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Asiamoney’s
2013
Best Domestic
Equity House
Spotlight
22 February 2016
Disclosure: Bahana Securities does and seeks to do business with companies covered in its research reports. Investors should consider this report as only a single factor
in making their investment decision.
Please see the important disclaimer information on the back of this report
2014Finance Asia's
Best Equity House
Alpha Southeast Asia
2014 Best Research Call FMCG Sector
Asiamoney's2013
Best DomesticEquity House
2015Institutional
Investors Highest RankedLocal Research
House
2015Global
Banking & FinanceReview
Best ResearchHouse
2016 Indonesia market strategy
Harry Su & team E-mail: harry.su@bahana.co.id
Phone: +6221 250 5735
Policy risks & market re-rating
Concerns on interest and NIM interventions; JCI down 0.4% w-w
On Friday, Indonesian banking counters under our coverage lost an average
of 3.9% in terms of share price, wiping out IDR41tn (USD3bn) of market
cap, and dragging down the overall Jakarta Composite Index by 1.7% on the
day or IDR87tn (USD6bn) by market cap. This sell down stemmed from
concerns of banking interventions by the government through Vice President
Jusuf Kalla, who has asked State-Owned Enterprise (SOE) banks to lower
lending rates to single-digit levels in an effort to boost the local economy.
Additionally, according to Rini Soemarno, the SOE Minister, Indonesian
banks’ NIMs should reach the 3-4% levels (current sector NIM: 5.3%; exhibit
4) over the next 3 years. At the same time, the Financial Services Authority
(OJK) head, Muliaman Hadad, has stated preparations of incentives for banks
which could lower their NIMs, citing the need for domestic banks to raise
their competitiveness in the lead up to the Asean Free Trade.
Ambivalence: Government action vs. oligopolistic banking structure
Our view on this issue is one of ambivalence. While based on textbook
theory, the government’s recent move to intervene in both interest rates and
NIMs would lead to financial repression, the existing Indonesian banking
structure is oligopolistic in nature with dominant price leadership. That said,
a failed market mechanism caused by monopoly does require government
intervention to correct. Failure to do so may lead the banking system as well
as the economy to continue performing sub-optimally.
Possible layoffs with property and the middle-up class hurt most
At this stage of the market cycle, the question for the Indonesian banking
sector would be the proper mechanism and the extent of government
intervention that would bring about greater market efficiency. However, we
would like to warn that without proper management and an adjustment
period, massive layoffs and deterioration in property rental prices could occur
as banks shift to IT and M&A/branch closures, in pursuit of efficiencies.
Furthermore, with lower deposit rates, the Indonesian middle-up class (note
that mid-low earners do not have savings) would lose out. However, on the
flip side, the overall middle class should benefit from lower borrowing rates
and higher purchasing power from stronger economic growth, helped by
lower lending rates.
Beneficiaries: Infrastructure, Consumers & SMEs; Bad for banks
With NIMs for prime corporate customers at 2-2.5%, banks will be forced to
lower margins of project, consumer and commercial (SMEs) loans. While this
will generally be negative for banks, the overall economy should benefit from
greater loan volumes from this lower trend in NIM. However, we note that
NPLs may rise without proper risk management. Going forward, in order to
offset the adverse impact from lower NIMs, we expect banks to be forced to
be creative in generating higher fee-based income (sales of mutual funds and
insurance, for examples). Based on our sensitivity analysis, for every 100bp
contraction in NIMs, the sector would see 40% lower average net earnings.
Exhibit 1. Market data
15F 16F 17F
Opr. profit growth (%) (2.3) 11.4 12.7
OP growth (%) – cons. 0.8 12.9 12.0
Net profit growth (%) (5.1) 14.8 14.3
NP growth (%) – cons. (5.6) 14.1 16.1
EPS growth (%) (7.5) 13.6 14.3
EPS growth (%) – cons. (5.8) 12.9 16.1
P/E (x) 19.5 17.0 14.9
P/E* (x) EX-UNVR & HMSP 16.8 14.6 12.8
P/E (x) - consensus 19.1 16.8 0.0
PEG (x) (3.8) 1.1 1.0
EV/EBITDA (x) 13.8 12.7 11.2
P/BV (x) 10.1 8.9 7.9
P/BV (x) exc. UNVR & LPPF 3.4 3.0 2.7
Div.yield (%) 2.1 2.3 2.5
Net gearing (%) 20.8 18.9 16.4
ROAE (%) 32.0 29.4 29.5
ROAA (%) 12.3 12.0 12.5
ROIC (%) 27.1 27.1 27.0 Source: Companies, Bahana estimates
Based on 19 February 2016 closing price
Exhibit 2. Top 10 leaders & laggards 19-Feb-16 18-Feb-15 change
(IDR) (IDR) (%)
TAXI IJ
107 97 10.3 TOWR IJ
4,200 3,980 5.5 HERO IJ
1,050 1,000 5.0 PPRO IJ
193 185 4.3 SGRO IJ
1,860 1,800 3.3 UNVR IJ
42,750 41,675 2.6 ROTI IJ
1,400 1,370 2.2
ECII 715 700 2.1 ANJT IJ
1,620 1,590 1.9 PTBA IJ
4,670 4,585 1.9
CASS IJ
1,250 1,340 (6.7) BBNI IJ
5,100 5,450 (6.4) CPIN IJ
3,445 3,635 (5.2) TBIG IJ
5,950 6,275 (5.2) BJBR IJ
920 970 (5.2) SRIL IJ
260 274 (5.1) CTRA IJ
1,310 1,380 (5.1) BBRI IJ
11,450 12,000 (4.6) BMRI IJ
9,300 9,725 (4.4) DSNG IJ
440 460 (4.3) Source: Bloomberg
Based on 19 February 2016 closing price
22 February 2016
PT Bahana Securities – Equity Research – Market strategy 2
2014Finance Asia's
Best Equity House
Alpha Southeast Asia
2014 Best Research Call FMCG Sector
Asiamoney's2013
Best DomesticEquity House
2015Institutional
Investors Highest RankedLocal Research
House
2015Global
Banking & FinanceReview
Best ResearchHouse
Mid-term re-rating expected; Portfolio switching with banks trimmed
Over the mid-term, lower lending rates and higher economic growth should
lead to a lower WACC, allowing for an overall market re-rating. However, our
conversations with both foreign and local funds last week point to one
universal conclusion: the trimming of banking stocks on possible faster-than-
expected NIM contractions. Most funds we spoke believe that this process will
be gradual, although NIM pressure would undoubtedly materialize. Some
local fund managers expect that the OJK will “punish” banks without proper
plans to lower future NIMs through approval sanctions (eg, product launches,
branch openings).
Taking out BBNI & ADHI; Adding PTPP, EXCL & JPFA to our top 10 list
Given these recent headwinds for Indonesian banks, we are taking out Bank
Negara Indonesia (BBNI-BUY-IDR5,100) from our top-10 buy list.
Additionally, we have also removed Adhi Karya (ADHI-BUY-IDR2,590) from
our top-10 buy list as the share price has surpassed our target price of
IDR2,550. We are also removing Pura Delta Lestari (DMAS-BUY-IDR214) as
the company’s marketing sales target this year has been cut by 45% y-y to
just 50ha (Bahana: 60ha) from 90.5ha previously. In their places, we have
replaced them with a construction name (PTPP-BUY-IDR3,825-TP:IDR4,300)
and 2 leveraged stocks which should benefit from positive sentiment
stemming from expectations of lower lending interest rates ahead: XL Axiata
(EXCL-BUY-IDR3,900-TP:IDR4,400) and Japfa (JPFA-BUY-IDR770TP:
IDR880). Looking ahead, we expect the consumer, telco and construction
sectors to experience greater weightings in fund managers’ portfolios. Thus,
as their bank holdings are trimmed, we foresee upward re-ratings for
consumer and construction counters, despite their current high valuations.
That said, we believe the JCI should remain relatively well supported, and we
retain our 2016 index target at 5,100.
Exhibit 3. Top 10 BUYs & 5 SELLs EPS
gwt
Mkt cap Price TP gwt. PER Yield
(USDm) (IDR) (IDR) (%) (x) (%)
HMSP IJ Equity
36,363 105,500 115,000 6.5 44.1 2.3 UNVR IJ Equity
24,163 42,750 46,000 12.4 49.3 1.9 TLKM IJ Equity
23,858 3,195 3,750 12.6 18.1 3.6 GGRM IJ Equity
9,140 64,125 65,000 9.3 20.7 2.0 ICBP IJ Equity
6,523 15,100 16,800 15.0 24.8 1.8 EXCL* IJ Equity
2,468 3,900 5,100 na na 0.0 ISAT IJ Equity
2,083 5,175 6,800 18.8 21.1 1.4 WSKT IJ Equity
1,935 1,925 2,250 17.3 23.1 0.9 PTPP* IJ Equity
1,372 3,825 4,300 29.8 20.3 1.5 JPFA* IJ Equity
608 770 880 na 12.6 1.4
ASII 20,693 6,900 5,550 4.9 15.9 2.8
INTP 5,277 19,350 17,600 0.3 16.4 5.5
BIRD 1,061 5,725 4,700 3.6 16.5 2.4
APLN 504 332 220 6.7 10.5 1.9
HERO 325 1,050 650 na 76.5 0.0 Source: Bloomberg, Bahana estimates
Based on 19 February 2016 closing price
*Note: new additions
Exhibit 4. Banking sector sensitivity table comparison, 2016F
2016F 2016F 2016F
NII (IDRbn) 301,631 NII (IDRbn) 38,710 NII (IDRbn) 61,062
Net profit (IDRbn) 103,686 Net profit (IDRbn) 19,883 Net profit (IDRbn) 26,815
Equity (IDRbn) 768,113 Equity (IDRbn) 102,150 Equity (IDRbn) 132,307
NIM (%) 5.3 NIM (%) 6.0 NIM (%) 7.6
ROE (%) 13.5 ROE (%) 19.5 ROE (%) 20.3
NII Net profit Changes ROE NII Net profit Changes ROE NII Net profit Changes ROE
(IDRbn) (IDRbn) (%) (%) (IDRbn) (IDRbn) (%) (%) (IDRbn) (IDRbn) (%) (%)
-100bps 245,224 61,381 (40.8) 8.0 -100bps 32,287 15,066 (24.2) 14.7 -100bps 53,038 20,797 (22.4) 15.7
-200bps 188,817 19,075 (81.6) 2.5 -200bps 25,865 10,249 (48.5) 10.0 -200bps 45,014 14,779 (44.9) 11.2
-300bps 132,409 (23,230) (122.4) -3.0 -300bps 19,442 5,432 (72.7) 5.3 -300bps 36,990 8,761 (67.3) 6.6
Sensitivity, NIM Sensitivity, NIM Sensitivity, NIM
Banking sector BBCA BBRI
2016F 2016F 2016F
NII (IDRbn) 46,651 NII (IDRbn) 28,923 NII (IDRbn) 14,845
Net profit (IDRbn) 20,330 Net profit (IDRbn) 11,022 Net profit (IDRbn) 2,998
Equity (IDRbn) 127,861 Equity (IDRbn) 68,878 Equity (IDRbn) 29,608
NIM (%) 5.5 NIM (%) 6.1 NIM (%) 7.0
ROE (%) 15.9 ROE (%) 16.0 ROE (%) 10.1
NII Net profit Changes ROE NII Net profit Change ROE NII Net profit Changes ROE
(IDRbn) (IDRbn) (%) (%) (IDRbn) (IDRbn) (%) (%) (IDRbn) (IDRbn) (%) (%)
-100bps 38,230 14,015 (31.1) 11.0 -100bps 24,212 7,489 (32.1) 10.9 -100bps 12,712 1,399 (53.4) 4.7
-200bps 29,809 7,699 (62.1) 6.0 -200bps 19,502 3,956 (64.1) 5.7 -200bps 10,579 (201) (106.7) -0.7
-300bps 21,389 1,384 (93.2) 1.1 -300bps 14,791 423 (96.2) 0.6 -300bps 8,446 (1,801) (160.1) -6.1
Sensitivity, NIMSensitivity, NIM Sensitivity, NIM
BMRI BBNI BDMN
22 February 2016
PT Bahana Securities – Equity Research – Market strategy 3
2014Finance Asia's
Best Equity House
Alpha Southeast Asia
2014 Best Research Call FMCG Sector
Asiamoney's2013
Best DomesticEquity House
2015Institutional
Investors Highest RankedLocal Research
House
2015Global
Banking & FinanceReview
Best ResearchHouse
2016F 2016F 2016F
NII (IDRbn) 8,509 NII (IDRbn) 7,440 NII (IDRbn) 5,598
Net profit (IDRbn) 1,987 Net profit (IDRbn) 2,084 Net profit (IDRbn) 1,472
Equity (IDRbn) 14,897 Equity (IDRbn) 14,398 Equity (IDRbn) 8,038
NIM (%) 11.4 NIM (%) 4.5 NIM (%) 5.9
ROE (%) 13.3 ROE (%) 14.5 ROE (%) 18.3
NII Net profit Change ROE NII Net profit Change ROE NII Net profit Change ROE
(IDRbn) (IDRbn) (%) (%) (IDRbn) (IDRbn) (%) (%) (IDRbn) (IDRbn) (%) (%)
-100bps 7,760 1,425 (28.3) 9.6 -100bps 5,775 835 (60) 5.8 -100bps 4,646 758 (90.6) 9.4
-200bps 7,011 863 (56.6) 5.8 -200bps 4,111 (413) (120) -2.9 -200bps 3,694 44 (99.4) 0.6
-300bps 6,262 301 (84.8) 2.0 -300bps 2,447 (1,661) (180) -11.5 -300bps 2,742 (670) (108.3) -8.3
Sensitivity, NIM Sensitivity, NIM Sensitivity, NIM
BTPN BBTN BJBR
2016F 2016F
NII (IDRbn) 3,494 NII (IDRbn) 3,350
Net profit (IDRbn) 1,023 Net profit (IDRbn) 1,194
Equity (IDRbn) 6,451 Equity (IDRbn) 8,071
NIM (%) 6.2 NIM (%) 4.0
ROE (%) 15.9 ROE (%) 14.8
NII Net profit Change ROE NII Net profit Change ROE
(IDRbn) (IDRbn) (%) (%) (IDRbn) (IDRbn) (%) (%)
-100bps 2,928 599 (41.5) 9.3 -100bps 2,518 570 (52.3) 7.1
-200bps 2,363 175 (82.9) 2.7 -200bps 1,686 (54) (104.5) -0.7
-300bps 1,797 (249) (124.4) -3.9 -300bps 854 (678) (156.8) -8.4
Sensitivity, NIM Sensitivity, NIM
BJTM BBKP
Source: Bahana estimates
Exhibit 5. Regional P/E comparison, 2016F
19.7
17.0 16.7 15.7
15.2
13.6 13.5 11.7 11.7
10.8
0
2
4
6
8
10
12
14
16
18
20
22
India Indonesia Philippines Malaysia South
Korea
Thailand Indonesia* Singapore China Hong Kong
(x)
Average**: 14.7x
Source: Bloomberg, * excluding UNVR & HMSP, **excluding Indonesia*, Bahana estimates
Exhibit 6. Regional EPS growth comparison, 2016F
53.5
24.8
13.6 11.4
8.4 7.2
(0.8) (1.2) (2.5)(5)
5
15
25
35
45
55
65
South Korea Thailand Indonesia Philippines Malaysia Singapore India China Hong Kong
(%)
Average: 12.7%
Source: Bloomberg, Bahana estimates
Following HMSP’s
inclusion in the JCI,
the market is
trading at a 17.0x
2016F PE; however,
excluding UNVR &
HMSP, our 2016F
market P/E would
fall to 13.5x, below
the regional
average
We expect 2016F
EPS growth to hit
13.6% y-y, slightly
above the regional
average, but below
the Bloomberg
consensus of
18.8% y-y (most
likely as the street
has not yet cut
their 2015F
earnings)
22 February 2016
PT Bahana Securities – Equity Research – Market strategy 4
2014Finance Asia's
Best Equity House
Alpha Southeast Asia
2014 Best Research Call FMCG Sector
Asiamoney's2013
Best DomesticEquity House
2015Institutional
Investors Highest RankedLocal Research
House
2015Global
Banking & FinanceReview
Best ResearchHouse
Exhibit 7. Regional PEG comparison, 2016F
1.9 1.6 1.5 1.1 0.9 0.5 0.3
(4.3)
(10.2)
(25.0)
(30.0)
(25.0)
(20.0)
(15.0)
(10.0)
(5.0)
0.0
5.0
Malaysia Singapore Philippines Indonesia Indonesia* Thailand SouthKorea
Hong Kong China India
(x)
Average**: (3.6)x
Source: Bloomberg * excluding UNVR & HMSP, **excluding Indonesia, Bahana estimates
Exhibit 8. Regional index comparison, YTD vs 2015
YTD in USD 2015 YTD in USD 2015
(%) (%) (%) (%)
IDX (Indonesia) 4.6 (2.0) S&P/TSX (Toronto) (1.0) 4.9
SET (Thailand) 3.3 (5.3) IBOV (Brazil) (5.7) 19.6
KLCI (Mal.) 0.9 14.7 NZSE (New Zealand)
(5.9) 20.9
TWSE (Taiwan) (0.7) (6.7) Dow Jones (USA) (5.9) (2.2)
VNI (Vietnam) (3.8) 11.0 S&P 500 (USA) (6.2) (0.7)
PCOMP (Phil.) (3.9) 0.8 CAC 40 (France) (6.6) 18.8
KOSPI (Korea) (6.8) 9.5 ASX (Australia) (7.0) 8.3
STI (Singapore) (6.9) (7.8) SMI (Swiss) (7.6) (1.1)
Nikkei (Japan) (9.1) 8.7 RTSI (Russia) (10.0) 12.0
Hang Seng (HK) (11.8) (7.2) Nasdaq (USA) (10.0) 5.7
SENSEX (India) (12.6) (0.3) DAX (Germany) (10.3) 19.8
SHCOMP (China) (19.6) 13.9 MADX (Madrid) (12.0) 2.8
SHENZHEN (China) (20.3) 67.6 FTSE 100 (UK) (13.6) 6.5 Source: Bloomberg
Based on 19 February 2016 and 30 December 2015 closing prices
Exhibit 9. Currency comparison, YTD vs 2015
YTD 2015 YTD 2015
(%) (%) (%) (%)
IDR (Indonesia) 2.3 (10.2) JPY (Japan) 6.3 (0.4)
MYR (Malaysia) 2.1 (18.6) EUR (EU) 2.3 (10.2)
SGD (Singapore) 0.9 (6.6) CAD (Canada) 0.5 (16.0)
THB (Thailand) 0.8 (8.7) TRY (Turkey) (1.2) (20.0)
VND (Vietnam) 0.5 (4.9) BRL (Brazil) (1.5) (32.9)
HKD (Hong Kong) (0.2) 0.1 AUD (Australia) (1.8) (10.8)
CNY (China) (0.4) (4.4) NZD (New Zealand) (2.9) (12.4)
TWD (Taiwan) (1.1) (3.7) GBP (UK) (3.0) (5.4)
PHP (Philippines) (1.6) (4.7) MXN (Mexico) (5.5) (14.3)
INR (India) (3.4) (4.7) RUB (Russia) (5.9) (16.3)
KRW (Korea) (4.7) (7.2) ARS (Argentina) (14.2) (34.5) Source: Bloomberg Based on 19 February 2016 and 30 December 2015 closing prices
Note: When a report covers six or more subject companies please access important disclosures for Daiwa Capital Markets Hong Kong Limited at
http://www.daiwacm.com/hk/research_disclaimer.html or contact your investment representative or Daiwa Capital Markets Hong Kong Limited at Level 26, One Pacific
Place, 88 Queensway, Hong Kong.
On the other hand,
we look for a 2016F
PEG of 1.1x, but
excluding UNVR &
HMSP, our 2016F
PEG would further
decrease to 0.9x
Indonesia is the
best performing
market in the
region YTD
IDR has been the
best performing
currency in the
region YTD
22 February 2016
PT Bahana Securities – Equity Research – Market strategy 5
2014Finance Asia's
Best Equity House
Alpha Southeast Asia
2014 Best Research Call FMCG Sector
Asiamoney's2013
Best DomesticEquity House
2015Institutional
Investors Highest RankedLocal Research
House
2015Global
Banking & FinanceReview
Best ResearchHouse
Exhibit 10. Aviation sector relative performance
29.6
19.6
27.5
8.4
(4.1)(2.6)
(32.2)(40)
(30)
(20)
(10)
0
10
20
30
(40)
(30)
(20)
(10)
0
10
20
30
ytd 1M 3M 6M 9M 12M 2015
(%) (%)
Aviation sector relative to JCI
Source: Bloomberg, Bahana
Exhibit 11. Poultry sector relative performance
26.9
16.7 24.2
74.6
16.0
2.6
(19.2)
(40)
(20)
0
20
40
60
80
(40)
(20)
0
20
40
60
80
ytd 1M 3M 6M 9M 12M 2015
(%) (%)
Poultry sector relative to JCI
Source: Bloomberg, Bahana
Exhibit 12. Automotive sector relative performance
12.0 11.4
5.7 5.9
2.1
(1.3)
(7.0)(10)
(5)
0
5
10
15
(10)
(5)
0
5
10
15
ytd 1M 3M 6M 9M 12M 2015
(%) (%)
Automotive sector relative to JCI
Source: Bloomberg, Bahana
Some positive
sentiment from
additional aircraft,
new internal routes,
lower oil prices and
a stronger IDR
From one of the
worst in 2015, the
sector has
rebounded YTD due
to a stronger IDR
and falling raw
materials prices,
easing oversupply
conditions which
allow for DOC and
broiler prices to rise
Helped by positive
sentiment from
lower interest rates,
despite continued
intense competition
and discounting
22 February 2016
PT Bahana Securities – Equity Research – Market strategy 6
2014Finance Asia's
Best Equity House
Alpha Southeast Asia
2014 Best Research Call FMCG Sector
Asiamoney's2013
Best DomesticEquity House
2015Institutional
Investors Highest RankedLocal Research
House
2015Global
Banking & FinanceReview
Best ResearchHouse
Exhibit 13. Consumer staples sector relative performance
10.4 8.4
10.9
19.0
31.8
43.3
28.9
0
5
10
15
20
25
30
35
40
45
0
5
10
15
20
25
30
35
40
45
ytd 1M 3M 6M 9M 12M 2015
(%) (%)
Consumer staples sector relative to JCI Source: Bloomberg, Bahana
Exhibit 14. Plantations sector relative performance
7.0
2.5
(1.9) (0.5)
(18.3)(17.4)
(21.7)
(25)
(20)
(15)
(10)
(5)
0
5
10
(25)
(20)
(15)
(10)
(5)
0
5
10
ytd 1M 3M 6M 9M 12M 2015
(%) (%)
Plantations sector relative to JCI
Source: Bloomberg, Bahana
Exhibit 15. Infrastructure sector relative performance
4.2
(4.7)
2.1 1.9
5.3
1.1 1.4
(6)
(4)
(2)
0
2
4
6
(6)
(4)
(2)
0
2
4
6
ytd 1M 3M 6M 9M 12M 2015
(%) (%)
Infrastructure-related sector relative to JCI
Source: Bloomberg, Bahana
With scarcity of
growth on the
ground, staples
remain as one of the
most defensive and
resilient sectors
El Nino effect (lower
Malaysia’s and
Indonesia’s
inventories) in
January is helping to
support the sector’s
recent performance
Perceived as a market proxy in 2015, it has outperformed on expectations of
project acceleration
22 February 2016
PT Bahana Securities – Equity Research – Market strategy 7
2014Finance Asia's
Best Equity House
Alpha Southeast Asia
2014 Best Research Call FMCG Sector
Asiamoney's2013
Best DomesticEquity House
2015Institutional
Investors Highest RankedLocal Research
House
2015Global
Banking & FinanceReview
Best ResearchHouse
Exhibit 16. Metals sector relative performance
0.8
5.2
(13.4)(15.8)
(38.2)
(42.3)
(46.5) (50)
(40)
(30)
(20)
(10)
0
10
(50)
(40)
(30)
(20)
(10)
0
10
ytd 1M 3M 6M 9M 12M 2015
(%) (%)
Metals sector relative to JCI
Source: Bloomberg, Bahana
Exhibit 17. Telco sector relative performance
(1.3)(2.9)
5.6 6.3
25.5
19.6 21.7
0
5
10
15
20
25
30
(5)
0
5
10
15
20
25
30
ytd 1M 3M 6M 9M 12M 2015
(%) (%)
Telco sector relative to JCI
Source: Bloomberg, Bahana
Exhibit 18. Banks sector relative performance
(1.3)
(3.7)
0.3
5.1
(0.4)
0.3
5.7
(4)
(3)
(2)
(1)
0
1
2
3
4
5
6
(4)
(3)
(2)
(1)
0
1
2
3
4
5
6
ytd 1M 3M 6M 9M 12M 2015
(%) (%)
Banks sector relative to JCI
Source: Bloomberg, Bahana
Starting to
outperform due to
oil-price sentiment
Starting to
underperform on
profit taking due to
its strong 2015
outperformance
Starting to
underperform due to
news on NIM
capping
22 February 2016
PT Bahana Securities – Equity Research – Market strategy 8
2014Finance Asia's
Best Equity House
Alpha Southeast Asia
2014 Best Research Call FMCG Sector
Asiamoney's2013
Best DomesticEquity House
2015Institutional
Investors Highest RankedLocal Research
House
2015Global
Banking & FinanceReview
Best ResearchHouse
Exhibit 19. Coal sector relative performance
(3.6)
1.0
(13.6) (14.0)
(24.5)
(18.0)
(11.4)
(30)
(25)
(20)
(15)
(10)
(5)
0
5
(30)
(25)
(20)
(15)
(10)
(5)
0
5
ytd 1M 3M 6M 9M 12M 2015
(%) (%)
Coal sector relative to JCI
Source: Bloomberg, Bahana
Exhibit 20. Oil-related sector relative performance
(3.8)
0.4
(6.6)
(9.0)
(3.9)
(4.9)
(2.4)
(10)
(8)
(6)
(4)
(2)
0
2
(10)
(8)
(6)
(4)
(2)
0
2
ytd 1M 3M 6M 9M 12M 2015
(%) (%)
Oil-related sector relative to JCI Source: Bloomberg, Bahana
Exhibit 21. Consumer retail sector relative performance
(4.8)
(3.0)
(0.7)
(3.2)
1.2 0.6
10.3
(6)
(4)
(2)
0
2
4
6
8
10
12
(6)
(4)
(2)
0
2
4
6
8
10
12
ytd 1M 3M 6M 9M 12M 2015
(%) (%)
Consumer retail relative to JCI Source: Bloomberg, Bahana
Underperformance
on continued weak
coal prices due to
implementation of
China’s clean air
policy
Has been
underperforming on
a depressed oil price
outlook from
oversupply condition
and the lifting of
Iran sanctions
With farmer incomes
down due to low
commodity prices,
retailers have
underperformed YTD
22 February 2016
PT Bahana Securities – Equity Research – Market strategy 9
2014Finance Asia's
Best Equity House
Alpha Southeast Asia
2014 Best Research Call FMCG Sector
Asiamoney's2013
Best DomesticEquity House
2015Institutional
Investors Highest RankedLocal Research
House
2015Global
Banking & FinanceReview
Best ResearchHouse
Exhibit 22. Property sector relative performance
(6.5)
(4.7)
(2.0)
4.6
(3.5) (3.9)
12.9
(10)
(5)
0
5
10
15
(10)
(5)
0
5
10
15
ytd 1M 3M 6M 9M 12M 2015
(%) (%)
Property sector relative to JCI
Source: Bloomberg, Bahana
Exhibit 23. Shipping sector relative performance
(7.1)
(9.4)
2.7
7.7
(2.8)
(6.1)
(11.4)
(15)
(10)
(5)
0
5
10
(15)
(10)
(5)
0
5
10
ytd 1M 3M 6M 9M 12M 2015
(%) (%)
Shipping sector relative to JCI Source: Bloomberg, Bahana
Exhibit 24. Industrial estate sector relative performance
(11.9)
(8.0)(10.1)
(13.4)
(24.6)
(29.9)
(18.4)
(35)
(30)
(25)
(20)
(15)
(10)
(5)
0
(35)
(30)
(25)
(20)
(15)
(10)
(5)
0
ytd 1M 3M 6M 9M 12M 2015
(%) (%)
Industrial estate sector relative to JCI
Source: Bloomberg, Bahana
Despite lower
interest rates, the
sector has been
underperforming
this year due to
weak marketing
sales and the
government’s
aggressive taxation
drive
Has done well in the
past 6 months,
helped by lower oil
prices
Concerns on
investment outlook
have hurt the
performance of the
sector
22 February 2016
PT Bahana Securities – Equity Research – Market strategy 10
2014Finance Asia's
Best Equity House
Alpha Southeast Asia
2014 Best Research Call FMCG Sector
Asiamoney's2013
Best DomesticEquity House
2015Institutional
Investors Highest RankedLocal Research
House
2015Global
Banking & FinanceReview
Best ResearchHouse
Exhibit 25. Cement sector relative performance
(13.6)
(6.1)
(13.1)
9.0
(7.8)
(12.5)
(9.1)
(15)
(10)
(5)
0
5
10
(15)
(10)
(5)
0
5
10
ytd 1M 3M 6M 9M 12M 2015
(%) (%)
Cement sector relative to JCI Source: Bloomberg, Bahana
Exhibit 26. Consumer media sector relative performance
(13.9)
(2.7)
(15.8)
(8.3)
(2.8)
(19.6)
(4.6)
(25)
(20)
(15)
(10)
(5)
0
(25)
(20)
(15)
(10)
(5)
0
ytd 1M 3M 6M 9M 12M 2015
(%) (%)
Consumer media relative to JCI Source: Bloomberg, Bahana
Exhibit 27. Transportation sector relative performance
(21.1)
(14.9)(17.2)
(28.8)
(39.3)
(54.3)
(39.2)
(60)
(50)
(40)
(30)
(20)
(10)
0
(60)
(50)
(40)
(30)
(20)
(10)
0
ytd 1M 3M 6M 9M 12M 2015
(%) (%)
Transportation sector relative to JCI Source: Bloomberg, Bahana
The sector has been
hurt by sentiment on
competition, the
oversupply situation
and weak margins
Suffered from FMCG
companies’ lower TV
ad spend and their
shift to cheaper
advertising media
(ie, online and direct
marketing)
The taxi industry has
been hurt by
decreased demand
on weak purchasing
power and lower
utilization rates on
intensifying online
mobile-based
competition
22 February 2016
PT Bahana Securities – Equity Research – Market strategy 11
2014Finance Asia's
Best Equity House
Alpha Southeast Asia
2014 Best Research Call FMCG Sector
Asiamoney's2013
Best DomesticEquity House
2015Institutional
Investors Highest RankedLocal Research
House
2015Global
Banking & FinanceReview
Best ResearchHouse
Exhibit 28. Bahana equity coverage, leaders & laggards COMPANY STOCK CODE RATING TARGET PRICE Up/(Downside)(%) 2/19/2016 2/18/2015 CHANGE (%)
Express Transindo Utama TAXI IJ REDUCE 120 12.1 107 97 10.3
Sarana Menara Nusantara TOWR IJ BUY 5,000 19.0 4,200 3,980 5.5 Hero Supermarket HERO IJ REDUCE 650 (38.1) 1,050 1,000 5.0
PP Property PPRO IJ HOLD 180 (6.7) 193 185 4.3
Sampoerna Agro SGRO IJ HOLD 1,800 (3.2) 1,860 1,800 3.3
Unilever Indonesia UNVR IJ BUY 46,000 7.6 42,750 41,675 2.6 Nippon Indosari Corpindo ROTI IJ BUY 1,450 3.6 1,400 1,370 2.2
Electronic City ECII IJ REDUCE 700 (2.1) 715 700 2.1
Austindo Nusantara Jaya ANJT IJ REDUCE 1,000 (38.3) 1,620 1,590 1.9 Bukit Asam PTBA IJ BUY 7,800 67.0 4,670 4,585 1.9
Medco Energi Internasional MEDC IJ BUY 1,300 55.7 835 820 1.8
Erajaya Swasembada ERAA IJ BUY 850 47.8 575 565 1.8 Ace Hardware Indonesia ACES IJ HOLD 875 (3.8) 910 900 1.1
Mayora Indah MYOR IJ BUY 31,000 16.0 26,725 26,450 1.0
Gudang Garam GGRM IJ BUY 65,000 1.4 64,125 63,500 1.0
Blue Bird BIRD IJ REDUCE 4,700 (17.9) 5,725 5,675 0.9 Aneka Tambang ANTM IJ BUY 764 107.0 369 366 0.8
Tiphone Mobile Indonesia TELE IJ BUY 1,180 69.8 695 690 0.7
Multipolar MLPL IJ BUY 550 140.2 229 228 0.4 Astra Agro Lestari AALI IJ REDUCE 14,300 (19.4) 17,750 17,725 0.1
Bank Jawa Timur BJTM IJ REDUCE 420 (0.2) 421 421 0.0
Holcim Indonesia SMCB IJ REDUCE 925 (2.6) 950 950 0.0
Indo Tambangraya Megah ITMG IJ REDUCE 5,200 (1.0) 5,250 5,250 0.0 Harum Energy HRUM IJ REDUCE 500 (21.3) 635 635 0.0
Tempo Scan Pacific TSPC IJ BUY 2,000 14.3 1,750 1,750 0.0
J Resources PSAB IJ BUY 2,000 88.7 1,060 1,060 0.0 Merdeka Copper Gold MDKA IJ BUY 2,200 15.8 1,900 1,900 0.0
Agung Podomoro Land APLN IJ REDUCE 220 (33.7) 332 332 0.0
Soechi Lines SOCI IJ BUY 630 33.5 472 472 0.0 Pelayaran Tempuran Emas TMAS IJ BUY 3,000 62.2 1,850 1,850 0.0
Indomobil Sukses Internasional IMAS IJ HOLD 2,000 (3.8) 2,080 2,085 (0.2)
AKR Corporindo AKRA IJ BUY 7,000 (9.1) 7,700 7,750 (0.6)
Japfa Comfeed Indonesia JPFA IJ BUY 550 (28.6) 770 775 (0.6) Bank Tabungan Pensiunan Nasional BTPN IJ REDUCE 2,350 13.3 2,075 2,090 (0.7)
Krakatau Steel KRAS IJ REDUCE 275 (24.2) 363 366 (0.8)
Xl Axiata EXCL IJ BUY 4,400 12.8 3,900 3,935 (0.9) Sido Muncul SIDO IJ HOLD 480 (5.0) 505 510 (1.0)
Indofood CBP Sukses Makmur ICBP IJ BUY 16,800 11.3 15,100 15,250 (1.0)
Tunas Baru Lampung TBLA IJ BUY 570 14.0 500 505 (1.0) Adi Sarana Armada ASSA IJ BUY 130 31.3 99 100 (1.0)
Wijaya Karya WIKA IJ BUY 3,100 15.5 2,685 2,715 (1.1)
Malindo Feedmill MAIN IJ BUY 1,700 27.3 1,335 1,350 (1.1)
HM Sampoerna HMSP IJ BUY 115,000 9.0 105,500 106,700 (1.1) United Tractors UNTR IJ HOLD 16,000 0.5 15,925 16,125 (1.2)
Waskita Karya WSKT IJ BUY 1,975 2.6 1,925 1,950 (1.3)
Indofood Sukses Makmur INDF IJ BUY 6,600 (1.9) 6,725 6,825 (1.5) Gajah Tunggal GJTL IJ BUY 860 76.2 488 496 (1.6)
Bank Tabungan Negara BBTN IJ BUY 1,520 1.0 1,505 1,530 (1.6)
Kawasan Industri Jababeka KIJA IJ BUY 270 13.9 237 241 (1.7) Indonesian Stock Exchange JCI 4,698 4,779 (1.7)
Kimia Farma KAEF IJ BUY 1,350 20.0 1,125 1,145 (1.7)
Bank Bukopin BBKP IJ HOLD 730 30.4 560 570 (1.8)
Semen Baturaja SMBR IJ HOLD 300 (5.4) 317 323 (1.9) Lippo Karawaci LPKR IJ REDUCE 1,130 9.7 1,030 1,050 (1.9)
Kalbe Farma KLBF IJ HOLD 1,480 17.0 1,265 1,290 (1.9)
Vale Indonesia INCO IJ BUY 2,500 66.1 1,505 1,535 (2.0) Lippo Cikarang LPCK IJ BUY 8,300 35.5 6,125 6,250 (2.0)
Ciputra Property CTRP IJ REDUCE 365 (6.2) 389 397 (2.0)
Siloam International Hospitals SILO IJ BUY 14,700 72.9 8,500 8,675 (2.0)
London Sumatra Indonesia LSIP IJ BUY 1,500 3.1 1,455 1,485 (2.0) Ramayana Lestari Sentosa RALS IJ REDUCE 640 (7.9) 695 710 (2.1)
Astra International ASII IJ REDUCE 5,550 (19.6) 6,900 7,050 (2.1)
Mitra Keluarga Karyasehat MIKA IJ SELL 1,900 (7.5) 2,055 2,100 (2.1) Pembangunan Perumahan PTPP IJ BUY 4,300 12.4 3,825 3,910 (2.2)
Summarecon Agung SMRA IJ BUY 1,820 16.3 1,565 1,600 (2.2)
Bumi Serpong Damai BSDE IJ BUY 2,020 16.8 1,730 1,770 (2.3) Puradelta Lestari DMAS IJ BUY 290 35.5 214 219 (2.3)
Garuda Indonesia GIAA IJ BUY 400 (5.4) 423 433 (2.3)
Matahari Putra Prima MPPA IJ BUY 2,750 54.1 1,785 1,830 (2.5)
Total Bangun Persada TOTL IJ BUY 940 64.9 570 585 (2.6) Mitra Adiperkasa MAPI IJ BUY 4,750 13.8 4,175 4,285 (2.6)
Timah TINS IJ REDUCE 411 (27.3) 565 580 (2.6)
Bank Central Asia BBCA IJ BUY 14,700 12.6 13,050 13,400 (2.6) Wintermar Offshore Marine WINS IJ HOLD 190 75.9 108 111 (2.7)
Pakuwon Jati PWON IJ HOLD 490 5.4 465 478 (2.7)
Anabatic Technologies ATIC IJ BUY 800 49.5 535 550 (2.7) Semen Indonesia SMGR IJ HOLD 10,600 4.2 10,175 10,475 (2.9)
Surya Semesta Internusa SSIA IJ BUY 720 8.3 665 685 (2.9)
Wijaya Karya Beton WTON IJ BUY 1,100 12.2 980 1,010 (3.0)
Matahari Department Store LPPF IJ BUY 19,800 23.0 16,100 16,600 (3.0) Alam Sutera Realty ASRI IJ REDUCE 300 (15.3) 354 365 (3.0)
Adaro Energy ADRO IJ BUY 700 19.7 585 605 (3.3)
Surya Citra Media SCMA IJ HOLD 3,250 14.4 2,840 2,940 (3.4) Bekasi Fajar Industrial Estates BEST IJ REDUCE 300 18.6 253 262 (3.4)
Media Nusantara Citra MNCN IJ BUY 2,000 31.1 1,525 1,580 (3.5)
Adhi Karya ADHI IJ BUY 2,550 (1.5) 2,590 2,685 (3.5) Jasa Marga JSMR IJ BUY 6,250 15.7 5,400 5,600 (3.6)
Telekomunikasi Indonesia TLKM IJ BUY 3,750 17.4 3,195 3,315 (3.6)
Bank Danamon Indonesia BDMN IJ BUY 3,400 (15.9) 4,045 4,200 (3.7)
Indocement Tunggal Prakarsa INTP IJ REDUCE 16,400 (15.2) 19,350 20,150 (4.0) Indosat ISAT IJ BUY 6,800 31.4 5,175 5,400 (4.2)
Perusahaan Gas Negara PGAS IJ REDUCE 2,500 (3.3) 2,585 2,700 (4.3)
Salim Ivomas Pratama SIMP IJ HOLD 290 (28.2) 404 422 (4.3) Dharma Satya Nusantara DSNG IJ BUY 535 21.6 440 460 (4.3)
Bank Mandiri BMRI IJ BUY 9,700 4.3 9,300 9,725 (4.4)
Bank Rakyat Indonesia BBRI IJ BUY 13,000 13.5 11,450 12,000 (4.6)
Ciputra Development CTRA IJ BUY 1,400 6.9 1,310 1,380 (5.1) Sri Rejeki Isman SRIL IJ BUY 500 92.3 260 274 (5.1)
Bank Jawa Barat dan Banten BJBR IJ BUY 1,020 10.9 920 970 (5.2)
Tower Bersama Infrastructure TBIG IJ HOLD 6,500 9.2 5,950 6,275 (5.2) Charoen Pokphand Indonesia CPIN IJ BUY 3,500 1.6 3,445 3,635 (5.2)
Bank Negara Indonesia BBNI IJ BUY 5,700 11.8 5,100 5,450 (6.4)
Source: Bloomberg, Bahana estimates
Head Office Surabaya Branch
Graha Niaga, 19th Floor Wisma BII, Ground Floor
Jl. Jend. Sudirman Kav. 58 Jl. Pemuda 60-70
Jakarta 12190 Surabaya 60271
Indonesia Indonesia
Tel. 62 21 250 5081 Tel. 62 31 535 2788
Fax. 62 21 522 6049 http://www.bahana.co.id Fax. 62 31 546 1157
Dealing Room: +62 21 527 0808 (Foreign Institutional)
Research: +62 21 250 5081
+62 21 250 5508 (Domestic Institutional)
Harry Suharry.su@bahana.co.id
Senior Associate DirectorHead of Corporate Strategy & Research
Consumer, Strategy
ext 3600direct: +62 21 250 5735
Teguh Hartanto
teguh.hartanto@bahana.co.idAssociate Director
Deputy Head of Research
Banks, Cement, Aviationext 3610
Leonardo Henry Gavaza, CFAleonardo@bahana.co.id
Senior Research ManagerAuto, Heavy equipment, Telco
ext 3608
Bob Setiadibob.setiadi@bahana.co.id
Research AnalystCement, Infratructure,Toll roads
ext 3605
Agustinus Reza Kirana
agustinus.reza@bahana.co.idResearch Analyst
Plantations, Shipping, Transportationext 3616
Arandi Ariantaraarandi@bahana.co.id
Research AnalystCoal, Metals, Oil & Gas
ext 3619
Made Ayu Wijayati
made.ayu@bahana.co.idResearch Executive
ext 3607
Bagus Adi Yoga Prawira
yoga.prawira@bahana.co.idResearch AnalystConsumer, Media
ext 3604
Zefanya Halim
zefanya@bahana.co.idCA Manager
ext 3612
Novianty Permata Sari
novianty@bahana.co.idCA
ext 3618
Ashish Agrawal
ashish@bahana.co.idVice President
Institutional Equity Salesext 2550 / 2553
Reynard Poernawan
reynard@bahana.co.idInstitutional Equity Sales
ext 2528
John M. Dasaad
dasaad@bahana.co.idInstitutional Equity Sales
ext 2549
Yohanes Adhi Handoko
yohanes@bahana.co.idManager, Surabaya Branch
ext 7250
Suwardi Widjaja
Suwardi@bahana.co.idInstitutional Equity Sales
ext 2548
Amelia Husada
amelia@bahana.co.idVice President
Institutional Equity Salesext 2552
Nurul Farida
nurul@bahana.co.idInstitutional Equity Sales
ext 2547
+62 31 535 2788 (Surabaya Branch)
Fakhrul Fulvianfakhrul.fulvian@bahana.co.id
Economistext 3602
Melvin Mikha Reminov
melvin@bahana.co.idResearch Associate
ext 3621
Sanni Satrio Dwi Utomo
sanni@bahana.co.idResearch Analyst
Industrial Estate, Propertyext 3611
Natalia Surjadiputranatalia@bahana.co.idDirector of Sales &
Client Relationship Management ext 2500
Sarah Jessica Hutapea
sarah.jessica@bahana.co.idResearch Associate
ext 3693
Nyoman Widita Prabawa
nyoman@bahana.co.idResearch Associate
ext 3623
Renaldy Effendy
renaldy@bahana.co.idResearch Analyst
Consumer, Healthcareext 3606
Gilang Purnama
gilang.purnama@bahana.co.idResearch Associate
ext 3601
Adriana Kosasih
adri@bahana.co.idSales Executive
ext 2541
Hanna Marionda
hanna@bahana.co.idSales Trader
ext 2525
Ari Santosa
ari.santosa@bahana.co.idSales Trader
ext 2554
Bram Taarea
bram@bahana.co.idInstitutional Equity Sales
ext 2524
Jozabad Jonathan
jozabad@bahana.co.idResearch Analyst
Poultryext 3620
Muhammad Wafi
wafi@bahana.co.idTechnical Analyst
ext 3609
Inca Adityainca@bahana.co.id
Senior Equity Institutional Salesext 2545
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For stocks and sectors in Indonesia covered by Bahana Securities, the following rating system is in effect:
Stock ratings are based on absolute upside or downside, which is the difference between the target price and the current market price. Unless otherwise specified, these ratings are set with a 12-month horizon. It is possible that future price volatility may cause a temporary mismatch between upside/downside for a stock based on the market price and the formal rating. "Buy": the price of the security is expected to increase by 10% or more. "Hold": the price of the security is expected to range from an increase of less than 10% to a decline of less than 5%. "Reduce": the price of the security is expected to decline by 5% or more.
Sector ratings are based on fundamentals for the sector as a whole. Hence, a sector may be rated “Overweight” even though its constituent stocks are a ll rated “Reduce”; and a sector may be rated “Underweight” even though its constituent stocks are all rated “Buy”. “Overweight”: positive fundamentals for the sector. “Neutral”: neither positive nor negative fundamentals for the sector. “Underweight”: negative fundamentals for the sector.
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Bahana Securities market making Bahana Securities may from time to time make a market in securities covered by this research.
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