Indonesia Company Update
1
16 April 2020 Communications | Media
Surya Citra Media (SCMA IJ) Neutral (from Buy)
Lower Ad Spend May Outweigh Rate Increase Target Price (Return): IDR940 (+12%) Price: IDR840 Market Cap: USD793m Avg Daily Turnover (IDR/USD) 26,464m/1.80m
• Downgrade to NEUTRAL from Buy with new IDR940 TP from IDR1,870, Analysts 12% upside and c.7% yield. COVID-19 brings risks to SCMA including lower ad spend, which may offset the rate increase this year and lower Indonesia Research Team revenue from special events – its strong suit. We believe increased risks +6221 5093 9888 may result in mid-to-low single-digit topline growth and negative earnings [email protected] growth this year. However, management guided the rate increase is not a 1-year programme and may continue in 2021, which should fuel recovery. • Rates have increased for selected customers, but at risk of lower ad spend. Ad rates have risen since March. However, Surya Citra Media is
also considering its customers’ capabilities. We expect a high single-digit to low teen ad rate increase in 2020. However, as risks of worsening economic Share Performance (%) growth may drive advertisers to reduce ad spend, which should lower YTD 1m 3m 6m 12m occupancy rates. Hence, we lower occupancy rates by 5% for the year. Absolute (40.4) 3.1 (42.3) (25.7) (51.2) • Good news is 1Q audience share was decent. SCMA’s audience share Relative (15.1) 7.2 (17.2) (2.1) (24.3) has been improving in 1Q20, compared to 4Q19, with all-time share 52-wk Price low/high (IDR) 635 – 1,860 average of 34.2% (+2.6ppts QoQ, +2.6ppts YoY) and prime-time share of 35.5% (+4.7ppts QoQ, +2.6ppts YoY). Combined with increased TV Surya Citra Media (SCMA IJ) audiences (+50% during mass social distancing according to KPI), this may Price Close Relative to Jakarta Composite Index (RHS) justify the rate increase, but it may also be offset by the lower occupancy. 2,110 114 1,910 108
• Revenue from special events halted. SCMA had two special events in 1,710 102 th the pipeline for 1Q20 – Lazada’s 8 anniversary and one from a telco 1,510 95
company, both involving international artists. Given the circumstances of 1,310 89
COVID-19, both events have been postponed. Note that the total contract 1,110 83
value for the special events was c.IDR120bn. If the pandemic is prolonged, 910 77
the company faces the risk of postponing other special events. 710 70
• Additional costs for Vidio still ongoing. As previously guided, the 510 64
Jul-19 Jul-19
Apr-19 Oct-19 Oct-19 Apr-20
Jan-20 Jan-20 Jun-19 Jun-19
Mar-20 Feb-20 Feb-20
Aug-19 Nov-19 Dec-19 Aug-19 Sep-19 Nov-19 Dec-19 May-19 company is budgeting for a loss of IDR200-300bn for content and opex for May-19 Vidio.com and has yet to revise the budget. This should further pressure Source: Bloomberg earnings for the year. However, the large scale social distancing, combined with bundled data plans from the telco operator is likely to increase usage and the user base of OTT platforms.
• Recovery in 2021 looks likely. Despite the risks, negative earnings growth for the year may be possible. We also do not rule out a potential recovery in 2021 from another round of ad rate increase and economic recovery. Still, we downgrade to NEUTRAL with lower IDR940 TP (implying 12x FY20F P/E), considering its cheap 10.7x P/E. SCMA’s strong balance sheet with a
net cash position should help it during this period. Upside risks are higher ad spend and ad rate. Downside risks include lower ad spend and ad rate.
Forecasts and Valuation Dec-18 Dec-19F Dec-20F Dec-21F Dec-22F Total turnover (IDRb) 5,002 5,430 5,612 6,334 6,899 Recurring net profit (IDRb) 1,402 1,223 1,128 1,414 1,605 Recurring net profit growth (%) 8.9 (12.8) (7.7) 25.4 13.5 Recurring P/E (x) 8.85 10.15 11.00 8.78 7.73 P/B (x) 2.7 2.4 2.3 2.1 1.9 P/CF (x) 7.61 9.04 7.03 6.52 7.36 Dividend Yield (%) 8.8 6.0 7.1 6.5 8.0 EV/EBITDA (x) 5.79 6.69 6.84 5.25 4.52 Return on average equity (%) 33.2 25.4 21.6 25.0 25.6 InterestNet debt cover to equity (x) (%) - net 667.97 cash - net 330.43 cash - net 305.19 cash - net 378.16 cash - net 428.92 cash
Source: Company data, RHB
See important disclosures at the end of this report 1 Market Dateline / PP 19489/05/2019 (035080)
Surya Citra Media Indonesia Company Update
16 April 2020 Communications | Media
Financial Exhibits
Asia Financial summary (IDR) Dec-18 Dec-19F Dec-20F Dec-21F Dec-22F Indonesia Recurring EPS 94.92 82.76 76.36 95.73 108.61 Communications DPS 73.89 50.25 59.36 54.87 67.48 Surya Citra Media BVPS 308.75 343.30 362.33 403.86 445.67 SCMA IJ Return on average equity (%) 33.2 25.4 21.6 25.0 25.6 Neutral Valuation metrics Dec-18 Dec-19F Dec-20F Dec-21F Dec-22F Valuation basis Recurring P/E (x) 8.85 10.15 11.00 8.78 7.73 12x P/E P/B (x) 2.7 2.4 2.3 2.1 1.9 FCF Yield (%) 13.4 9.5 12.6 13.7 12.0 Key drivers Dividend Yield (%) 8.8 6.0 7.1 6.5 8.0 Our forecast are most sensitive to: EV/EBITDA (x) 5.79 6.69 6.84 5.25 4.52 i. Ad rate; EV/EBIT (x) 6.26 7.36 7.63 5.78 4.96 ii. Ad spend volume and occupancy rate;
iii. Digital revenue growth. Income statement (IDRb) Dec-18 Dec-19F Dec-20F Dec-21F Dec-22F
Key risks Total turnover 5,002 5,430 5,612 6,334 6,899 Gross profit 2,845 2,777 2,825 3,353 3,709 Upside risks include: i. Higher-than-expected ad spend; EBITDA 2,096 1,819 1,701 2,083 2,356 ii. Higher-than-expected ad rate increase; Depreciation and amortisation (159) (167) (175) (192) (212) iii. Lower loss from Vidio.com. Operating profit 1,938 1,652 1,526 1,891 2,145 Net interest (22) (5) (5) 5 5 Downside risks include: i. Economic downturn resulting in lower ad spend; Pre-tax profit 1,906 1,647 1,521 1,896 2,150 ii. Cancelled ad rate increase (for 2021); Taxation (494) (414) (383) (471) (535) iii. Higher loss from Video.com; Reported net profit 1,402 1,223 1,128 1,414 1,605 iv. Regulatory risks from new licensing fee. Recurring net profit 1,402 1,223 1,128 1,414 1,605
Company Profile Cash flow (IDRb) Dec-18 Dec-19F Dec-20F Dec-21F Dec-22F Surya Citra Media owns and operates two FTA TV Change in w orking capital (8) (331) 443 294 (134) channels: Surya Citra Televisi (SCTV) and Indosiar Visual Mandiri (Indosiar/IVM). The company also Cash flow from operations 1,631 1,373 1,767 1,904 1,686 operates in house production, talent management, Capex 27 (200) (200) (200) (200) OOH billboards, and OTT platform. Cash flow from investing activities (193) (367) (375) (392) (412) Dividends paid (1,092) (742) (877) (811) (997) Cash flow from financing activities (842) (1,051) (877) (811) (997) Cash at beginning of period 234 830 772 1,287 1,985 Net change in cash 596 (44) 515 701 277 Ending balance cash 830 785 1,287 1,988 2,262
Balance sheet (IDRb) Dec-18 Dec-19F Dec-20F Dec-21F Dec-22F Total cash and equivalents 830 772 1,287 1,985 2,258
Tangible fixed assets 1,050 1,250 1,450 1,650 1,850 Total assets 6,138 6,742 7,063 7,725 8,383 Short-term debt 16 0 0 0 0 Total long-term debt 0 0 0 0 0 Total liabilities 1,035 1,148 1,198 1,257 1,307 Total equity 5,103 5,594 5,865 6,469 7,076 Total liabilities & equity 6,138 6,742 7,063 7,725 8,383
Key metrics Dec-18 Dec-19F Dec-20F Dec-21F Dec-22F Revenue grow th (%) 12.3 8.6 3.3 12.9 8.9 Recurrent EPS grow th (%) 8.9 (12.8) (7.7) 25.4 13.5 Gross margin (%) 56.9 51.1 50.4 52.9 53.8 Operating EBITDA margin (%) 41.9 33.5 30.3 32.9 34.2 Net profit margin (%) 28.0 22.5 20.1 22.3 23.3 Dividend payout ratio (%) 77.9 60.7 77.7 57.3 62.1 Capex/sales (%) (0.5) 3.7 3.6 3.2 2.9 Interest cover (x) (668) (330) (305) (378) (429)
Source: Company data, RHB
See important disclosures at the end of this report 2 Market Dateline / PP 19489/05/2019 (035080)
Surya Citra Media Indonesia Company Update
16 April 2020 Communications | Media
Figure 1: Earnings forecasts – Changes to our estimates New Old Changes 2020F 2021F 2020F 2021F 2020F 2021F Revenue 5,632 6,334 6,183 6,861 -9% -8% Gross Profit 2,845 3,353 3,264 3,650 -13% -8% Operating Profit 1,546 1,891 2,027 2,290 -24% -17% EBITDA 1,721 2,083 2,202 2,482 -22% -16% Net Profit 1,173 1,424 1,534 1,723 -24% -17%
Gross Margin 51% 53% 53% 53% Operating Margin 27% 30% 33% 33% EBITDA Margin 31% 33% 36% 36% Net Margin 21% 22% 25% 25%
Source: Company data, RHB, Bloomberg
Fine tuning our projections We have a factored in a 10% ad rate increase but 5% drop in occupancy to SCMA’s topline growth. However, from our discussion with management, the COVID-19 pandemic has resulted in the postponement of several special events including from Lazada and a telco company with a total of IDR120bn. Seeing that the risk from the pandemic is likely to persist, we lower our revenue forecast by -9% and -8% in 2020 and 2021, resulting in lower earnings forecasts by -24% and -17% after also adding in the costs for Vidio.com.
Figure 2: Earnings forecasts – RHB vs Street RHB Consensus RHB as % of Cons 2020F 2021F 2020F 2021F 2020F 2021F Revenue 5,632 6,334 6,124 6,578 92% 96% Gross Profit 2,845 3,353 3,224 3,497 88% 96% Operating Profit 1,546 1,891 1,919 1,993 81% 95% EBITDA 1,721 2,083 2,065 2,159 83% 96% Net Profit 1,173 1,424 1,459 1,564 80% 91%
Gross Margin 51% 53% 53% 53% Operating Margin 27% 30% 31% 30% EBITDA Margin 31% 33% 34% 33% Net Margin 21% 22% 24% 24%
Source: Company data, RHB, Bloomberg
Our forecast vs consensus We believe consensus estimates are still optimistic as revenue forecast growth remains at 12%. We believe many have yet to take into account the further drop in ad spend from the pandemic.
See important disclosures at the end of this report 3 Market Dateline / PP 19489/05/2019 (035080)
Surya Citra Media Indonesia Company Update
16 April 2020 Communications | Media
Valuation Downgrade to NEUTRAL with lower TP of IDR940 Our 12-month TP of IDR940 implies 12x P/E (near -2SD from its 3-year mean) from a 2020F EPS of IDR78.
Figure 3: P/E valuation P/E 2020F
Regional peers P/E (x) 16.0 Applied discount for SCMA (%) 25% Our TP of IDR940 implies 12x 2020F P/E, an undemanding multiple Implied SCMA P/E (x) 12.0 SCMA EPS 2020F (IDR) 78 SCMA equity value/ share (IDR) 940
Source: Company data, RHB
Figure 4: SCMA’s 3-year P/E band
35.0 +2 SD = 32.6x
30.0 +1 SD = 27.1x 25.0 Mean = 21.7x 20.0 SCMA is currently trading at an -1 SD = 16.2x undemanding 8.9x PE (Consensus EPS estimate), below -2SD to its 3- 15.0 year mean -2 SD = 10.7x 10.0 P/E = 8.9x
5.0
Source: Bloomberg, RHB
Recommendation Chart
Date Recommendation Target Price Price Price Close 2019-11-05 Buy 1,870 1,185 3,980
Recommendations & Target Price 2019-08-01 Buy 2,415 1,470
na
2,630 2,630 2,800 2,415 3,480 1,870 2019-04-23 Buy 2,800 1,680 2019-04-05 Buy 2,800 1,615 2,980 2019-04-01 Buy 2,800 1,635 2,480 2019-03-12 Buy 2,800 1,795 1,980 2018-11-29 Buy 2,800 1,950 2018-10-18 Buy 2,800 1,785 1,480 2018-09-25 Buy 2,800 1,825
980 Source: RHB, Bloomberg 480 Buy Neutral Sell Trading Buy Take Profit Not Rated Apr-15 Jul-16 Oct-17 Feb-19
Source: RHB, Bloomberg
See important disclosures at the end of this report 4 Market Dateline / PP 19489/05/2019 (035080)
unknown risks, uncertainties and other factors which may cause the actual results, RHB Guide to Investment Ratings performance or achievement to be materially different from any future results, performance or achievement, expressed or implied by such forward-looking Buy: Share price may exceed 10% over the next 12 months statements. Caution should be taken with respect to such statements and recipients Trading Buy: Share price may exceed 15% over the next 3 months, however longer- of this report should not place undue reliance on any such forward-looking statements. term outlook remains uncertain RHB expressly disclaims any obligation to update or revise any forward-looking Neutral: Share price may fall within the range of +/- 10% over the next statements, whether as a result of new information, future events or circumstances 12 months after the date of this publication or to reflect the occurrence of unanticipated events. Take Profit: Target price has been attained. Look to accumulate at lower levels Sell: Share price may fall by more than 10% over the next 12 months The use of any website to access this report electronically is done at the recipient’s own Not Rated: Stock is not within regular research coverage risk, and it is the recipient’s sole responsibility to take precautions to ensure that it is free from viruses or other items of a destructive nature. This report may also provide the addresses of, or contain hyperlinks to, websites. RHB takes no responsibility for the Investment Research Disclaimers content contained therein. Such addresses or hyperlinks (including addresses or RHB has issued this report for information purposes only. This report is intended for hyperlinks to RHB own website material) are provided solely for the recipient’s circulation amongst RHB and its affiliates’ clients generally or such persons as may be convenience. The information and the content of the linked site do not in any way form deemed eligible by RHB to receive this report and does not have regard to the specific part of this report. Accessing such website or following such link through the report or investment objectives, financial situation and the particular needs of any specific person RHB website shall be at the recipient’s own risk. who may receive this report. This report is not intended, and should not under any circumstances be construed as, an offer or a solicitation of an offer to buy or sell the This report may contain information obtained from third parties. Third party content securities referred to herein or any related financial instruments. providers do not guarantee the accuracy, completeness, timeliness or availability of any information and are not responsible for any errors or omissions (negligent or otherwise), This report may further consist of, whether in whole or in part, summaries, research, regardless of the cause, or for the results obtained from the use of such content. Third compilations, extracts or analysis that has been prepared by RHB’s strategic, joint party content providers give no express or implied warranties, including, but not limited venture and/or business partners. No representation or warranty (express or implied) to, any warranties of merchantability or fitness for a particular purpose or use. Third party is given as to the accuracy or completeness of such information and accordingly content providers shall not be liable for any direct, indirect, incidental, exemplary, investors should make their own informed decisions before relying on the same. compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including lost income or profits and opportunity costs) in connection with any This report is not directed to, or intended for distribution to or use by, any person or use of their content. 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 The research analysts responsible for the production of this report hereby certifies that the applicable laws or regulations. By accepting this report, the recipient hereof (i) the views expressed herein accurately and exclusively reflect his or her personal views represents and warrants that it is lawfully able to receive this document under the laws and opinions about any and all of the issuers or securities analysed in this report and and regulations of the jurisdiction in which it is located or other applicable laws and (ii) were prepared independently and autonomously. The research analysts that authored acknowledges and agrees to be bound by the limitations contained herein. Any failure this report are precluded by RHB in all circumstances from trading in the securities or to comply with these limitations may constitute a violation of applicable laws. other financial instruments referenced in the report, or from having an interest in the company(ies) that they cover. All the information contained herein is based upon publicly available information and has been obtained from sources that RHB believes to be reliable and correct at the The contents of this report is strictly confidential and may not be copied, reproduced, time of issue of this report. However, such sources have not been independently published, distributed, transmitted or passed, in whole or in part, to any other person verified by RHB and/or its affiliates and this report does not purport to contain all without the prior express written consent of RHB and/or its affiliates. This report has information that a prospective investor may require. The opinions expressed herein been delivered to RHB and its affiliates’ clients for information purposes only and upon are RHB’s present opinions only and are subject to change without prior notice. RHB the express understanding that such parties will use it only for the purposes set forth is not under any obligation to update or keep current the information and opinions above. By electing to view or accepting a copy of this report, the recipients have agreed expressed herein or to provide the recipient with access to any additional information. that they will not print, copy, videotape, record, hyperlink, download, or otherwise Consequently, RHB does not guarantee, represent or warrant, expressly or impliedly, attempt to reproduce or re-transmit (in any form including hard copy or electronic as to the adequacy, accuracy, reliability, fairness or completeness of the information distribution format) the contents of this report. RHB and/or its affiliates accepts no and opinion contained in this report. Neither RHB (including its officers, directors, liability whatsoever for the actions of third parties in this respect. associates, connected parties, and/or employees) nor does any of its agents accept any liability for any direct, indirect or consequential losses, loss of profits and/or The contents of this report are subject to copyright. Please refer to Restrictions on damages that may arise from the use or reliance of this research report and/or further Distribution below for information regarding the distributors of this report. Recipients communications given in relation to this report. Any such responsibility or liability is must not reproduce or disseminate any content or findings of this report without the hereby expressly disclaimed. express permission of RHB and the distributors.
Whilst every effort is made to ensure that statement of facts made in this report are The securities mentioned in this publication may not be eligible for sale in some states accurate, all estimates, projections, forecasts, expressions of opinion and other or countries or certain categories of investors. The recipient of this report should have subjective judgments contained in this report are based on assumptions considered to regard to the laws of the recipient’s place of domicile when contemplating transactions be reasonable and must not be construed as a representation that the matters referred in the securities or other financial instruments referred to herein. The securities to therein will occur. Different assumptions by RHB or any other source may yield discussed in this report may not have been registered in such jurisdiction. Without substantially different results and recommendations contained on one type of research prejudice to the foregoing, the recipient is to note that additional disclaimers, warnings product may differ from recommendations contained in other types of research. The or qualifications may apply based on geographical location of the person or entity performance of currencies may affect the value of, or income from, the securities or receiving this report. any other financial instruments referenced in this report. Holders of depositary receipts backed by the securities discussed in this report assume currency risk. Past The term “RHB” shall denote, where appropriate, the relevant entity distributing or performance is not a guide to future performance. Income from investments may disseminating the report in the particular jurisdiction referenced below, or, in every fluctuate. The price or value of the investments to which this report relates, either other case, RHB Investment Bank Berhad and its affiliates, subsidiaries and related directly or indirectly, may fall or rise against the interest of investors. companies.
This report does not purport to be comprehensive or to contain all the information that a RESTRICTIONS ON DISTRIBUTION prospective investor may need in order to make an investment decision. The recipient of this report is making its own independent assessment and decisions regarding any Malaysia securities or financial instruments referenced herein. Any investment discussed or This report is issued and distributed in Malaysia by RHB Investment Bank Berhad recommended in this report may be unsuitable for an investor depending on the investor’s (“RHBIB”). The views and opinions in this report are our own as of the date hereof and specific investment objectives and financial position. The material in this report is general is subject to change. If the Financial Services and Markets Act of the United Kingdom information intended for recipients who understand the risks of investing in financial or the rules of the Financial Conduct Authority apply to a recipient, our obligations instruments. This report does not take into account whether an investment or course of owed to such recipient therein are unaffected. RHBIB has no obligation to update its action and any associated risks are suitable for the recipient. Any recommendations opinion or the information in this report. contained in this report must therefore not be relied upon as investment advice based on the recipient's personal circumstances. Investors should make their own independent Thailand evaluation of the information contained herein, consider their own investment objective, This report is issued and distributed in the Kingdom of Thailand by RHB Securities financial situation and particular needs and seek their own financial, business, legal, tax (Thailand) PCL, a licensed securities company that is authorised by the Ministry of and other advice regarding the appropriateness of investing in any securities or the Finance, regulated by the Securities and Exchange Commission of Thailand and is a investment strategies discussed or recommended in this report. member of the Stock Exchange of Thailand. The Thai Institute of Directors Association has disclosed the Corporate Governance Report of Thai Listed Companies made This report may contain forward-looking statements which are often but not always pursuant to the policy of the Securities and Exchange Commission of Thailand. RHB identified by the use of words such as “believe”, “estimate”, “intend” and “expect” and Securities (Thailand) PCL does not endorse, confirm nor certify the result of the Corporate statements that an event or result “may”, “will” or “might” occur or be achieved and Governance Report of Thai Listed Companies. other similar expressions. Such forward-looking statements are based on assumptions made and information currently available to RHB and are subject to known and
5 Market Dateline / PP 19489/05/2019 (035080)
Indonesia conflict of interest may exist in view of the investment banking activities undertaken by This report is issued and distributed in Indonesia by PT RHB Sekuritas Indonesia. This the RHBIB Group as mentioned above and should exercise their own judgement research does not constitute an offering document and it should not be construed as before making any investment decisions. an offer of securities in Indonesia. Any securities offered or sold, directly or indirectly, in Indonesia or to any Indonesian citizen or corporation (wherever located) or to any Malaysia Indonesian resident in a manner which constitutes a public offering under Indonesian Save as disclosed in the following link (RHB Research conflict disclosures – Apr 2020) laws and regulations must comply with the prevailing Indonesian laws and regulations. and to the best of our knowledge, RHBIB hereby declares that: 1. RHBIB does not have a financial interest in the securities or other capital market Singapore products of the subject company(ies) covered in this report. This report is issued and distributed in Singapore by RHB Securities Singapore Pte 2. RHBIB is not a market maker in the securities or capital market products of the Ltd which is a holder of a capital markets services licence and an exempt financial subject company(ies) covered in this report. adviser regulated by the Monetary Authority of Singapore. RHB Securities Singapore 3. None of RHBIB’s staff or associated person serve as a director or board member* Pte Ltd may distribute reports produced by its respective foreign entities, affiliates or of the subject company(ies) covered in this report other foreign research houses pursuant to an arrangement under Regulation 32C of *For the avoidance of doubt, the confirmation is only limited to the staff of research the Financial Advisers Regulations. Where the report is distributed in Singapore to a department person who is not an Accredited Investor, Expert Investor or an Institutional Investor, 4. RHBIB did not receive compensation for investment banking or corporate finance RHB Securities Singapore Pte Ltd accepts legal responsibility for the contents of the services from the subject company in the past 12 months. report to such persons only to the extent required by law. Singapore recipients should 5. RHBIB did not receive compensation or benefit (including gift and special cost contact RHB Securities Singapore Pte Ltd in respect of any matter arising from or in arrangement e.g. company/issuer-sponsored and paid trip) in relation to the connection with the report. production of this report.
Hong Kong Thailand This report is distributed in Hong Kong by RHB Securities Hong Kong Limited (興業僑 Save as disclosed in the following link (RHB Research conflict disclosures – Apr 2020) 豐證券有限公司) (CE No.: ADU220) (“RHBSHK”) which is licensed in Hong Kong by and to the best of our knowledge, RHB Securities (Thailand) PCL hereby declares that: the Securities and Futures Commission for Type 1 (dealing in securities). Any investors 1. RHB Securities (Thailand) PCL does not have a financial interest in the securities wishing to purchase or otherwise deal in the securities covered in this report should or other capital market products of the subject company(ies) covered in this report. contact RHBSHK. RHBSHK is a wholly owned subsidiary of RHB Hong Kong Limited; 2. RHB Securities (Thailand) PCL is not a market maker in the securities or capital for the purposes of disclosure under the Hong Kong jurisdiction herein, please note market products of the subject company(ies) covered in this report. that RHB Hong Kong Limited with its affiliates (including but not limited to RHBSHK) 3. None of RHB Securities (Thailand) PCL’s staff or associated person serve as a will collectively be referred to as “RHBHK.” RHBHK conducts a full-service, integrated director or board member* of the subject company(ies) covered in this report investment banking, asset management, and brokerage business. RHBHK does and 1. *For the avoidance of doubt, the confirmation is only limited to the staff of research seeks to do business with companies covered in its research reports. As a result, department investors should be aware that the firm may have a conflict of interest that could affect 4. RHB Securities (Thailand) PCL did not receive compensation for investment the objectivity of this research report. Investors should consider this report as only a banking or corporate finance services from the subject company in the past 12 single factor in making their investment decision. Importantly, please see the months. company-specific regulatory disclosures below for compliance with specific rules and 5. RHB Securities (Thailand) PCL did not receive compensation or benefit (including regulations under the Hong Kong jurisdiction. Other than company-specific disclosures gift and special cost arrangement e.g. company/issuer-sponsored and paid trip) in relating to RHBHK, this research report is based on current public information that we relation to the production of this report. consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. Indonesia Save as disclosed in the following link (RHB Research conflict disclosures – Apr 2020) United States and to the best of our knowledge, PT RHB Sekuritas Indonesia hereby declares that: This report was prepared by RHB and is being distributed solely and directly to “major” 1. PT RHB Sekuritas Indonesia and its investment analysts, does not have any U.S. institutional investors as defined under, and pursuant to, the requirements of Rule interest in the securities of the subject company(ies) covered in this report. 15a-6 under the U.S. Securities and Exchange Act of 1934, as amended (the For the avoidance of doubt, interest in securities include the following: “Exchange Act”). Accordingly, access to this report via Bursa Marketplace or any other a) Holding directly or indirectly, individually or jointly own/hold securities or Electronic Services Provider is not intended for any party other than “major” US entitled for dividends, interest or proceeds from the sale or exercise of the institutional investors, nor shall be deemed as solicitation by RHB in any manner. RHB subject company’s securities covered in this report*; is not registered as a broker-dealer in the United States and does not offer brokerage b) Being bound by an agreement to purchase securities or has the right to services to U.S. persons. Any order for the purchase or sale of the securities transfer the securities or has the right to pre subscribe the securities*. discussed herein that are listed on Bursa Malaysia Securities Berhad must be placed c) Being bound or required to buy the remaining securities that are not with and through Auerbach Grayson (“AG”). Any order for the purchase or sale of all subscribed/placed out pursuant to an Initial Public Offering*. other securities discussed herein must be placed with and through such other d) Managing or jointly with other parties managing such parties as referred to in registered U.S. broker-dealer as appointed by RHB from time to time as required by (a), (b) or (c) above. the Exchange Act Rule 15a-6. This report is confidential and not intended for 2. PT RHB Sekuritas Indonesia is not a market maker in the securities or capital distribution to, or use by, persons other than the recipient and its employees, agents market products of the subject company(ies) covered in this report. and advisors, as applicable. Additionally, where research is distributed via Electronic 3. None of PT RHB Sekuritas Indonesia’s staff** or associated person serve as a Service Provider, the analysts whose names appear in this report are not registered director or board member* of the subject company(ies) covered in this report. or qualified as research analysts in the United States and are not associated persons 4. PT RHB Sekuritas Indonesia did not receive compensation for investment banking of Auerbach Grayson AG or such other registered U.S. broker-dealer as appointed by or corporate finance services from the subject company in the past 12 months. RHB from time to time and therefore may not be subject to any applicable restrictions 5. PT RHB Sekuritas Indonesia** did not receive compensation or benefit (including under Financial Industry Regulatory Authority (“FINRA”) rules on communications with gift and special cost arrangement e.g. company/issuer-sponsored and paid trip) in a subject company, public appearances and personal trading. Investing in any non- relation to the production of this report: U.S. securities or related financial instruments discussed in this research report may Notes: present certain risks. The securities of non-U.S. issuers may not be registered with, or *The overall disclosure is limited to information pertaining to PT RHB Sekuritas be subject to the regulations of, the U.S. Securities and Exchange Commission. Indonesia only. Information on non-U.S. securities or related financial instruments may be limited. **The disclosure is limited to Research staff of PT RHB Sekuritas Indonesia only. Foreign companies may not be subject to audit and reporting standards and regulatory requirements comparable to those in the United States. The financial instruments Singapore discussed in this report may not be suitable for all investors. Transactions in foreign Save as disclosed in the following link (RHB Research conflict disclosures – Apr 2020) markets may be subject to regulations that differ from or offer less protection than and to the best of our knowledge, RHB Securities Singapore Pte Ltd hereby declares those in the United States. that: 1. RHB Securities Singapore Pte Ltd, its subsidiaries and/or associated companies DISCLOSURE OF CONFLICTS OF INTEREST do not make a market in any issuer covered in this report. 2. RHB Securities Singapore Pte Ltd, its subsidiaries and/or its associated RHB Investment Bank Berhad, its subsidiaries (including its regional offices) and companies and its analysts do not have a financial interest (including a associated companies, (“RHBIB Group”) form a diversified financial group, shareholding of 1% or more) in the issuer covered in this report. undertaking various investment banking activities which include, amongst others, 3. RHB Securities, its staff or connected persons do not serve on the board or trustee underwriting, securities trading, market making and corporate finance advisory. positions of the issuer covered in this report. 4. RHB Securities Singapore Pte Ltd, its subsidiaries and/or its associated As a result of the same, in the ordinary course of its business, any member of the companies do not have and have not within the last 12 months had any corporate RHBIB Group, may, from time to time, have business relationships with or hold finance advisory relationship with the issuer covered in this report or any other positions in the securities (including capital market products) or perform and/or solicit relationship that may create a potential conflict of interest. investment, advisory or other services from any of the subject company(ies) covered 5. RHB Securities Singapore Pte Ltd, or person associated or connected to it do not in this research report. have any interest in the acquisition or disposal of, the securities, specified securities based derivatives contracts or units in a collective investment scheme While the RHBIB Group will ensure that there are sufficient information barriers and covered in this report. internal controls in place where necessary, to prevent/manage any conflicts of interest to ensure the independence of this report, investors should also be aware that such
6 Market Dateline / PP 19489/05/2019 (035080)
6. RHB Securities Singapore Pte Ltd and its analysts do not receive any compensation or benefit in connection with the production of this research report or recommendation.
Analyst Certification The analyst(s) who prepared this report, and their associates hereby, certify that: (1) they do not have any financial interest in the securities or other capital market products of the subject companies mentioned in this report, except for:
Analyst Company - -
(2) no part of his or her compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this report.
KUALA LUMPUR JAKARTA RHB Investment Bank Bhd PT RHB Sekuritas Indonesia Level 3A, Tower One, RHB Centre Revenue Tower, 11th Floor, District 8 Jalan Tun Razak - SCBD Kuala Lumpur 50400 Jl. Jendral Sudirman Kav 52-53 Malaysia Jakarta 12190 Tel : +603 9280 8888 Indonesia Fax : +603 9200 2216 Tel : +6221 509 39 888 Fax : +6221 509 39 777
HONG KONG BANGKOK RHB Securities Hong Kong Ltd. RHB Securities (Thailand) PCL 12th Floor, World-Wide House 10th Floor, Sathorn Square Office 19 Des Voeux Road Tower Central 98, North Sathorn Road, Silom Hong Kong Bangrak, Bangkok 10500 Tel : +852 2525 1118 Thailand Fax : +852 2810 0908 Tel: +66 2088 9999 Fax :+66 2088 9799
SINGAPORE RHB Securities Singapore Pte Ltd. 10 Collyer Quay #09-08 Ocean Financial Centre Singapore 049315 Tel : +65 6533 1818 Fax : +65 6532 6211
7 Market Dateline / PP 19489/05/2019 (035080)