Indonesia Strategy

24 October 2019 Strategy Overweight (Maintained) 12M JCI Target: 7,000 New Cabinet – All About Check And Balance

 Cautiously optimistic, helped by stable political conditions. President RHB Indonesia’s Top 10 Picks Target Price finally announced his new Cabinet, themed under Indonesia Maju, yesterday. The 39 ministerial appointments (including spokesperson, Bank Central Asia (BBCA IJ) – BUY IDR40,000 secretary, and staff), comprised 23 new faces and 16 members of the previous Bank Rakyat Indonesia (BBRI IJ) – BUY IDR5,000 Cabinet. 49% of these are professionals and 51% are from political parties – Telekomunikasi Indonesia (TLKM IJ) – BUY IDR4,700 around 25% (five seats) from PDIP, 25% (five seats) from , 20% (four Semen Indonesia (SMGR IJ) – BUY IDR16,300 seats) from PKB, 20% (four seats) from Nasdem, and 10% (two seats) from Jasa Marga (JSMR IJ) – BUY IDR7,000 Gerindra, ie the opposition party. Merdeka Copper Gold (MDKA IJ) – BUY IDR1,450  Focus on domestic stability, reconciliation. We believe stability is still a Astra Agro Lestari (AALI IJ) – BUY IDR16,160 main objective in President Joko Widodo’s second term, being deemed as Waskita Karya (WSKT IJ) – BUY IDR2,700 necessary in order for him to achieve the goals of his five focus programmes. Ciputra Development (CTRA IJ) – BUY IDR1,480 This was made evident by his appointment of ex-military leaders and ex-rival Medikaloka Hermina (HEAL IJ) – BUY IDR4,500 in Presidential election as the Defence Minister for political stability and reconciliation, as well as ex-military leader Fachrul Razi as the Analysts Minister of Religion to tone down any potential radical and separatist issues. Andrey Wijaya Edhy Prabowo, the vice chairman of Gerindra, has also been appointed as the +6221 5093 9846 Minister of Maritime Affairs and Fisheries. In our view, the president is clearly [email protected] seeking Gerindra’s support for the 2019-2024 cabinet.

As seen in the 2020 State Budget, the biggest portion of allocations will go Michael W Setjoadi towards improving domestic stability. The national security budget (ie +6221 5093 9844 allocations to the Defence Ministry and police department) amounted to [email protected] c.IDR236trn (+15.7% YoY).  Sustenance for infrastructure projects. Two ministers with extensive Recent Related Report: experience have also been reappointed – Basuki Hadimuljono (Ministry for Preview 3Q19: Slowdown To Likely Continue Public Housing and Works) and Budi Karya Sumadi (Minister of Indonesia Strategy: Jokowi’s Second Term Inauguration Transportation). Both are proven, credible officers and work in line with the Indonesia Strategy: Top 10: TLKM, SMGR, JSMR, HEAL president’s aim to advance vital infrastructure projects. We believe Finance Added Minister Sri Mulyani and the President’s Chief of Staff Moeldoko also provide Indonesia Strategy: Top 10 Picks: Replacing HMSP With support on the economic and political fronts. BBCA  Creativity and tourism in play. The appointment of Nadiem Makarim Indonesia Strategy: IDX-RHB Investment Summit 2019 (founder of Go-Jek) as Education Minister is in line with President Joko Indonesia Strategy: A Stock Picking Market; Add MDKA Widodo’s aim to develop human capital with expertise in information, To Top10 communication, and technology (ICT). The tourism and e-commerce sectors Indonesia Strategy: Market 2Q19 EPS Growth Slowed are still deemed as important as part of the backbone for growth in foreign To 7% reserves – Wishnutama (Minister of Tourism and Creative Economy) is anticipated to bring a new dynamic during his time in office. These two RHB Indonesia analysts: ministers have extensive experience working in areas where millennials have Andrey Wijaya – Strategy, Auto, Infrastructure, Coal a major presence. Michael Setjoadi – Strategy, Staples, Tobacco, Poultry, Telco  Upbeat on infrastructure-related and telco sectors. For infrastructure- Christopher Andre Benas – Banks, Plantation, Property related sectors, we expect more contracts to be given soon, with the political Jessica Ayu Pratiwi – Healthcare, Retail, Transportation overhang now over. Also, the central bank’s stance on the benchmark interest Ghibran Al Imran – Small/Mid Cap Banks, Media, Metals rate may also lead to easier financing. For telcos, we believe the new Minister Ahmad Nazmi – Regional Economist Johnny G Plate’s appointment will improve sentiment on Telekomunikasi Indonesia, as the previous minister’s push for industry consolidation may not be continued. % P/E (x) P/BV (x) Yield (%) Company Name Rating TP (IDR) Upside Dec-20F Dec-20F Dec-20F Bank Central Buy 40,000 27.5 23.4 3.9 0.9 AsiaBank Rakyat Buy 5,000 19.6 11.8 2.2 2.9 TelekomunikasiIndonesia Buy 4,700 10.3 18.1 3.5 2.9 SemenIndonesia Indonesia Buy 16,300 28.6 34.8 2.5 0.5 Jasa Marga Buy 7,000 22.8 18.2 1.7 1.1 Merdeka Copper Buy 1,450 16.0 19.5 3.6 0.0 AstraGold Agro Buy 16,160 51.0 13.2 0.9 0.5 WaskitaLestari Karya Buy 2,700 63.6 6.0 1.0 3.3 Ciputra Buy 1,480 23.8 17.1 1.3 0.9 MedikalokaDevelopment Buy 4,500 30.4 35.5 4.3 0.6 Source:Hermina Company data, RHB

See important disclosures at the end of this report 1

Strategy - Indonesia Indonesia Strategy

24 October 2019

Figure 1: Indonesia’s Cabinet for 2019-2024 – themed under Indonesia Maju (Forward Indonesia) NEW FACES No Current Name Affiliation . Position Prabowo Subianto Prabowo Subianto Djojohadikusumo (born 17 Oct 1951) is the Chairman of Gerindra, (68) Gerindra a businessman and a former army lieutenant-general. The highlight of his military 1. (Great career was in 1996, when he was on a mission to free 11 scientific researchers who Minister of Defense Indonesia were taken hostage by the Free Movement (OPM). Prabowo was appointed by Movement) President Soeharto to head the 27,000-strong Army Strategic Reserve Command (Kostrad) during the 1998 riots. Edhy Prabowo (47) Gerindra Edhy Prabowo, born in Muara Enim, 24 Dec 1972, is Gerindra’s vice chairman and Minister of Fisheries (Great the main speaker of DPR's Commission IV (Agriculture, Plantation, Forestry, Marine, 2. and Maritime Indonesia Fisheries and Staple Food). He began his career as an athlete, met Prabowo Subianto Movement) in 1991-1992, and became his most trusted partner in both politics and business.

Bahlil Lahadalia (43) Bahlil Lahadalila, born in Banda on 7 Aug 1976, came from humble beginnings. His Investment success story has become a famous example of motivation – as he has built his 3. Coordinating Golkar reputation by weathering through hardships. He led the National Association of Young Board Entrepreneurs (HIPMI) in 2015-2019. He also owned PT Rifa Capital, a holding entity of 10 companies. Zainudin Amali (57) Zainudin Amali, born in Gorontalo on 16 Mar 1962, has been the chairperson of the Minister of Youth East Java DPD (regional representative) since 2013 representing Golkar. Zainudin 4. and Sports Golkar served as Golkar’s secretary-general in 2014-2015. He is now the chairperson of Affairs Golkar DPP (Central Board).

Syahrul Y. Limpo Syahrul Yasin Limpo, born in Makassar on 16 Mar 1955, was the governor of South (64) NasDem Minister of Sulawesi in 2008-2018. In 2016, he was one among eight members of Golkar 5. (National Agriculture approved by the party as the new chairman, though he was not elected to the position. Democrat) He moved from Golkar to Nasdem in Mar 2018.

Johnny G. Plate, born in Ruteng on 10 Sep 1956, is a businessman. He holds several Johnny G. Plate (63) Minister of NasDem positions including Commissioner of Indonesia Air Asia (2005-present), Commissioner Communication 6. (National of Mandosawu Putratama Sakti (property) (2006-present), President Commissioner of and Information Democrat) Aryan Indonesia (Kidzania) (2007-present), Managing Director of the Bima Palma Technology Group (palm oil) (2006-2013), and Managing Director of Air Asia Investama. Suharso Monoarfa Minister of (64) PPP Suharso Monoarfa, born in Mataram on 31 Oct 1954, is an entrepreneur and politician National 7. (United (acting chairman of PPP party). On 19 Jan 2015, he was elected by President Joko Development Development) Widodo as a member of the Presidential Advisory Council. Planning Agency

Juliari P. Batubara PDIP Juliari Peter Batubara, born in on 22 Jul 1972, was elected as a member of (47) Minister of Social (Indonesian the Indonesian Parliament Representative (DPR) member for the 2019-2024 period 8. Affairs Democratic and ensigned under Commission VI (Trade, Industry, Investment, SME & SOE, and Party- National Standardization). In 2010, he was entrusted to serve as PDIP's Deputy Struggle) General Treasurer.

Bintang Puspayoga PDIP I Gusti Ayu Bintang Darmawati (also known as Bintang Puspayoga) was born on 24 (51) Minister of Woman (Indonesian Nov 1968. She is the wife of former Minister of Cooperatives, Small and Medium 9. Empowerment and Democratic Enterprises in 2014-2019, Anak Agung Gede Ngurah Puspayoga. She was also the Child Protection Party- Chairman of the business management division of the National Crafts Council. Struggle)

Coordinating Mohammad Mahfud MD is a lawyer, academician, and politician. He was born on 13 Mahfud MD (62) PKB Minister for May 1957, in Sampang (Madura Island). He was briefly appointed as Minister of (National 10. Political, Legal, Defense and Minister of Justice and Human Rights during President Abdurrahman Awakening and Security "Gus Dur" Wahid’s tenure in 1999-2001. He was also the second Chief Justice of the Party) Affairs Indonesia's Constitutional Court for 2008-13 period. Agus Suparmanto PKB He was actively engaged in developing the sport of fencing in Indonesia. Agus Minister of Trade (National 11. Suparmanto was also reappointed as Chairman of the Indonesia Fencing Association Awakening (PB Ikasi) for 2018-2022. Party)

Ida Fauziyah, born in Mojokerto on 16 Jul 1969, was elected as a DPR member in Ida Fauziyah (50) Minister of PKB 1999-2018. She was also assigned to be the Chairwoman on Commission VIII, Human (National 12. specialising in social affairs, women's empowerment, child protection and alms. In Workforce Awakening 2018, she ran for vice-governor, partnering Sudirman Said, in the 2018 Party) gubernatorial election. Abdul H. Iskandar Minister of (57) Acceleration PKB Abdul Halim Iskandar (born in Jombang, 14 Jul 1962) is the older brother of the Development of (National General Chairman of PKB, . He also served as Chairman of the 13. Backward Awakening East Java Provincial Parliament (DPRD) in 2014-2019. He is also known as a teacher Regions Party) in various Islamic schools.

Nadiem Anwar Makarim, born in Singapore on 4 Jul 1984, is the founder of Indonesian Nadiem Makarim Minister of online ride-hailing company, Go-Jek. He was previously Managing Consultant at (35) National McKinsey & Company and co-founder / Managing Director of Zalora Indonesia. His 14. Education and Professional grandfather, Hamid Algadri, was one of the pioneers fighting for Indonesia’s Culture independence.

See important disclosures at the end of this report 2

Strategy - Indonesia Indonesia Strategy

24 October 2019

Wishnutama (49) Minister of Wishnutama Kusubandio was born in Jayapura, on 4 May 1970. This former well- Tourism and known journalist founded NET (Net Mediatama), and has been its CEO since 2013. 15. Economic Professional He brought the 2018 Asian Games opening to the world, a feat praised by President Creative Joko Widodo. Wishnutama was also the chairman of ATVN (Indonesian National Television Assocation). Erick Thohir (49) Erick Thohir, born on 30 May 1970, is the founder and chairman of Mahaka Group. He is also the former owner of Inter Milan and D.C. United, and served as Director Minister of SOE 16. Professional of Oxford United. In 2018, Erick was appointed as the President of the Indonesian

Olympic Committee (KOI). He was also the chief of Joko Widodo’s re-election campaign team during the 2019 Presidential Election. Fadjroel Rachman M Fadjroel Rachman, born in Banjarmasin on 17 Jan 1964, is the President (55) Presidential Commissioner of Adhi Karya, a position he has occupied since 2015. He is also a 17. Spokesman Professional Director of Guidelines Research Consulting. He was an activist during 1998 and is well-known for his literary works, for which he received the Lima Besar Khatulistiwa Literary Award in 2007.

Minister of Teten Masduki (56) Teten Masduki (born on 6 May 1963) is Indonesian social activist involved in the public Cooperatives and clearinghouse for information on corruption, collusion, and nepotism of Indonesia. On 18. Small-Medium Professional 2 Sep 2015, he was appointed as the chief of the President’s Staff. He was awarded Enterprises the Ramon Magsaysay Award in 2005 for his work in public service.

Fachrul Razi (72) Fachrul Razi was born in , on 26 Jul 1947. He was a Deputy Commander of TNI (National Army) in 1999-2000. During the 2019 presidential election, he became a 19. Minister of Religion Professional leading supporter of the Jokowi-Ma'ruf team, ie the Bravo 5 Team. After retiring from the army, Fachrul has been active on the business and social fronts.

ST Burhanuddin ST Burhanuddin is a former Deputy Attorney General for Civil and State Administration 20. Attorney General Professional (until 2014). Previously, he was the Head of the Attorney General’s office in South and West Sulawesi.

Terawan Agus P. (55) Terawan Agus Putranto was born in Yogyakarta on 5 Aug 1964. He graduated as a Minister of Health doctor from the (UGM) in 1990. He continued his career in 21. Professional military (TNI), and is known for his method of treating stroke ailments – which have been applied in Germany under the “Terawan Theory”.

Tito Karnavian (54) Muhammad Tito Karnavian, born in on 26 Oct 1964, was the chief of the Minister of 22. Professional Indonesian National Police from 13 Jul 2016 to 21 Oct 2019. In 2012, he was Domestic Affairs appointed as the Papua Regional Police Chief.

Arifin Tasrif (66) Minister of Energy, Arifin Tasrif, born in Jakarta on 19 Jun 1952, is the former ambassador to Japan. HE 23. Mineral, and Professional has also served as the President Director of Pupuk Indonesia until 2015. Resources

BELOW ARE MEMBERS WHO ALSO SERVED IN JOKOWI’S CABINET IN HIS PREVIOUS TERM No. Name Position Affiliation Short bio Agus Gumiwang K. (50) Agus Gumiwang Kartasasmita (born on 3 Jan 1969) was the Minister of Social Affairs Minister of since 24 August 2018. He began his political career when he was elected into the 24. Golkar Industry House's Representative Council (DPR) in 1998-2004. He was re-elected into the Legislative Assembly in 2009.

Luhut B. Panjaitan Luhut Binsar Pandjaitan (born 28 Sep 1947) is an Indonesian politician and former Coordinating (72) military officer. He was formerly the Coordinating Minister for Political, Legal, and Minister of Security Affairs after being the President’s Chief of Staff during President Joko 25. Maritime and Golkar Widodo’s first term. After retiring from the military, in 2004 he founded Toba Sejahtera Investment Group. In 2011, he won Ernst & Young's Entrepreneur of the Year Award in the Social Affairs Development category. Airlangga Hartarto, an Indonesian businessman and politician, was born in (57) Coordinating on 1 Oct 1962. He is the current chairman of Golkar and previously served as the 26. Minister of the Golkar Minister of Industry during Jokowi's first term (appointed in 2016). His father, Hartarto Economy Sastrosoenarto, also served in the ministry in 1983-1993.

Yasonna Laoly (66) PDIP Yasonna Hamonangan Laoly, born on 27 May 1953, has headed the same ministry Minister of (Indonesian since 2014. He was a member of the North Sumatra DPRD from 1999 to 2003, and of 27. Justice and Democratic the People's Consultative Assembly from 2004 to 2014. He helped President Joko Human Rights Party- Widodo to draft legislation on mass organisations (Perppu Ormas), and ultimately Struggle) banned Hizbut Tahrir Indonesia (HTI). Tjahjo Kumolo (61) PDIP Tjahjo Kumolo, born in Central Java on 1 Dec 1957, previously served as the Minister Minister of State (Indonesian of Home Affairs. He is a longtime loyalist of former President 28. Apparatus Democratic and a senior member of PDIP. He served two terms in the DPR between 1987-1997, Empowerment Party- during President Suharto’s term in office. Struggle) Pramono Anung (56) PDIP (Indonesian Pramono Anung Wibowo (born in Kediri, 11 Jun 1963) is an Indonesian politician who National 29. Democratic has served as Secretary of the Indonesian Cabinet since 12 Aug 2015. He was a Secretary Party- Deputy Chairperson of the DPR representing PDIP over 2009-2014. Struggle)

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Strategy - Indonesia Indonesia Strategy

24 October 2019

Siti Nurbaya Bakar Siti Nurbaya Bakar, born in Jakarta on 28 Jul 1956, has been the Minister of (63) Minister of NasDem Environment and Forestry since President Joko Widodo's first term. Previously, she 30. Environment (National was appointed by President as the Secretary General of and Forestry Democrat) the Regional Representatives Council (DPD) for 2006-2013. She later stepped down and joined NasDem.

Retno Marsudi (56) Retno Lestari Priansari Marsudi (born 27 Nov 1962) is an Indonesian diplomat and the Minister of Minister of Foreign Affairs since 2014. She is the first female minister appointed to the 31. Professional Foreign Affairs post. She was previously the Indonesian ambassador to the Netherlands from 2012- 2014, as well as the ambassador to Iceland and Norway from 2005 to 2008.

Pratikno (57) Pratikno, born in Surabaya on 13 Feb 1962, is a politician and academician. He has continued to serve as Minister of the State Secretariat in Jokowi’s cabinet and a rector Minister of State 32. Professional of Gadjah Mada University in Yogyakarta. In 2009, he represented the General Secretariat Election Commission (KPU) as a moderator in the 2009 Presidential Debate which was aired across the country. Sri Mulyani (57) Sri Mulyani Indrawati (born 26 Aug 1962) is an Indonesian economist who has been Minister of Finance of Indonesia since 2016. She previously served in the same Minister of post from 2005to 2010 as well. In Jun 2010, she was appointed as the Managing 33. Professional Finance Director of the World Bank Group and resigned as the Minister of Finance, then reappointed back on 27 Jul 2016 by President Jokowi. In 2014, she was ranked as the 38th most powerful woman in the world by Forbes magazine. Basuki H. (64) Basuki Hadimuljono (born 5 Nov 1954) has been the Minister of Public Works and Minister of Public Housing since 2014 – after 30 years of being a public servant. Due to Jokowi's 34. Public Housing Professional focus on infrastructure, Basuki's ministry received significant portions of the budget and Works (2018: c.USD7.5bn).

Bambang B. (53) Minister of Bambang Brojonegoro, born in Jakarta on 3 Oct 1966, was previously appointed the 35. Research and Professional Minister of National Development Planning. He was also Indonesia’s Finance Technology Minister during 2014-2016, until President Joko Widodo reshuffled the Cabinet.

Budi Karya S. (62) Budi Karya Sumadi was born in Palembang, on 18 Dec 1956. Sumadi began his career as a planning architect for Pembangunan Jaya Ancol in 1982, and was made CEO in Minister of 36. Professional 2004. He then moved to Jakarta Propertindo, and served as its CEO. In 2015, Sumadi Transportation was transferred to Angkasa Pura II. Sumadi was appointed as the Minister of Transportation on Jul 2016. Sofyan Djalil (66) Sofyan A. Djalil (born 23 Sep 1953 in East Aceh) has also been the Minister of Minister of Communications and Informatics (2004-2007), Minister of State-Owned Enterprises, 37. Agrarian and Professional Coordinating Minister for Economic Affairs (2014-2015), and the National Spatial Planning Development Planning Agency (2015-2016).

Moeldoko (62) Moeldoko (born 8 Jul 1957) is an Indonesian government official and retired general, and has served as Chief of Staff since Joko Widodo's first term. He graduated from Chief of the Indonesian Military Academy (AKABRI) in 1981 and received the prestigious Adhi 38. Professional Presidential Staff Makayasa medal as valedictorian of his class. Moeldoko has received many awards including the Indonesian Military Distinguished Service Star and Singapore's Military Meritorious Service Medal. Muhadjir Effendy Coordinating (63) Minister for Muhadjir Effendy was born in Madiun, on 29 Jul 1956. Previously, he was the Minister Human 39. Professional of National Education and Culture, replacing Anies Baswedan in 2016. Before joining Development the Cabinet, he was a rector in Muhammadiyah Malang University in 2000-2016. and Cultural Affairs

Source: Various sources, RHB

Figure 2: Indonesia’s 2019-2024 Cabinet, helmed by President Joko Widodo

Source: elshinta.com, RHB

See important disclosures at the end of this report 4

Strategy - Indonesia Indonesia Strategy

24 October 2019

Figure 3: Ministry/non-ministry expenditure trend Figure 4: 2018-2020F ministry expenditure

1,900 16.0 250 236 220 1,700 14.0 205 204 210 206 12.0 188 1,500 200 175 10.0 163 158 153 1,300 774 8.0 148 609 672 150 1,100 6.0 500 900 451 470 4.0 100 83 76 79 700 2.0 0.0 500 847 855 910 34 37 37 732 684 765 (2.0) 50 300 (4.0) 100 (6.0) 0 2015 2016 2017 2018 2019 2020 National Public facility Infrastructure Human Finance Others (Outlook) defense and and social related [3] workforce security [1] assistance [2] development Non-Ministry (IDRtrn; LHS) Ministry (IDRtrn; LHS) [4] Expenditure growth (% YoY; RHS) 2018 2019 2020F Source: MoF’s 2020 APBN, RHB Note: [1] National Defence + Police [2] Agrarian and Spatial Planning + Social Affairs + Public health [3] Public Works & Housing + Transport [4] Research & Technology + Education & Culture Source: MoF’s 2020 APBN, RHB

Figure 5: Cabinet seat allocation by political party

10%

25%

20%

25% 20%

Golkar PDIP PKB Nasdem Gerindra

Source: Various, RHB

See important disclosures at the end of this report 5

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RHBIB does not have a financial interest in the securities or other capital market Ltd which is a holder of a capital markets services licence and an exempt financial products of the subject company(ies) covered in this report. adviser regulated by the Monetary Authority of Singapore. RHB Securities Singapore 2. RHBIB is not a market maker in the securities or capital market products of the Pte Ltd may distribute reports produced by its respective foreign entities, affiliates or subject company(ies) covered in this report. other foreign research houses pursuant to an arrangement under Regulation 32C of 3. None of RHBIB’s staff or associated person serve as a director or board the Financial Advisers Regulations. Where the report is distributed in Singapore to a member* of the subject company(ies) covered in this report person who is not an Accredited Investor, Expert Investor or an Institutional Investor, *For the avoidance of doubt, the confirmation is only limited to the staff of RHB Securities Singapore Pte Ltd accepts legal responsibility for the contents of the research department report to such persons only to the extent required by law. Singapore recipients should 4. Save as disclosed below, RHBIB did not receive compensation for investment contact RHB Securities Singapore Pte Ltd in respect of any matter arising from or in banking or corporate finance services from the subject company in the past 12 connection with the report. months. 5. RHBIB did not receive compensation or benefit (including gift and special cost Hong Kong arrangement e.g. company/issuer-sponsored and paid trip) in relation to the This report is issued and distributed in Hong Kong by RHB Securities Hong Kong production of this report. Limited (興業僑豐證券有限公司) (CE No.: ADU220) (“RHBSHK”) which is licensed in Hong Kong by the Securities and Futures Commission for Type 1 (dealing in securities) Thailand and Type 4 (advising on securities) regulated activities. Any investors wishing to RHB Securities (Thailand) PCL and/or its directors, officers, associates, connected purchase or otherwise deal in the securities covered in this report should contact parties and/or employees, may have, or have had, interests and/or commitments in RHBSHK. RHBSHK is a wholly owned subsidiary of RHB Hong Kong Limited; for the the securities in subject company(ies) mentioned in this report or any securities related purposes of disclosure under the Hong Kong jurisdiction herein, please note that RHB thereto. Further, RHB Securities (Thailand) PCL may have, or have had, business Hong Kong Limited with its affiliates (including but not limited to RHBSHK) will relationships with the subject company(ies) mentioned in this report. As a result, collectively be referred to as “RHBHK.” RHBHK conducts a full-service, integrated investors should exercise their own judgment carefully before making any investment investment banking, asset management, and brokerage business. RHBHK does and decisions. seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect Indonesia the objectivity of this research report. Investors should consider this report as only a PT RHB Sekuritas Indonesia is not affiliated with the subject company(ies) covered in single factor in making their investment decision. Importantly, please see the this report both directly or indirectly as per the definitions of affiliation above. Pursuant company-specific regulatory disclosures below for compliance with specific rules and to the Capital Market Law (Law Number 8 Year 1995) and the supporting regulations regulations under the Hong Kong jurisdiction. Other than company-specific disclosures thereof, what constitutes as affiliated parties are as follows: relating to RHBHK, this research report is based on current public information that we 1. Familial relationship due to marriage or blood up to the second degree, both consider reliable, but we do not represent it is accurate or complete, and it should not horizontally or vertically; be relied on as such. 2. Affiliation between parties to the employees, Directors or Commissioners of the parties concerned; United States 3. Affiliation between 2 companies whereby one or more member of the Board of This report was prepared by RHB and is being distributed solely and directly to “major” Directors or the Commissioners are the same; U.S. institutional investors as defined under, and pursuant to, the requirements of Rule 4. Affiliation between the Company and the parties, both directly or indirectly, 15a-6 under the U.S. Securities and Exchange Act of 1934, as amended (the controlling or being controlled by the Company; “Exchange Act”). Accordingly, access to this report via Bursa Marketplace or any other 5. Affiliation between 2 companies which are controlled, directly or indirectly, by the Electronic Services Provider is not intended for any party other than “major” US same party; or institutional investors, nor shall be deemed as solicitation by RHB in any manner. RHB 6. Affiliation between the Company and the main Shareholders. is not registered as a broker-dealer in the United States and does not offer brokerage services to U.S. persons. Any order for the purchase or sale of the securities PT RHB Sekuritas Indonesia is not an insider as defined in the Capital Market Law discussed herein that are listed on Bursa Malaysia Securities Berhad must be placed and the information contained in this report is not considered as insider information with and through Auerbach Grayson (“AG”). Any order for the purchase or sale of all prohibited by law. Insider means: other securities discussed herein must be placed with and through such other a. a commissioner, director or employee of an Issuer or Public Company; registered U.S. broker-dealer as appointed by RHB from time to time as required by b. a substantial shareholder of an Issuer or Public Company; the Exchange Act Rule 15a-6. This report is confidential and not intended for c. an individual, who because of his position or profession, or because of a distribution to, or use by, persons other than the recipient and its employees, agents business relationship with an Issuer or Public Company, has access to inside and advisors, as applicable. Additionally, where research is distributed via Electronic information; and Service Provider, the analysts whose names appear in this report are not registered or d. an individual who within the last six months was a Person defined in letters a, b qualified as research analysts in the United States and are not associated persons of or c, above. Auerbach Grayson AG or such other registered U.S. broker-dealer as appointed by RHB from time to time and therefore may not be subject to any applicable restrictions Singapore under Financial Industry Regulatory Authority (“FINRA”) rules on communications with Save as disclosed in the following link (RHB Research conflict disclosures – Oct 2019) a subject company, public appearances and personal trading. Investing in any non- and to the best of our knowledge, RHB Securities Singapore Pte Ltd hereby declares U.S. securities or related financial instruments discussed in this research report may that: present certain risks. The securities of non-U.S. issuers may not be registered with, or 1. RHB Securities Singapore Pte Ltd, its subsidiaries and/or associated companies be subject to the regulations of, the U.S. Securities and Exchange Commission. do not make a market in any issuer covered in this report. Information on non-U.S. securities or related financial instruments may be limited. 2. RHB Securities Singapore Pte Ltd, its subsidiaries and/or its associated Foreign companies may not be subject to audit and reporting standards and regulatory companies and its analysts do not have a financial interest (including a requirements comparable to those in the United States. The financial instruments shareholding of 1% or more) in the issuer covered in this report. discussed in this report may not be suitable for all investors. Transactions in foreign 3. RHB Securities, its staff or connected persons do not serve on the board or markets may be subject to regulations that differ from or offer less protection than trustee positions of the issuer covered in this report. those in the United States. 4. RHB Securities Singapore Pte Ltd, its subsidiaries and/or its associated companies do not have and have not within the last 12 months had any corporate finance advisory relationship with the issuer covered in this report or any other DISCLOSURE OF CONFLICTS OF INTEREST relationship that may create a potential conflict of interest. 5. RHB Securities Singapore Pte Ltd, or person associated or connected to it do RHB Investment Bank Berhad, its subsidiaries (including its regional offices) and not have any interest in the acquisition or disposal of, the securities, specified associated companies, (“RHBIB Group”) form a diversified financial group, securities based derivatives contracts or units in a collective investment scheme undertaking various investment banking activities which include, amongst others, covered in this report. underwriting, securities trading, market making and corporate finance advisory. 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 As a result of the same, in the ordinary course of its business, any member of the or recommendation. RHBIB Group, may, from time to time, have business relationships with or hold positions in the securities (including capital market products) or perform and/or solicit Hong Kong investment, advisory or other services from any of the subject company(ies) covered The following disclosures relate to relationships between RHBHK and companies in this research report. covered by Research Department of RHBSHK and referred to in this research report:

While the RHBIB Group will ensure that there are sufficient information barriers and RHBSHK hereby certifies that no part of RHBSHK analyst compensation was, is or will internal controls in place where necessary, to prevent/manage any conflicts of interest be, directly or indirectly, related to the specific recommendations or views expressed to ensure the independence of this report, investors should also be aware that such in this research report. conflict of interest may exist in view of the investment banking activities undertaken by

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RHBHK had an investment banking services client relationships during the past 12 months with: -.

RHBHK has received compensation for investment banking services, during the past 12 months from: -.

RHBHK managed/co-managed public offerings, in the past 12 months for: -.

On a principal basis. RHBHK has a position of over 1% market capitalization of: -.

Additionally, please note the following:

Ownership and material conflicts of interest: RHBSHK policy prohibits its analysts and associates reporting to analysts from owning securities of any company covered by the analyst.

Analyst as officer or director: RHBSHK policy prohibits its analysts, and associates reporting to analysts from serving as an officer, director, advisory board member or employee of any company covered by the analyst.

RHBHK salespeople, traders, and other non-research professionals may provide oral or written market commentary or trading strategies to RHB clients that reflect opinions that are contrary to the opinions expressed in this research report.

KUALA LUMPUR JAKARTA RHB Investment Bank Bhd PT RHB Sekuritas Indonesia Level 3A, Tower One, RHB Centre Revenue Tower 11th floor, District 8 - SCBD Jalan Tun Razak Jl. Jenderal Sudirman Kav. 52-53 Kuala Lumpur 50400 Jakarta 12910 Malaysia Indonesia Tel : +603 9280 8888 Tel : +6221 5093 9888 Fax : +603 9200 2216 Fax :+6221 5093 9777

HONG KONG BANGKOK RHB Securities Hong Kong Ltd. RHB Securities (Thailand) PCL 12th Floor, World-Wide House 10th Floor, Sathorn Square Office Tower 19 Des Voeux Road 98, North Sathorn Road, Silom Central Bangrak, Bangkok 10500 Hong Kong Thailand Tel : +852 2525 1118 Tel: +66 2088 9999 Fax : +852 2810 0908 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

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