Indonesia: 2014 in review - 2015 market outlookasiaresearch.daiwacm.com/eg/cgi-bin/.../20150105id... · Indonesia: 2014 in review - 2015 market outlook Harry Su E-mail: [email protected]

Asiamoney’s

2013

Best Domestic

Equity House

Market flash

5 January 2015

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

2014

Finance Asia's

Best

Equity House

Asiamoney's

2013

Best Domestic

Equity House

Alpha

Southeast Asia

2014 Best

Research Call

FMCG Sector

Indonesia: 2014 in review - 2015 market outlook

Harry Su E-mail: [email protected] Phone: +6221 250 5735

Strong 2014 JCI performance of 22.3%; 4th best in the region

2014 ended strong for the JCI, which closed at 5,227 (high: 5,263 on 8

September; low: 4,161 on 6 January), reflecting a strong annual performance

of 22.3% y-y (exhibit 4), much better than the 2013 performance of -1% y-

y, and just shy of our revised-up target of 5,250 from 5,000 initially. In terms

of regional performance, the Jakarta Composite Index was the fourth best in

both absolute (exhibit 4) and USD terms (the IDR depreciated 1.8% in 2014

– exhibit 5), behind Shenzhen/Shanghai (China), Sensex (India) and PCOMP

(the Philippines). JCI’s performance last year, based on our estimate,

outpaced the market’s 2014 EPS growth of 13.8% y-y, reflecting 1-year

forward PE expansion to 17.9x (16.6x ex-UNVR). This higher valuation,

coupled with political jitters throughout 2014, resulted in 2014 average daily

turnover of IDR4.7tn (USD396mn), down compared to 2013’s average daily

transaction of DR4.9tn (USD469mn), down 4% y-y in IDR basis (exhibit 6)

and 16% in USD terms, partly also dragged down by changes in trading units

and alterations in price fractions.

Best: Construction & property; Worst: Coal & consumer discretionary

While exhibits 10-24 display the best and the worst sectors under our

coverage, exhibit 2 shows the 10 best 2014 performing stocks within our

coverage, led by construction plays WSKT, PTPP, WIKA, ADHI and TOTL,

helped by the Jokowi euphoria on expected strong government expenditure

on infrastructure. This is followed by property-related counters LPCK, SMRA

and PWON. On the flip side, the 10 worst performing stocks in our covered

universe were dominated by coal plays BUMI, ITMG and HRUM as well as

consumer discretionary (RANC and RALS) and poultry (MAIN and JPFA)

counters. The complete list of our coverage is enumerated on exhibit 7.

23 IPOs in 2014: Down 23% y-y; 75% average return

Despite last year’s limited number of IPOs (2014: 23; 2013: 30), raising

IDR9tn (USD720m), the performances of the new listings (exhibit 8) were

strong at 75% average return (2013:2%). However, stripping out the top six

best-performing IPOs (ASMI, BALI, WTON, LINK, BPII, TARA), which provided

triple-digit returns, the average IPO performance would come down to

19.5%, more in line with the overall JCI performance. Average fundraising

was also lower at IDR391bn (USD31m), compared to 2013’s IDR557bn/

USD53m, translating to an average market cap of USD104m (assuming 30%

average free float), suggesting relatively small IPOs. Note that on 17 January

2014, there was one re-listing: Tunas Alfin (TALF) which we have not

included in our IPO list. In January 2015, there is only one company (Bank

Yudha) planning to list in January (exhibit 9), although we note that several

state-owned companies are planning corporate actions in the form of IPOs

and rights issues throughout 2015.

2015: Market positives and challenges

Helped by lower global oil prices, we applaud Jokowi’s 2014 year-end closer

move in partly dismantling Indonesia’s inefficient energy subsidy system by

lowering the gasoline price from IDR8,500 liter to IDR7,600 (-10.6%), with

diesel prices cut 3.3% from IDR7,500 per liter to IDR7,250 while kerosene

Exhibit 1. Market data 13A 14F 15F 16F

Opr. profit growth (%) 8.8 11.6 11.2 11.9

EPS growth (%) 3.6 13.7 11.5 11.8

P/E (x) 24.5 20.1 17.9 15.8

PEG (x) 6.9 1.5 1.6 1.3

EV/EBITDA (x) 10.7 11.3 8.9 7.6

P/BV (x) 7.2 8.5 6.4 5.6

Div. yield (%) 2.3 2.4 2.5 2.7

ROE (%) 29.4 28.3 30.2 28.9 Source: Companies, Bahana estimates

Based on 30 December 2014 closing price

Exhibit 2. Top 10 leaders & laggards 30-Dec-14 30-Dec-13 Change

(IDR) (IDR) (%)

WSKT 1,470 405 263.0

PTPP 3,575 1,160 208.2

KAEF 1,465 590 148.3

WIKA 3,680 1,580 132.9

MLPL 835 360 131.9

ADHI 3,480 1,510 130.5

TOTL 1,120 500 124.0

LPCK 10,400 4,875 113.3

SMRA 1,520 780 94.9

PWON 515 270 90.7

BUMI 80 300 (73.3)

BWPT 400 1,106 (63.8)

ITMG 15,375 28,500 (46.1)

ASSA 155 280 (44.6)

HRUM 1,660 2,750 (39.6)

SRIL 163 245 (33.5)

MAIN 2,130 3,175 (32.9)

RANC 445 660 (32.6)

RALS 790 1,060 (25.5)

JPFA 950 1,220 (22.1) Source: Bloomberg


Exhibit 3. Top 10 BUYs & 5 SELLs EPS

gwt

Mkt cap Price TP gwt. PER Yield

(USDm) (IDR) (IDR) (%) (%) (%)

TLKM 23,202 2,865 3,350 13.2 16.6 3.9

UNVR 19,800 32,300 37,500 22.2 36.6 2.7

PGAS 11,685 6,000 7,000 6.5 13.2 4.6

GGRM 9,383 60,700 70,000 13.7 19.2 2.2

KLBF 6,892 1,830 1,975 15.4 35.0 1.3

ICBP 6,137 13,100 13,300 18.7 24.6 1.8

JSMR 3,852 7,050 7,200 7.7 28.7 1.4

ISAT 1,768 4,050 4,500 na na -

KAEF 654 1,465 1,400 32.1 29.7 0.7

TELE 526 930 1,160 21.0 15.9 1.6

SCMA 4,111 3,500 2,360 30.8 26.5 1.4

MNCN 2,913 2,540 2,300 0.4 19.9 2.3

MYOR 1,502 20,900 20,250 108.9 26.1 1.0

IMAS 889 4,000 2,500 na 58.0 0.4

RALS 450 790 720 (3.7) 14.4 3.8 Source: Bloomberg, Bahana estimates

Based on 30 December 2014 closing prices

5 January 2015

PT Bahana Securities – Equity Research – Market strategy 2

2014

Finance Asia's

Best

Equity House

Asiamoney's

2013

Best Domestic

Equity House

Alpha

Southeast Asia

2014 Best

Research Call

FMCG Sector

prices remained unchanged at IDR2,500 per liter. Once approved by the

parliament, this unprecedented government decision will positively impact the

market as follows, in our view:

1. The fixed-subsidy system (diesel subsidy of IDR1,000 a liter) provides a

bridge for the government’s next step of completely doing away with fuel

subsidies. At this stage, the gasoline subsidy is scrapped although the

government will continue to pay for gasoline-distribution costs for areas

outside of Java, Madura and Bali.

2. Lower fuel subsidy to around IDR17tn, accounting for just 1% of total

government expenditure from IDR276tn or 13.5%, translates to our

estimated infrastructure increased spending of IDR317tn, up 98% from

IDR160tn in 2014.

3. A drop in inflation to reach the 5.04% level (2014: 8.36% y-y) from 5.6%

previously, helped also by lower commodity prices on depressed oil prices

(exhibit 29). This should pave the way for lower interest rates in 2H15

once the Fed rate hike overhang is out of the way.

4. Decreased CAD to 2.0% in 2015, down from an estimated 2014 level of

3%, should eventually allow the local currency to appreciate to the

IDR11,500/1USD level based on our forecast.

5. More manageable CAD could lead to an investment upgrade from S&P,

which would result in lower borrowing costs to help accelerate the much-

needed infrastructure-related projects.

At the other end of the spectrum, we see 2015 market challenges as follows:

1. With the authorities planning to announce monthly retail diesel and

gasoline prices, which will fluctuate with international prices, inflation

could be more volatile ahead, particularly if there is no ceiling fuel price in

place. For the time being, however, the recent fuel price decline, the

current low commodity prices (exhibits 25-30) and March harvest period

should bode well for CPI figures, although these would be partially offset

by higher administered prices stemming from the planned electricity and

LPG price increases ahead.

2. On the infrastructure front, we see possible project delays due to political

interests, land clearing issues as well as lack of sufficient labor force.

3. On the political side, the market will also look for greater coalition within

the parliament in order to help support Jokowi’s ambitious infrastructure

project plans.

4. Fund outflows continue to be the market’s biggest threat ahead,

particularly in 1H15 as the Fed could begin to raise interest rates in the

middle of 2015. Additionally, we also see lofty market valuation as a risk.

2015: Cautious optimism with 5,900 index target

In line with our 2015F market EPS growth of 12% y-y, we have a 5,900

target for the JCI. However, with continued weak outlook on commodities and

possible higher Fed rate, we continue to recommend defensive local exposure

as a shield against both internal and external volatilities. In 2015, we are

positive mostly on defensive sectors (exhibit 3) such as telecom (TLKM, ISAT,

TELE) and consumer staples (UNVR, GGRM, KLBF, ICBP and KAEF), helped by

some improvement in the purchasing power outlook given the recent lower

fuel prices. Additionally, we expect the staples to benefit from lower raw

materials prices on the back of weak oil prices. On a more negative note, we

are UNDERWEIGHT in the auto sector due to continued intense competition

as well as commodities-related sectors on weak price outlook. At this stage,

we retain our view that investors should stay away from consumer

discretionary counters like Media and Retailers on their poor fundamentals.

5 January 2015


2014

Finance Asia's

Best

Equity House

Asiamoney's

2013

Best Domestic

Equity House

Alpha

Southeast Asia

2014 Best

Research Call

FMCG Sector

Exhibit 4. Regional index comparison, 2014 vs 2013

2014 2013 2014 2013

(%) (%) (%) (%)

SHCOMP (China) 52.9 (6.7) Nasdaq (USA) 13.4 38.3

SHENZHEN (China) 33.8 20.0 NZSE (New Zealand) 12.3 13.2

SENSEX (India) 30.1 9.0 S&P 500 (USA) 11.4 29.6

PCOMP (Phil.) 22.8 1.3 SMI (Swiss) 9.5 20.2

IDX (Indonesia) 22.3 (1.0) S&P/TSX (Toronto) 9.1 9.6

SET (Thailand) 15.3 (6.7) Dow Jones (USA) 7.5 26.5

VNI (Vietnam) 8.1 22.0 MADX (Madrid) 3.0 22.7

TWSE (Taiwan) 8.1 11.8 DAX (Germany) 2.7 25.5

Nikkei (Japan) 7.1 56.7 CAC 40 (France) (0.5) 18.0

STI (Singapore) 6.2 0.0 ASX (Australia) (2.1) 16.7

Hang Seng (HK) 1.3 2.9 FTSE 100 (UK) (2.7) 15.1

KOSPI (Korea) (4.8) 0.7 IBOV (Brazil) (2.9) (15.5)

KLCI (Mal.) (5.7) 10.5 RTSI (Russia) (45.2) (5.6) Source: Bloomberg

Exhibit 5. Currency comparison, 2014 vs 2013

2014 2013 2014 2013

(%) (%) (%) (%)

HKD (Hong Kong) (0.0) (0.0) NZD (New Zealand) (5.4) (0.9)

THB (Thailand) (0.6) (6.9) GBP (UK) (6.3) 1.9

PHP (Philippines) (0.7) (8.3) TRY (Turkey) (8.7) (20.4)

VND (Vietnam) (1.4) (1.2) AUD (Australia) (9.1) (16.6)

IDR (Indonesia) (1.8) (26.3) CAD (Canada) (9.4) (7.1)

INR (India) (2.0) (12.4) BRL (Brazil) (12.5) (15.1)

CNY (China) (2.5) 2.8 MXN (Mexico) (13.2) (1.4)

KRW (Korea) (3.9) 1.4 EUR (EU) (13.6) 4.0

SGD (Singapore) (4.9) (3.4) JPY (Japan) (13.7) (21.4)

TWD (Taiwan) (6.2) (2.7) ARS (Argentina) (29.8) (32.6)

MYR (Malaysia) (6.8) (7.1) RUB (Russia) (84.8) (7.7) Source: Bloomberg

Based on 31 December 2014 and 31 December 2013 closing prices

Exhibit 6. JCI average monthly turnover, January 2013-December 2014

4.2

4.9

6.1

5.1

6.2

6.8

4.2

5.15.2

4.3

4.1

3.3

4.2

4.8

5.9

5.7

5.2

3.6

5.5

4.34.3 4.3

3.9

4.3

3

4

5

6

7

(IDRtn)

JCI average daily turnover

Source: Bloomberg, Bahana

ADT in 2014 was

IDR4.7tn, lower

than 2013’s level of

IDR4.9tn

5 January 2015


2014

Finance Asia's

Best

Equity House

Asiamoney's

2013

Best Domestic

Equity House

Alpha

Southeast Asia

2014 Best

Research Call

FMCG Sector

Exhibit 7. Bahana equity coverage, leaders & laggards, FY2014

STOCK CODE RATING TARGET PRICE Up/(Downside)

Potential (%) 12/30/2014 12/30/2013 CHANGE (%)

WSKT IJ HOLD 990 (32.7) 1,470 405 263.0

PTPP IJ BUY 3,100 (13.3) 3,575 1,160 208.2

KAEF IJ BUY 1,400 (4.4) 1,465 590 148.3

WIKA IJ BUY 3,150 (14.4) 3,680 1,580 132.9

MLPL IJ BUY 1,400 67.7 835 360 131.9

ADHI IJ REDUCE 2,600 (25.3) 3,480 1,510 130.5

TOTL IJ REDUCE 825 (26.3) 1,120 500 124.0

LPCK IJ BUY 12,000 15.4 10,400 4,875 113.3

SMRA IJ BUY 1,600 5.3 1,520 780 94.9

PWON IJ BUY 500 (2.9) 515 270 90.7

MEDC IJ BUY 4,452 17.2 3,800 2,100 81.0

CTRA IJ BUY 1,245 (0.4) 1,250 750 66.7

BEST IJ HOLD 690 (5.5) 730 445 64.0

BBRI IJ BUY 12,500 7.3 11,650 7,250 60.7

TBLA IJ HOLD 830 9.9 755 470 60.6

PSAB IJ BUY 1,400 159.3 540 343 57.4

MPPA IJ BUY 3,900 27.9 3,050 1,940 57.2

APLN IJ HOLD 340 1.5 335 215 55.8

BBNI IJ BUY 6,900 13.1 6,100 3,950 54.4

KIJA IJ BUY 450 52.5 295 192 53.6

CASS IJ HOLD 1,150 (8.0) 1,250 820 52.4

TOWR IJ BUY 5,100 22.9 4,150 2,750 50.9

TELE IJ BUY 1,160 24.7 930 620 50.0

JSMR IJ BUY 7,200 2.1 7,050 4,725 49.2

KLBF IJ BUY 1,975 7.9 1,830 1,250 46.4

GGRM IJ BUY 70,000 15.3 60,700 42,000 44.5

BSDE IJ BUY 1,900 5.3 1,805 1,290 39.9

BBTN IJ HOLD 1,230 2.1 1,205 870 38.5

BMRI IJ BUY 11,600 7.7 10,775 7,850 37.3

INCO IJ HOLD 4,000 10.3 3,625 2,650 36.8

BBCA IJ BUY 14,300 9.0 13,125 9,600 36.7

LPPF IJ BUY 19,000 26.7 15,000 11,000 36.4

CTRP IJ HOLD 750 (11.2) 845 620 36.3

ROTI IJ BUY 1,400 1.1 1,385 1,020 35.8

TLKM IJ BUY 3,350 16.9 2,865 2,130 34.5

PGAS IJ BUY 7,000 16.7 6,000 4,475 34.1

SCMA IJ REDUCE 2,360 (32.6) 3,500 2,625 33.3

ACES IJ REDUCE 714 (9.0) 785 590 33.1

ASRI IJ BUY 640 14.3 560 430 30.2

ICBP IJ BUY 13,300 1.5 13,100 10,200 28.4

INTP IJ BUY 25,000 0.0 25,000 20,000 25.0

UNVR IJ BUY 37,500 16.1 32,300 26,000 24.2

BJTM IJ BUY 500 8.7 460 375 22.7

PTBA IJ REDUCE 12,000 (4.0) 12,500 10,200 22.5

WINS IJ BUY 1,600 93.9 825 675 22.2

BBKP IJ HOLD 770 2.7 750 620 21.0

BDMN IJ HOLD 3,700 (18.2) 4,525 3,775 19.9

SMBR IJ REDUCE 330 (13.4) 381 330 15.5

SMGR IJ HOLD 17,600 8.6 16,200 14,150 14.5

TINS IJ HOLD 1,300 5.7 1,230 1,081 13.8

LPKR IJ BUY 1,200 17.6 1,020 910 12.1

CPIN IJ HOLD 4,500 19.0 3,780 3,375 12.0

GIAA IJ BUY 620 11.7 555 496 11.9

ASII IJ REDUCE 6,600 (11.1) 7,425 6,800 9.2

ASII IJ REDUCE 6,600 (11.1) 7,425 6,800 9.2

ERAA IJ HOLD 1,060 (2.8) 1,090 1,000 9.0

SGRO IJ HOLD 2,150 2.4 2,100 2,000 5.0

INDF IJ BUY 8,300 23.0 6,750 6,600 2.3

WTON IJ HOLD 1,120 (13.8) 1,300 1,300 0.0

ANJT IJ HOLD 1,250 (5.7) 1,325 1,325 0.0

HERO IJ REDUCE 1,500 (37.0) 2,380 2,425 (1.9)

KRAS IJ REDUCE 370 (23.7) 485 495 (2.0)

LSIP IJ REDUCE 1,710 (9.5) 1,890 1,930 (2.1)

ANTM IJ REDUCE 720 (32.4) 1,065 1,090 (2.3)

ISAT IJ BUY 4,500 11.1 4,050 4,150 (2.4)

MNCN IJ REDUCE 2,300 (9.4) 2,540 2,625 (3.2)

AALI IJ HOLD 23,500 (3.1) 24,250 25,100 (3.4)

SMCB IJ REDUCE 2,000 (8.5) 2,185 2,275 (4.0)

ADRO IJ REDUCE 1,000 (3.8) 1,040 1,090 (4.6)

AKRA IJ HOLD 4,775 15.9 4,120 4,375 (5.8)

EXCL IJ BUY 7,400 52.1 4,865 5,200 (6.4)

MAPI IJ HOLD 5,750 13.3 5,075 5,500 (7.7)

BTPN IJ HOLD 4,600 16.5 3,950 4,300 (8.1)

UNTR IJ REDUCE 16,500 (4.9) 17,350 19,000 (8.7)

SIMP IJ REDUCE 565 (19.9) 705 780 (9.6)

CMNP IJ HOLD 3,300 11.5 2,960 3,350 (11.6)

TSPC IJ BUY 3,325 16.1 2,865 3,250 (11.8)

SIDO IJ HOLD 700 14.8 610 700 (12.9)

GJTL IJ HOLD 1,400 (1.8) 1,425 1,680 (15.2)

BJBR IJ HOLD 830 13.7 730 890 (18.0)

IMAS IJ REDUCE 2,500 (37.5) 4,000 4,900 (18.4)

MYOR IJ REDUCE 20,250 (3.1) 20,900 26,000 (19.6)

TAXI IJ REDUCE 1,100 (6.0) 1,170 1,460 (19.9)

JPFA IJ HOLD 1,050 10.5 950 1,220 (22.1)

RALS IJ REDUCE 720 (8.9) 790 1,060 (25.5)

RANC IJ HOLD 440 (1.1) 445 660 (32.6)

MAIN IJ HOLD 3,000 40.8 2,130 3,175 (32.9)

SRIL IJ BUY 220 35.0 163 245 (33.5)

HRUM IJ REDUCE 1,100 (33.7) 1,660 2,750 (39.6)

ASSA IJ HOLD 150 (3.2) 155 280 (44.6)

ITMG IJ REDUCE 18,000 17.1 15,375 28,500 (46.1)

BWPT IJ REDUCE 320 (20.0) 400 1,106 (63.8)

BUMI IJ REDUCE 120 50.0 80 300 (73.3)

Source: Bloomberg, Bahana estimates

5 January 2015


2014

Finance Asia's

Best

Equity House

Asiamoney's

2013

Best Domestic

Equity House

Alpha

Southeast Asia

2014 Best

Research Call

FMCG Sector

Exhibit 8. IPOs, 2014 Listing date Funds raised IPO price Current price Return

Code Name Industry (IDRb) (IDR) (IDR) (%)

PNBS Bank Panin Syariah Banking 15-Jan-14 475 100 180 80.0

ASMI Asuransi Mitra Maparya Insurance 16-Jan-14 109 270 540 100.0

CANI Capitol Nusantara Indonesia Transportation 16-Jan-14 42 200 254 27.0

BINA Bank Ina Perdana Banking 16-Jan-14 125 240 260 8.3

BALI Bali Towerindo Sentra Infrastructure 13-Mar-14 35 400 2,190 447.5

WTON Wijaya Karya Beton Construction 8-Apr-14 1,207 590 1,300 120.3

BLTZ Graha Layar Prima Media 10-Apr-14 223 3,000 3,000 0.0

MDIA Intermedia Capital Media 11-Apr-14 541 1,380 2,200 59.4

LRNA Eka Sari Lorena Transport Transportation 15-Apr-14 135 900 204 (77.3)

DAJK Dwi Aneka Jaya Kemasindo Manufacture 15-May-14 470 470 575 22.3

LINK Link Net Media 2-Jun-14 487 1,600 4,920 207.5

CINT Chitose Internasional Manufacture 27-Jun-14 99 330 362 9.7

MGNA Magna Finance Finance 7-Jul-14 74 105 98 (6.7)

BPII Batavia Prosperindo International Consultant 8-Jul-14 75 500 1,000 100.0

MBAP Mitrabara Adiperdana Coal 10-Jul-14 319 1,300 1,310 0.8

TARA Sitara Propertindo Property 11-Jul-14 424 106 444 318.9

DNAR Bank Dinar Indonesia Banking 11-Jul-14 55 110 194 76.4

BIRD Blue Bird Transportation 5-Nov-14 2,447 6,500 9,425 45.0

SOCI Soechi Lines Shipping 3-Dec-14 582 550 660 20.0

IMPC Impack Pratama Industri Packaging 17-Dec-14 570 3,800 5,100 34.2

IBFN Intan Baruprana Finance Finance 22-Dec-14 192 288 330 14.6

AGRS Bank Agris Banking 22-Dec-14 99 110 143 30.0

GOLL Golden Plantation Plantation 23-Dec-14 230 288 251 (12.8)

Total 9,016 70.7

Total (excluding ASMI, BALI, WTON, LINK, BPII, and TARA) 6,678 19.5 Source: Bloomberg note: listed based on date of listing


Exhibit 9. 2015 IPO schedule Company Industry IPO price

(IDR) Shares released (mn)

Listing Date

Underwriter

Archi Indonesia Mining - 1,600 - CIMB Securities, Danareksa Sekuritas, Mandiri Sekuritas, Valbury, CSFB (pulled out)

Bank Yudha Bhakti Banking - 300 13 Jan Semesta Indovest Garuda Maintenance Facility Aviation - - - - Harapan Borneo Internasional Coal - - - - Jiwasraya Finance - - - - Perkebunan Nusantara VII Plantations - - - - PP Properti Property - - - - Source: KSEI

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.

http://www.daiwacm.com/hk/research_disclaimer.html

5 January 2015


2014

Finance Asia's

Best

Equity House

Asiamoney's

2013

Best Domestic

Equity House

Alpha

Southeast Asia

2014 Best

Research Call

FMCG Sector

Exhibit 10. Infrastructure-related sector relative performance

13.4

30.3

42.6

31.7

95.1

0

10

20

30

40

50

60

70

80

90

100

0

10

20

30

40

50

60

70

80

90

100

1M 3M 6M 9M 12M

(%) (%)

Infrastructure-related sector relative to JCI


Exhibit 11. Industrial estate sector relative performance

(1.0)

27.7

46.2

8.4

58.8

(10)

0

10

20

30

40

50

60

(10)

0

10

20

30

40

50

60

1M 3M 6M 9M 12M

(%) (%)

Industrial estate sector relative to JCI


Exhibit 12. Property sector relative performance

(3.3)

17.1 20.3

5.4

33.4

(5)

0

5

10

15

20

25

30

35

(5)

0

5

10

15

20

25

30

35

1M 3M 6M 9M 12M

(%) (%)

Property sector relative to JCI


Best performing

sector in the past 12

months, followed by

…

… the Industrial

estate sector on the

Jokowi effect

The sector saw some

recovery from 2013’s LTV weak performance, in spite of high interest rates and tight liquidity

5 January 2015


2014

Finance Asia's

Best

Equity House

Asiamoney's

2013

Best Domestic

Equity House

Alpha

Southeast Asia

2014 Best

Research Call

FMCG Sector

Exhibit 13. Banks sector relative performance

(0.2)

4.6

8.1

5.6

20.7

(5)

0

5

10

15

20

25

(5)

0

5

10

15

20

25

1M 3M 6M 9M 12M

(%) (%)

Banks sector relative to JCI


Exhibit 14. Oil-related sector relative performance

(2.2)

(4.2)

(1.4)

8.1

11.3

(6)

(4)

(2)

0

2

4

6

8

10

12

(6)

(4)

(2)

0

2

4

6

8

10

12

1M 3M 6M 9M 12M

(%) (%)

Oil-related sector relative to JCI Source: Bloomberg, Bahana

Exhibit 15. Consumer staples sector relative performance

1.8

3.8

5.5

7.2

8.3

0

2

4

6

8

10

0

2

4

6

8

10

1M 3M 6M 9M 12M

(%) (%)

Consumer staples sector relative to JCI Source: Bloomberg, Bahana

Bigger banks

continue to book

solid earnings on

well-maintained

margins and

manageable NPLs,

resulting in sector

outperformance in

the past 12 months

Market

underperformance

had started in the

past 6 months due to

weak global oil

prices

Safe haven status

continued to provide

shelter for investors

amid volatilities in

the past year

5 January 2015


2014

Finance Asia's

Best

Equity House

Asiamoney's

2013

Best Domestic

Equity House

Alpha

Southeast Asia

2014 Best

Research Call

FMCG Sector

Exhibit 16. Telco sector relative performance

(0.1)

(5.0)

5.3

14.6

7.8

(6)

(3)

0

3

6

9

12

15

(6)

(3)

0

3

6

9

12

15

1M 3M 6M 9M 12M

(%) (%)

Telco sector relative to JCI


Exhibit 17. Metals sector relative performance

(5.7)(4.6)

(6.7)

6.8

3.5

(10)

(5)

0

5

10

(10)

(5)

0

5

10

1M 3M 6M 9M 12M

(%) (%)

Metals sector relative to JCI


Exhibit 18. Consumer Discretionary sector relative performance

(1.5)

(14.3)

(11.1)

(7.3)

1.5

(15)

(10)

(5)

0

5

(15)

(10)

(5)

0

5

1M 3M 6M 9M 12M

(%) (%)

Consumer discretionary sector relative to JCI


Telco sector

outperformance is

due to margin

expansion on more

rational competition

and solid revenue

growth on data

segment expansions

Poor performance in

the past 6 months as

oil prices began their

downward trend

Fuel-price hike and

lower GDP growth

adversely impacted

sentiment for the

sector

5 January 2015


2014

Finance Asia's

Best

Equity House

Asiamoney's

2013

Best Domestic

Equity House

Alpha

Southeast Asia

2014 Best

Research Call

FMCG Sector

Exhibit 19. Cement sector relative performance

(3.9)

10.1

(1.5)

(10.0)

(7.2)

(15)

(10)

(5)

0

5

10

15

(15)

(10)

(5)

0

5

10

15

1M 3M 6M 9M 12M

(%) (%)

Cement sector relative to JCI Source: Bloomberg, Bahana

Exhibit 20. Aviation sector relative performance

(2.3)

27.2

22.6

9.1

(4.2) (6)

0

6

12

18

24

30

(6)

0

6

12

18

24

30

1M 3M 6M 9M 12M

(%) (%)

Aviation sector relative to JCI


Exhibit 21. Automotive sector relative performance

3.2 2.7

(6.2)

(12.7)

(14.4) (16)

(12)

(8)

(4)

0

4

(16)

(12)

(8)

(4)

0

4

1M 3M 6M 9M 12M

(%) (%)

Automotive sector relative to JCI


Relatively weak

performance in the

past 12 months due

to hikes in electricity

tariffs and reduction

in demand due to the

elections

Significant

outperformance

started six months

ago, in line with

lower oil prices

On continued intense

competition, auto

sector’s weak

margins and low

revenue growth

resulted in 14%

market

underperformance in

2014

5 January 2015


2014

Finance Asia's

Best

Equity House

Asiamoney's

2013

Best Domestic

Equity House

Alpha

Southeast Asia

2014 Best

Research Call

FMCG Sector

Exhibit 22. Poultry sector relative performance

(11.1)

(15.5)

(11.0)

(19.5)

(17.1)

(20)

(16)

(12)

(8)

(4)

0

(20)

(16)

(12)

(8)

(4)

0

1M 3M 6M 9M 12M

(%) (%)

Poultry sector relative to JCI


Exhibit 23. Coal sector relative performance

(7.9)

(17.1)

(24.0)

(13.1)

(30.6)(35)

(30)

(25)

(20)

(15)

(10)

(5)

0

(35)

(30)

(25)

(20)

(15)

(10)

(5)

0

1M 3M 6M 9M 12M

(%) (%)

Coal sector relative to JCI


Exhibit 24. Plantations sector relative performance

(2.1) (2.1)

(30.7)

(24.7)

(35.5)

(40)

(35)

(30)

(25)

(20)

(15)

(10)

(5)

0

(40)

(35)

(30)

(25)

(20)

(15)

(10)

(5)

0

1M 3M 6M 9M 12M

(%) (%)

Plantations sector relative to JCI Source: Bloomberg, Bahana

Poultry sector

underperformed on

fear of purchasing

power erosion post

higher fuel prices

On continued bleak

commodities’ prices

outlook, coal and …

… plantations were

by far the two worst

performing sectors

in 2014

5 January 2015


2014

Finance Asia's

Best

Equity House

Asiamoney's

2013

Best Domestic

Equity House

Alpha

Southeast Asia

2014 Best

Research Call

FMCG Sector

Exhibit 25. Coal price, Jan 2014-now

60

65

70

75

80

85

90

Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15

(USD/Mtn)

Average: 70.9

62.3


Exhibit 26. CPO price, Jan 2014-now

650

700

750

800

850

900

950

1000


(USD/Mtn)

Average: 824.3

732.5


Exhibit 27. Gold price, Jan 2014-now

1,100

1,150

1,200

1,250

1,300

1,350

1,400


(USD/oz)

Average: 1,265

1,185


At the end of 2014,

coal price closed at

USD62/ton, down

29% y-y, averaging

USD71/ton, down

17% y-y, due to

higher slower

demand as well as

higher China’s coal

supplies

At the end of 2014,

CPO price closed at

USD733/ton, down

20% y-y, averaging

USD824/ton, down

3% y-y, due to lower

biodiesel demand on

weak oil price

At the end of 2014,

gold price closed at

USD1,185/oz, down

1% y-y, averaging

USD1,265/oz, down

10% y-y, due to

stronger USD

5 January 2015


2014

Finance Asia's

Best

Equity House

Asiamoney's

2013

Best Domestic

Equity House

Alpha

Southeast Asia

2014 Best

Research Call

FMCG Sector

Exhibit 28. Nickel price, Jan 2014-now

13,000

14,500

16,000

17,500

19,000

20,500

22,000


(USD/Mtn)

Average: 16,867

14,935


Exhibit 29. Oil Brent price, Jan 2014-now

50

60

70

80

90

100

110

120


(USD/barrel)

Average: 99.4

57.3


Exhibit 30. Tins price, Jan 2014-now

18000

19000

20000

21000

22000

23000

24000


(USD/Mtn)

Average: 21,893

19,500


At the end of 2014,

nickel price closed at

USD14,935/ton, up

7% y-y, averaging

USD16,867/ton, up

12% y-y, helped by

the ore ban

At the end of 2014,

brent oil price closed

at USD57/bbl, down

48% y-y, averaging

USD99/bbl, down

9% y-y, due to the

shale revolution,

higher petroleum

supplies and weak

demand

At the end of 2014,

tin price closed at

USD19,500/ton,

down 14% y-y,

averaging

USD21,893/ton,

down 2% y-y

2014

Finance Asia's

Best

Equity House

Asiamoney's

2013

Best Domestic

Equity House

Alpha

Southeast Asia

2014 Best

Research Call

FMCG Sector

Andre Natala Susanto

[email protected] Associate

ext 3601

Chandra Widjanarka

[email protected] Analyst

ext 1252

Harry [email protected]

Senior Associate DirectorHead of Research

Strategy, Consumer

ext 3600direct: +62 21 250 5735

Dealing Room: +62 21 527 0808 (Foreign Institutional)

Teguh Hartanto

[email protected] Director

Deputy Head of Research

Banks, Cement, Aviationext 3610

Leonardo Henry Gavaza, [email protected]

Senior Research ManagerAuto, Plantations, Heavy equipment, Telco

ext 3608

Arga Samudro

[email protected] 3602

Chandra Widjanarka


ext 1252

+62 21 250 5508 (Domestic Institutional)

Ashish Agrawal

[email protected] President

Institutional Equity Salesext 2550 / 2553

Reynard Poernawan

[email protected] Equity Sales

ext 2528

John M. Dasaad

[email protected] Sales

ext 2549

Yohanes Adhi Handoko

[email protected], Surabaya Branch

ext 7250

Suwardi Widjaja


ext 2548

Ricardo Silaen, CFA


Institutional Equity Salesext 2524

Amelia Husada


Institutional Equity Salesext 2552

Michael W Setjoadi [email protected]

Research AnalystConsumer, Poultry

ext 3613

Nurul Farida


ext 2543

Research: +62 21 250 5081

Adrian Mahendra Putra

[email protected] AnalystIndustrial Estate

ext 3614

Hanna Marionda

[email protected] Trader

ext 2525

Adriana Kosasih

[email protected] Executive

ext 2541

Ari Santosa

[email protected] Trader

ext 2554

Adi Saputra


ext 3693

William Tong


ext 3604

Robin Sutanto


Propertyext 3620

Agustinus Reza Kirana

[email protected] AnalystTransportation

ext 3616

Wendy [email protected]

Research AnalystConsumer, Media

ext 3606

Bob [email protected]

Research AnalystCement, Infratructure,Toll roads

ext 3605

Muhammad Wafi


ext 3609

+62 31 535 2788 (Surabaya Branch)

Arandi [email protected]

Research AnalystCoal, Metals, Oil & Gas

ext 3619

Edy [email protected]

Head of Equity Sales & TradingInstitutional Equity Sales

ext 2545

Made Ayu Wijayati

[email protected] Executive

ext 3607

Sanni Satrio Dwi Utomo


ext 3611

Andre Natala Susanto


ext 3601

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

http://www.bahana.co.id/

2014

Finance Asia's

Best

Equity House

Asiamoney's

2013

Best Domestic

Equity House

Alpha

Southeast Asia

2014 Best

Research Call

FMCG Sector

Disclaimer This publication is prepared by PT.Bahana Securities and reviewed by Daiwa Securities Group Inc. and/or its affiliates, and distributed outside Indonesia by Daiwa Securities Group Inc. and/or its affiliates, except to the extent expressly provided herein. Certain copies of this publication may be distributed inside and outside of Indonesia by PT. Bahana Securities in accordance with relevant laws and regulations. This publication and the contents hereof are intended for information purposes only, and may be subject to change without further notice. Any use, disclosure, distribution, dissemination, copying, printing or reliance on this publication for any other purpose without our prior consent or approval is strictly prohibited. Any review does not constitute a full verification of the publication and merely provides a minimum check. Neither Daiwa Securities Group Inc. nor any of its respective parent, holding, subsidiaries or affiliates, nor any of its respective directors, officers, servants and employees, represent nor warrant the accuracy or completeness of the information contained herein or as to the existence of other facts which might be significant, and will not accept any responsibility or liability whatsoever for any use of or reliance upon this publication or any of the contents hereof. Neither this publication, nor any content hereof, constitute, or are to be construed as, an offer or solicitation of an offer to buy or sell any of the securities or investments mentioned herein in any country or jurisdiction nor, un less expressly provided, any recommendation or investment opinion or advice. Any view, recommendation, opinion or advice expressed in this publication constitutes the views of the analyst(s) named herein and does not necessarily reflect those of Daiwa Securities Group Inc. and/or its affiliates nor any of its respective directors, officers, servants and employees except where the publication states otherwise. This research report is not to be relied upon by any person in making any investment decision or otherwise advising with respect to, or dealing in, the securities mentioned, as it does not take into account the specific investment objectives, financial situation and particular needs of any person.

Neither Daiwa Securities Group Inc. nor any of its affiliates is licensed to undertake any business within the Republic of Indonesia. Any display of any trade name or logo of the Daiwa Securities Group Inc. on this publication shall not be deemed to be an undertaking of any business within the Republic of Indonesia.

Daiwa Securities Group Inc., its subsidiaries or affiliates, or its or their respective directors, officers and employees from time to time may have trades as principals, or have positions in, or have other interests in the securities of the company under research including derivatives in respect of such securities or may have also performed investment banking and other services for the issuer of such securities. The following are additional disclosures.

Japan

Daiwa Securities Co. Ltd. and Daiwa Securities Group Inc.

Daiwa Securities Co. Ltd. is a subsidiary of Daiwa Securities Group Inc.

Investment Banking Relationship

Within the preceding 12 months, The subsidiaries and/or affiliates of Daiwa Securities Group Inc. * has lead-managed public offerings and/or secondary offerings (excluding straight bonds) of the securities of the following companies: Modern Land (China) Co. Ltd (1107 HK); China Everbright Bank Company Limited (6818 HK); econtext Asia Ltd (1390 HK); Lotte Shopping Co (023530 KS); Rexlot Holdings Ltd (555 HK); Neo Solar Power Corp (3576 TT); Accordia Golf Trust (AGT SP); Hua Hong Semiconductor Ltd (1347 HK).

*Subsidiaries of Daiwa Securities Group Inc. for the purposes of this section shall mean any one or more of:

• Daiwa Capital Markets Hong Kong Limited (大和資本市場香港有限公司)

• Daiwa Capital Markets Singapore Limited

• Daiwa Capital Markets Australia Limited

• Daiwa Capital Markets India Private Limited

• Daiwa-Cathay Capital Markets Co., Ltd.

• Daiwa Securities Capital Markets Korea Co., Ltd

Disclosure of Interest of Bahana Securities


Within the preceding 12 months, Bahana Securities has lead-managed public offerings and/or secondary offerings (excluding straight bonds) of the securities of the following companies: PT Telekomunikasi Indonesia (Persero) Tbk (TLKM IJ); Garuda Indonesia (Persero) (GIAA IJ); Wijaya Karya Beton Tbk PT (WTON IJ); J Resources Asia Pasific Tbk PT (PSAB IJ)

Hong Kong

This research is distributed in Hong Kong by Daiwa Capital Markets Hong Kong Limited (大和資本市場香港有限公司) (“DHK”) which is regulated by the Hong Kong Securities and Futures Commission. Recipients of this research in Hong Kong may contact DHK in respect of any matter arising from or in connection with this research.

Ownership of Securities

For “Ownership of Securities” information, please visit BlueMatrix disclosure Link at https://daiwa3.bluematrix.com/sellside/Disclosures.action.


For “Investment Banking Relationship”, please visit BlueMatrix disclosure Link at https://daiwa3.bluematrix.com/sellside/Disclosures.action.

Relevant Relationship (DHK)

DHK may from time to time have an individual employed by or associated with it serves as an officer of any of the companies under its research coverage.

DHK market making

DHK may from time to time make a market in the securities covered by this research.

Singapore

This research is distributed in Singapore by Daiwa Capital Markets Singapore Limited and it may only be distributed in Singapore to accredited investors, expert investors and institutional investors as defined in the Financial Advisers Regulations and the Securities and Futures Act (Chapter 289), as amended from time to time. By virtue of distribution to these category of investors, Daiwa Capital Markets Singapore Limited and its representatives are not required to comply with Section 36 of the Financial Advisers Act (Chapter 110) (Section 36 relates to disclosure of Daiwa Capital Markets Singapore Limited’s interest and/or its representative’s interest in securities). Recipients of this research in Singapore may contact Daiwa Capital Markets Singapore Limited in respect of any matter arising from or in connection with the research.

Australia

This research is distributed in Australia by Daiwa Capital Markets Stockbroking Limited and it may only be distributed in Australia to wholesale investors within the meaning of the Corporations Act. Recipients of this research in Australia may contact Daiwa Capital Markets Stockbroking Limited in respect of any matter arising from or in connection with the research.


For “Ownership of Securities” information, please visit BlueMatrix disclosure Link at https://daiwa3.bluematrix.com/sellside/Disclosures.action.

India

This research is distributed by Daiwa Capital Markets India Private Limited (DAIWA) which is an intermediary registered with Securities & Exchange Board of India. This report is not to be considered as an offer or solicitation for any dealings in securities. While the information in this report has been compiled by DAIWA in good faith from sources believed to be reliable, no representation or warranty, express of implied, is made or given as to its accuracy, completeness or correctness. DAIWA its officers, employees, representatives and agents accept no liability whatsoever for any loss or damage whether direct, indirect, consequential or otherwise howsoever arising (whether in negligence or otherwise) out of or in connection with or from any use of or reliance

https://daiwa3.bluematrix.com/sellside/Disclosures.action



2014

Finance Asia's

Best

Equity House

Asiamoney's

2013

Best Domestic

Equity House

Alpha

Southeast Asia

2014 Best

Research Call

FMCG Sector

on the contents of and/or omissions from this document. Consequently DAIWA expressly disclaims any and all liability for, or based on or relating to any such information contained in or errors in or omissions in this report. Accordingly, you are recommended to seek your own legal, tax or other advice and should rely solely on your own judgment, review and analysis, in evaluating the information in this document. The data contained in this document is subject to change without any prior notice DAIWA reserves its right to modify this report as maybe required from time to time. DAIWA is committed to providing independent recommendations to its Clients and would be happy to provide any information in response to any query from its Clients. This report is strictly confidential and is being furnished to you solely for your information. The information contained in this document should not be reproduced (in whole or in part) or redistributed in any form to any other person. We and our group companies, affiliates, officers, directors and employees may from time to time, have long or short positions, in and buy sell the securities thereof, of company(ies) mentioned herein or be engaged in any other transactions involving such securities and earn brokerage or other compensation or act as advisor or have the potential conflict of interest with respect to any recommendation and related information or opinion. DAIWA prohibits its analyst and their family members from maintaining a financial interest in the securities or derivatives of any companies that the analyst cover. This report is not intended or directed for distribution to ,or use by any person, citizen or entity which is resident or located in any state or country or jurisdiction where such publication, distribution or use would be contrary to any statutory legislation, or regulation which would require DAIWA and its affiliates/ group companies to any registration or licensing requirements. The views expressed in the report accurately reflect the analyst’s personal views about the securities and issuers that are subject of the Report, and that no part of the analyst’s compensation was, is or will be directly or indirectly, related to the recommendations or views expressed in the Report. This report does not recommend to US recipients the use of Daiwa Capital Markets India Private Limited or any of its non – US affiliates to effect trades in any securities and is not supplied with any understanding that US recipients will direct commission business to Daiwa Capital Markets India Private Limited.

Taiwan

This research is distributed in Taiwan by Daiwa-Cathay Capital Markets Co., Ltd and it may only be distributed in Taiwan to institutional investors or specific investors who have signed recommendation contracts with Daiwa-Cathay Capital Markets Co., Ltd in accordance with the Operational Regulations Governing Securities Firms Recommending Trades in Securities to Customers. Recipients of this research in Taiwan may contact Daiwa-Cathay Capital Markets Co., Ltd in respect of any matter arising from or in connection with the research.

Philippines

This research is distributed in the Philippines by DBP-Daiwa Capital Markets Philippines, Inc. which is regulated by the Philippines Securities and Exchange

Commission and the Philippines Stock Exchange, Inc. Recipients of this research in the Philippines may contact DBP-Daiwa Capital Markets Philippines, Inc.

in respect of any matter arising from or in connection with the research. DBP-Daiwa Capital Markets Philippines, Inc. recommends that investors

independently assess, with a professional advisor, the specific financial risks as well as the legal, regulatory, tax, accounting, and other consequences of a

proposed transaction. DBP-Daiwa Capital Markets Philippines, Inc. may have positions or may be materially interested in the securities in any of the markets

mentioned in the publication or may have performed other services for the issuers of such securities.

For relevant securities and trading rules please visit SEC and PSE Link at http://www.sec.gov.ph/irr/AmendedIRRfinalversion.pdf and

http://www.pse.com.ph/ respectively.

United Kingdom

This research report is produced by Daiwa Capital Markets Europe Limited and/or its affiliates and is distributed in the European Union, Iceland, Liechtenstein, Norway and Switzerland. Daiwa Capital Markets Europe Limited is authorised and regulated by The Financial Conduct Authority (“FCA”) and is a member of the London Stock Exchange, Eurex and NYSE Liffe. Daiwa Capital Markets Europe Limited and/or its affiliates may, from time to time, to the extent permitted by law, participate or invest in other financing transactions with the issuers of the securities referred to herein (the “Securities”), perform services for or solicit business from such issuers, and/or have a position or effect transactions in the Securities or options thereof and/or may have acted as an underwriter during the past twelve months for the issuer of such securities. In addition, employees of Daiwa Capital Markets Europe Limited and/or its affiliates may have positions and effect transactions in such securities or options and may serve as Directors of such issuers. Daiwa Capital Markets Europe Limited may, to the extent permitted by applicable UK law and other applicable law or regulation, effect transactions in the Securities before this material is published to recipients.

This publication is intended for investors who are not Retail Clients in the United Kingdom within the meaning of the Rules of the FCA and should not therefore be distributed to such Retail Clients in the United Kingdom. Should you enter into investment business with Daiwa Capital Markets Europe’s affiliates outside the United Kingdom, we are obliged to advise that the protection afforded by the United Kingdom regulatory system may not apply; in particular, the benefits of the Financial Services Compensation Scheme may not be available.

Daiwa Capital Markets Europe Limited has in place organisational arrangements for the prevention and avoidance of conflicts of interest. Our conflict management policy is available at http://www.uk.daiwacm.com/about-us/corporate-governance-regulatory. Regulatory disclosures of investment banking relationships are available at https://daiwa3.bluematrix.com/sellside/Disclosures.action.

Germany

This document is distributed in Germany by Daiwa Capital Markets Europe Limited, Niederlassung Frankfurt which is regulated by BaFin (Bundesanstalt fuer Finanzdienstleistungsaufsicht) for the conduct of business in Germany.

Bahrain

This research material is distributed by Daiwa Capital Markets Europe Limited, Bahrain Branch, regulated by The Central Bank of Bahrain and holds Investment Business Firm – Category 2 license and having its official place of business at the Bahrain World Trade Centre, South Tower, 7th floor, P.O. Box 30069, Manama, Kingdom of Bahrain. Tel No. +973 17534452 Fax No. +973 535113

This material is provided as a reference for making investment decisions and is not intended to be a solicitation for investment. Investment decisions should be made at your own discretion and risk. Accordingly, no representation or warranty, express or implied, is made as to and no reliance should be placed on the fairness, accuracy, completeness or correctness of the information and opinions contained in this document, Content herein is based on information available at the time the research material was prepared and may be amended or otherwise changed in the future without not ice. All information is intended for the private use of the person to whom it is provided without any liability whatsoever on the part of Daiwa Capital Markets Europe Limited, Bahrain Branch, any associated company or the employees thereof. If you are in doubt about the suitability of the product or the research material itself, please consult your own financial adviser. Daiwa Capital Markets Europe Limited, Bahrain Branch retains all rights related to the content of this material, which may not be redistributed or otherwise transmitted without prior consent.

United States

This report is distributed in the U.S. by Daiwa Capital Markets America Inc. (DCMA). It may not be accurate or complete and should not be relied upon

as such. It reflects the preparer’s views at the time of its preparation, but may not reflect events occurring after its preparation; nor does it reflect

PT.Bahana Securities’ or DCMA’s views at any time. Neither PT.Bahana Securities, DCMA nor the preparer has any obligation to update this report

or to continue to prepare research on this subject. This report is not an offer to sell or the solicitation of any offer to buy securities. Unless this report

says otherwise, any recommendation it makes is risky and appropriate only for sophisticated speculative investors able to incur significant losses.

Readers should consult their financial advisors to determine whether any such recommendation is consistent with their own investment objectives,

financial situation and needs. This report does not recommend to U.S. recipients the use of any of PT.Bahana Securities’ or DCMA’s non-U.S. affiliates to effect trades in any security and is not supplied with any understanding that U.S. recipients of this report will direct commission business to

such non-U.S. entities. Unless applicable law permits otherwise, non-U.S. customers wishing to effect a transaction in any securities referenced in this

material should contact a Daiwa entity in their local jurisdiction. Most countries throughout the world have their own laws regulating the types of

securities and other investment products which may be offered to their residents, as well as a process for doing so. As a result, the securities

discussed in this report may not be eligible for sales in some jurisdictions. Customers wishing to obtain further information about this report should

contact DCMA: Daiwa Capital Markets America Inc., Financial Square, 32 Old Slip, New York, New York 10005 (telephone 212-612-7000).


For “Ownership of Securities” information please visit BlueMatrix disclosure Link at https://daiwa3.bluematrix.com/sellside/Disclosures.action .

http://www.sec.gov.ph/irr/AmendedIRRfinalversion.pdf%20and%20http:/www.pse.com.ph/

http://www.sec.gov.ph/irr/AmendedIRRfinalversion.pdf%20and%20http:/www.pse.com.ph/

http://www.uk.daiwacm.com/about-us/corporate-governance-regulatory



2014

Finance Asia's

Best

Equity House

Asiamoney's

2013

Best Domestic

Equity House

Alpha

Southeast Asia

2014 Best

Research Call

FMCG Sector

Investment Banking Relationships

For “Investment Banking Relationships” please visit BlueMatrix disclosure link at https://daiwa3.bluematrix.com/sellside/Disclosures.action .

DCMA Market Making

For “DCMA Market Making” please visit BlueMatrix disclosure link at https://daiwa3.bluematrix.com/sellside/Disclosures.action .

Research Analyst Conflicts

For updates on “Research Analyst Conflicts” please visit BlueMatrix disclosure link at https://daiwa3.bluematrix.com/sellside/Disclosures.action. The

principal research analysts who prepared this report have no financial interest in securities of the issuers covered in the report, are not (nor are any members of their household) an officer, director or advisory board member of the issuer(s) covered in the report, and are not aware of any material

relevant conflict of interest involving the analyst or DCMA, and did not receive any compensation from the issuer during the past 12 months except as

noted: no exceptions.

Research Analyst Certification

For updates on “Research Analyst Certification” and “Rating System” please visit BlueMatrix disclosure link at

https://daiwa3.bluematrix.com/sellside/Disclosures.action . The views about any and all of the subject securities and issuers expressed in this

Research Report accurately reflect the personal views of the research analyst(s) primarily responsible for this report (or the views of the firm

producing the report if no individual analysts[s] is named on the report); and no part of the compensation of such analyst(s) (or no part of the compensation of the firm if no individual analyst[s)] is named on the report) was, is, or will be directly or indirectly related to the specific

recommendations or views contained in this Research Report.

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 all 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.

Ownership of Securities For “Ownership of Securities” information, please visit BlueMatrix disclosure Link at https://daiwa3.bluematrix.com/sellside/Disclosures.action .

Investment Banking Relationships For “Investment Banking Relationship”, please visit BlueMatrix disclosure Link at https://daiwa3.bluematrix.com/sellside/Disclosures.action . Relevant Relationships (Bahana Securities) Bahana Securities may from time to time have an individual employed by or associated with it serves as an officer of any of the companies under its research coverage.

Bahana Securities market making Bahana Securities may from time to time make a market in securities covered by this research.

Additional information may be available upon request.

Japan - additional notification items pursuant to Article 37 of the Financial Instruments and Exchange Law

(This Notification is only applicable where report is distributed by Daiwa Securities Co. Ltd.)

If you decide to enter into a business arrangement with us based on the information described in materials presented along with this document, we ask you to pay close attention to the following items.

In addition to the purchase price of a financial instrument, we will collect a trading commission* for each transaction as agreed beforehand with you. Since

commissions may be included in the purchase price or may not be charged for certain transactions, we recommend that you confirm the commission for

each transaction.

In some cases, we may also charge a maximum of ¥ 2 million (including tax) per year as a standing proxy fee for our deposit of your securities, if you are

a non-resident of Japan. For derivative and margin transactions etc., we may require collateral or margin requirements in accordance with an agreement made beforehand with

you. Ordinarily in such cases, the amount of the transaction will be in excess of the required collateral or margin requirements.

There is a risk that you will incur losses on your transactions due to changes in the market price of financial instruments based on fluctuations in interest

rates, exchange rates, stock prices, real estate prices, commodity prices, and others. In addition, depending on the content of the transaction, the loss

could exceed the amount of the collateral or margin requirements.

There may be a difference between bid price etc. and ask price etc. of OTC derivatives handled by us.

Before engaging in any trading, please thoroughly confirm accounting and tax treatments regarding your trading in financial instruments with such experts

as certified public accountants.

*The amount of the trading commission cannot be stated here in advance because it will be determined between our company and you based on current market conditions and the content of each transaction etc.

When making an actual transaction, please be sure to carefully read the materials presented to you prior to the execution of agreement, and to take responsibility for your own decisions regarding the signing of the agreement with us.

Corporate Name: Daiwa Securities Co. Ltd.

Financial instruments firm: chief of Kanto Local Finance Bureau (Kin-sho) No.108

Memberships: Japan Securities Dealers Association, Financial Futures Association of Japan

Japan Securities Investment Advisers Association

Type II Financial Instruments Firms Association







Documents

Indonesia: 2014 in review - 2015 market outlookasiaresearch.daiwacm.com/eg/cgi-bin/.../20150105id... · Indonesia: 2014 in review - 2015 market outlook Harry Su E-mail: [email protected]