
Tjandra Lienandjaja
Liliana S Bambang
Ariyanto Kurniawan
Matthew Wibowo
Rizky Hidayat
Aditya Sastrawinata
Leo Putera Rinaldy
Wisnu Trihatmojo
Yudha Gautama
Kevin Halim
Priscilla Thany

Head of Equity Research, Strategy


Banking
Property, Building Material
Telecom, Coal & Metal Mining
Retail, Textile, Hospital
Property, Industrial, Media
Shipping, Construction
Economist
Research Assistant
Research Assistant
Research Assistant
Research Assistant

john.rachmat@mandirisek.co.id
tjandra.lienandjaja@mandirisek.co.id
liliana.bambang@mandirisek.co.id
ariyanto.kurniawan@mandirisek.co.id
matthew.wibowo@mandirisek.co.id
rizky.hidayat@mandirisek.co.id
aditya.sastrawinata@mandirisek.co.id
leo.rinaldy@mandirisek.co.id
wisnu.trihatmojo@mandirisek.co.id
yudha.gautama@mandirisek.co.id
kevin.halim@mandirisek.co.id
priscilla.thany@mandirisek.co.id

+6221 5296 9542


+6221 5296 9617
+6221 5296 9465
+6221 5296 9682
+6221 5296 9549
+6221 5296 9415
+6221 5296 9543
+6221 5296 9406
+6221 5296 9544
+62 21 5296 9623
+62 21 5296 9418
+62 21 5296 9546

Co-Head Institutional Equities


Co-Head Institutional Equities
Institutional Sales
Institutional Sales
Institutional Sales
Institutional Sales
Institutional Sales
Institutional Sales
Institutional Sales
Institutional Sales
Institutional Sales
Equity Dealing
Equity Dealing
Equity Dealing
Equity Dealing

lokman.lie@mandirisek.co.id
silva.halim@mandirisek.co.id
andrew.handaya@mandirisek.co.id
cindy.amelia@mandirisek.co.id
janefer.soelaiman@mandirisek.co.id
karmia.tandjung@mandirisek.co.id
santikara.salim@mandirisek.co.id
oos.rosadi@mandirisek.co.id
vera.ongyono@mandirisek.co.id
yohan.setio@mandirisek.co.id
zahra.niode@mandirisek.co.id
kusnadi.widjaja@mandirisek.co.id
edwin.setiadi@mandirisek.co.id
jane.sukardi@mandirisek.co.id
michael.taarea@mandirisek.co.id

+6221 527 5375


+6221 527 5375
+6221 527 5375
+6221 527 5375
+6221 527 5375
+6221 527 5375
+6221 527 5375
+6221 527 5375
+6221 527 5375
+6221 527 5375
+6221 527 5375
+6221 527 5375
+6221 527 5375
+6221 527 5375
+6221 527 5375

Head Retail Equities


Plaza Mandiri
Pondok Indah Office Tower
Pondok Indah Prioritas
Kelapa Gading
Mangga Dua
Bandung
Yogyakarta
Solo
Surabaya
Malang
Medan
Palembang
Pontianak

andreas@mandirisek.co.id
boy.triyono@mandirisek.co.id
damar.gumilang@mandirisek.co.id
herianto@mandirisek.co.id
yohanes.triyanto@mandirisek.co.id
hendra.riady@mandirisek.co.id
indra.masari@mandirisek.co.id
yogiswara.perdana@mandirisek.co.id
widodo@mandirisek.co.id
Linawati@mandirisek.co.id
bambang.suwanto@mandirisek.co.id
ruwie@mandirisek.co.id
aidil.idham@mandirisek.co.id
yuri.ariadi@mandirisek.co.id

+6221 526 9693


+6221 526 5678
+6221 2912 4005
+6221 7591 8400
+6221 45845355
+6221 6230 2333
+6222 426 5088
+62274 560 596
+62271 788 9290
+6231 535 7218
+62341 336 440
+6261 8050 1825
+62711 319 900
+62561 582 293

INSTITUTIONAL SALES
Lokman Lie
Silva Halim
Andrew Handaya
Cindy Amelia P. Kalangie
Janefer Amanda Soelaiman
Karmia Tandjung-Nasution
Mirna Santikara Salim
Oos Rosadi
Vera Ongyono
Yohan Setio, CFA
Zahra Aldila Niode
Kusnadi Widjaja
Edwin Pradana Setiadi
Jane Theodoven Sukardi
Michael Taarea

RETAIL SALES
Andreas M. Gunawidjaja
Boy Triyono
A. A. Damargumilang
Herianto
Yohanes Triyanto
Hendra Riady
Indra Mas'ari
Yogiswara P.
Widodo
Linawati
Bambang Suwanto
Ruwie
Aidil Idham
Yuri Ariadi

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 (10% or higher), Neutral (-10% to10%) and Sell (-10% 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 guarantee its
accuracy and completeness. PT. Mandiri Sekuritas or any other company in the Mandiri Group may be involved in transactions contrary to any opinion
herein to make markets, or have positions in the securities recommended herein. PT. Mandiri Sekuritas or any other company in the Mandiri Group may seek
or will seek investment banking or other business relationships with the companies in this report. For further information please contact our number
62-21-5263445 or fax 62-21-5275711.
ANALYSTS CERTIFICATION: Each contributor to this report hereby certifies that all the views expressed accurately reflect his or her views about the
companies, securities and all pertinent variables. It is also certified that the views and recommendations contained in this report are not and will not be
influenced by any part or all of his or her compensation.

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