Equity Research

Friday, December 23, 2016

Danareksa Sekuritas – Equity Research

FROM EQUITY RESERACH

Matahari Putra Prima: Why has the stock price fallen significantly? (MPPA JK. Rp1,345. HOLD. TP Rp1,600)

What is interesting? MPPA’s stock was sold off by investors yesterday, with the share price slumping 7.2%. The share price has trended lower since early December, pretty much in line with the weak market.

MARKET NEWS

*Analysts’ comment inside

Bright outlook for the F&B industry WIKA allocates Rp12.0tr for 2017 capex, up 13%yoy MTLA to partner Keppel land to develop a Rp1tn project Semen Panasia is optimistic of demand recovery

Previous Reports:

PWON: Correction creates upside, Cigarette: Additional tax may lead to higher selling prices Snapshot20161222

AUTO: November 2016: The highest monthly car sales in 2016 Snapshot20161219

WIKA: Ending the year on a high note, Ace Hardware Indonesia: In-line 11M16 revenues Snapshot20161216

MTLA: Taking the middle way, SMGR: Steady performance--Snapshot20161215

Cement sales November: still sluggish (UNDERWEIGHT), ASRI: Solid marketing sales growth due to one-off transaction, Ramayana Lestari Sentosa: In-line 11M16 gross sales -Snapshot20161214

ACES: Continued inventory problems -Snapshot20161213

IDX ANNOUNCEMENT

AGM EGM Announcement

Code Action Date Time (WIB)

BNII EGM 23-Dec-16 10.00

BCIC EGM 23-Dec-16 14.00

CTRS EGM 27-Dec-16 10.00

CTRP EGM 27-Dec-16 11.00

CTRA EGM 27-Dec-16 13.30

MORNING HIGHLIGHT

Key Index

Close

Chg Ytd Vol

(%) (%) (US$ m)

Asean - 5

Indonesia 5,043 (1.3) 9.8 308

Thailand 1,504 (0.3) 16.8 750

Philippines 6,587 (1.5) (5.2) 129

Malaysia 1,623 (0.4) (4.1) 349

Singapore 2,882 (0.7) (0.0) 512

Regional

China 3,140 0.1 (11.3) 32,748

Hong Kong 21,636 (0.8) (1.3) 6,513

Japan 19,428 (0.1) 2.1 11,055

Korea 2,034 (0.1) 3.7 2,813

Taiwan 9,119 (0.9) 9.4 1,810

India 25,980 (1.0) (0.5) 442

NASDAQ 5,447 (0.4) 8.8 56,670

Dow Jones 19,919 (0.1) 14.3 7,050

Currency and Interest Rate

Rate

w-w m-m ytd

(%) (%) (%)

Rupiah Rp/1US$ 13,469 (0.6) (0.2) 2.3

SBI rate % 5.90 - - (1.3)

10y Gov Indo bond 7.86 (0.1) (0.2) (0.9)

Hard Commodities

Unit Price

d-d m-m ytd

(%) (%) (%)

Coal US$/ton 87 (0.2) (18.4) 71.4

Gold US$/toz 1,129 0.1 (5.0) 6.4

Nickel US$/mt.ton 10,674 (0.9) (5.8) 21.6

Tin US$/mt.ton 21,065 0.1 (1.0) 44.4

Soft Commodities

Unit Price

d-d m-m ytd

(%) (%) (%)

Cocoa US$/mt.ton 2,288 0.4 (7.1) (30.0)

Corn US$/mt.ton 126 - (2.9) (5.6)

Oil (WTI) US$/barrel 53 (0.5) 9.9 42.3

Oil (Brent) US$/barrel 55 1.1 12.1 47.7

Palm oil MYR/mt.ton 3,227 (0.4) 9.4 46.7

Rubber USd/kg 191 (1.5) 9.5 61.7

Pulp US$/tonne 809 N/A (0.0) 0.7

Coffee US$/60kgbag 145 0.1 (4.4) 30.0

Sugar US$/MT 491 (0.2) (6.8) 16.2

Wheat US$/ton 108 (0.6) (7.1) (23.5)

Source: Bloomberg

Equity Research

Friday, December 23, 2016

Danareksa Sekuritas – Equity Research

PT Danareksa Sekuritas

Jl. Medan Merdeka Selatan No. 14 Jakarta 10110 Indonesia Tel (62 21) 29 555 888 Fax (62 21) 350 1709

Equity Research Team

Sales team

novrita@danareksa.com (62 21) 29555 888 ext. 3128

Novrita E. Putrianti ehrliech@danareksa.com (62 21) 29555 888 ext. 3132

Ehrliech Suhartono

maria.renata@danareksa.com (62-21) 29555 888 ext.3513 Construction

Maria Renata

yunita@danareksa.com (62 21) 29555 888 ext. 3145

Yunita L. Nababan

lucky.purnomo@danareksa.com (62-21) 29555 888 ext.3512 Technical Analyst

Lucky Bayu Purnomo

putia@danareksa.com (62-21) 2955 5824 Consumer

Puti Adani

laksmitaa@danareksa.com (62 21) 29555 888 ext. 3125

Laksmita Armandani

antonia.hartono@danareksa.com (62-21) 29555 888 ext.3504 Cement, Property

Antonia Febe Hartono

mhardiansyah@danareksa.com (62 21) 29555 888 ext. 3109

Muhammad Hardiansyah

tuty@danareksa.com (62 21) 29555 888 ext. 3121

Tuty Sutopo

upik_y@danareksa.com (62 21) 29555 888 ext. 3137

Upik Yuzarni

kevin.giarto@danareksa.com (62 21) 29555 888 ext. 3139

Kevin Giarto

stefanus.darmagiri@danareksa.com (62-21) 2955 5831 Auto, Coal, Heavy Equip., Metal, Cement

Stefanus Darmagiri

natalia.sutanto@danareksa.com (62-21) 29555 888 ext.3508 Consumer, Tobacco, Property

Natalia Sutanto

agus.pramono@danareksa.com (62-21) 29555 888 ext.3500 Strategy, Banking

Agus Pramono, CFA

adeline.solaiman@danareksa.com (62-21) 2955 888 ext. 3503 Retail

Adeline Solaiman

melati.isnandari@danareksa.com (62-21) 2955 888 ext. 3506 Research Associate

Melati Laksmindra Isnandari

Equity Research

Friday, December 23, 2016

Danareksa Sekuritas – Equity Research

Matahari Putra Prima: Why has the stock price fallen significantly? (MPPA. Rp1,345. HOLD. TP Rp1,600)

- What is interesting? MPPA’s stock was sold off by investors yesterday, with the share price slumping 7.2%. The share price has trended lower since early December, pretty much in line with the weak market (exhibit 1).

- What are the reasons? We contacted the company and they said that MPPA might inject funds into MatahariMall.com in January 2017. Although no further details on this matter are available yet, we believe it can be one of the reasons behind yesterday’s share price decline. We are currently awaiting the detailed press release from the management concerning this possible transaction.

- Our view on MPPA’s outlook: We forecast 129% yoy growth in EPS in 2017F with potential margins improvement due to the low base following the inventory clean-up.

- What are the main concerns? Similar issues as for Matahari Department Store (LPPF). We have recently downgraded LPPF from BUY to SELL concerning the company’s intention to increase its stake in PT Global Ecommerce Indonesia (GEI), the parent company of MatahariMall.com, as we believe the transaction may be overvalued (the USD100mn Mitsui injection is equal to a 20% stake in GEI) and there is a potential conflict of interests. The transaction is estimated to reach around Rp590bn and be conducted in several tranches from the end of 2016 until 3Q17. The valuation is considered material as it is around 40% of the company’s 9M16 equity (Rp1.4tn).

Exhibit 1. MPPA’s stock price, Dec 1-Dec 22, 2016, (in Rp)

Source: Company Adeline Solaiman adeline.solaiman@danareksa.com (62 21) 2955 888 ext 3503 Natalia Sutanto natalia.sutanto@danareksa.com (62 21) 2955 888 ext 3508

FLASH NOTES

Equity Research

Friday, December 23, 2016

Danareksa Sekuritas – Equity Research

Bright outlook for the F&B industry

The Ministry of Industry stated that the food and beverages industry will book growth of 7.5% to 7.8% yoy in 2017, supported by better economic conditions. Several players in the industry share a similar view, as reflected in their expansion plans and optimistic targets for next year. PT Niramas Utama, the producer of Inaco, targets 15-20% growth this year with higher expected growth next year. Meanwhile, PT Tirta Fresindo Jaya, the producer of Le Minerale, will commence the operation of a new plant in January 2017, with the capacity to produce 5 million packs of bottled water. Siantar Top (STTP) also targets 20-30% growth next year with a higher contribution from the exports market of 5% (from 3% currently). (Kontan) WIKA allocates Rp12.0tr for 2017 capex, up 13%yoy

Wijaya Karya (WIKA) has earmarked Rp12.0tr for capex in 2017, 13.4% higher than the Rp10.6tr allocated in 2016. The capex will support its 2017 targets, with new contracts targeted to reach Rp43.7tr, 19.6% lower than its 2016 target of Rp53.8tr. Projects from the private sector are expected to be the main contributor to next year’s new contracts, which are targeted to account for 40.3% of the total, followed by SOE projects (30%) and government projects (29.89%). As such, the company is targeting its 2017 order book to reach Rp102.9tr supported by Rp59.7tr of carry over contracts. Furthermore, WIKA is preparing for the IPO of two subsidiaries, Wijaya Karya Realty and Wijaya Karya Gedung, in 2017. (Bisnis Indonesia) MTLA to partner Keppel land to develop a Rp1tn project

Metropolitan Land (MTLA) and Sukses Manis Indonesia, a subsidiary of Keppel Land, have signed a joint operation agreement to develop a landed residential project in Metland Puri Cipondoh in 3Q17. The JO plans to develop 450 landed residential units on 12 ha of land. This project is aimed at the mid and mid-up income groups in Tangerang. The project value is expected to reach Rp800-1tn. (Investor Daily) Semen Panasia is optimistic of demand recovery

Sinar Tambang Arthalestari, the producer of Semen Panasia, is optimistic of demand recovery in 2017. This reflects the expectation of more progress on government infrastructure projects. According to the management, the company will benefit from multiple infrastructure projects in Central Java (toll road projects, the Batang coal fired power plant, and Kendal industrial estate) given the company’s strategic manufacturing plant location in Ajibarang (with annual capacity of 2mn tons). At the same time, the company also plans to conduct expansion outside Java. (Investor Daily)

MARKET NEWS

Price Mkt Cap

Target Rp Bn 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2016

Danareksa Universe 2,904,167 150,667 176,605 243.4 285.3 3% 17% 19.3 16.4 22.1 19.8 2.7 2.4 14.9

Auto 304,639 15,508 18,375 311.9 369.5 7% 18% 19.6 16.6 14.4 12.2 2.2 2.0 11.7

Astra International HOLD 7,525 8,400 304,639 15,508 18,375 383 454 360 435 7% 18% 19.6 16.6 14.4 12.2 2.2 2.0 27.1 11.7

Banks 993,940 74,614 91,514 732.3 898.1 0% 23% 13.3 10.9 1.9 1.7 16.2

BCA HOLD 14,550 16,300 358,730 18,931 20,806 768 844 768 844 5% 10% 18.9 17.2 N/A N/A 3.5 3.0 N/A 19.6

BNI HOLD 5,300 6,100 98,838 10,494 13,698 563 735 563 735 16% 31% 9.4 7.2 N/A N/A 1.1 1.0 N/A 12.7

BRI BUY 10,875 14,500 268,277 26,092 31,100 1,058 1,261 1,058 1,261 3% 19% 10.3 8.6 N/A N/A 1.8 1.6 N/A 20.1

Bank Tabungan Negara BUY 1,630 2,300 17,262 2,200 2,572 208 243 208 243 19% 17% 7.8 6.7 N/A N/A 0.9 0.7 N/A 13.6

Bank Mandiri HOLD 10,750 11,250 250,833 16,898 23,339 724 1,000 724 1,000 -17% 38% 14.8 10.7 N/A N/A 1.6 1.4 N/A 12.4

Cement 133,243 7,891 5,869 406 302 -15% -26% 16.9 22.7 10.7 11.4 2.4 2.3 14.4

Indocement SELL 15,000 14,600 55,218 3,863 2,808 1,049 763 1,042 757 -11% -27% 14.3 19.7 9.9 10.2 2.2 2.1 net cash 15.8

Semen Indonesia SELL 8,925 8,100 52,939 3,792 2,958 639 499 633 492 -16% -22% 14.0 17.9 8.2 9.1 1.9 1.8 6.1 13.8

Semen Baturaja SELL 2,550 400 25,086 236 103 24 11 24 11 -33% -56% 106.1 242.4 61.4 48.2 8.0 7.8 net cash 7.8

Cigarettes 539,315 18,145 19,608 153 166 8% 8% 29.7 27.5 20.1 18.5 7.4 6.9 25.4

Gudang Garam HOLD 60,850 70,400 117,081 6,342 6,860 3,296 3,565 3,296 3,565 -1% 8% 18.5 17.1 11.6 10.7 3.0 2.6 46.6 16.4

HM Sampoerna HOLD 3,630 3,850 422,235 11,803 12,749 101 110 101 109 14% 8% 35.8 33.1 26.5 24.2 12.6 12.3 net cash 36.1

Construction 132,520 6,602 8,166 88 109 36% 24% 20.1 16.2 11.0 9.4 2.7 2.3 15.3

Wijaya Karya BUY 2,320 4,300 20,810 758 900 123 146 123 146 21% 19% 18.8 15.9 10.3 8.5 4.2 3.6 24.6 16.2

Pembangunan Perumahan BUY 3,600 5,700 22,250 967 1,295 200 267 211 298 31% 34% 18.0 13.5 11.0 8.4 4.3 3.5 net cash 20.2

Adhi Karya BUY 1,995 3,500 7,104 703 986 208 292 216 303 52% 40% 9.6 6.8 5.2 4.1 1.1 0.9 net cash 12.2

Waskita Karya BUY 2,300 3,700 31,220 1,688 2,344 124 173 124 173 61% 39% 18.5 13.3 13.4 9.5 2.8 2.4 20.2 16.4

Waskita Beton BUY 530 770 13,971 547 788 21 30 21 30 64% 44% 25.5 17.7 15.0 11.5 2.0 1.8 net cash 13.1

Wika Beton BUY 825 1,300 7,190 268 362 31 42 31 42 54% 35% 26.8 19.9 14.5 10.5 2.9 2.6 net cash 11.5

Jasa Marga BUY 4,130 5,700 29,975 1,671 1,492 246 219 249 223 14% -11% 16.8 18.8 10.8 11.8 2.5 2.3 143.1 15.0

Consumer 383,721 10,506 12,110 507 584 15% 15% 36.5 31.7 25.8 22.4 16.2 15.5 45.0

Indofood CBP BUY 7,775 10,850 90,671 3,714 4,293 319 368 319 368 24% 16% 24.4 21.1 17.1 14.8 5.5 5.4 net cash 22.5

Unilever HOLD 37,975 46,650 289,749 6,563 7,555 860 990 860 990 12% 15% 44.2 38.4 31.3 27.2 55.5 50.2 28.9 130.6

Kino Indonesia BUY 2,310 4,500 3,300 229 262 160 183 160 183 -32% 14% 14.4 12.6 8.3 7.7 1.7 1.5 3.9 12.3

Healthcare 81,916 2,490 2,743 97 106 11% 9% 32.9 29.9 21.2 18.9 5.9 5.2 19.0

Kalbe Farma SELL 1,430 1,400 67,031 2,210 2,441 47 52 47 52 10% 10% 30.3 27.5 19.3 17.3 5.7 5.0 net cash 19.9

Kimia Farma SELL 2,680 1,510 14,885 279 302 50 54 48 52 12% 8% 53.3 49.3 36.0 30.0 7.2 6.4 33.7 14.3

Heavy Equipment 72,831 4,481 5,676 1,201 1,522 16% 27% 16.3 12.8 5.6 4.4 1.9 1.7 12.0

Hexindo Adiperkasa

United Tractors HOLD 19,525 23,500 72,831 4,481 5,676 1,201 1,522 1,231 1,556 16% 27% 16.3 12.8 5.6 4.4 1.9 1.7 net cash 12.0

Mining 161,334 4,311 5,355 54 67 1% 24% 37.4 30.1 9.8 8.9 1.4 1.4 3.9

Adaro Energy HOLD 1,680 800 53,736 1,781 1,980 56 62 56 62 -13% 11% 30.2 27.1 7.5 6.9 1.4 1.4 18.9 4.6

Timah HOLD 1,095 590 8,155 180 196 24 26 24 26 78% 9% 45.3 41.5 11.1 10.1 1.5 1.5 26.0 3.3

Vale Indonesia HOLD 2,700 2,800 26,828 222 480 22 48 22 48 -67% 116% 120.7 55.9 11.1 9.5 1.1 1.1 net cash 0.9

Aneka Tambang HOLD 860 650 20,666 (307) (147) (13) (6) (13) (6) -79% -52% (67.4) (140.3) 27.0 23.8 1.1 1.2 18.0 (1.7)

Bukit Asam BUY 12,175 8,800 28,053 1,610 1,834 741 844 741 844 -21% 14% 16.4 14.4 11.8 10.0 2.8 2.5 net cash 16.7

Indo Tambangraya Megah HOLD 16,075 8,400 18,164 947 1,106 838 979 838 979 14% 17% 19.2 16.4 6.0 5.3 1.6 1.6 net cash 8.4

Harum Energy HOLD 2,120 790 5,732 (123) (95) (45) (35) (45) (35) -540% -22% (46.8) (60.2) 45.7- 56.4- 1.5 1.6 net cash (3.2)

Property 103,686 5,172 6,045 44 52 -16% 17% 20.0 17.2 12.1 11.7 1.6 1.4 8.4

Alam Sutera HOLD 344 380 6,759 820 924 42 47 53 52 38% 13% 8.2 7.3 9.3 9.6 0.3 0.3 33.2 4.2

Bumi Serpong Damai BUY 1,660 2,500 31,950 1,859 2,009 97 104 139 146 -13% 8% 17.2 15.9 11.3 11.1 1.6 1.4 11.5 9.5

Ciputra Development BUY 1,295 1,850 19,976 661 998 43 54 38 45 -38% 26% 30.2 24.1 12.5 12.1 2.3 1.5 42.2 7.7

Pakuwon Jati HOLD 545 700 26,247 1,757 2,019 36 42 34 39 39% 15% 14.9 13.0 11.1 10.1 3.0 2.4 29.6 21.8

Summarecon BUY 1,300 1,600 18,755 75 95 5 7 14 19 -91% 27% 249.2 197.0 18.1 17.3 3.2 3.1 92.8 1.3

Retail 78,936 3,435 3,888 100 114 17% 13% 23.0 20.3 13.3 11.9 5.5 5.1 25.2

Mitra Adi Perkasa HOLD 4,790 5,000 7,951 174 267 108 166 107 165 370% 54% 44.4 28.9 9.4 8.5 2.6 2.5 99.8 5.8

Ramayana BUY 1,145 1,350 8,125 396 468 56 66 54 64 18% 18% 20.4 17.3 15.0 13.3 2.3 2.2 net cash 11.6

Matahari Department Store SELL 14,450 12,000 42,164 2,080 2,370 707 805 704 803 16% 14% 20.5 17.9 14.2 12.4 20.5 17.3 net cash 131.7

Matahari Putra Prima HOLD 1,345 1,700 7,233 129 185 24 34 29 40 -30% 44% 56.3 39.1 12.6 10.7 2.5 2.3 net cash 4.5

Ace Hardware SELL 785 750 13,463 656 598 37 35 38 34 7% -5% 21.2 22.4 15.6 15.7 4.6 4.2 net cash 23.7

Equity

Valuation Rating Price (Rp) Net profit, Rp bn EPS (Rp) EPS Growth PER (x)Core EPS (Rp) EV / EBITDA (x) PBV (x) ROENet Gearing

Equity Research

Friday, December 23, 2016

Danareksa Sekuritas – Equity Research

LEADERS Price as on

Code 22-Dec-2016 21-Dec-2016 Chg, % w-w, % m-m, % YTD, % Rating

Summarecon Agung SMRA 1,300 1,250 4.0 (6.8) (7.1) (21.2) BUY

Adaro Energy ADRO 1,680 1,670 0.6 0.6 3.1 226.2 HOLD

Bank Mandiri BMRI 10,750 10,750 - (0.5) (1.4) 16.2 HOLD

Bukit Asam PTBA 12,175 12,175 - (4.1) 2.3 169.1 BUY

Matahari Department Store LPPF 14,450 14,500 (0.3) 0.3 (0.9) (17.9) SELL

Ciputra Development CTRA 1,295 1,300 (0.4) (4.1) (9.8) (10.8) BUY

Bank Central Asia BBCA 14,550 14,675 (0.9) (1.5) (1.0) 9.4 HOLD

Pakuwon Jati PWON 545 550 (0.9) (7.6) (21.0) 9.9 HOLD

Bank Negara Indonesia BBNI 5,300 5,350 (0.9) (1.9) 3.4 6.2 HOLD

Bank Rakyat Indonesia BBRI 10,875 11,000 (1.1) (4.6) (5.4) (4.8) BUY

Sources: Bloomberg

LAGGARDS Price as on

Code 22-Dec-2016 21-Dec-2016 Chg, % w-w, % m-m, % YTD, % Rating

Matahari Putra Prima MPPA 1,345 1,450 (7.2) (19.0) (21.1) (26.3) HOLD

Harum Energy HRUM 2,120 2,250 (5.8) (7.4) (10.9) 214.1 HOLD

Kino Indonesia KINO 2,310 2,450 (5.7) (8.7) (23.0) (39.8) BUY

Mitra Adi Perkasa MAPI 4,790 5,025 (4.7) (4.7) (2.0) 26.2 HOLD

Kimia Farma KAEF 2,680 2,800 (4.3) (3.6) (0.7) 208.0 SELL

Vale Indonesia INCO 2,700 2,820 (4.3) (16.9) (19.9) 65.1 HOLD

Pembangunan Perumahan PTPP 3,600 3,740 (3.7) (5.8) (6.7) (2.3) BUY

Indo Tambangraya Megah ITMG 16,075 16,700 (3.7) (8.1) (0.8) 180.8 HOLD

Adhi Karya ADHI 1,995 2,070 (3.6) (4.5) (0.2) (6.8) BUY

Jasa Marga JSMR 4,130 4,280 (3.5) (7.8) (1.7) (20.8) BUY

Sources: Bloomberg

COVERAGE PERFORMANCE

Equity Research

Friday, December 23, 2016

Danareksa Sekuritas – Equity Research

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