INVESTOR DIGEST Equity Research | 05 September 2019

Economic Data HIGHLIGHT Latest 2019F  Media: TV Guide Aug ’19 - SCMA Up; MNCN Stable 7-DRRR (%), eop 5.50 5.75  Merdeka Copper Gold: Just the Tip of the Iceberg (MDKA; Rp6.225; Buy; TP: Rp8,000) Inflation (YoY %) 3.49 3.21  Market Recap September 4th 2019; JCI 6,269.66 Points +8.07pts (+0.13%); Valued US$ 1 = Rp, period avg 14,153 14,286 $435mn; Mkt Cap $493bn; USD/IDR 14,153

Stock Market Data SECTOR (04 September 2019)

Media: TV Guide Aug ’19 - SCMA Up; MNCN Stable JCI Index 6,269.7 0.13% Trading T/O ( Rp bn ) 6,156.0  SCM delivered audience share recovery, while MNCN held audience share steady Market Cap ( Rp tn ) 7,193.7 in Aug ’19. Series of signature programming to further support MNCN’s outperformance, while audience share rebound plus digital strategy calibration could help justify valuation re-rating at SCM in 2H19. Stay OW on sector. Market Data Summary*  SCM Regaining Momentum. SCM gained 230bps/90bps prime time/non-prime

2019F 2020F time audience shares on MoM basis in Aug ’19. The strong prime time share gains were driven by both TV stations, SCTV and Indosar, who added 70bps and P/E (x) 17.1 16.0 160bps prime time shares, respectively. SCM’s prime time share gains came at P/BV (x) 2.4 2.3 the expense of ANTV, who lost 310bps prime time share in Aug ’19. The strong EV/EBITDA (x) 13.6 13.1 prime time performance from Indosiar can be attributed to such show as Konser Div. Yield (%) 2.6 2.7 D’Star 2019. Meanwhile, the strong prime time performance from SCTV can be Net Gearing (%) 19.7 18.3 attributed to better audience share and TVR trends from such shows as ‘Cinta ROE (%) 14.9 14.8 Karena Cinta’ and ‘Cinta Anak Muda’. SCM also regained audience share EPS Growth (%) 8.3 7.1 leadership in the non-prime time segments, helped by domestic sports program EBITDA Growth (%) 4.8 4.0 ‘Shopee Liga 1’ at Indosiar. Earnings Yield (%) 5.8 6.3  Stable Prime Time Trend at MNCN. MNCN managed to hold prime time

audience share flat at 36.2%, but lost 60bps non-prime time audience share on * Aggregate of 75 companies in MS research universe, representing 62.8%of JCI’s market capitalization MoM basis in Aug ’19. In the prime time segment, RCTI’s 20bps audience share

gain was offset by GTV’s 20bps audience share loss during the month; MNC TV’s prime time share trended flat at 11.2%. Meanwhile in the non-prime time segment, RCTI booked modest 10bps audience share gain, but GTV and MNCTV lost 70bps share, combined. Though, we expect MNCN to deliver stronger prime time momentum for the rest of 2H19 with the backing from signature programming, such as MasterChef Indonesia, Indonesian Idol, and The Voice Indonesia. Furthermore, exclusive broadcast rights of Euro 2020 next year should support revenue growth trajectory in 2020F.

 VIVA losing steam? Viva lost 300bps/50bps prime time/non-prime time audience shares on MoM basis in Aug ’19 as ANTV underperformed in both prime time and non-prime time segments. ANTV, who managed to streak out in Jun-Jul ’19 with the support from popular local horror titles, has now appeared to lose competitiveness in prime time. Though, Viva’s show, such as ‘Fitri’, remained as relevant contender in the prime time.

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 Mixed trends by Trans. Trans gained 40bps prime time share, but lost 20bps non-prime time share on MoM basis in Aug ’19. Trans’s prime time steadiness was supported by all-round consistency from Trans TV and Trans 7 stations. Though, Trans 7 did better in non-prime time than Trans TV in Aug ’19.

 Maintain Overweight. We expect MNCN’s revenue and earnings growth momentum to continue in 2H19 and in 2020 given series of signature programs coming up. Meanwhile, SCMA’s recent audience share regain could bring back some confidence on 2H19 performance and help justify valuation recovery, especially considering the stock’s 38.5% underperformance relative to JCI on year-to-date basis. To note, SCMA currently trades at 11.9x/11.0x PER ‘19F/’20F and offers 5.9% dividend yield. We also reiterate our Overweight rating on the sector given the relatively favorable macro backdrop, supported by stable domestic currency and global oil price, and potential FTA TV ad spend pick-up post- election season in 2H19.

PRIME TIME AUDIENCE SHARES NON PRIME TIME AUDIENCE SHARES

Source: Nielsen, Surya Citra Media, Mandiri Sekuritas Research estimates Source: Nielsen, Surya Citra Media, Mandiri Sekuritas Research estimates

ALL TIME AUDIENCE SHARES

Source: Nielsen, Surya Citra Media, Mandiri Sekuritas Research estimates

Kresna Hutabarat (+6221 5296 9542) [email protected] Henry Tedja (+6221 5296 9434) [email protected]

CORPORATE

Merdeka Copper Gold: Just the Tip of the Iceberg (MDKA; Rp6.225; Buy; TP: Rp8,000)

 MDKA offers one of the most interesting copper/gold mining projects in Indonesia through its TB Porphyry project. However, MDKA may need additional debt/equity funding to finance USD1.2bn capex for the project. Initiate coverage with a Buy recommendation with SOTP target price of Rp8,000/share.

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 Prime beneficiary of gold price up-cycle. We initiate coverage on Merdeka Copper Gold (MDKA) with a buy recommendation with SOTP-based target price of Rp8,000/share. Since gold price has soared by 19% YTD to USD 1,529/oz, we believe MDKA is one of the prime beneficiaries of strong gold price outlook, as around 77% of its revenues come from gold, while its copper assets may provide longer-term earnings surprise due to potential supply deficit of copper by 2021. We estimate MDKA’s EBITDA and net profit to grow by 33% and 54% in 2019, respectively, mainly driven by higher gold price and higher copper output. The key risk in our view is the delay of the TB porphyry project, which represents around 74% of MDKA’s valuation in addition to commodity price and production risks.

 TB Porphyry – the crown jewel. While we forecast the current operating mines should be able to generate over USD 190mn EBITDA/year, which can be used to finance both capex as well as to pay down debt, we believe MDKA may need additional debt/equity funding to finance the development of its TB Porphyry project with initial capex of USD 1.2bn with initial project life of >20 years for exploiting around 14% of total porphyry inferred resources. MDKA estimates annual revenues of USD 600mn-1bn, which suggest strong cash flow generation from the project. More capex is needed if MDKA decides to build a copper smelter facility rather than use a third party’s facility. The TB Porphyry project is one of the world’s largest underdeveloped copper/gold deposits, containing approximately 9.5mn tons of CU and 28 moz of AU.

 Experienced management team and strong support from key shareholders. MDKA is managed by a strong management team with over 20 years of experience in the mining industry. On top of that, MDKA also receives strong support from key shareholders, including Saratoga Capital, Provident Capital—controlling shareholder of Tower Bersama, and Garibaldi Tohir—key shareholder of Adaro Energy, with strong track record of project execution.

SALES BREAKDOWN (2018) COGS BREAKDOWN(2018)

Others, 0%

Copper, 23% Depreciation & amortization, 27% Processing , 45%

Gold, 77% Mining , 28%

Source: Company Source: Company

FINANCIAL SUMMARY YE Dec (USD Mn) 2017A 2018A 2019F 2020F 2021F EBITDA 91 142 189 222 221 Net Profit 43 52 80 99 101 Fully-diluted EPS 1.2 1.3 1.9 2.3 2.3 Fully-diluted EPS growth (%) 0.0 4.4 49.5 20.3 1.7 P/E Ratio (x) 38.1 34.3 23.2 19.6 19.3 EV/EBITDA (x) 19.1 14.8 11.3 9.9 9.3 P/B Ratio (x) 8.7 5.1 3.8 3.3 2.8 Dividend Yield (%) 0.0 0.0 0.0 0.0 0.0 ROAE (%) 22.8 19.3 18.9 18.2 15.6 Source: Company (2017-2018), Mandiri Sekuritas (2019-2021)

EARNIGS SENSITIVITY FY19F FY20F

EBITDA Net profit EBITDA Net profit Gold ASP +1% 1.4% 2.1% 1.3% 1.8% Gold sales volume +1% 1.4% 2.1% 1.3% 1.8% Copper ASP +1% 0.7% 1.0% 0.7% 0.9% Copper sales volume +1% 0.7% 1.0% 0.7% 0.9%

Source: Mandiri Sekuritas estimates

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PEERS VALUATION Market Cap PE EV/EBITDA ROE PBV P/CF Company Name (USDmn) 2019F 2020F 2019F 2020F 2019F 2020F 2019F 2020F 2019F 2020F Merdeka Copper Gold Tbk 1,859.5 21.2 19.3 11.4 10.5 17.7 15.1 4.2 4.2 14.2 16.3 Freeport-McMoran 13,333.7 60.9 15.0 10.1 7.3 2.5 9.3 1.4 1.3 6.7 4.2 Southern Copper 24,428.7 14.8 13.7 8.3 7.8 23.9 24.3 3.5 3.3 11.0 9.9 KGHM Polska Miedz 3,928.8 7.6 7.7 4.4 4.3 9.8 8.9 0.7 0.7 3.9 3.8 First Quantum Minerals 4,223.3 13.5 9.0 7.5 5.2 3.1 2.6 0.4 0.4 3.6 2.2 Rio Tinto 86,158.1 7.7 8.7 4.5 4.9 24.8 21.7 1.9 1.8 5.5 5.6 Anfotagasta 10,441.2 17.2 17.3 5.3 5.3 7.5 7.3 1.4 1.4 5.7 6.0 Glencore 39,436.2 13.7 10.4 5.9 5.3 6.5 9.3 0.9 0.9 4.6 3.9 BHP Biliton 118,205.9 13.0 11.1 5.5 5.1 18.6 22.7 2.6 2.5 7.1 6.8 OZ Minerals 1,910.8 16.1 16.1 5.9 5.9 5.7 5.7 1.0 1.0 6.8 6.8 Zijin Mining Group 10,674.6 13.3 13.3 9.5 9.5 10.6 10.6 1.4 1.4 6.9 6.9 KAZ Minerals Plc 2,142 4.5 4.5 4.0 4.0 32.0 32.0 1.2 1.2 3.3 3.3

Simple average 26.8 13.8 8.6 7.5 13.5 14.4 2.5 2.4 9.0 8.7 Median 18.3 14.0 9.1 7.5 13.9 12.2 2.4 2.3 8.8 7.1 Weighted avg 29.3 13.5 8.6 7.4 15.9 18.0 2.6 2.5 9.2 7.9 Source: Bloomberg, Mandiri Sekuritas

Ariyanto Kurniawan (+6221 5296 9682) [email protected] Weasly Louis Alianto (+6221 5296 9510) [email protected]

MARKET

Market Recap September 4th 2019; JCI 6,269.66 Points +8.07pts (+0.13%); Valued $435mn; Mkt Cap $493bn; USD/IDR 14,153

 TOP TURNOVER: TLKM BBRI BMRI BBCA BBNI ASII INCO BRPT ANTM TPIA ADRO GGRM MNCN PTBA UNTR (35%)

 ADVANCING SECTOR: mining+1.2%; auto+0.8%; property+0.2%; financial+0.1%

 DECLINING SECTOR: telco-1.3%; cement-0.7%; construction & plantation-0.4%; consumer-0.1%

 The US-China trade dispute is the single most important flat price driver of late. Then poor US economic data further stoked global recession fears and further soured investor sentiment already hurt by heightened trade war concerns. The JCI maintained presence around flat line, thanks to BMRI’s support in early trading (+1.1%). The JakMine sub index also jumped 1.8% in early trade following the rise in gold and silver prices by 1% and 1.2%, respectively: ZINC+7.1% ITMG+4.6% INDY+4.4% ADRO+3.8% TINS+2.4% INCO+1% KKGI+0.9%. Then when big banks gave up early gains, the JCI fell 0.25%: BMRI cls+0.4% BBRI+0.2% BBNI-0.3%. The share price of MNCN surged 6.9% at 1320 level in 1.7x avg five-week vol after securing broadcasting rights for Euro 2020. For info, pre- to post-event activities of Euro 2020 is expected to contribute at least 7-8% to advertising revenues. In the end, the JCI was up 0.13% at 6269 level. Market turnover (excluding $10MN KLBF; $9MN SSMS crossing) was steady at $435MN. Foreign participants rose to 30% and came up better seller for 25%. Gainers beat losers by 11 to 10. The IDR strengthened against the USD dollar from 14228 to 14153 after the govt plans to cut corporate taxes to lure more overseas investment. The benchmark 10-year bond rose and the yield fell 0.4bps to 7.348%. This quarter, the JCI fell 1.4%. This year, the index rose 1.2%, heading for the best year since 2017. It advanced 6.2% in the past 52 weeks. The MSCI AC Asia Pacific Index lost 6.9% in the same period. The JCI is now 5.5% below its 52-week high on April 18, 2019 and 11.5% above its low on Sept 5, 2018. It is little changed in the past five days and fell 1.1% in the past 30 days. It is trading at a PER of 20x on a trailing basis and 15.2x estimated earnings of its members for the coming year. The index's dividend yield is 2.5% on a trailing 12-month basis. The JCI's members have a

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total market capitalization of IDR7.21 quadrillion. The 30-day price volatility rose to 13.37% compared with 13.33% in the previous session and the avg of 12.92% over the past month.

 Earlier in the day, Chinese markets led the recovery in other Asian stocks after reporting a growth in the country’s service sector (which expanded at fastest pace in three months in Aug), despite broader economic headwinds. Then when Carrie Lam officially withdraw the controversial extradition bills, HK markets rebounded hard and led other Asian markets further higher. In the meantime, global traders have almost fully priced in a 25bps interest rate cut at the Fed’s Sept. 17- 18 policy meeting while expectations for another 25 bps reduction being implemented at the Oct meeting have risen to 61% from 53% over the past month. Whilst at the same time, investors braced for a potential interest rate cut by the ECB next week. US crude oil futures dipped 0.04% to $53.92 per barrel, adding to the previous day’s losses. The contracts had shed more than 2% on Tuesday after the weak US ISM data raised concerns about a weakening global economy.

Sales Team +6221 527 5375

FROM THE PRESS

PLN to Adjust Tariff for 900 VA Customers Starting January 2020, PLN plans to adjust electricity tariff for 27.9 mn 900 VA customers which 6.9 mn are subsidized while the other 21 mn are not. PLN mentioned that the 21 mn non subsidized customers actually have been imposed the tariff adjustment mechanism since 2017. Nevertheless, the government have hold the adjustment for past two years which added the burden to electricity subsidy. Hence, the government decides to fully implemented tariff adjustment mechanism in 2020 for the 21 mn non subsided 900VA customers. Meanwhile, the 6.9 mn subsidized customers will not receive subsidy anymore in 2020 and will follow tariff adjustment mechanism. Thus, the electricity subsidy budget could be cut to Rp 54,79 tn from Rp 62.2 tn previously. (Kontan)

KUR disbursement reached 60% of target in Aug-19 Bank Mandiri (BMRI) recorded Rp15.0tn disbursement of KUR in Aug-19, up +27%yoy, equivalent to 60% of the bank’s FY19 quota. Meanwhile, BRI (BBRI) has disbursed Rp59.1tn, 67.1% of its FY19’s quota, and BNI (BBNI) has disbursed Rp12.8tn, 80% of quota. (Kontan)

Bank Permata (BNLI) to maintain NPL below 4% BNLI targets to maintain NPL below 4% this year. CFO of the bank, Lea Setianti Kusumawijaya states that up until 1H19, the bank has solved Rp5tn of bad debt. As of Jun-19, BNLI’s NPL stood at 3.58%. (Bisnis Indonesia)

Bank BTN (BBTN) issues first electronic mortgage certificate (HT-el) A mortgage certificate allows creditors to sale the underlying collateral when bad debt occurs. The HT-el would fasten BBTN’s auction process, as HT-el would speed up the processing time to issue a mortgage certificate, from 100-200days to maximum 7days. (Bisnis Indonesia)

IoT devices experience significant growth in Indonesia Telkomsel and XL Axiata claimed devices that connected to Internet of Things (IoT) have grown significant, as much as two- fold growth compared to last year. To note, Telkomsel’s IoT business grew 90% compared to 3Q18. (Bisnis)

Surya Semesta Internusa (SSIA) books 15.6ha in 8M19 presales, exceeding 15ha full-year target Additional 2.6ha was sold in August after having sold 13ha in 1H19 for use as a data centre to a US-based tech company. Blended ASP was USD 120 psm, translating to total presales of IDR 261bn. The company targets 15% revenue contribution from the property business by 4Q19. (Company)

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Indices and Fund Flows Currencies and Bonds Major Commodities

YTD Chg YTD YTD Indices Last Chg (%) Currency Last Chg (%) Last Chg (%) (%) Chg (%) Chg (%)

JCI 6,269.7 +0.1 +1.2 Rp/US$ 14,120 -0.42 +2.1 Oil spot (US$/bl) 56.26 +4.3 +23.9 Dow Jones 26,355.5 +0.9 +13.0 US$/EUR 1.104 +0.56 +3.9 Nickel spot (US$/mt) 18,015 -0.0 +69.9 Nikkei 20,649.1 +0.1 +3.2 YEN/US$ 106.39 +0.42 +3.1 Gold spot (US$/oz) 1,552 +0.3 +21.1 Hang Seng 26,523.2 +3.9 +2.6 SGD/US$ 1.384 -0.44 -1.6 Tin 3-month (US$/mt) 17,200 +2.9 -11.7 STI 3,130.6 +1.3 +2.0 CPO futures (Ringgit/ton) 2,187 +0.3 +3.1 Ishares indo 25.1 +0.5 +0.9 Coal (US$/ton) 66.4 -0.2 -35.0 Rubber forward (US¢/kg) 152.7 +1.9 +2.8 Foreign YTD YTD Gov. Bond Chg Soybean oil Fund Flows Last Chg Last Chg 28.79 -0.3 +4.5 Chg Yield (bps) (US$/100gallons) (US$mn) (bps) Equity Flow -59.5 +4,080 5Yr 6.81 -2 -110 Baltic Dry Index 2,501.0 +2.0 +96.8 Bonds Flow +117.7 +8,071 10Yr 7.35 -0 -67

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Equity Valuation Price Price % of Mkt Cap Net Profit PER (x) P/BV (x) EV/EBITDA (x) EPS Growth Div.Yield Code Rating (Rp) Target PT (Rp Bn) 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 MANSEK universe 6,270 6,650 6.1 4,517,644 263,193 282,897 17.1 16.0 2.4 2.3 13.6 13.1 8.3% 7.1% 2.6% 2.7% Financials 1,604,965 104,492 116,425 15.3 13.8 2.3 2.1 0.0 0.0 13.2% 11.4% 2.2% 2.5% BBCA Neutral 30,100 26,500 (12.0) 742,116 29,483 32,062 25.2 23.1 4.3 3.8 N.A. N.A. 14.0% 8.7% 1.1% 1.2% BBNI Neutral 7,425 9,000 21.2 138,466 16,642 18,879 8.3 7.3 1.2 1.1 N.A. N.A. 10.8% 13.4% 4.3% 5.4% BBRI Buy 4,160 5,000 20.2 512,922 36,551 41,656 14.0 12.3 2.5 2.4 N.A. N.A. 13.0% 14.0% 3.2% 3.6% BBTN Buy 2,060 2,900 40.8 21,815 2,614 3,901 8.3 5.6 0.8 0.8 N.A. N.A. -6.9% 49.2% 2.6% 2.6% BDMN Neutral 4,710 4,900 4.0 46,033 5,849 4,698 7.7 9.6 1.0 1.0 N.A. N.A. 49.1% -19.7% 3.0% 4.4% BJBR Neutral 1,535 1,770 15.3 15,437 1,444 1,838 10.7 8.4 1.3 1.2 N.A. N.A. -8.8% 27.4% 5.8% 5.1% BJTM Neutral 635 630 (0.8) 9,473 1,145 1,221 8.3 7.8 1.1 1.0 N.A. N.A. -9.2% 6.7% 7.3% 6.6% BNGA Neutral 1,015 1,350 33.0 25,509 3,946 4,261 6.5 6.0 0.6 0.6 N.A. N.A. 13.3% 8.0% 2.7% 3.1% BNLI Neutral 1,000 465 (53.5) 28,043 1,081 1,409 25.9 19.9 1.2 1.1 N.A. N.A. 69.0% 30.3% 0.0% 0.0% PNBN Buy 1,365 1,550 13.6 32,880 2,990 3,318 11.0 9.9 0.8 0.8 N.A. N.A. -3.0% 11.0% 0.0% 0.0% BTPS Buy 3,150 3,150 0.0 24,267 1,307 1,648 18.6 14.7 4.6 3.6 N.A. N.A. 35.4% 26.1% 0.0% 1.1% BFIN Buy 535 900 68.2 8,006 1,441 1,532 5.6 5.2 1.1 1.0 N.A. N.A. -1.9% 6.4% 5.5% 5.4% Construction & materials 265,321 14,482 17,313 18.3 15.3 1.8 1.7 11.0 10.4 -6.7% 19.5% 1.4% 1.7% INTP Buy 21,150 23,500 11.1 77,858 1,868 2,478 41.7 31.4 3.2 2.9 22.1 17.6 65.5% 32.7% 0.5% 0.8% SMGR Buy 13,350 16,100 20.6 79,186 2,253 3,708 35.1 21.4 2.5 2.3 12.8 10.5 -26.8% 64.6% 1.0% 1.6% ADHI Buy 1,305 2,035 55.9 4,647 721 672 6.4 6.9 0.7 0.6 5.3 5.4 11.9% -6.8% 2.8% 3.1% PTPP Buy 1,790 3,085 72.3 11,098 1,731 2,088 6.4 5.3 0.8 0.7 4.6 4.2 15.3% 20.6% 4.1% 4.7% WIKA Buy 2,000 2,885 44.3 17,920 2,101 2,002 8.5 8.9 1.1 1.0 5.7 5.3 21.4% -4.7% 2.3% 2.2% WSKT Buy 1,710 2,280 33.3 22,882 2,699 2,997 8.5 7.6 1.1 1.0 11.6 11.9 -31.9% 11.1% 2.4% 2.6% WTON Buy 476 700 47.1 4,149 525 608 7.9 6.8 1.2 1.1 4.4 3.8 8.0% 15.7% 3.5% 3.8% WSBP Buy 332 420 26.5 8,752 1,002 1,077 8.7 8.1 1.1 1.0 6.7 5.9 -9.2% 7.4% 6.3% 5.7% JSMR Buy 5,350 5,600 4.7 38,830 1,583 1,683 24.5 23.1 2.2 2.1 13.5 15.0 -15.9% 6.3% 1.0% 0.8% Consumer staples 1,165,687 46,338 49,695 25.2 23.5 6.4 5.8 16.3 15.2 5.3% 7.2% 2.8% 2.8% ICBP Buy 12,000 12,350 2.9 139,943 5,042 5,414 27.8 25.8 5.8 5.2 16.4 15.9 10.2% 7.4% 1.7% 1.9% INDF Buy 7,925 9,750 23.0 69,581 4,610 4,929 15.1 14.1 2.0 1.8 8.7 8.3 10.7% 6.9% 3.8% 4.2% MYOR Neutral 2,460 2,850 15.9 55,003 1,864 2,152 29.5 25.6 5.8 5.0 15.5 13.7 8.6% 15.5% 1.2% 1.3% UNVR Neutral 47,575 48,200 1.3 362,997 7,361 7,969 49.3 45.6 62.3 56.4 34.1 31.3 -19.2% 8.3% 2.5% 2.0% GGRM Buy 68,100 99,000 45.4 131,030 9,462 10,433 13.8 12.6 2.5 2.2 9.2 8.3 21.4% 10.3% 2.2% 2.2% HMSP Buy 2,670 3,500 31.1 310,569 14,702 15,230 21.1 20.4 8.5 8.3 15.9 15.4 8.6% 3.6% 4.3% 4.7% KLBF Buy 1,660 1,950 17.5 77,813 2,557 2,742 30.4 28.4 4.9 4.5 19.4 18.0 4.1% 7.2% 1.6% 1.7% SIDO Buy 1,250 1,050 (16.0) 18,750 739 827 25.4 22.7 5.7 5.1 18.5 16.3 11.4% 11.9% 3.1% 3.5% Healthcare 56,546 971 1,126 58.3 50.2 4.5 4.0 20.3 17.3 28.7% 16.0% 0.0% 0.0% MIKA Buy 2,420 2,950 21.9 35,213 727 805 48.4 43.8 8.5 6.6 30.3 26.9 18.5% 10.7% 0.0% 0.0% SILO Buy 6,725 7,150 6.3 10,928 21 44 509.8 246.3 1.7 1.7 11.3 9.3 33.1% 107.0% 0.0% 0.0% HEAL Buy 3,500 5,000 42.9 10,406 222 277 46.9 37.5 5.2 4.6 16.1 13.3 78.5% 24.8% 0.0% 0.0% Consumer discretionary 368,003 29,914 30,341 12.3 12.1 2.0 1.8 8.7 8.7 5.4% 1.4% 3.5% 3.7% ACES Buy 1,800 1,700 (5.6) 30,870 1,113 1,232 27.7 25.1 6.3 5.4 21.4 19.2 14.8% 10.6% 1.3% 1.4% LPPF Buy 3,010 7,500 149.2 8,783 2,092 2,278 4.2 3.9 2.5 2.0 1.8 1.4 48.9% 8.9% 11.2% 16.7% MAPI Buy 1,000 1,100 10.0 16,600 815 815 20.4 20.4 3.2 2.9 8.3 8.1 13.4% 0.0% 0.6% 0.7% - MPPA Sell 172 250 45.3 925 -335 -462 -2.8 -2.0 0.5 0.7 15.3 39.3 -20.3% -37.9% -9.0% 10.9% RALS Buy 1,185 1,700 43.5 8,409 558 626 15.1 13.4 2.1 2.0 9.6 8.5 9.2% 12.2% 3.6% 4.0% ASII Buy 6,500 8,200 26.2 263,143 21,698 21,514 12.1 12.2 1.8 1.6 9.1 9.6 0.1% -0.9% 3.7% 3.7% SCMA Buy 1,215 1,600 31.7 17,902 1,443 1,561 12.4 11.5 3.5 3.2 8.5 7.7 -3.6% 8.2% 5.6% 6.1% MNCN Buy 1,320 1,800 36.4 16,373 2,040 2,214 8.0 7.4 1.4 1.2 5.7 5.1 34.2% 8.5% 1.9% 2.0% MSIN Buy 374 650 73.8 1,946 291 325 6.7 6.0 1.4 1.2 4.5 3.8 38.2% 11.4% 7.5% 8.3% PZZA Buy 1,010 1,400 38.6 3,052 199 239 15.3 12.8 2.3 2.0 7.3 6.4 24.2% 20.0% 0.0% 0.0% Commodities 282,873 29,873 28,599 9.4 9.9 1.1 1.0 4.3 4.1 -9.0% -4.9% 4.1% 3.9% AALI Buy 10,450 14,200 35.9 20,113 1,817 1,968 11.1 10.2 1.0 0.9 4.3 3.5 16.6% 8.3% 3.1% 3.6% LSIP Buy 1,180 1,450 22.9 8,051 650 665 12.4 12.1 0.9 0.9 4.4 4.1 11.4% 2.3% 2.9% 3.2% SSMS Neutral 895 1,300 45.3 8,525 1,158 1,263 7.4 6.8 1.5 1.3 4.7 4.0 27.0% 9.1% 3.2% 4.1% BWPT Neutral 121 195 61.2 3,815 -67 -189 -56.5 -20.2 0.7 0.7 7.0 6.2 70.0% -180.3% 0.0% 0.0% UNTR Buy 20,450 31,200 52.6 76,281 10,892 10,254 7.0 7.4 1.2 1.1 3.6 3.6 -2.1% -5.9% 4.3% 4.0% ADRO* Neutral 1,235 1,300 5.3 39,503 380 313 7.3 9.0 0.7 0.7 3.3 3.3 -9.1% -17.6% 5.5% 4.1%

Please see important disclosure at the back of this report Page 7 of 9 Equity Research | 05 September 2019

Price Price % of Mkt Cap Net Profit PER (x) P/BV (x) EV/EBITDA (x) EPS Growth Div.Yield Code Rating (Rp) Target PT (Rp Bn) 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 HRUM* Neutral 1,450 1,500 3.4 3,722 22 17 11.7 15.9 0.9 0.9 1.2 1.3 -29.7% -25.1% 4.7% 3.5% INDY* Neutral 1,420 1,500 5.6 7,398 46 50 11.3 10.5 0.5 0.5 2.3 2.0 -42.8% 10.3% 2.2% 2.4% ITMG* Neutral 13,150 17,500 33.1 14,420 150 127 6.8 8.1 1.1 1.1 2.4 2.9 -42.2% -15.2% 12.6% 10.5% PTBA Neutral 2,440 3,000 22.9 28,115 3,957 3,476 6.7 8.0 1.6 1.5 4.9 4.9 -23.9% -16.4% 7.0% 6.2% ANTM Buy 1,100 1,100 0.0 26,434 924 1,006 28.6 26.3 1.3 1.3 12.6 11.7 5.7% 8.9% 1.2% 1.3% INCO* Buy 3,870 4,000 3.4 38,454 54 111 50.1 24.7 1.4 1.4 11.0 8.1 -11.0% 106.7% 0.6% 1.2% TINS Buy 1,080 2,200 103.7 8,044 1,262 1,492 6.4 5.4 1.1 0.9 3.8 3.4 137.4% 18.3% 5.5% 6.5% Property & Industrial Estate 144,038 10,292 10,878 13.2 13.2 1.1 1.1 10.6 10.8 20.7% -0.4% 1.1% 1.2% ASRI Sell 306 280 (8.5) 6,013 997 1,578 6.0 3.8 0.6 0.5 7.0 5.5 5.8% 58.3% 0.7% 0.7% BSDE Neutral 1,325 1,450 9.4 25,502 1,972 2,043 12.9 12.5 0.9 0.8 11.3 11.7 10.0% 3.6% 0.0% 0.0% CTRA Buy 1,070 1,450 35.5 19,860 981 1,039 20.2 19.1 1.3 1.2 12.6 12.3 -14.0% 5.9% 0.9% 0.8% JRPT Buy 770 980 27.3 10,588 1,005 919 10.5 11.5 1.5 1.4 9.2 9.9 5.7% -8.6% 2.6% 1.8% PWON Neutral 635 680 7.1 30,581 2,399 2,426 12.7 12.6 2.1 1.8 9.4 9.5 4.8% 1.2% 0.9% 0.9% SMRA Buy 1,105 1,200 8.6 15,942 313 486 50.9 32.8 2.3 2.2 14.6 12.6 -1.8% 55.3% 0.5% 0.5% LPKR Buy 254 360 41.7 17,930 1,498 993 8.4 18.1 0.6 0.6 9.8 14.0 24.6% -53.4% 0.3% 0.4% DMAS Buy 304 390 28.3 14,652 675 855 21.7 17.1 2.0 2.0 20.3 16.3 36.1% 26.6% 4.1% 5.2% BEST Buy 308 400 29.9 2,971 452 540 6.6 5.5 0.7 0.6 6.4 6.1 7.0% 19.4% 3.0% 3.6% Telco 554,377 21,434 22,888 25.9 24.2 3.7 3.6 7.5 7.1 33.9% 6.8% 3.0% 3.1% EXCL Buy 3,500 3,600 2.9 37,408 188 497 198.7 75.2 2.0 2.0 6.5 6.0 N/M 164.1% 0.0% 0.0% TLKM Neutral 4,290 4,500 4.9 424,977 19,217 20,207 22.1 21.0 4.1 3.9 7.6 7.2 6.6% 5.2% 3.4% 3.6% ISAT Neutral 3,400 3,000 (11.8) 18,475 -2,159 -2,253 -8.6 -8.2 2.0 2.7 5.9 5.4 10.2% -4.4% 0.0% 0.0% LINK Buy 4,030 5,500 36.5 11,734 1,126 1,132 10.6 10.5 2.2 2.0 5.0 4.7 42.7% 0.5% 4.8% 4.8% TBIG Buy 6,300 5,700 (9.5) 27,348 795 938 34.4 29.2 7.5 6.5 12.8 12.1 16.8% 17.9% 1.8% 1.5% TOWR Buy 675 1,000 48.1 34,435 2,266 2,367 15.2 14.5 3.8 3.4 8.4 8.1 2.5% 4.5% 3.5% 3.5% Chemical 16,404 1,949 1,888 8.4 8.7 0.8 0.8 3.8 3.6 22.9% -3.2% 0.0% 0.0% AGII Buy 615 700 13.8 1,886 105 136 18.0 13.9 0.6 0.6 6.8 6.2 5.0% 29.5% 0.0% 0.0% BRPT* Neutral 1,040 2,640 153.9 14,518 129 125 7.9 8.3 0.9 0.8 3.6 3.4 25.4% -3.4% 0.0% 0.0% Airlines 5,703 427 529 13.4 10.8 1.1 1.0 7.7 6.5 -2.9% 24.0% 0.0% 0.0% GMFI* Neutral 202 275 36.0 5,703 30 38 13.4 10.8 1.1 1.0 7.7 6.5 -2.0% 26.1% 0.0% 0.0% Oil and Gas 47,271 2,564 2,693 18.4 17.6 1.0 1.0 5.8 5.6 12.6% 5.0% 1.9% 2.1% PGAS* Buy 1,950 3,150 61.5 47,271 180 192 18.4 17.6 1.0 1.0 5.8 5.6 13.7% 6.8% 1.9% 2.1% Transportation 6,455 458 522 14.1 12.4 1.2 1.1 5.8 5.3 0.1% 14.0% 2.0% 2.3% BIRD Buy 2,580 3,935 52.5 6,455 458 522 14.1 12.4 1.2 1.1 5.8 5.3 0.1% 14.0% 2.0% 2.3% 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

Please see important disclosure at the back of this report Page 8 of 9 Mandiri Sekuritas A subsidiary of PT Bank Mandiri (Persero) Tbk Menara Mandiri Tower I, 25th floor, Jl. Jend. Sudirman Kav. 54 – 55, Jakarta 12190, Indonesia General: +62 21 526 3445, Fax : +62 21 527 5374 (Equity Sales)

RESEARCH

Adrian Joezer Head of Equity Research, Strategy, Consumer [email protected] +6221 5296 9415 Tjandra Lienandjaja Deputy Head of Equity Research, Banking [email protected] +6221 5296 9617 Ariyanto Kurniawan Automotive, Coal, Chemical [email protected] +6221 5296 9682 Kresna Hutabarat Telecom, Media [email protected] +6221 5296 9542 Priscilla Thany Banking, Building Material [email protected] +6221 5296 9569 Lakshmi Rowter Healthcare, Consumer [email protected] +6221 5296 9549 Robin Sutanto Property [email protected] +6221 5296 9572 Edbert Surya Construction, Transportation [email protected] +6221 5296 9623 Silvony Gathrie Research Assistant [email protected] +6221 5296 9544 Riyanto Hartanto Research Assistant [email protected] +6221 5296 9488 Henry Tedja Research Assistant [email protected] +6221 5296 9434 Wesley Louis Alianto Research Assistant [email protected] +6221 5296 9510 Leo Putera Rinaldy Chief Economist [email protected] +6221 5296 9406 Imanuel Reinaldo Economist [email protected] +6221 5296 9651

INSTITUTIONAL SALES

Silva Halim Head Institutional Equities [email protected] +6221 527 5375 Andrew Handaya Institutional Sales [email protected] +6221 527 5375 Feliciana Ramonda Institutional Sales [email protected] +6221 527 5375 Henry Pranoto Institutional Sales [email protected] +6221 527 5375 Kevin Giarto Institutional Sales [email protected] +6221 527 5375 Sharon Anastasia Tjahjadi Institutional Sales [email protected] +6221 527 5375 Talitha Medha Anindya Institutional Sales [email protected] +6221 527 5375 Kusnadi Widjaja Equity Dealing [email protected] +6221 527 5375 Edwin Pradana Setiadi Equity Dealing [email protected] +6221 527 5375 Jane Theodoven Sukardi Equity Dealing [email protected] +6221 527 5375 Michael Taarea Equity Dealing [email protected] +6221 527 5375

RETAIL SALES

Andreas M. Gunawidjaja Head Retail Equities [email protected] +6221 526 9693 Boy Triyono Jakarta [email protected] +6221 526 5678 Dhanan Febrie Handita Bandung [email protected] +6222 426 5088 Yogiswara Perdana Yogyakarta [email protected] +62274 560 596 Widodo Solo [email protected] +62271 788 9290 Linawati Surabaya [email protected] +6231 535 7218 Ruwie Medan [email protected] +6261 8050 1825 Aidil Idham Palembang [email protected] +62711 319 900 Yuri Ariadi Pontianak [email protected] +62561 582 293

INVESTMENT RATINGS: Indicators of expected total return (price appreciation plus dividend yield) within the 12-month period from the date of the last published report, are: Buy (15% or higher), Neutral (-15% to15%) and Sell (-15% or lower).

DISCLAIMER: This report is issued by PT. Mandiri Sekuritas, a member of the Indonesia Stock Exchanges (IDX) and Mandiri Sekuritas is registered and supervised by the Financial Services Authority (OJK). Although the contents of this document may represent the opinion of PT. Mandiri Sekuritas, deriving its judgement from materials and sources believed to be reliable, PT. Mandiri Sekuritas or any other company in the Mandiri Group cannot 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 62-21-5275374.

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.