Company Guide Agung Podomoro Land

Version 2 | Bloomberg : APLN IJ | Reuters: APLN.JK Refer to important disclosures at the end of this report

DBS Group Research . Equity 7 Jun 2016

FULLY VALUED Laying low for now Last Traded Price: Rp244 (JCIJCIJCIJCI : 4,896.03) Price Target : Rp205 (-16% downside) (Prev Rp285) Maintain FULLY VALUED call. We adjusted our RNAV Potential Catalyst: More significant project acquisitions downwards to Rp502/sh to reflect latest revenue recognition Where we differdiffer:::: Having the most bearish estimates and earning estimates given the latest development of APLN’s Analyst existing and new projects. Subsequently, our TP is adjusted to Edward Ariadi Tanuwijaya +6221 3003 4932 Rp205 (implying c.19% downside from current level). [email protected] What’s New Reclamation project status remains uncleaunclearrrr.. The development of APLN’s major projects remain uncertain with all the swirling • New revenue stream from PGV Cimanggis project news on the 160-ha Pluit City reclamation project. APLN, • Reclamation project remains unclear given the known for its fast turnover business model, has to seek other latest development (and administrative court projects to maintain its earnings continuity and sustainability. order) • Balance sheet will continue to be highly geared New segment provides fresh revenue streamstream.. APLN recently groundbroke its new project Podomoro Golf View (PGV) • Maintain FULLY VALUED call Cimanggis in south suburb area. The company,

through its subsidiary PT. Graha Tunas Selaras, plans to build 25 apartment towers (i.e. 37,000 apartment units) on this 60- Price Relative ha project. This PGV project offers 20-30 sqm units with price Rp Relative Index per unit ranging between Rp198m and Rp470m. APLN's 536.3 211 191 486.3 involvement in this project marks a slight shift into affordable 171 436.3 151 vertical residential apartment (known as rusunami) for the low 386.3 131 336.3 middle class segment and its intention to support the 111 286.3 91 government’s one-million-house programme. 236.3 71 186.3 51 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Valuation: Agung Podomoro Land (LHS) Relative JCI INDEX (RHS) Our target price of Rp205 is pegged at a 60% discount to our

Forecasts and Valuation base case RNAV. APLN is trading at deep 50% discount to FY Dec (((RpRpRp m) 2015 AAA 2016 FFF 2017 FFF 2018 FFF RNAV (but still much narrower than its 6-year average of 62%) Revenue 5,972 5,901 6,460 6,188 and 6.8x FY16F PE (at -1SD of its mean forward PE). EBITDA 2,220 2,238 2,588 2,344 Pre -tax Profit 1,457 1,492 1,814 1,594 Net Profit 809 731 871 882 Key Risks to Our View: Net Pft (Pre Ex.) 809 731 871 882 More significant project acquisitionsacquisitions.. The new Podomoro Golf Net Pft Gth (Pre -ex) (%) (5.4) (9.6) 19.2 1.3 View (PGV) Cimanggis project gave new revenue streamline EPS ( Rp ) 39.5 35.7 42.5 43.0 for APLN going forward. Successful acquisitions of new EPS Pre Ex. ( Rp ) 39.5 35.7 42.5 43.0 EPS Gth Pre Ex (%) (5) (10) 19 1 projects amid the current difficulties would alleviate some Diluted EPS (Rp ) 39.5 35.7 42.5 43.0 concerns on its earnings continuity. Net DPS ( Rp ) 0.0 5.92 5.35 6.37 BV Per Share ( Rp ) 332 362 399 436 At A Glance PE (X) 6.2 6.8 5.7 5.7 Issued Capital (m shrs) 20,501 PE Pre Ex. (X) 6.2 6.8 5.7 5.7 P/Cash Flow (X) 71.1 4.9 4.4 3.8 Mkt. Cap (Rpbn/US$m) 5,002 / 375 EV/EBITDA (X) 4.8 5.9 4.7 4.6 Major Shareholders (%) Net Div Yield (%) 0.0 2.4 2.2 2.6 Indofica 64.8 P/Book Value (X) 0.7 0.7 0.6 0.6 Prudential Life Assurance 6.6 Net Debt/Equity (X) 0.4 0.5 0.3 0.2 Simfoni Gema Lestari 5.1 RO AE (%) 12.2 10.3 11.2 10.3 Free Float (%) 27.1

Earnings Rev (%): 16 (13) N/A 3m Avg. Daily Val (US$m) 0.26 Consensus EPS (RpRpRp )::: 44.9 55.9 N/A ICB Industry : Real Estate / Real Estate Investment & Services Other Broker Recs: B: 3 S: 3 H: 0

Source of all data: Company, DBS Vickers, Bloomberg Finance L.P.

ASIAN INSIGHTS VICKERS SECURITIES ed: TH / sa:MA Company Guide

Agung Podomoro Land

WHAT’S NEW Revenue breakdown and GP margin trend

Laying low for now 7,000 Rpbn 55% Focus shift into new segmentsegment.. APLN, through its subsidiary PT. 6,000 50% Graha Tunas Selaras, plans to build 25 apartment towers (i.e. 5,000

37,000 apartment units) on new 60-ha project Podomoro Golf 45% 4,000 View (PGV) Cimanggis in suburb area. This PGV 3,000 project offers 20-30 sqm units with price per unit ranging 40% between Rp198m and Rp470m. This marks a slight shift into 2,000 affordable vertical residential apartment (known as rusunami) 35% 1,000 for the low middle class segment. Besides, APLN intends to support government’s one-million-house programme. 0 30% 2011 2012 2013 2014 2015 Apartments Offices Houses & shophouses Investment Properties GP Margin (RHS) Reclamation project status remains unclear. Earlier this month, Source: Company, DBS Vickers the administrative court (PTUN) ordered Jakarta local government to revoke its decree SK no. 2238 issued on 23 Summary of assumption changes December 2014 which granted APLN’s subsidiary PT. Muara APLN Wisesa Samudra to reclamate island “G” in northern Jakarta FY15A FY16F FY17F shore. This has apparrently sealed the fate of this project, Mktg. Sales Now 2,2,2,5402, 540 2,2,2,8502, 850 2,769 in Rpbn Prev 2,933 2,015 which was stalled/stopped since early 2Q15 due to the central Chg (%) -3% +37% government's decision to suspend for further evaluation. Revenue Now 5,972 5,901 6,460

in Rpbn Prev 5,882 7,002 Fast turnover business model leaning towards sustainability Chg (%) 0% -8% riskriskrisk.risk . The difficulties in acquiring new significant projects going Net profit Now 810 731 871 forward and the uncertainties over its reclamation project are in Rpbn Prev 629 997 currently a risk going forward, affecting APLN’s earnings Chg (%) 16% -13% continuity and sustainability. The PGV project mentioned RNAV Now 505050750 777 above is estimated to contribute c. 2% of APLN’s RNAV. In in Rp/sh Prev 524 addition, APLN’s net gearing of 40% as of 1Q16 will continue Chg (%) -3% to increase given its existing capex requirement and slower TPTPTP Now 202020520 555 earnings generation. in Rp/sh Prev 285 Chg (%) -28% Maintain our bearish call on this countercounter.. Rec Now Fully Valued Prev Fully Valued In 1Q16, APLN managed to book Rp1.02tn marketing sales, Source: DBS Vickers 30% of its full-year guidance of Rp3.5tn (+40% y-o-y). It is a vast improvement from very weak 2015 (Note that FY15 marketing sales of Rp2.5tn is at the lowest level since its IPO in 2010). We adjusted our RNAV downwards to Rp507/sh to reflect latest revenue recognition and earning estimates given the latest development of APLN’s existing and new projects.

Subsequently, our TP is adjusted to Rp205 (implying c.19% downside from current level). APLN is trading at a deep 50% discount to RNAV and 6.8x FY16F PE given all the risks explained above.

ASIAN INSIGHTS VICKERS SECURITIES Page 2 Company Guide Agung Podomoro Land

APLN: RNAV summary APLN portfolio Stake owned Valuation (Rpbn) RNAV Investment Properties

Central Park Mall 100% 2,235 2,235 Pocy Extension 100% 558 558 Mall 26% 2,161 551 SCTV Tower - Senayan City 26% 289 74 Panin Tower - Senayan City 26% 208 53 Mall 60% 893 536 AXA Tower - Kuningan City 60% 550 330 Green Bay Pluit Mall 100% 652 650 SoHo@MT Haryono 100% 52 52 Festival City Link 59% 496 292 Emporium Pluit Mall 53% 1,502 792 Lindeteves Trade Center 35% 87 30 Mal Plaza Balikpapan 65% 1,457 947 Pullman Hotel, Central Park 100% 558 558 Harris Hotel - Festival Citylink 59% 155 91 Sofitel, Nusa Dua, Bali 75% 1,059 795 Amaris Hotel - Thamrin City 100% 108 108 POP Hotel - Festival City Link 59% 137 81 Senayan City Apartments 26% 14 4 BnB Hotel, Kelapa Gading 51% 148 76 Mercure, Kelapa Gading 100% 221 221 Pullman Bandung 85% 274 233 IBIS Bandung 85% 263 223 Indigo Hotel Bali 51% 705 359 Pullman Vimala Hills 100% 539 539 Investment Properties Total Surplus/(Deficit) --- 111 10,10,388388

Property Developments

Green Bay Sea View 100% 117 116 Green Permata 70% 3 2 Grand Taruma - Karawang 90% 291 262 Metro Park Residence 80% 70 56 Vimala Hills. Gadog 100% 719 718 SOHO@Pocy 100% 674 674 Madison Park 100% 165 165

SOHO@MT Haryono 100% 330 330 Simprug (Pakubuwono Residence) 60% 382 229 Balikpapan 65% 205 133 Plaza Kenari Mas 50% 536 268 51% 267 136 Batam 80% 359 287 Deli 58% 1,481 859 Harco Glodok 69% 999 690 Klender 85% 359 305 Podomoro Golf View Cimanggis 100% 246 246

Total PV of future development profits --- 222 5,477

FY16F Net Cash (Debt) --- Rpbn --- 333 ---5,-5,5,5,465465

RNAV (1+2+3) 10,10,400400

Fully Diluted Share base (bn) 21

RNAV per share (Rp) 555000777

Source: DBS Vickers

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Agung Podomoro Land

Marketing sales (Rpbn) CRITICAL DATA POINTS TO WATCH 6,089

Earnings Drivers: 5,271 Marketing sales achieved 4,392 Property developers recognise non-recurring revenue from 3,514 3,136 2,850 2,769 2,540 marketing sales in prior years. We expect revenue to grow 2,635 anaemically by c.1% CAGR over 2015-18F given expected 1,757 slower revenue recognition from high-rise projects. Marketing 878 sales grew by 15% CAGR over 2011-14 before tumbling 0 2014A 2015A 2016F 2017F 2018F drastically to a record low in 2015. We expect marketing to slowly recover and grow by 7% CAGR between FY15-18F. Sales Trend

Rp bn 20.0% Fast turnover business model has some risks. APLN’s business 6,000 18.0% continuity depends heavily on the successful acquisition of new 5,000 16.0% projects. APLN has nine ongoing projects in its portfolio. The 14.0% 4,000 12.0% 10.0% strategy to focus on smaller-scale and short-life projects 3,000 (normally about 3-5 years) allows for more flexibility and faster 8.0% 2,000 6.0% asset monetisation, provided execution goes ahead as expected. 4.0% 1,000 This poses as a threat for future growth as land acquisition is 2.0% 0 0.0% getting more difficult and availability of good projects for 2014A 2015A 2016F 2017F 2018F acquisition are getting more scarce. Total Revenue Revenue Growth (%) (YoY)

Recurring revenue from investment properties Profitability Trend Rp bn APLN generates c. 30% of consolidated revenue from its 1,930 investment properties such as retail malls, hotel and office 1,730 leases. Without major additions and even the current possibility of streamlining its investment property portfolio for generating 1,530 cash flow, the share of recurring revenue will shrink gradually. 1,330

1,130 Product mix affects profitability 930 APLN’s apartment projects have generally generated higher 730 gross profit margins than landed residential and shophouse 2014A 2015A 2016F 2017F 2018F projects, while recurring revenues from investment properties Operating EBIT Pre tax Profit Net Profit are generally stable. Therefore, the revenue mix will dictate APLN’s profitability going forward. Margins Trend

31.0% Needs to monitor costs SG&A expenses (as % of revenue) have trended up with sharp 26.0% increase in key items (such as commission, wages & allowance 21.0% and tax & licenses) given new projects in its portfolio and the challenges to attract more demand. Good control of SG&A 16.0% expenses is crucial if the developer wants to grow earnings 11.0% during this challenging period. 2014A 2015A 2016F 2017F 2018F Operating Margin % Net Income Margin % Current roadblocks in its major projects The central government has halted reclamation Disc to RNAV Trend 80% projects pending further review. APLN is also involved in an 75% ongoing legal battle to determine the legal status of the land in 70% Klender (). 65% 60% Average 62% 55% 50% 45% 40% 35% 30% 11 12 13 14 15 11 12 13 14 15 12 13 14 15 16 12 13 14 15 16 ------Jul Jul Jul Jul Jul Jan Jan Jan Jan Jan Oct Oct Oct Oct Oct Apr Apr Apr Apr Apr Source: Company, DBS Vickers

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Leverage & Asset Turnover (x) Balance Sheet: 0.3 Relatively high net gearing may limit growth opportunities 0.80 0.70 APLN’s net gearing has been rising, and has reached pre-IPO 0.3 0.60 level following aggressive capex for expansion over the past 0.50 0.3 four years, and more stringent requirements for loan 0.40 0.2 disbursements to developers. We expect this to continue given 0.30

0.20 the high portion of apartment projects in APLN’s portfolio. As of 0.2 September 2015, net gearing had reached 49%. 0.10 0.00 0.2 2014A 2015A 2016F 2017F 2018F Capex to should taper off going forward Gross Debt to Equity (LHS) Asset Turnover (RHS) We expect capex requirement to taper off given current slow Capital Expenditure Rpbn cash flow generation. Rpm 4,000.0 Share Price Drivers: 3,500.0 3,000.0 Inorganic growth going forward 2,500.0 Given the nature of APLN’s fast turnover business model, new 2,000.0 project acquisitions or pipeline (depending on the acquisition 1,500.0 value) may create positive sentiment as it diversifies its revenue 1,000.0 sources going forward. 500.0 0.0 2014A 2015A 2016F 2017F 2018F MarketMarketinging sales and pipeline Capital Expenditure ( -) Marketing sales achieved is a good indicator for all Indonesia ROE (%) property developers (including APLN) as it gives leading 14.0% indication for the revenue generation for the next 2-3 years 12.0%

(depending on the revenue recognition). 10.0% Key Risks: 8.0% Increasingly difficult to find strategic acquisition targetstargets. Business continuity depends on successful project acquisitions, 6.0% especially in Greater Jakarta where residential land bank is 4.0% diminishing. Hence, earnings may not be sustainable going 2.0% forward. 0.0% 2014A 2015A 2016F 2017F 2018F

Stricter regulations for highhigh----riserise developments. Plot ratio approval and balanced ratio rules, when strictly implemented, Forward PE Band (x) (x) could potentially slow property demand. Liquidity tightening 13.4 could slow demand further. 12.4 +2sd: 11.9x 11.4

Strict implementation ooffff potential revision to housing 10.4 +1sd: 10.2x development balance ratio (of low, middle and luxury houses). 9.4 If implemented strictly and retroactively, this could potentially 8.4 Avg: 8.5x 7.4 mean additional costs for property developers and more -1sd: 6.8x 6.4 complicated property development planning 5.4 -2sd: 5.1x 4.4 CapitalCapital----intensiveintensive projects require large fundingfunding. High-rise and Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 investment property developments require large upfront capital. External financing costs have to be kept in check. PB Band (x) (x) 2.3 Potential interest rate hikehikessss.... Property demand is sensitive to 2.1 and is negatively correlated to interest rate movements. 1.9 +2sd: 1.8x 1.7 Company Background 1.5 +1sd: 1.49x 1.3 APLN has been focusing on high-rise developments and prides Avg: 1.19x 1.1 itself as a major superblock developer. Most of its projects are 0.9 -1sd: 0.88x in strategic inner city locations. 0.7 -2sd: 0.57x 0.5 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16

Source: Company, DBS Vickers

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Agung Podomoro Land

Key Assumptions FY Dec 20142014A AAA 20152015AAAA 20162016FFFF 20172017FFFF 20182018FFFF

Marketing sales 6,089 2,540 2,850 2,769 3,136

Segmental Breakdown FY Dec 2014 AAA 2015 AAA 2016 FFF 2017 FFF 2018 FFF

Revenues (Rpbn) Apartments 2,323 2,383 1,690 1,928 2,180 Offices 132 1,072 0.0 0.0 0.0 Houses & shophouses 1,466 893 2,527 2,578 1,801 Rental - Hotel, office, & 1,376 1,624 1,684 1,953 2,208 Better margins from shopping center apartment segment Total 5,297 5,972 5,901 6,460 6,188 Gross Profit (Rpbn) Apartments 1,071 985 1,082 1,348 1,127 Offices 73.1 557 0.0 0.0 0.0 Houses & shophouses 723 640 978 985 717 Rental - Hotel, office, & 788 909 995 1,186 1,359 shopping center Total 2,655 3,091 3,054 3,520 3,202 Gross Profit Margins (%) Apartments 46.1 41.3 64.0 69.9 51.7 Offices 55.5 52.0 N/A N/A N/A Houses & shophouses 49.3 71.6 38.7 38.2 39.8 Rental - Hotel, office, & 57.3 56.0 59.1 60.7 61.5 shopping center Total 50.1 51.8 51.8 54.5 51.8

Income Statement (Rpbn) FY Dec 20142014A AAA 20152015AAAA 20162016FFFF 20172017FFFF 20182018FFFF

Revenue 5,297 5,972 5,901 6,460 6,188 Cost of Goods Sold (2,642) (2,881) (2,847) (2,940) (2,985) Gross Profit 2,655 3,091 3,054 3,520 3,202 Other Opng (Exp)/Inc (1,225) (1,403) (1,416) (1,550) (1,485) Operating Profit 1,430 1,688 1,638 1,969 1,717 Other Non Opg (Exp)/Inc 103 73.5 72.6 79.5 76.2 Associates & JV Inc 90.6 111 116 122 128 Net Interest (Exp)/Inc (393) (416) (335) (357) (327) Exceptional Gain/(Loss) 0.0 0.0 0.0 0.0 0.0 PrePrePre ---tax Profit 1,230 1,457 1,492 1,814 1,594 Tax (246) (340) (336) (368) (352) Minority Interest (129) (308) (425) (575) (360) Preference Dividend 0.0 0.0 0.0 0.0 0.0 Net Profit 855 809 731 871 882 Net Profit before Except. 855 809 731 871 882 EBITDA 1,944 2,220 2,238 2,588 2,344 Growth Revenue Gth (%) 8.1 12.7 (1.2) 9.5 (4.2) EBITDA Gth (%) 12.5 14.2 0.8 15.6 (9.4) Opg Profit Gth (%) 12.1 18.1 (3.0) 20.2 (12.8) Net Profit Gth (Pre-ex) (%) 0.4 (5.4) (9.6) 19.2 1.3 Margins & Ratio Gross Margins (%) 50.1 51.8 51.8 54.5 51.8 Opg Profit Margin (%) 27.0 28.3 27.8 30.5 27.8 Net Profit Margin (%) 16.1 13.5 12.4 13.5 14.3 ROAE (%) 14.1 12.2 10.3 11.2 10.3 ROA (%) 3.9 3.4 3.2 4.0 4.0 ROCE (%) 8.2 8.4 8.0 9.7 8.2 Div Payout Ratio (%) 14.4 0.0 15.0 15.0 15.0 Net Interest Cover (x) 3.6 4.1 4.9 5.5 5.2 Source: Company, DBS Vickers

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Quarterly / Interim Income Statement (Rpbn) FY Dec 1Q1Q1Q2015 1Q 2015 2Q2Q2Q20152Q 2015 3Q3Q3Q20153Q 2015 4Q4Q4Q20154Q 2015 1Q1Q1Q20161Q 2016

Revenue 995 1,781 1,144 2,052 1,184 Cost of Goods Sold (456) (878) (604) (943) (562) Gross Profit 539 903 540 1,109 622 Other Oper. (Exp)/Inc (342) (346) (374) (341) (273) Operating Profit 198 557 166 768 349 Other Non Opg (Exp)/Inc 29.9 20.7 57.6 (34.7) (0.1) Associates & JV Inc 41.7 23.8 16.8 28.4 21.5 Net Interest (Exp)/Inc (65.3) (147) (131) (72.8) (140) Exceptional Gain/(Loss) 0.0 0.0 0.0 0.0 0.0 PrePrePre ---tax Profit 204 454 110 689 230 Tax (52.9) (90.1) (55.8) (141) (61.8) Minority Interest (49.5) (114) (37.0) (107) (58.2) Net Profit 101 250 17.0 441 110 Net profit bef Except. 101 250 17.0 441 110 EBITDA 269 602 240 762 370 The lowest quarterly earnings Growth ever Revenue Gth (%) (44.3) 78.9 (35.8) 79.4 (42.3) EBITDA Gth (%) (53.2) 123.6 (60.1) 216.9 (51.4) Opg Profit Gth (%) (64.8) 182.0 (70.2) 363.0 (54.6) Net Profit Gth (Pre-ex) (%) (70.9) 146.4 (93.2) 2,495.4 (75.1) Margins Gross Margins (%) 54.2 50.7 47.2 54.0 52.5 Opg Profit Margins (%) 19.8 31.3 14.5 37.4 29.4 Net Profit Margins (%) 10.2 14.0 1.5 21.5 9.3

Balance Sheet (Rpbn) FY Dec 2014 AAA 2015 AAA 2016 FFF 2017 FFF 2018 FFF

Net Fixed Assets 3,169 3,617 3,486 3,354 3,220 Invts in Associates & JVs 203 246 246 246 246 Other LT Assets 6,020 7,032 6,901 6,766 6,579 Cash & ST Invts 4,336 2,894 233 657 1,154 Inventory 7,480 8,333 8,483 8,583 8,633 Debtors 1,240 941 843 923 884 Other Current Assets 1,237 1,497 1,558 1,563 1,566 Total Assets 23,686 24,559 21,749 22,092 22,282

ST Debt 442 1,241 414 423 483 Creditor 1,242 909 812 841 855 Other Current Liab 7,318 7,968 4,840 5,008 5,213 LT Debt 6,044 5,075 5,283 4,083 2,883 Other LT Liabilities 211 293 293 293 293 Shareholder’s Equity 6,411 6,810 7,419 8,181 8,932 Minority Interests 2,019 2,263 2,688 3,263 3,623 Total Cap. & Liab. 23,686 24,559 21,749 22,092 22,282

Non-Cash Wkg. Capital 1,398 1,893 5,232 5,219 5,016 Net Cash/(Debt) (2,150) (3,422) (5,465) (3,849) (2,212) Debtors Turn (avg days) 91.2 66.6 55.2 49.9 53.3 Creditors Turn (avg days) 195.3 131.0 121.7 121.7 121.7 Inventory Turn (avg days) 1,176.3 1,200.4 1,271.2 1,241.3 1,229.1 Asset Turnover (x) 0.2 0.2 0.3 0.3 0.3 Net gearing to remain Current Ratio (x) 1.6 1.4 1.8 1.9 1.9 high given slower earning s generation Quick Ratio (x) 0.6 0.4 0.2 0.3 0.3 Net Debt/Equity (X) 0.3 0.4 0.5 0.3 0.2 Net Debt/Equity ex MI (X) 0.3 0.5 0.7 0.5 0.2 Capex to Debt (%) (15.6) 17.9 59.2 (0.2) (3.0) Z-Score (X) 1.1 1.4 1.6 1.9 1.9

Source: Company, DBS Vickers

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Agung Podomoro Land

Cash Flow Statement (Rpbn) FY Dec 20142014A AAA 20152015AAAA 20162016FFFF 20172017FFFF 20182018FFFF

Pre-Tax Profit 1,230 1,457 1,492 1,814 1,594 Dep. & Amort. 321 347 411 417 422 Tax Paid (246) (340) (336) (368) (352) Assoc. & JV Inc/(loss) 0.0 0.0 0.0 0.0 0.0 Chg in Wkg.Cap. (2,562) (1,086) (116) (147) 3.60 Other Operating CF (129) (308) (425) (575) (360) Net Operating CF (1,387) 70.3 1,026 1,141 1,308 Capital Exp.(net) 1,011 (1,134) (3,375) 10.0 100 Other Invts.(net) 147 (42.7) 0.0 0.0 0.0 Capex to taper off Invts in Assoc. & JV 0.0 0.0 0.0 0.0 0.0 eventually Div from Assoc & JV 0.0 0.0 0.0 0.0 0.0 Other Investing CF 0.0 0.0 0.0 0.0 0.0 Net Investing CF 1,157 (1,176) (3,375) 10.0 100 Div Paid (123) 0.0 (121) (110) (131) Chg in Gross Debt 1,027 (171) (619) (1,191) (1,140) Capital Issues (74.9) (410) 0.0 0.0 0.0 Other Financing CF 562 245 425 575 360 Net Financing CF 1,391 (336) (315) (726) (911) Currency Adjustments 0.0 0.0 0.0 0.0 0.0 Chg in Cash 1,161 (1,442) (2,664) 425 497 Opg CFPS (Rp) 57.3 56.4 55.7 62.8 63.6 Free CFPS (Rp) (18.3) (51.9) (115) 56.1 68.7 Source: Company, DBS Vickers

Target Price & Ratings History

404 RpRpRp Closing Target S.No. Date Rating 384 Price Price 364 1: 13 Jul 15 372 330 FULLY VALUED 1 2: 10 Aug 15 338 330 FULLY VALUED 2 344 6 3: 03 Sep 15 325 280 FULLY VALUED 4: 30 Oct 15 276 280 FULLY VALUED 324 5: 05 Jan 16 328 285 FULLY VALUED 3 5 304 6: 19 Feb 16 332 285 FULLY VALUED 7: 31 Mar 16 299 285 FULLY VALUED 284 4 7 8: 29 Apr 16 254 285 FULLY VALUED 9: 30 May 16 254 285 FULLY VALUED 264 8

244 9 224 Jun-15 Oct-15 Feb-16 Jun-16 Note : Share price and Target price are adjusted for corporate actions.

Source: DBS Vickers

ASIAN INSIGHTS VICKERS SECURITIES Page 8 Company Guide Agung Podomoro Land

DBS Vickers recommendations are based an Absolute Total Return* Rating system, defined as follows: STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame) BUY (>15% total return over the next 12 months for small caps, >10% for large caps) HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps) FULLY VALUED (negative total return i.e. > -10% over the next 12 months) SELSELSELLSEL L (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame) Share price appreciation + dividends

GENERAL DISCLOSURE/DISCLAIMER This report is prepared by PT DBS Vickers SecuritiesSecurities IndonesiaIndonesia.. This report is solely intended for the clients of DBS Bank Ltd and DBS Vickers Securities (Singapore) Pte Ltd, its respective connected and associated corporations and affiliates (collectively, the “DBS Vickers Group”) only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of PT DBS Vickers Securities Indonesia.

The research set out in this report is based on information obtained from sources believed to be reliable, but we (which collectively refers to DBS Bank Ltd., its respective connected and associated corporations, affiliates and their respective directors, officers, employees and agents (collectively, the “DBS Group”)) do not make any representation or warranty as to its accuracy, completeness or correctness. Opinions expressed are subject to change without notice. This document is prepared for general circulation. Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. This document is for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate independent legal or financial advice. The DBS Group accepts no liability whatsoever for any direct, indirect and/or consequential loss (including any claims for loss of profit) arising from any use of and/or reliance upon this document and/or further communication given in relation to this document. This document is not to be construed as an offer or a solicitation of an offer to buy or sell any securities. The DBS Group, along with its affiliates and/or persons associated with any of them may from time to time have interests in the securities mentioned in this document. The DBS Group may have positions in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and other banking services for these companies.

Any valuations, opinions, estimates, forecasts, ratings or risk assessments herein constitutes a judgment as of the date of this report, and there can be no assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments. The information in this document is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed and it may not contain all material information concerning the company (or companies) referred to in this report. The valuations, opinions, estimates, forecasts, ratings or risk assessments described in this report were based upon a number of estimates and assumptions and are inherently subject to significant uncertainties and contingencies. It can be expected that one or more of the estimates on which the valuations, opinions, estimates, forecasts, ratings or risk assessments were based will not materialize or will vary significantly from actual results. Therefore, the inclusion of the valuations, opinions, estimates, forecasts, ratings or risk assessments described herein IS NOT TO BE RELIED UPON as a representation and/or warranty by the DBS Group (and/or any persons associated with the aforesaid entities), that:

(a) such valuations, opinions, estimates, forecasts, ratings or risk assessments or their underlying assumptions will be achieved, and (b) there is any assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments stated therein.

Any assumptions made in this report that refers to commodities, are for the purposes of making forecasts for the company (or companies) mentioned herein. They are not to be construed as recommendations to trade in the physical commodity or in the futures contract relating to the commodity referred to in this report.

DBS Vickers Securities (USA) Inc ("DBSVUSA")"), a U.S.-registered broker-dealer, does not have its own investment banking or research department, has not participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months and does not engage in market-making.

ANALYST CERTIFICATION The research analyst(s) primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views. The analyst(s) also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report. As of 7 Jun 2016, the analyst(s) and his/her spouse and/or relatives who are financially dependent on the analyst(s), do not hold interests in the securities recommended in this report (“interest” includes direct or indirect ownership of securities).

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Agung Podomoro Land

COMPANYCOMPANY----SPECIFICSPECIFIC / RREGULATORYEGULATORY DISCLOSURES 1.1.1. PT DBS Vickers Securities Indonesia (''DBSVI'') does not have a proprietary position in the securities recommended in this report as of 6 Jun 2016

2.2.2. Compensation for investment banking services: DBSVUSA does not have its own investment banking or research department, nor has it participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months. Any US persons wishing to obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA exclusively.

RESTRICTIONS ON DISTRIBUTION General This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

Australia This report is being distributed in Australia by DBS Bank Ltd. (“DBS”) or DBS Vickers Securities (Singapore) Pte Ltd (“DBSVS”), both of which are exempted from the requirement to hold an Australian Financial Services Licence under the Corporation Act 2001 (“CA”) in respect of financial services provided to the recipients. Both DBS and DBSVS are regulated by the Monetary Authority of Singapore under the laws of Singapore, which differ from Australian laws. Distribution of this report is intended only for “wholesale investors” within the meaning of the CA.

Hong Kong This report is being distributed in Hong Kong by DBS Vickers (Hong Kong) Limited which is licensed and regulated by the Hong Kong Securities and Futures Commission.

Indonesia This report is being distributed in Indonesia by PT DBS Vickers Securities Indonesia. Malaysia This report is distributed in Malaysia by AllianceDBS Research Sdn Bhd ("ADBSR"). Recipients of this report, received from ADBSR are to contact the undersigned at 603-2604 3333 in respect of any matters arising from or in connection with this report. In addition to the General Disclosure/Disclaimer found at the preceding page, recipients of this report are advised that ADBSR (the preparer of this report), its holding company Alliance Investment Bank Berhad, their respective connected and associated corporations, affiliates, their directors, officers, employees, agents and parties related or associated with any of them may have positions in, and may effect transactions in the securities mentioned herein and may also perform or seek to perform broking, investment banking/corporate advisory and other services for the subject companies. They may also have received compensation and/or seek to obtain compensation for broking, investment banking/corporate advisory and other services from the subject companies.

Wong Ming Tek, Executive Director, ADBSR Singapore This report is distributed in Singapore by DBS Bank Ltd (Company Regn. No. 196800306E) or DBSVS (Company Regn No. 198600294G), both of which are Exempt Financial Advisers as defined in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. DBS Bank Ltd and/or DBSVS, may distribute reports produced by its respective foreign entities, affiliates or other foreign research houses pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, DBS Bank Ltd accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact DBS Bank Ltd at 6327 2288 for matters arising from, or in connection with the report . Thailand This report is being distributed in Thailand by DBS Vickers Securities (Thailand) Co Ltd. Research reports distributed are only intended for institutional clients only and no other person may act upon it. United Kingdom This report is being distributed in the UK by DBS Vickers Securities (UK) Ltd, who is an authorised person in the meaning of the Financial Services and Markets Act and is regulated by The Financial Conduct Authority. Research distributed in the UK is intended only for institutional clients. Dubai This research report is being distributed in The Dubai International Financial Centre (“DIFC”) by DBS Bank Ltd., (DIFC Branch) having its office at PO Box 506538, 3 rd Floor, Building 3, East Wing, Gate Precinct, Dubai International Financial Centre (DIFC), Dubai, United Arab Emirates. DBS Bank Ltd., (DIFC Branch) is regulated by The Dubai Financial Services Authority. This research report is intended only for professional clients (as defined in the DFSA rulebook) and no other person may act upon it. United States This report was prepared by PT DBS Vickers Securities Indonesia. DBSVUSA did not participate in its preparation. The research analyst(s) named on this report are not registered as research analysts with FINRA and are not associated persons of DBSVUSA. The research analyst(s) are not subject to FINRA Rule 2241 restrictions on analyst compensation, communications with a subject company, public appearances and trading securities held by a research analyst. This report is being distributed in the United States by DBSVUSA, which accepts responsibility for its contents. This report may only be distributed to Major U.S. Institutional Investors (as defined in SEC Rule 15a-6) and to such other institutional investors and qualified persons as DBSVUSA may authorize. Any U.S. person receiving this report who wishes to effect transactions in any securities referred to herein should contact DBSVUSA directly and not its affiliate. Other jurisdictions In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended only for qualified, professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions. PT DBS Vickers Securities Indonesia DBS Bank Tower, Ciputra World 1, 32/F Jl. Prof. Dr. Satrio Kav. 3-5, Jakarta 12940, Indonesia Tel. 6221-3003 4900, Fax: 6221-3003 4943

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