12 March 2019

Premier Insight
Bukit Asam (PTBA IJ; Buy)
JCI Index Weak results as costs rising
Equity | Indonesia | Research Daily

6,600 10,000 FY18 earnings below estimates as production costs increased

9,000
6,550
8,000 18%.
6,500 7,000

6,000
We revise down our earnings forecasts by 9%-12% for FY19F-20F.
JCI Index

6,450

Rp bn
6,400
5,000
Strong cash balance; Potential high dividend yield.
4,000

6,350 3,000 Maintain Buy with 16% upside to new TP of Rp4,600 (prev.
2,000
6,300
1,000 Rp5,100).
6,250 -
Results came below expectation. PTBA recorded lower than expected results as
8-Feb

1-Mar

4-Mar

5-Mar

6-Mar

8-Mar

11-Mar
11-Feb

12-Feb

13-Feb

14-Feb

15-Feb

18-Feb

19-Feb

20-Feb

21-Feb

22-Feb

25-Feb

26-Feb

27-Feb

28-Feb

net profit decreased 19% qoq and 41% yoy to Rp1.09tn in 4Q18. This brought net
Foreign net buy (sell) profit to Rp5.02tn in FY18, up 12% yoy, but came below consensus (93%) and our
5,000 80%
(83%) forecasts for the period. Operating profit dropped 33% qoq and 49% yoy to
4,000
70%
Rp1.11tn in 4Q18, bringing FY18 operating profit to Rp6.28tn, up 6.5% yoy, but
60%

came below consensus (88%) and our (80%) forecasts for FY18. These were
% net buy/market turnover

3,000 50%
Net buy (sell) in Rp bn

40% mainly caused by higher than expected production costs of Rp13tn (+18% yoy) in
2,000
30%

20%
FY18, higher than our forecast of Rp12.1tn. Revenues dropped 6.9% qoq and 18%
1,000

10% yoy to Rp5.13tn in 4Q18, bringing top-line to Rp21.2tn in FY18, up 8.7% yoy,
- 0%
which came below consensus (95%) and our (98%) forecasts for FY18.
-10%
22-Feb

25-Feb

26-Feb

27-Feb

28-Feb

1-Mar

4-Mar

5-Mar

6-Mar

8-Mar

11-Mar

(1,000)
-20%

(2,000) -30%
We revise down earnings estimate for FY19F-20F. We revise down our
earnings forecasts by 9% and 12% for FY19F-20F, respectively (Fig. 9) as we
apply higher production costs for PTBA and lower revenues from DMO quota
Key Indexes
transfer. We note that on its production costs, PTBA recorded higher expenses for
Index Closing 1 day 1 year YTD
third party services of Rp680bn in FY18, vs. Rp187bn recorded in FY17. With our
JCI 6,366 -0.3% -2.1% 2.8% new estimates, we forecast PTBA’s earnings would be flat in FY19F (+0.8%) before
LQ45 995 0.0% -7.4% 1.3% increasing by 16% in FY20F. We apply flat benchmark coal price assumption of
DJI 25,651 0.8% 1.9% 10.0% US$85 per ton for FY19F-20F.
SET 1,627 -0.2% -9.6% 4.1%
HSI 28,503 1.0% -9.8% 10.3%
NKY 21,125 0.5% -3.2% 7.1%
Attractive dividend yield of 8% - 11%. PTBA would likely distribute high
FTSE 7,131 0.4% -1.2% 6.0% dividend in the next 1-2 months. Initially, PTBA plans to hold annual shareholders
FSSTI 3,191 -0.1% -9.9% 4.0% meeting on 1 April 2019. We estimate shareholders meeting would be held in the
EIDO 25 1.1% - 11.3% 2.1%
end of April or early May 2019. With PTBA’s strong cash balance of Rp6.3tn, we
estimate dividend payout ratio would range between 75% to 100%, translating to
Commodity price
attractive dividend yield of 8.2% - 10.9%. Please note that PTBA distributed
Commodities Last price Ret 1 day Ret 1 year
(in USD)
dividend per share of ~Rp318 with payout ratio of 75% in May 2018.
Oil/barrel (WTI) 56.8 1.3% -8.5%
CPO/tonne 519.2 -0.3% -10.8% Maintain Buy with 16% upside to new TP of Rp4,600 (prev. Rp5,100).
Soy/bushel 8.5 0.0% -15.8% Despite our earnings downgrade, we maintain our Buy rating for PTBA with 16%
Rubber/kg 1.6 -1.1% -22.2%
potential upside to our new target price (DCF-based, WACC: 14.3%, TG: 2%) of
Nickel/tonne 12,808 -1.5% -7.3%
Tins/tonne 21,091 -1.5% -1.8%
Rp4,600 (prev. Rp5,100) which implies FY19F-20F P/E of 10.5x and 9.0x,
Copper/tonne 6,435 0.2% -7.2% respectively. PTBA is a good short-term bargain with potential high dividend yield
Gold/try.oz (Spot) 1,293 -0.4% -2.2% of 8.2% - 10.9% which we believe would be distributed in the next 1-2 months.
Coal/tonne 94.6 -1.0% -4.9%
Corn/bushel 3.3 -0.6% -10.4%
Year To 31 Dec 2017A 2018A 2019F 2020F 2021F
Wheat/bushel* 146.5 5.8% -7.0%
Revenue (RpBn) 19,471 21,167 23,113 25,751 29,126
* : 1 month change
EBITDA (RpBn) 6,575 6,997 7,019 8,074 8,984
Source : Bloomberg
EBITDA Growth (%) 122.2 6.4 0.3 15.0 11.3
Net Profit (RpBn) 4,476 5,024 5,063 5,857 6,450
EPS (Rp) 425 436 440 508 560
EPS Growth (%) 123.1 2.7 0.8 15.7 10.1
Net Gearing (%) (23.3) (36.8) (19.6) (22.2) (21.8)
PER (x) 9.4 9.1 9.1 7.8 7.1
PBV (x) 3.0 2.8 2.6 2.4 2.2
Dividend Yield (%) 1.4 7.3 8.2 8.8 11.5
EV/EBITDA (x) 5.9 5.7 6.0 5.1 4.6
Source: PTBA, IndoPremier Share Price Closing as of : 11-March-2019

Refer to Important disclosures in the last page of this report

PremierInsight

News & Analysis

Corporates

EXCL: XL Axiata (EXCL IJ; Rp2,390; Buy) cooperates with Ericsson for network
modernization with 5G-ready router in the next 3 years. Erricson’s sytem (router)
could give better connectivity for LTE, LTE-Advance, and 5G application.
(Selular.id)

Comment: Slight positive sentiment to EXCL as network modernization may help

to improve EXCL’s network quality (better subscriber’s experience). We expect
EXCL’s 2019F data revenue to grow by +15%YoY (vs. FY18 14%YoY), mainly
driven by data traffic growth of 72%YoY. We have a Buy for EXCL with TP
Rp2,800.

LPKR: Lippo Karawaci (LPKR IJ; Rp1,770; Not Rated) plans to sell its shares in
Lippo Mall Puri worth Rp3.7tn to PT Puri Bintang Terang. (IDX)

Comment: The mall contributes less than 20% to LPKR’s total asset. We believe
the divestment will positively impact company’s cash flow in short term.

PEHA: Phapros (PEHA IJ; Rp2,200; Not Rated) recorded FY18 net profit of
Rp133bn (+6.4% yoy). However, net profit margin considered flat at 13.03% (vs
12.50% FY17). As for revenue, PEHA booked a relatively stable revenue at
Rp1,023bn (+2.08% yoy). Operating margin also maintained at 18.94% (vs
18.70% FY17). (Bisnis Indonesia)

SCMA: Surya Citra Media (SCMA IJ; Rp256; Non-rated) Announced plan to
acquire strategic shares and interest in several new online media companies. This
is to drive and strengthen company’s position as media and content company.
The company disclosed the announcement yesterday after market closed. Details
on the acquisition plan: 1) 99% ownership in PT Vidio Dot Com (“Vidio.com”); 2)
50% plus 1 shares of PTKapanlagi Dot Com Networks (“KLY”); 3) 99% ownership
of PT Binary Ventura Indonesia (“BVI)” that owned 60% of PT Estha Yudha
Ekatama (“EYE”), and 4) 50% shares in Samara Media Entertainment (PT Benson
Media Kreasi) which have ownership in serveral events/initiatives, e.g. IDEAFest,
Jakarta Halal Things. SCMA, KMK, MAC, and BVI are direct subsidiaries of PT
Elang Mahkota Teknologi Tbk (EMTK IJ; Non rated). Total amount of this
acquisition plan does not constitute a Material Transaction, according to
company. Company’s internal cash flow is mre than enough to fund acquisition
plan and its working capital. (Company)

WSKT: Waskita Karya (WSKT IJ; Rp1,880; Hold) created a JV with Modernland
Realty (MDLN IJ; Rp; Not Rated) to develop 300ha land in Bekasi for warehousing
and property. WSKT has 60% of shares in the JV where the rest is 40% is
controlled by Modern Realty. The JV will buy the 349ha of land from MDLN
subsidiary with total worth of Rp1.1tn. (Bisnis Indonesia)

Comment: We are positive towards the news, as WSKT is currently construction

the development of Cibitung-Cilincing toll road which were located just north of
the land location, which will provide an access to Tanjung Priok Port. However at
this stage we still maintain our Hold call for WSKT given company’s high debt
level and financing expense.

Markets & Sector

Automotive: The Finance Minister Sri Mulyani Indrawati stated that there will be
new tax calculations on vehicle tax (PPnBM). Governtment offers tax incentives
for low carbon emission vehicles (LCEV) including Hybrid Electric Vehicle (HEV),
Battery Electric Vehicle (BET), Plug-in hybrid electric vehicle (PHEV). The new tax
calculations will be based on number of passengers per vehicle, carbon
emissions, engine capacity, and fuel consumption from previously only based on
engine capacity and vehicle type. (Kontan)

Refer to Important disclosures in the last page of this report 2

PremierInsight

Infrastructure: DKI Jakarta provincial government will accelerate the

development of Jakarta infrastructure from 30 years to 10 years. The plans
include the development of: 1) MRT track from 16km to 223km, 2) LRT frim
5.8km to 116km, and 3) Trans Jakarta from 431km to 2,149km. The DKI
Government has submitted a budget of 571tn for infrastructure improvements
such as public transportation, houses, clean water and waste water management.
Financing for this development will be carried out through bank loans,
investments and private partnerships. (Bisnis Indonesia)

Comment: The plan would positively impact the construction sector; however as
the plan is still in nascent stage, we would wait for further update regarding the
plan. As for now, maintain Buy on WIKA as our top pick in construction sector.

Property: According to Summarecon Agung (SMRA IJ; Rp865; Hold) around

75% of their apartment projects were positioned for mid class segment with price
below Rp1bn. The only exception (25%) would be apartment projects which
located in middle of Jakarta with high land prices. In the other hand, Ciputra
Development (CTRA IJ; Rp; Buy) offes The Newton 2 aparment with price point
start from Rp1bn, as the project was located in mid Jakarta. Back in 2016,
Newton 1 was offered with price start from Rp800mn/unit. (Kontan)

Comment: We believe that middle segment will continue to compose the property
market in the near term, especially product with price point below Rp2bn. We
believe property demand will continue to be dominated by end-user, at least until
the election time is over. Maintain Buy on CTRA and PWON as our top pick in
residential property sector.

Economics

Retail survey: Retail sales activity grew 7.2% yoy (Dec18: 7.7% yoy),
according to BI’s retail survey. Contributors were mainly cultural goods (+21.5%
yoy) and clothing, which had seen strong expansion since 2H18. Information and
communication goods sales in retail spaces declined by 14.2% yoy (Dec18: -
10.3% yoy). It is expected retail sales to yet rise again in Feb19 by c. 11% yoy
with the increase in sales of spare parts, food & beverages, cultural goods, and
clothing goods. (Bank Indonesia)

Refer to Important disclosures in the last page of this report 3

 Head Office
PT INDO PREMIER SEKURITAS
Wisma GKBI 7/F Suite 718
Jl. Jend. Sudirman No.28
Jakarta 10210 - Indonesia
p +62.21.5793.1168
f +62.21.5793.1167

INVESTMENT RATINGS
BUY : Expected total return of 10% or more within a 12-month period
HOLD : Expected total return between -10% and 10% within a 12-month period
SELL : Expected total return of -10% or worse within a 12-month period

ANALYSTS CERTIFICATION.
The views expressed in this research report accurately reflect the analyst;s personal views about any and all of the subject securities or issuers; and no part of the
research analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in the report.

DISCLAIMERS
This reserch is based on information obtained from sources believed to be reliable, but we do not make any representation or warraty nor accept any responsibility
or liability as to its accruracy, completeness or correctness. Opinions expressed are subject to change without notice. This document is prepared for general
circulation. Any recommendations contained in this document does not have regard to the specific investment objectives, finacial situation and the particular
needs of any specific addressee. This document is not and should not be construed as an offer or a solicitation of an offer to purchase or subscribe or sell any
securities. PT. Indo Premier Sekuritas or its affiliates may seek or will seek investment banking or other business relationships with the companies in this report.
 12 March 2019
Premier Insight
Bukit Asam (PTBA IJ; Buy)
JCI Index Weak results as costs rising
Equity | Indonesia | Research Daily

6,600 10,000 FY18 earnings below estimates as production costs increased

9,000
6,550
8,000 18%.
6,500 7,000

6,000
We revise down our earnings forecasts by 9%-12% for FY19F-20F.
JCI Index

6,450

Rp bn
6,400
5,000
Strong cash balance; Potential high dividend yield.
4,000

6,350 3,000 Maintain Buy with 16% upside to new TP of Rp4,600 (prev.
2,000
6,300
1,000 Rp5,100).
6,250 -
Results came below expectation. PTBA recorded lower than expected results as
8-Feb

1-Mar

4-Mar

5-Mar

6-Mar

8-Mar

11-Mar
11-Feb

12-Feb

13-Feb

14-Feb

15-Feb

18-Feb

19-Feb

20-Feb

21-Feb

22-Feb

25-Feb

26-Feb

27-Feb

28-Feb

net profit decreased 19% qoq and 41% yoy to Rp1.09tn in 4Q18. This brought net
Foreign net buy (sell) profit to Rp5.02tn in FY18, up 12% yoy, but came below consensus (93%) and our
5,000 80%
(83%) forecasts for the period. Operating profit dropped 33% qoq and 49% yoy to
4,000
70%
Rp1.11tn in 4Q18, bringing FY18 operating profit to Rp6.28tn, up 6.5% yoy, but
60%

came below consensus (88%) and our (80%) forecasts for FY18. These were
% net buy/market turnover

3,000 50%
Net buy (sell) in Rp bn

40% mainly caused by higher than expected production costs of Rp13tn (+18% yoy) in
2,000
30%

20%
FY18, higher than our forecast of Rp12.1tn. Revenues dropped 6.9% qoq and 18%
1,000

10% yoy to Rp5.13tn in 4Q18, bringing top-line to Rp21.2tn in FY18, up 8.7% yoy,
- 0%
which came below consensus (95%) and our (98%) forecasts for FY18.
-10%
22-Feb

25-Feb

26-Feb

27-Feb

28-Feb

1-Mar

4-Mar

5-Mar

6-Mar

8-Mar

11-Mar

(1,000)
-20%

(2,000) -30%
We revise down earnings estimate for FY19F-20F. We revise down our
earnings forecasts by 9% and 12% for FY19F-20F, respectively (Fig. 9) as we
apply higher production costs for PTBA and lower revenues from DMO quota
Key Indexes
transfer. We note that on its production costs, PTBA recorded higher expenses for
Index Closing 1 day 1 year YTD
third party services of Rp680bn in FY18, vs. Rp187bn recorded in FY17. With our
JCI 6,366 -0.3% -2.1% 2.8% new estimates, we forecast PTBA’s earnings would be flat in FY19F (+0.8%) before
LQ45 995 0.0% -7.4% 1.3% increasing by 16% in FY20F. We apply flat benchmark coal price assumption of
DJI 25,651 0.8% 1.9% 10.0% US$85 per ton for FY19F-20F.
SET 1,627 -0.2% -9.6% 4.1%
HSI 28,503 1.0% -9.8% 10.3%
NKY 21,125 0.5% -3.2% 7.1%
Attractive dividend yield of 8% - 11%. PTBA would likely distribute high
FTSE 7,131 0.4% -1.2% 6.0% dividend in the next 1-2 months. Initially, PTBA plans to hold annual shareholders
FSSTI 3,191 -0.1% -9.9% 4.0% meeting on 1 April 2019. We estimate shareholders meeting would be held in the
EIDO 25 1.1% - 11.3% 2.1%
end of April or early May 2019. With PTBA’s strong cash balance of Rp6.3tn, we
estimate dividend payout ratio would range between 75% to 100%, translating to
Commodity price
attractive dividend yield of 8.2% - 10.9%. Please note that PTBA distributed
Commodities Last price Ret 1 day Ret 1 year
(in USD)
dividend per share of ~Rp318 with payout ratio of 75% in May 2018.
Oil/barrel (WTI) 56.8 1.3% -8.5%
CPO/tonne 519.2 -0.3% -10.8% Maintain Buy with 16% upside to new TP of Rp4,600 (prev. Rp5,100).
Soy/bushel 8.5 0.0% -15.8% Despite our earnings downgrade, we maintain our Buy rating for PTBA with 16%
Rubber/kg 1.6 -1.1% -22.2%
potential upside to our new target price (DCF-based, WACC: 14.3%, TG: 2%) of
Nickel/tonne 12,808 -1.5% -7.3%
Tins/tonne 21,091 -1.5% -1.8%
Rp4,600 (prev. Rp5,100) which implies FY19F-20F P/E of 10.5x and 9.0x,
Copper/tonne 6,435 0.2% -7.2% respectively. PTBA is a good short-term bargain with potential high dividend yield
Gold/try.oz (Spot) 1,293 -0.4% -2.2% of 8.2% - 10.9% which we believe would be distributed in the next 1-2 months.
Coal/tonne 94.6 -1.0% -4.9%
Corn/bushel 3.3 -0.6% -10.4%
Year To 31 Dec 2017A 2018A 2019F 2020F 2021F
Wheat/bushel* 146.5 5.8% -7.0%
Revenue (RpBn) 19,471 21,167 23,113 25,751 29,126
* : 1 month change
EBITDA (RpBn) 6,575 6,997 7,019 8,074 8,984
Source : Bloomberg
EBITDA Growth (%) 122.2 6.4 0.3 15.0 11.3
Net Profit (RpBn) 4,476 5,024 5,063 5,857 6,450
EPS (Rp) 425 436 440 508 560
EPS Growth (%) 123.1 2.7 0.8 15.7 10.1
Net Gearing (%) (23.3) (36.8) (19.6) (22.2) (21.8)
PER (x) 9.4 9.1 9.1 7.8 7.1
PBV (x) 3.0 2.8 2.6 2.4 2.2
Dividend Yield (%) 1.4 7.3 8.2 8.8 11.5
EV/EBITDA (x) 5.9 5.7 6.0 5.1 4.6
Source: PTBA, IndoPremier Share Price Closing as of : 11-March-2019

Refer to Important disclosures in the last page of this report

PremierInsight

News & Analysis

Corporates

EXCL: XL Axiata (EXCL IJ; Rp2,390; Buy) cooperates with Ericsson for network
modernization with 5G-ready router in the next 3 years. Erricson’s sytem (router)
could give better connectivity for LTE, LTE-Advance, and 5G application.
(Selular.id)

Comment: Slight positive sentiment to EXCL as network modernization may help

to improve EXCL’s network quality (better subscriber’s experience). We expect
EXCL’s 2019F data revenue to grow by +15%YoY (vs. FY18 14%YoY), mainly
driven by data traffic growth of 72%YoY. We have a Buy for EXCL with TP
Rp2,800.

LPKR: Lippo Karawaci (LPKR IJ; Rp1,770; Not Rated) plans to sell its shares in
Lippo Mall Puri worth Rp3.7tn to PT Puri Bintang Terang. (IDX)

Comment: The mall contributes less than 20% to LPKR’s total asset. We believe
the divestment will positively impact company’s cash flow in short term.

PEHA: Phapros (PEHA IJ; Rp2,200; Not Rated) recorded FY18 net profit of
Rp133bn (+6.4% yoy). However, net profit margin considered flat at 13.03% (vs
12.50% FY17). As for revenue, PEHA booked a relatively stable revenue at
Rp1,023bn (+2.08% yoy). Operating margin also maintained at 18.94% (vs
18.70% FY17). (Bisnis Indonesia)

SCMA: Surya Citra Media (SCMA IJ; Rp256; Non-rated) Announced plan to
acquire strategic shares and interest in several new online media companies. This
is to drive and strengthen company’s position as media and content company.
The company disclosed the announcement yesterday after market closed. Details
on the acquisition plan: 1) 99% ownership in PT Vidio Dot Com (“Vidio.com”); 2)
50% plus 1 shares of PTKapanlagi Dot Com Networks (“KLY”); 3) 99% ownership
of PT Binary Ventura Indonesia (“BVI)” that owned 60% of PT Estha Yudha
Ekatama (“EYE”), and 4) 50% shares in Samara Media Entertainment (PT Benson
Media Kreasi) which have ownership in serveral events/initiatives, e.g. IDEAFest,
Jakarta Halal Things. SCMA, KMK, MAC, and BVI are direct subsidiaries of PT
Elang Mahkota Teknologi Tbk (EMTK IJ; Non rated). Total amount of this
acquisition plan does not constitute a Material Transaction, according to
company. Company’s internal cash flow is mre than enough to fund acquisition
plan and its working capital. (Company)

WSKT: Waskita Karya (WSKT IJ; Rp1,880; Hold) created a JV with Modernland
Realty (MDLN IJ; Rp; Not Rated) to develop 300ha land in Bekasi for warehousing
and property. WSKT has 60% of shares in the JV where the rest is 40% is
controlled by Modern Realty. The JV will buy the 349ha of land from MDLN
subsidiary with total worth of Rp1.1tn. (Bisnis Indonesia)

Comment: We are positive towards the news, as WSKT is currently construction

the development of Cibitung-Cilincing toll road which were located just north of
the land location, which will provide an access to Tanjung Priok Port. However at
this stage we still maintain our Hold call for WSKT given company’s high debt
level and financing expense.

Markets & Sector

Automotive: The Finance Minister Sri Mulyani Indrawati stated that there will be
new tax calculations on vehicle tax (PPnBM). Governtment offers tax incentives
for low carbon emission vehicles (LCEV) including Hybrid Electric Vehicle (HEV),
Battery Electric Vehicle (BET), Plug-in hybrid electric vehicle (PHEV). The new tax
calculations will be based on number of passengers per vehicle, carbon
emissions, engine capacity, and fuel consumption from previously only based on
engine capacity and vehicle type. (Kontan)

Refer to Important disclosures in the last page of this report 2

PremierInsight

Infrastructure: DKI Jakarta provincial government will accelerate the

development of Jakarta infrastructure from 30 years to 10 years. The plans
include the development of: 1) MRT track from 16km to 223km, 2) LRT frim
5.8km to 116km, and 3) Trans Jakarta from 431km to 2,149km. The DKI
Government has submitted a budget of 571tn for infrastructure improvements
such as public transportation, houses, clean water and waste water management.
Financing for this development will be carried out through bank loans,
investments and private partnerships. (Bisnis Indonesia)

Comment: The plan would positively impact the construction sector; however as
the plan is still in nascent stage, we would wait for further update regarding the
plan. As for now, maintain Buy on WIKA as our top pick in construction sector.

Property: According to Summarecon Agung (SMRA IJ; Rp865; Hold) around

75% of their apartment projects were positioned for mid class segment with price
below Rp1bn. The only exception (25%) would be apartment projects which
located in middle of Jakarta with high land prices. In the other hand, Ciputra
Development (CTRA IJ; Rp; Buy) offes The Newton 2 aparment with price point
start from Rp1bn, as the project was located in mid Jakarta. Back in 2016,
Newton 1 was offered with price start from Rp800mn/unit. (Kontan)

Comment: We believe that middle segment will continue to compose the property
market in the near term, especially product with price point below Rp2bn. We
believe property demand will continue to be dominated by end-user, at least until
the election time is over. Maintain Buy on CTRA and PWON as our top pick in
residential property sector.

Economics

Retail survey: Retail sales activity grew 7.2% yoy (Dec18: 7.7% yoy),
according to BI’s retail survey. Contributors were mainly cultural goods (+21.5%
yoy) and clothing, which had seen strong expansion since 2H18. Information and
communication goods sales in retail spaces declined by 14.2% yoy (Dec18: -
10.3% yoy). It is expected retail sales to yet rise again in Feb19 by c. 11% yoy
with the increase in sales of spare parts, food & beverages, cultural goods, and
clothing goods. (Bank Indonesia)

Refer to Important disclosures in the last page of this report 3

 Head Office
PT INDO PREMIER SEKURITAS
Wisma GKBI 7/F Suite 718
Jl. Jend. Sudirman No.28
Jakarta 10210 - Indonesia
p +62.21.5793.1168
f +62.21.5793.1167

INVESTMENT RATINGS
BUY : Expected total return of 10% or more within a 12-month period
HOLD : Expected total return between -10% and 10% within a 12-month period
SELL : Expected total return of -10% or worse within a 12-month period

ANALYSTS CERTIFICATION.
The views expressed in this research report accurately reflect the analyst;s personal views about any and all of the subject securities or issuers; and no part of the
research analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in the report.

DISCLAIMERS
This reserch is based on information obtained from sources believed to be reliable, but we do not make any representation or warraty nor accept any responsibility
or liability as to its accruracy, completeness or correctness. Opinions expressed are subject to change without notice. This document is prepared for general
circulation. Any recommendations contained in this document does not have regard to the specific investment objectives, finacial situation and the particular
needs of any specific addressee. This document is not and should not be construed as an offer or a solicitation of an offer to purchase or subscribe or sell any
securities. PT. Indo Premier Sekuritas or its affiliates may seek or will seek investment banking or other business relationships with the companies in this report.
 12 March 2019
Premier Insight
Bukit Asam (PTBA IJ; Buy)
JCI Index Weak results as costs rising
Equity | Indonesia | Research Daily

6,600 10,000 FY18 earnings below estimates as production costs increased

9,000
6,550
8,000 18%.
6,500 7,000

6,000
We revise down our earnings forecasts by 9%-12% for FY19F-20F.
JCI Index

6,450

Rp bn
6,400
5,000
Strong cash balance; Potential high dividend yield.
4,000

6,350 3,000 Maintain Buy with 16% upside to new TP of Rp4,600 (prev.
2,000
6,300
1,000 Rp5,100).
6,250 -
Results came below expectation. PTBA recorded lower than expected results as
8-Feb

1-Mar

4-Mar

5-Mar

6-Mar

8-Mar

11-Mar
11-Feb

12-Feb

13-Feb

14-Feb

15-Feb

18-Feb

19-Feb

20-Feb

21-Feb

22-Feb

25-Feb

26-Feb

27-Feb

28-Feb

net profit decreased 19% qoq and 41% yoy to Rp1.09tn in 4Q18. This brought net
Foreign net buy (sell) profit to Rp5.02tn in FY18, up 12% yoy, but came below consensus (93%) and our
5,000 80%
(83%) forecasts for the period. Operating profit dropped 33% qoq and 49% yoy to
4,000
70%
Rp1.11tn in 4Q18, bringing FY18 operating profit to Rp6.28tn, up 6.5% yoy, but
60%

came below consensus (88%) and our (80%) forecasts for FY18. These were
% net buy/market turnover

3,000 50%
Net buy (sell) in Rp bn

40% mainly caused by higher than expected production costs of Rp13tn (+18% yoy) in
2,000
30%

20%
FY18, higher than our forecast of Rp12.1tn. Revenues dropped 6.9% qoq and 18%
1,000

10% yoy to Rp5.13tn in 4Q18, bringing top-line to Rp21.2tn in FY18, up 8.7% yoy,
- 0%
which came below consensus (95%) and our (98%) forecasts for FY18.
-10%
22-Feb

25-Feb

26-Feb

27-Feb

28-Feb

1-Mar

4-Mar

5-Mar

6-Mar

8-Mar

11-Mar

(1,000)
-20%

(2,000) -30%
We revise down earnings estimate for FY19F-20F. We revise down our
earnings forecasts by 9% and 12% for FY19F-20F, respectively (Fig. 9) as we
apply higher production costs for PTBA and lower revenues from DMO quota
Key Indexes
transfer. We note that on its production costs, PTBA recorded higher expenses for
Index Closing 1 day 1 year YTD
third party services of Rp680bn in FY18, vs. Rp187bn recorded in FY17. With our
JCI 6,366 -0.3% -2.1% 2.8% new estimates, we forecast PTBA’s earnings would be flat in FY19F (+0.8%) before
LQ45 995 0.0% -7.4% 1.3% increasing by 16% in FY20F. We apply flat benchmark coal price assumption of
DJI 25,651 0.8% 1.9% 10.0% US$85 per ton for FY19F-20F.
SET 1,627 -0.2% -9.6% 4.1%
HSI 28,503 1.0% -9.8% 10.3%
NKY 21,125 0.5% -3.2% 7.1%
Attractive dividend yield of 8% - 11%. PTBA would likely distribute high
FTSE 7,131 0.4% -1.2% 6.0% dividend in the next 1-2 months. Initially, PTBA plans to hold annual shareholders
FSSTI 3,191 -0.1% -9.9% 4.0% meeting on 1 April 2019. We estimate shareholders meeting would be held in the
EIDO 25 1.1% - 11.3% 2.1%
end of April or early May 2019. With PTBA’s strong cash balance of Rp6.3tn, we
estimate dividend payout ratio would range between 75% to 100%, translating to
Commodity price
attractive dividend yield of 8.2% - 10.9%. Please note that PTBA distributed
Commodities Last price Ret 1 day Ret 1 year
(in USD)
dividend per share of ~Rp318 with payout ratio of 75% in May 2018.
Oil/barrel (WTI) 56.8 1.3% -8.5%
CPO/tonne 519.2 -0.3% -10.8% Maintain Buy with 16% upside to new TP of Rp4,600 (prev. Rp5,100).
Soy/bushel 8.5 0.0% -15.8% Despite our earnings downgrade, we maintain our Buy rating for PTBA with 16%
Rubber/kg 1.6 -1.1% -22.2%
potential upside to our new target price (DCF-based, WACC: 14.3%, TG: 2%) of
Nickel/tonne 12,808 -1.5% -7.3%
Tins/tonne 21,091 -1.5% -1.8%
Rp4,600 (prev. Rp5,100) which implies FY19F-20F P/E of 10.5x and 9.0x,
Copper/tonne 6,435 0.2% -7.2% respectively. PTBA is a good short-term bargain with potential high dividend yield
Gold/try.oz (Spot) 1,293 -0.4% -2.2% of 8.2% - 10.9% which we believe would be distributed in the next 1-2 months.
Coal/tonne 94.6 -1.0% -4.9%
Corn/bushel 3.3 -0.6% -10.4%
Year To 31 Dec 2017A 2018A 2019F 2020F 2021F
Wheat/bushel* 146.5 5.8% -7.0%
Revenue (RpBn) 19,471 21,167 23,113 25,751 29,126
* : 1 month change
EBITDA (RpBn) 6,575 6,997 7,019 8,074 8,984
Source : Bloomberg
EBITDA Growth (%) 122.2 6.4 0.3 15.0 11.3
Net Profit (RpBn) 4,476 5,024 5,063 5,857 6,450
EPS (Rp) 425 436 440 508 560
EPS Growth (%) 123.1 2.7 0.8 15.7 10.1
Net Gearing (%) (23.3) (36.8) (19.6) (22.2) (21.8)
PER (x) 9.4 9.1 9.1 7.8 7.1
PBV (x) 3.0 2.8 2.6 2.4 2.2
Dividend Yield (%) 1.4 7.3 8.2 8.8 11.5
EV/EBITDA (x) 5.9 5.7 6.0 5.1 4.6
Source: PTBA, IndoPremier Share Price Closing as of : 11-March-2019

Refer to Important disclosures in the last page of this report

PremierInsight

News & Analysis

Corporates

EXCL: XL Axiata (EXCL IJ; Rp2,390; Buy) cooperates with Ericsson for network
modernization with 5G-ready router in the next 3 years. Erricson’s sytem (router)
could give better connectivity for LTE, LTE-Advance, and 5G application.
(Selular.id)

Comment: Slight positive sentiment to EXCL as network modernization may help

to improve EXCL’s network quality (better subscriber’s experience). We expect
EXCL’s 2019F data revenue to grow by +15%YoY (vs. FY18 14%YoY), mainly
driven by data traffic growth of 72%YoY. We have a Buy for EXCL with TP
Rp2,800.

LPKR: Lippo Karawaci (LPKR IJ; Rp1,770; Not Rated) plans to sell its shares in
Lippo Mall Puri worth Rp3.7tn to PT Puri Bintang Terang. (IDX)

Comment: The mall contributes less than 20% to LPKR’s total asset. We believe
the divestment will positively impact company’s cash flow in short term.

PEHA: Phapros (PEHA IJ; Rp2,200; Not Rated) recorded FY18 net profit of
Rp133bn (+6.4% yoy). However, net profit margin considered flat at 13.03% (vs
12.50% FY17). As for revenue, PEHA booked a relatively stable revenue at
Rp1,023bn (+2.08% yoy). Operating margin also maintained at 18.94% (vs
18.70% FY17). (Bisnis Indonesia)

SCMA: Surya Citra Media (SCMA IJ; Rp256; Non-rated) Announced plan to
acquire strategic shares and interest in several new online media companies. This
is to drive and strengthen company’s position as media and content company.
The company disclosed the announcement yesterday after market closed. Details
on the acquisition plan: 1) 99% ownership in PT Vidio Dot Com (“Vidio.com”); 2)
50% plus 1 shares of PTKapanlagi Dot Com Networks (“KLY”); 3) 99% ownership
of PT Binary Ventura Indonesia (“BVI)” that owned 60% of PT Estha Yudha
Ekatama (“EYE”), and 4) 50% shares in Samara Media Entertainment (PT Benson
Media Kreasi) which have ownership in serveral events/initiatives, e.g. IDEAFest,
Jakarta Halal Things. SCMA, KMK, MAC, and BVI are direct subsidiaries of PT
Elang Mahkota Teknologi Tbk (EMTK IJ; Non rated). Total amount of this
acquisition plan does not constitute a Material Transaction, according to
company. Company’s internal cash flow is mre than enough to fund acquisition
plan and its working capital. (Company)

WSKT: Waskita Karya (WSKT IJ; Rp1,880; Hold) created a JV with Modernland
Realty (MDLN IJ; Rp; Not Rated) to develop 300ha land in Bekasi for warehousing
and property. WSKT has 60% of shares in the JV where the rest is 40% is
controlled by Modern Realty. The JV will buy the 349ha of land from MDLN
subsidiary with total worth of Rp1.1tn. (Bisnis Indonesia)

Comment: We are positive towards the news, as WSKT is currently construction

the development of Cibitung-Cilincing toll road which were located just north of
the land location, which will provide an access to Tanjung Priok Port. However at
this stage we still maintain our Hold call for WSKT given company’s high debt
level and financing expense.

Markets & Sector

Automotive: The Finance Minister Sri Mulyani Indrawati stated that there will be
new tax calculations on vehicle tax (PPnBM). Governtment offers tax incentives
for low carbon emission vehicles (LCEV) including Hybrid Electric Vehicle (HEV),
Battery Electric Vehicle (BET), Plug-in hybrid electric vehicle (PHEV). The new tax
calculations will be based on number of passengers per vehicle, carbon
emissions, engine capacity, and fuel consumption from previously only based on
engine capacity and vehicle type. (Kontan)

Refer to Important disclosures in the last page of this report 2

PremierInsight

Infrastructure: DKI Jakarta provincial government will accelerate the

development of Jakarta infrastructure from 30 years to 10 years. The plans
include the development of: 1) MRT track from 16km to 223km, 2) LRT frim
5.8km to 116km, and 3) Trans Jakarta from 431km to 2,149km. The DKI
Government has submitted a budget of 571tn for infrastructure improvements
such as public transportation, houses, clean water and waste water management.
Financing for this development will be carried out through bank loans,
investments and private partnerships. (Bisnis Indonesia)

Comment: The plan would positively impact the construction sector; however as
the plan is still in nascent stage, we would wait for further update regarding the
plan. As for now, maintain Buy on WIKA as our top pick in construction sector.

Property: According to Summarecon Agung (SMRA IJ; Rp865; Hold) around

75% of their apartment projects were positioned for mid class segment with price
below Rp1bn. The only exception (25%) would be apartment projects which
located in middle of Jakarta with high land prices. In the other hand, Ciputra
Development (CTRA IJ; Rp; Buy) offes The Newton 2 aparment with price point
start from Rp1bn, as the project was located in mid Jakarta. Back in 2016,
Newton 1 was offered with price start from Rp800mn/unit. (Kontan)

Comment: We believe that middle segment will continue to compose the property
market in the near term, especially product with price point below Rp2bn. We
believe property demand will continue to be dominated by end-user, at least until
the election time is over. Maintain Buy on CTRA and PWON as our top pick in
residential property sector.

Economics

Retail survey: Retail sales activity grew 7.2% yoy (Dec18: 7.7% yoy),
according to BI’s retail survey. Contributors were mainly cultural goods (+21.5%
yoy) and clothing, which had seen strong expansion since 2H18. Information and
communication goods sales in retail spaces declined by 14.2% yoy (Dec18: -
10.3% yoy). It is expected retail sales to yet rise again in Feb19 by c. 11% yoy
with the increase in sales of spare parts, food & beverages, cultural goods, and
clothing goods. (Bank Indonesia)

Refer to Important disclosures in the last page of this report 3

 Head Office
PT INDO PREMIER SEKURITAS
Wisma GKBI 7/F Suite 718
Jl. Jend. Sudirman No.28
Jakarta 10210 - Indonesia
p +62.21.5793.1168
f +62.21.5793.1167

INVESTMENT RATINGS
BUY : Expected total return of 10% or more within a 12-month period
HOLD : Expected total return between -10% and 10% within a 12-month period
SELL : Expected total return of -10% or worse within a 12-month period

ANALYSTS CERTIFICATION.
The views expressed in this research report accurately reflect the analyst;s personal views about any and all of the subject securities or issuers; and no part of the
research analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in the report.

DISCLAIMERS
This reserch is based on information obtained from sources believed to be reliable, but we do not make any representation or warraty nor accept any responsibility
or liability as to its accruracy, completeness or correctness. Opinions expressed are subject to change without notice. This document is prepared for general
circulation. Any recommendations contained in this document does not have regard to the specific investment objectives, finacial situation and the particular
needs of any specific addressee. This document is not and should not be construed as an offer or a solicitation of an offer to purchase or subscribe or sell any
securities. PT. Indo Premier Sekuritas or its affiliates may seek or will seek investment banking or other business relationships with the companies in this report.
 12 March 2019
Premier Insight
Bukit Asam (PTBA IJ; Buy)
JCI Index Weak results as costs rising
Equity | Indonesia | Research Daily

6,600 10,000 FY18 earnings below estimates as production costs increased

9,000
6,550
8,000 18%.
6,500 7,000

6,000
We revise down our earnings forecasts by 9%-12% for FY19F-20F.
JCI Index

6,450

Rp bn
6,400
5,000
Strong cash balance; Potential high dividend yield.
4,000

6,350 3,000 Maintain Buy with 16% upside to new TP of Rp4,600 (prev.
2,000
6,300
1,000 Rp5,100).
6,250 -
Results came below expectation. PTBA recorded lower than expected results as
8-Feb

1-Mar

4-Mar

5-Mar

6-Mar

8-Mar

11-Mar
11-Feb

12-Feb

13-Feb

14-Feb

15-Feb

18-Feb

19-Feb

20-Feb

21-Feb

22-Feb

25-Feb

26-Feb

27-Feb

28-Feb

net profit decreased 19% qoq and 41% yoy to Rp1.09tn in 4Q18. This brought net
Foreign net buy (sell) profit to Rp5.02tn in FY18, up 12% yoy, but came below consensus (93%) and our
5,000 80%
(83%) forecasts for the period. Operating profit dropped 33% qoq and 49% yoy to
4,000
70%
Rp1.11tn in 4Q18, bringing FY18 operating profit to Rp6.28tn, up 6.5% yoy, but
60%

came below consensus (88%) and our (80%) forecasts for FY18. These were
% net buy/market turnover

3,000 50%
Net buy (sell) in Rp bn

40% mainly caused by higher than expected production costs of Rp13tn (+18% yoy) in
2,000
30%

20%
FY18, higher than our forecast of Rp12.1tn. Revenues dropped 6.9% qoq and 18%
1,000

10% yoy to Rp5.13tn in 4Q18, bringing top-line to Rp21.2tn in FY18, up 8.7% yoy,
- 0%
which came below consensus (95%) and our (98%) forecasts for FY18.
-10%
22-Feb

25-Feb

26-Feb

27-Feb

28-Feb

1-Mar

4-Mar

5-Mar

6-Mar

8-Mar

11-Mar

(1,000)
-20%

(2,000) -30%
We revise down earnings estimate for FY19F-20F. We revise down our
earnings forecasts by 9% and 12% for FY19F-20F, respectively (Fig. 9) as we
apply higher production costs for PTBA and lower revenues from DMO quota
Key Indexes
transfer. We note that on its production costs, PTBA recorded higher expenses for
Index Closing 1 day 1 year YTD
third party services of Rp680bn in FY18, vs. Rp187bn recorded in FY17. With our
JCI 6,366 -0.3% -2.1% 2.8% new estimates, we forecast PTBA’s earnings would be flat in FY19F (+0.8%) before
LQ45 995 0.0% -7.4% 1.3% increasing by 16% in FY20F. We apply flat benchmark coal price assumption of
DJI 25,651 0.8% 1.9% 10.0% US$85 per ton for FY19F-20F.
SET 1,627 -0.2% -9.6% 4.1%
HSI 28,503 1.0% -9.8% 10.3%
NKY 21,125 0.5% -3.2% 7.1%
Attractive dividend yield of 8% - 11%. PTBA would likely distribute high
FTSE 7,131 0.4% -1.2% 6.0% dividend in the next 1-2 months. Initially, PTBA plans to hold annual shareholders
FSSTI 3,191 -0.1% -9.9% 4.0% meeting on 1 April 2019. We estimate shareholders meeting would be held in the
EIDO 25 1.1% - 11.3% 2.1%
end of April or early May 2019. With PTBA’s strong cash balance of Rp6.3tn, we
estimate dividend payout ratio would range between 75% to 100%, translating to
Commodity price
attractive dividend yield of 8.2% - 10.9%. Please note that PTBA distributed
Commodities Last price Ret 1 day Ret 1 year
(in USD)
dividend per share of ~Rp318 with payout ratio of 75% in May 2018.
Oil/barrel (WTI) 56.8 1.3% -8.5%
CPO/tonne 519.2 -0.3% -10.8% Maintain Buy with 16% upside to new TP of Rp4,600 (prev. Rp5,100).
Soy/bushel 8.5 0.0% -15.8% Despite our earnings downgrade, we maintain our Buy rating for PTBA with 16%
Rubber/kg 1.6 -1.1% -22.2%
potential upside to our new target price (DCF-based, WACC: 14.3%, TG: 2%) of
Nickel/tonne 12,808 -1.5% -7.3%
Tins/tonne 21,091 -1.5% -1.8%
Rp4,600 (prev. Rp5,100) which implies FY19F-20F P/E of 10.5x and 9.0x,
Copper/tonne 6,435 0.2% -7.2% respectively. PTBA is a good short-term bargain with potential high dividend yield
Gold/try.oz (Spot) 1,293 -0.4% -2.2% of 8.2% - 10.9% which we believe would be distributed in the next 1-2 months.
Coal/tonne 94.6 -1.0% -4.9%
Corn/bushel 3.3 -0.6% -10.4%
Year To 31 Dec 2017A 2018A 2019F 2020F 2021F
Wheat/bushel* 146.5 5.8% -7.0%
Revenue (RpBn) 19,471 21,167 23,113 25,751 29,126
* : 1 month change
EBITDA (RpBn) 6,575 6,997 7,019 8,074 8,984
Source : Bloomberg
EBITDA Growth (%) 122.2 6.4 0.3 15.0 11.3
Net Profit (RpBn) 4,476 5,024 5,063 5,857 6,450
EPS (Rp) 425 436 440 508 560
EPS Growth (%) 123.1 2.7 0.8 15.7 10.1
Net Gearing (%) (23.3) (36.8) (19.6) (22.2) (21.8)
PER (x) 9.4 9.1 9.1 7.8 7.1
PBV (x) 3.0 2.8 2.6 2.4 2.2
Dividend Yield (%) 1.4 7.3 8.2 8.8 11.5
EV/EBITDA (x) 5.9 5.7 6.0 5.1 4.6
Source: PTBA, IndoPremier Share Price Closing as of : 11-March-2019

Refer to Important disclosures in the last page of this report

PremierInsight

News & Analysis

Corporates

EXCL: XL Axiata (EXCL IJ; Rp2,390; Buy) cooperates with Ericsson for network
modernization with 5G-ready router in the next 3 years. Erricson’s sytem (router)
could give better connectivity for LTE, LTE-Advance, and 5G application.
(Selular.id)

Comment: Slight positive sentiment to EXCL as network modernization may help

to improve EXCL’s network quality (better subscriber’s experience). We expect
EXCL’s 2019F data revenue to grow by +15%YoY (vs. FY18 14%YoY), mainly
driven by data traffic growth of 72%YoY. We have a Buy for EXCL with TP
Rp2,800.

LPKR: Lippo Karawaci (LPKR IJ; Rp1,770; Not Rated) plans to sell its shares in
Lippo Mall Puri worth Rp3.7tn to PT Puri Bintang Terang. (IDX)

Comment: The mall contributes less than 20% to LPKR’s total asset. We believe
the divestment will positively impact company’s cash flow in short term.

PEHA: Phapros (PEHA IJ; Rp2,200; Not Rated) recorded FY18 net profit of
Rp133bn (+6.4% yoy). However, net profit margin considered flat at 13.03% (vs
12.50% FY17). As for revenue, PEHA booked a relatively stable revenue at
Rp1,023bn (+2.08% yoy). Operating margin also maintained at 18.94% (vs
18.70% FY17). (Bisnis Indonesia)

SCMA: Surya Citra Media (SCMA IJ; Rp256; Non-rated) Announced plan to
acquire strategic shares and interest in several new online media companies. This
is to drive and strengthen company’s position as media and content company.
The company disclosed the announcement yesterday after market closed. Details
on the acquisition plan: 1) 99% ownership in PT Vidio Dot Com (“Vidio.com”); 2)
50% plus 1 shares of PTKapanlagi Dot Com Networks (“KLY”); 3) 99% ownership
of PT Binary Ventura Indonesia (“BVI)” that owned 60% of PT Estha Yudha
Ekatama (“EYE”), and 4) 50% shares in Samara Media Entertainment (PT Benson
Media Kreasi) which have ownership in serveral events/initiatives, e.g. IDEAFest,
Jakarta Halal Things. SCMA, KMK, MAC, and BVI are direct subsidiaries of PT
Elang Mahkota Teknologi Tbk (EMTK IJ; Non rated). Total amount of this
acquisition plan does not constitute a Material Transaction, according to
company. Company’s internal cash flow is mre than enough to fund acquisition
plan and its working capital. (Company)

WSKT: Waskita Karya (WSKT IJ; Rp1,880; Hold) created a JV with Modernland
Realty (MDLN IJ; Rp; Not Rated) to develop 300ha land in Bekasi for warehousing
and property. WSKT has 60% of shares in the JV where the rest is 40% is
controlled by Modern Realty. The JV will buy the 349ha of land from MDLN
subsidiary with total worth of Rp1.1tn. (Bisnis Indonesia)

Comment: We are positive towards the news, as WSKT is currently construction

the development of Cibitung-Cilincing toll road which were located just north of
the land location, which will provide an access to Tanjung Priok Port. However at
this stage we still maintain our Hold call for WSKT given company’s high debt
level and financing expense.

Markets & Sector

Automotive: The Finance Minister Sri Mulyani Indrawati stated that there will be
new tax calculations on vehicle tax (PPnBM). Governtment offers tax incentives
for low carbon emission vehicles (LCEV) including Hybrid Electric Vehicle (HEV),
Battery Electric Vehicle (BET), Plug-in hybrid electric vehicle (PHEV). The new tax
calculations will be based on number of passengers per vehicle, carbon
emissions, engine capacity, and fuel consumption from previously only based on
engine capacity and vehicle type. (Kontan)

Refer to Important disclosures in the last page of this report 2

PremierInsight

Infrastructure: DKI Jakarta provincial government will accelerate the

development of Jakarta infrastructure from 30 years to 10 years. The plans
include the development of: 1) MRT track from 16km to 223km, 2) LRT frim
5.8km to 116km, and 3) Trans Jakarta from 431km to 2,149km. The DKI
Government has submitted a budget of 571tn for infrastructure improvements
such as public transportation, houses, clean water and waste water management.
Financing for this development will be carried out through bank loans,
investments and private partnerships. (Bisnis Indonesia)

Comment: The plan would positively impact the construction sector; however as
the plan is still in nascent stage, we would wait for further update regarding the
plan. As for now, maintain Buy on WIKA as our top pick in construction sector.

Property: According to Summarecon Agung (SMRA IJ; Rp865; Hold) around

75% of their apartment projects were positioned for mid class segment with price
below Rp1bn. The only exception (25%) would be apartment projects which
located in middle of Jakarta with high land prices. In the other hand, Ciputra
Development (CTRA IJ; Rp; Buy) offes The Newton 2 aparment with price point
start from Rp1bn, as the project was located in mid Jakarta. Back in 2016,
Newton 1 was offered with price start from Rp800mn/unit. (Kontan)

Comment: We believe that middle segment will continue to compose the property
market in the near term, especially product with price point below Rp2bn. We
believe property demand will continue to be dominated by end-user, at least until
the election time is over. Maintain Buy on CTRA and PWON as our top pick in
residential property sector.

Economics

Retail survey: Retail sales activity grew 7.2% yoy (Dec18: 7.7% yoy),
according to BI’s retail survey. Contributors were mainly cultural goods (+21.5%
yoy) and clothing, which had seen strong expansion since 2H18. Information and
communication goods sales in retail spaces declined by 14.2% yoy (Dec18: -
10.3% yoy). It is expected retail sales to yet rise again in Feb19 by c. 11% yoy
with the increase in sales of spare parts, food & beverages, cultural goods, and
clothing goods. (Bank Indonesia)

Refer to Important disclosures in the last page of this report 3

 Head Office
PT INDO PREMIER SEKURITAS
Wisma GKBI 7/F Suite 718
Jl. Jend. Sudirman No.28
Jakarta 10210 - Indonesia
p +62.21.5793.1168
f +62.21.5793.1167

INVESTMENT RATINGS
BUY : Expected total return of 10% or more within a 12-month period
HOLD : Expected total return between -10% and 10% within a 12-month period
SELL : Expected total return of -10% or worse within a 12-month period

ANALYSTS CERTIFICATION.
The views expressed in this research report accurately reflect the analyst;s personal views about any and all of the subject securities or issuers; and no part of the
research analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in the report.

DISCLAIMERS
This reserch is based on information obtained from sources believed to be reliable, but we do not make any representation or warraty nor accept any responsibility
or liability as to its accruracy, completeness or correctness. Opinions expressed are subject to change without notice. This document is prepared for general
circulation. Any recommendations contained in this document does not have regard to the specific investment objectives, finacial situation and the particular
needs of any specific addressee. This document is not and should not be construed as an offer or a solicitation of an offer to purchase or subscribe or sell any
securities. PT. Indo Premier Sekuritas or its affiliates may seek or will seek investment banking or other business relationships with the companies in this report.
 12 March 2019
Premier Insight
Bukit Asam (PTBA IJ; Buy)
JCI Index Weak results as costs rising
Equity | Indonesia | Research Daily

6,600 10,000 FY18 earnings below estimates as production costs increased

9,000
6,550
8,000 18%.
6,500 7,000

6,000
We revise down our earnings forecasts by 9%-12% for FY19F-20F.
JCI Index

6,450

Rp bn
6,400
5,000
Strong cash balance; Potential high dividend yield.
4,000

6,350 3,000 Maintain Buy with 16% upside to new TP of Rp4,600 (prev.
2,000
6,300
1,000 Rp5,100).
6,250 -
Results came below expectation. PTBA recorded lower than expected results as
8-Feb

1-Mar

4-Mar

5-Mar

6-Mar

8-Mar

11-Mar
11-Feb

12-Feb

13-Feb

14-Feb

15-Feb

18-Feb

19-Feb

20-Feb

21-Feb

22-Feb

25-Feb

26-Feb

27-Feb

28-Feb

net profit decreased 19% qoq and 41% yoy to Rp1.09tn in 4Q18. This brought net
Foreign net buy (sell) profit to Rp5.02tn in FY18, up 12% yoy, but came below consensus (93%) and our
5,000 80%
(83%) forecasts for the period. Operating profit dropped 33% qoq and 49% yoy to
4,000
70%
Rp1.11tn in 4Q18, bringing FY18 operating profit to Rp6.28tn, up 6.5% yoy, but
60%

came below consensus (88%) and our (80%) forecasts for FY18. These were
% net buy/market turnover

3,000 50%
Net buy (sell) in Rp bn

40% mainly caused by higher than expected production costs of Rp13tn (+18% yoy) in
2,000
30%

20%
FY18, higher than our forecast of Rp12.1tn. Revenues dropped 6.9% qoq and 18%
1,000

10% yoy to Rp5.13tn in 4Q18, bringing top-line to Rp21.2tn in FY18, up 8.7% yoy,
- 0%
which came below consensus (95%) and our (98%) forecasts for FY18.
-10%
22-Feb

25-Feb

26-Feb

27-Feb

28-Feb

1-Mar

4-Mar

5-Mar

6-Mar

8-Mar

11-Mar

(1,000)
-20%

(2,000) -30%
We revise down earnings estimate for FY19F-20F. We revise down our
earnings forecasts by 9% and 12% for FY19F-20F, respectively (Fig. 9) as we
apply higher production costs for PTBA and lower revenues from DMO quota
Key Indexes
transfer. We note that on its production costs, PTBA recorded higher expenses for
Index Closing 1 day 1 year YTD
third party services of Rp680bn in FY18, vs. Rp187bn recorded in FY17. With our
JCI 6,366 -0.3% -2.1% 2.8% new estimates, we forecast PTBA’s earnings would be flat in FY19F (+0.8%) before
LQ45 995 0.0% -7.4% 1.3% increasing by 16% in FY20F. We apply flat benchmark coal price assumption of
DJI 25,651 0.8% 1.9% 10.0% US$85 per ton for FY19F-20F.
SET 1,627 -0.2% -9.6% 4.1%
HSI 28,503 1.0% -9.8% 10.3%
NKY 21,125 0.5% -3.2% 7.1%
Attractive dividend yield of 8% - 11%. PTBA would likely distribute high
FTSE 7,131 0.4% -1.2% 6.0% dividend in the next 1-2 months. Initially, PTBA plans to hold annual shareholders
FSSTI 3,191 -0.1% -9.9% 4.0% meeting on 1 April 2019. We estimate shareholders meeting would be held in the
EIDO 25 1.1% - 11.3% 2.1%
end of April or early May 2019. With PTBA’s strong cash balance of Rp6.3tn, we
estimate dividend payout ratio would range between 75% to 100%, translating to
Commodity price
attractive dividend yield of 8.2% - 10.9%. Please note that PTBA distributed
Commodities Last price Ret 1 day Ret 1 year
(in USD)
dividend per share of ~Rp318 with payout ratio of 75% in May 2018.
Oil/barrel (WTI) 56.8 1.3% -8.5%
CPO/tonne 519.2 -0.3% -10.8% Maintain Buy with 16% upside to new TP of Rp4,600 (prev. Rp5,100).
Soy/bushel 8.5 0.0% -15.8% Despite our earnings downgrade, we maintain our Buy rating for PTBA with 16%
Rubber/kg 1.6 -1.1% -22.2%
potential upside to our new target price (DCF-based, WACC: 14.3%, TG: 2%) of
Nickel/tonne 12,808 -1.5% -7.3%
Tins/tonne 21,091 -1.5% -1.8%
Rp4,600 (prev. Rp5,100) which implies FY19F-20F P/E of 10.5x and 9.0x,
Copper/tonne 6,435 0.2% -7.2% respectively. PTBA is a good short-term bargain with potential high dividend yield
Gold/try.oz (Spot) 1,293 -0.4% -2.2% of 8.2% - 10.9% which we believe would be distributed in the next 1-2 months.
Coal/tonne 94.6 -1.0% -4.9%
Corn/bushel 3.3 -0.6% -10.4%
Year To 31 Dec 2017A 2018A 2019F 2020F 2021F
Wheat/bushel* 146.5 5.8% -7.0%
Revenue (RpBn) 19,471 21,167 23,113 25,751 29,126
* : 1 month change
EBITDA (RpBn) 6,575 6,997 7,019 8,074 8,984
Source : Bloomberg
EBITDA Growth (%) 122.2 6.4 0.3 15.0 11.3
Net Profit (RpBn) 4,476 5,024 5,063 5,857 6,450
EPS (Rp) 425 436 440 508 560
EPS Growth (%) 123.1 2.7 0.8 15.7 10.1
Net Gearing (%) (23.3) (36.8) (19.6) (22.2) (21.8)
PER (x) 9.4 9.1 9.1 7.8 7.1
PBV (x) 3.0 2.8 2.6 2.4 2.2
Dividend Yield (%) 1.4 7.3 8.2 8.8 11.5
EV/EBITDA (x) 5.9 5.7 6.0 5.1 4.6
Source: PTBA, IndoPremier Share Price Closing as of : 11-March-2019

Refer to Important disclosures in the last page of this report

PremierInsight

News & Analysis

Corporates

EXCL: XL Axiata (EXCL IJ; Rp2,390; Buy) cooperates with Ericsson for network
modernization with 5G-ready router in the next 3 years. Erricson’s sytem (router)
could give better connectivity for LTE, LTE-Advance, and 5G application.
(Selular.id)

Comment: Slight positive sentiment to EXCL as network modernization may help

to improve EXCL’s network quality (better subscriber’s experience). We expect
EXCL’s 2019F data revenue to grow by +15%YoY (vs. FY18 14%YoY), mainly
driven by data traffic growth of 72%YoY. We have a Buy for EXCL with TP
Rp2,800.

LPKR: Lippo Karawaci (LPKR IJ; Rp1,770; Not Rated) plans to sell its shares in
Lippo Mall Puri worth Rp3.7tn to PT Puri Bintang Terang. (IDX)

Comment: The mall contributes less than 20% to LPKR’s total asset. We believe
the divestment will positively impact company’s cash flow in short term.

PEHA: Phapros (PEHA IJ; Rp2,200; Not Rated) recorded FY18 net profit of
Rp133bn (+6.4% yoy). However, net profit margin considered flat at 13.03% (vs
12.50% FY17). As for revenue, PEHA booked a relatively stable revenue at
Rp1,023bn (+2.08% yoy). Operating margin also maintained at 18.94% (vs
18.70% FY17). (Bisnis Indonesia)

SCMA: Surya Citra Media (SCMA IJ; Rp256; Non-rated) Announced plan to
acquire strategic shares and interest in several new online media companies. This
is to drive and strengthen company’s position as media and content company.
The company disclosed the announcement yesterday after market closed. Details
on the acquisition plan: 1) 99% ownership in PT Vidio Dot Com (“Vidio.com”); 2)
50% plus 1 shares of PTKapanlagi Dot Com Networks (“KLY”); 3) 99% ownership
of PT Binary Ventura Indonesia (“BVI)” that owned 60% of PT Estha Yudha
Ekatama (“EYE”), and 4) 50% shares in Samara Media Entertainment (PT Benson
Media Kreasi) which have ownership in serveral events/initiatives, e.g. IDEAFest,
Jakarta Halal Things. SCMA, KMK, MAC, and BVI are direct subsidiaries of PT
Elang Mahkota Teknologi Tbk (EMTK IJ; Non rated). Total amount of this
acquisition plan does not constitute a Material Transaction, according to
company. Company’s internal cash flow is mre than enough to fund acquisition
plan and its working capital. (Company)

WSKT: Waskita Karya (WSKT IJ; Rp1,880; Hold) created a JV with Modernland
Realty (MDLN IJ; Rp; Not Rated) to develop 300ha land in Bekasi for warehousing
and property. WSKT has 60% of shares in the JV where the rest is 40% is
controlled by Modern Realty. The JV will buy the 349ha of land from MDLN
subsidiary with total worth of Rp1.1tn. (Bisnis Indonesia)

Comment: We are positive towards the news, as WSKT is currently construction

the development of Cibitung-Cilincing toll road which were located just north of
the land location, which will provide an access to Tanjung Priok Port. However at
this stage we still maintain our Hold call for WSKT given company’s high debt
level and financing expense.

Markets & Sector

Automotive: The Finance Minister Sri Mulyani Indrawati stated that there will be
new tax calculations on vehicle tax (PPnBM). Governtment offers tax incentives
for low carbon emission vehicles (LCEV) including Hybrid Electric Vehicle (HEV),
Battery Electric Vehicle (BET), Plug-in hybrid electric vehicle (PHEV). The new tax
calculations will be based on number of passengers per vehicle, carbon
emissions, engine capacity, and fuel consumption from previously only based on
engine capacity and vehicle type. (Kontan)

Refer to Important disclosures in the last page of this report 2

PremierInsight

Infrastructure: DKI Jakarta provincial government will accelerate the

development of Jakarta infrastructure from 30 years to 10 years. The plans
include the development of: 1) MRT track from 16km to 223km, 2) LRT frim
5.8km to 116km, and 3) Trans Jakarta from 431km to 2,149km. The DKI
Government has submitted a budget of 571tn for infrastructure improvements
such as public transportation, houses, clean water and waste water management.
Financing for this development will be carried out through bank loans,
investments and private partnerships. (Bisnis Indonesia)

Comment: The plan would positively impact the construction sector; however as
the plan is still in nascent stage, we would wait for further update regarding the
plan. As for now, maintain Buy on WIKA as our top pick in construction sector.

Property: According to Summarecon Agung (SMRA IJ; Rp865; Hold) around

75% of their apartment projects were positioned for mid class segment with price
below Rp1bn. The only exception (25%) would be apartment projects which
located in middle of Jakarta with high land prices. In the other hand, Ciputra
Development (CTRA IJ; Rp; Buy) offes The Newton 2 aparment with price point
start from Rp1bn, as the project was located in mid Jakarta. Back in 2016,
Newton 1 was offered with price start from Rp800mn/unit. (Kontan)

Comment: We believe that middle segment will continue to compose the property
market in the near term, especially product with price point below Rp2bn. We
believe property demand will continue to be dominated by end-user, at least until
the election time is over. Maintain Buy on CTRA and PWON as our top pick in
residential property sector.

Economics

Retail survey: Retail sales activity grew 7.2% yoy (Dec18: 7.7% yoy),
according to BI’s retail survey. Contributors were mainly cultural goods (+21.5%
yoy) and clothing, which had seen strong expansion since 2H18. Information and
communication goods sales in retail spaces declined by 14.2% yoy (Dec18: -
10.3% yoy). It is expected retail sales to yet rise again in Feb19 by c. 11% yoy
with the increase in sales of spare parts, food & beverages, cultural goods, and
clothing goods. (Bank Indonesia)

Refer to Important disclosures in the last page of this report 3

 Head Office
PT INDO PREMIER SEKURITAS
Wisma GKBI 7/F Suite 718
Jl. Jend. Sudirman No.28
Jakarta 10210 - Indonesia
p +62.21.5793.1168
f +62.21.5793.1167

INVESTMENT RATINGS
BUY : Expected total return of 10% or more within a 12-month period
HOLD : Expected total return between -10% and 10% within a 12-month period
SELL : Expected total return of -10% or worse within a 12-month period

ANALYSTS CERTIFICATION.
The views expressed in this research report accurately reflect the analyst;s personal views about any and all of the subject securities or issuers; and no part of the
research analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in the report.

DISCLAIMERS
This reserch is based on information obtained from sources believed to be reliable, but we do not make any representation or warraty nor accept any responsibility
or liability as to its accruracy, completeness or correctness. Opinions expressed are subject to change without notice. This document is prepared for general
circulation. Any recommendations contained in this document does not have regard to the specific investment objectives, finacial situation and the particular
needs of any specific addressee. This document is not and should not be construed as an offer or a solicitation of an offer to purchase or subscribe or sell any
securities. PT. Indo Premier Sekuritas or its affiliates may seek or will seek investment banking or other business relationships with the companies in this report.
 12 March 2019
Premier Insight
Bukit Asam (PTBA IJ; Buy)
JCI Index Weak results as costs rising
Equity | Indonesia | Research Daily

6,600 10,000 FY18 earnings below estimates as production costs increased

9,000
6,550
8,000 18%.
6,500 7,000

6,000
We revise down our earnings forecasts by 9%-12% for FY19F-20F.
JCI Index

6,450

Rp bn
6,400
5,000
Strong cash balance; Potential high dividend yield.
4,000

6,350 3,000 Maintain Buy with 16% upside to new TP of Rp4,600 (prev.
2,000
6,300
1,000 Rp5,100).
6,250 -
Results came below expectation. PTBA recorded lower than expected results as
8-Feb

1-Mar

4-Mar

5-Mar

6-Mar

8-Mar

11-Mar
11-Feb

12-Feb

13-Feb

14-Feb

15-Feb

18-Feb

19-Feb

20-Feb

21-Feb

22-Feb

25-Feb

26-Feb

27-Feb

28-Feb

net profit decreased 19% qoq and 41% yoy to Rp1.09tn in 4Q18. This brought net
Foreign net buy (sell) profit to Rp5.02tn in FY18, up 12% yoy, but came below consensus (93%) and our
5,000 80%
(83%) forecasts for the period. Operating profit dropped 33% qoq and 49% yoy to
4,000
70%
Rp1.11tn in 4Q18, bringing FY18 operating profit to Rp6.28tn, up 6.5% yoy, but
60%

came below consensus (88%) and our (80%) forecasts for FY18. These were
% net buy/market turnover

3,000 50%
Net buy (sell) in Rp bn

40% mainly caused by higher than expected production costs of Rp13tn (+18% yoy) in
2,000
30%

20%
FY18, higher than our forecast of Rp12.1tn. Revenues dropped 6.9% qoq and 18%
1,000

10% yoy to Rp5.13tn in 4Q18, bringing top-line to Rp21.2tn in FY18, up 8.7% yoy,
- 0%
which came below consensus (95%) and our (98%) forecasts for FY18.
-10%
22-Feb

25-Feb

26-Feb

27-Feb

28-Feb

1-Mar

4-Mar

5-Mar

6-Mar

8-Mar

11-Mar

(1,000)
-20%

(2,000) -30%
We revise down earnings estimate for FY19F-20F. We revise down our
earnings forecasts by 9% and 12% for FY19F-20F, respectively (Fig. 9) as we
apply higher production costs for PTBA and lower revenues from DMO quota
Key Indexes
transfer. We note that on its production costs, PTBA recorded higher expenses for
Index Closing 1 day 1 year YTD
third party services of Rp680bn in FY18, vs. Rp187bn recorded in FY17. With our
JCI 6,366 -0.3% -2.1% 2.8% new estimates, we forecast PTBA’s earnings would be flat in FY19F (+0.8%) before
LQ45 995 0.0% -7.4% 1.3% increasing by 16% in FY20F. We apply flat benchmark coal price assumption of
DJI 25,651 0.8% 1.9% 10.0% US$85 per ton for FY19F-20F.
SET 1,627 -0.2% -9.6% 4.1%
HSI 28,503 1.0% -9.8% 10.3%
NKY 21,125 0.5% -3.2% 7.1%
Attractive dividend yield of 8% - 11%. PTBA would likely distribute high
FTSE 7,131 0.4% -1.2% 6.0% dividend in the next 1-2 months. Initially, PTBA plans to hold annual shareholders
FSSTI 3,191 -0.1% -9.9% 4.0% meeting on 1 April 2019. We estimate shareholders meeting would be held in the
EIDO 25 1.1% - 11.3% 2.1%
end of April or early May 2019. With PTBA’s strong cash balance of Rp6.3tn, we
estimate dividend payout ratio would range between 75% to 100%, translating to
Commodity price
attractive dividend yield of 8.2% - 10.9%. Please note that PTBA distributed
Commodities Last price Ret 1 day Ret 1 year
(in USD)
dividend per share of ~Rp318 with payout ratio of 75% in May 2018.
Oil/barrel (WTI) 56.8 1.3% -8.5%
CPO/tonne 519.2 -0.3% -10.8% Maintain Buy with 16% upside to new TP of Rp4,600 (prev. Rp5,100).
Soy/bushel 8.5 0.0% -15.8% Despite our earnings downgrade, we maintain our Buy rating for PTBA with 16%
Rubber/kg 1.6 -1.1% -22.2%
potential upside to our new target price (DCF-based, WACC: 14.3%, TG: 2%) of
Nickel/tonne 12,808 -1.5% -7.3%
Tins/tonne 21,091 -1.5% -1.8%
Rp4,600 (prev. Rp5,100) which implies FY19F-20F P/E of 10.5x and 9.0x,
Copper/tonne 6,435 0.2% -7.2% respectively. PTBA is a good short-term bargain with potential high dividend yield
Gold/try.oz (Spot) 1,293 -0.4% -2.2% of 8.2% - 10.9% which we believe would be distributed in the next 1-2 months.
Coal/tonne 94.6 -1.0% -4.9%
Corn/bushel 3.3 -0.6% -10.4%
Year To 31 Dec 2017A 2018A 2019F 2020F 2021F
Wheat/bushel* 146.5 5.8% -7.0%
Revenue (RpBn) 19,471 21,167 23,113 25,751 29,126
* : 1 month change
EBITDA (RpBn) 6,575 6,997 7,019 8,074 8,984
Source : Bloomberg
EBITDA Growth (%) 122.2 6.4 0.3 15.0 11.3
Net Profit (RpBn) 4,476 5,024 5,063 5,857 6,450
EPS (Rp) 425 436 440 508 560
EPS Growth (%) 123.1 2.7 0.8 15.7 10.1
Net Gearing (%) (23.3) (36.8) (19.6) (22.2) (21.8)
PER (x) 9.4 9.1 9.1 7.8 7.1
PBV (x) 3.0 2.8 2.6 2.4 2.2
Dividend Yield (%) 1.4 7.3 8.2 8.8 11.5
EV/EBITDA (x) 5.9 5.7 6.0 5.1 4.6
Source: PTBA, IndoPremier Share Price Closing as of : 11-March-2019

Refer to Important disclosures in the last page of this report

PremierInsight

News & Analysis

Corporates

EXCL: XL Axiata (EXCL IJ; Rp2,390; Buy) cooperates with Ericsson for network
modernization with 5G-ready router in the next 3 years. Erricson’s sytem (router)
could give better connectivity for LTE, LTE-Advance, and 5G application.
(Selular.id)

Comment: Slight positive sentiment to EXCL as network modernization may help

to improve EXCL’s network quality (better subscriber’s experience). We expect
EXCL’s 2019F data revenue to grow by +15%YoY (vs. FY18 14%YoY), mainly
driven by data traffic growth of 72%YoY. We have a Buy for EXCL with TP
Rp2,800.

LPKR: Lippo Karawaci (LPKR IJ; Rp1,770; Not Rated) plans to sell its shares in
Lippo Mall Puri worth Rp3.7tn to PT Puri Bintang Terang. (IDX)

Comment: The mall contributes less than 20% to LPKR’s total asset. We believe
the divestment will positively impact company’s cash flow in short term.

PEHA: Phapros (PEHA IJ; Rp2,200; Not Rated) recorded FY18 net profit of
Rp133bn (+6.4% yoy). However, net profit margin considered flat at 13.03% (vs
12.50% FY17). As for revenue, PEHA booked a relatively stable revenue at
Rp1,023bn (+2.08% yoy). Operating margin also maintained at 18.94% (vs
18.70% FY17). (Bisnis Indonesia)

SCMA: Surya Citra Media (SCMA IJ; Rp256; Non-rated) Announced plan to
acquire strategic shares and interest in several new online media companies. This
is to drive and strengthen company’s position as media and content company.
The company disclosed the announcement yesterday after market closed. Details
on the acquisition plan: 1) 99% ownership in PT Vidio Dot Com (“Vidio.com”); 2)
50% plus 1 shares of PTKapanlagi Dot Com Networks (“KLY”); 3) 99% ownership
of PT Binary Ventura Indonesia (“BVI)” that owned 60% of PT Estha Yudha
Ekatama (“EYE”), and 4) 50% shares in Samara Media Entertainment (PT Benson
Media Kreasi) which have ownership in serveral events/initiatives, e.g. IDEAFest,
Jakarta Halal Things. SCMA, KMK, MAC, and BVI are direct subsidiaries of PT
Elang Mahkota Teknologi Tbk (EMTK IJ; Non rated). Total amount of this
acquisition plan does not constitute a Material Transaction, according to
company. Company’s internal cash flow is mre than enough to fund acquisition
plan and its working capital. (Company)

WSKT: Waskita Karya (WSKT IJ; Rp1,880; Hold) created a JV with Modernland
Realty (MDLN IJ; Rp; Not Rated) to develop 300ha land in Bekasi for warehousing
and property. WSKT has 60% of shares in the JV where the rest is 40% is
controlled by Modern Realty. The JV will buy the 349ha of land from MDLN
subsidiary with total worth of Rp1.1tn. (Bisnis Indonesia)

Comment: We are positive towards the news, as WSKT is currently construction

the development of Cibitung-Cilincing toll road which were located just north of
the land location, which will provide an access to Tanjung Priok Port. However at
this stage we still maintain our Hold call for WSKT given company’s high debt
level and financing expense.

Markets & Sector

Automotive: The Finance Minister Sri Mulyani Indrawati stated that there will be
new tax calculations on vehicle tax (PPnBM). Governtment offers tax incentives
for low carbon emission vehicles (LCEV) including Hybrid Electric Vehicle (HEV),
Battery Electric Vehicle (BET), Plug-in hybrid electric vehicle (PHEV). The new tax
calculations will be based on number of passengers per vehicle, carbon
emissions, engine capacity, and fuel consumption from previously only based on
engine capacity and vehicle type. (Kontan)

Refer to Important disclosures in the last page of this report 2

PremierInsight

Infrastructure: DKI Jakarta provincial government will accelerate the

development of Jakarta infrastructure from 30 years to 10 years. The plans
include the development of: 1) MRT track from 16km to 223km, 2) LRT frim
5.8km to 116km, and 3) Trans Jakarta from 431km to 2,149km. The DKI
Government has submitted a budget of 571tn for infrastructure improvements
such as public transportation, houses, clean water and waste water management.
Financing for this development will be carried out through bank loans,
investments and private partnerships. (Bisnis Indonesia)

Comment: The plan would positively impact the construction sector; however as
the plan is still in nascent stage, we would wait for further update regarding the
plan. As for now, maintain Buy on WIKA as our top pick in construction sector.

Property: According to Summarecon Agung (SMRA IJ; Rp865; Hold) around

75% of their apartment projects were positioned for mid class segment with price
below Rp1bn. The only exception (25%) would be apartment projects which
located in middle of Jakarta with high land prices. In the other hand, Ciputra
Development (CTRA IJ; Rp; Buy) offes The Newton 2 aparment with price point
start from Rp1bn, as the project was located in mid Jakarta. Back in 2016,
Newton 1 was offered with price start from Rp800mn/unit. (Kontan)

Comment: We believe that middle segment will continue to compose the property
market in the near term, especially product with price point below Rp2bn. We
believe property demand will continue to be dominated by end-user, at least until
the election time is over. Maintain Buy on CTRA and PWON as our top pick in
residential property sector.

Economics

Retail survey: Retail sales activity grew 7.2% yoy (Dec18: 7.7% yoy),
according to BI’s retail survey. Contributors were mainly cultural goods (+21.5%
yoy) and clothing, which had seen strong expansion since 2H18. Information and
communication goods sales in retail spaces declined by 14.2% yoy (Dec18: -
10.3% yoy). It is expected retail sales to yet rise again in Feb19 by c. 11% yoy
with the increase in sales of spare parts, food & beverages, cultural goods, and
clothing goods. (Bank Indonesia)

Refer to Important disclosures in the last page of this report 3

 Head Office
PT INDO PREMIER SEKURITAS
Wisma GKBI 7/F Suite 718
Jl. Jend. Sudirman No.28
Jakarta 10210 - Indonesia
p +62.21.5793.1168
f +62.21.5793.1167

INVESTMENT RATINGS
BUY : Expected total return of 10% or more within a 12-month period
HOLD : Expected total return between -10% and 10% within a 12-month period
SELL : Expected total return of -10% or worse within a 12-month period

ANALYSTS CERTIFICATION.
The views expressed in this research report accurately reflect the analyst;s personal views about any and all of the subject securities or issuers; and no part of the
research analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in the report.

DISCLAIMERS
This reserch is based on information obtained from sources believed to be reliable, but we do not make any representation or warraty nor accept any responsibility
or liability as to its accruracy, completeness or correctness. Opinions expressed are subject to change without notice. This document is prepared for general
circulation. Any recommendations contained in this document does not have regard to the specific investment objectives, finacial situation and the particular
needs of any specific addressee. This document is not and should not be construed as an offer or a solicitation of an offer to purchase or subscribe or sell any
securities. PT. Indo Premier Sekuritas or its affiliates may seek or will seek investment banking or other business relationships with the companies in this report.
 12 March 2019
Premier Insight
Bukit Asam (PTBA IJ; Buy)
JCI Index Weak results as costs rising
Equity | Indonesia | Research Daily

6,600 10,000 FY18 earnings below estimates as production costs increased

9,000
6,550
8,000 18%.
6,500 7,000

6,000
We revise down our earnings forecasts by 9%-12% for FY19F-20F.
JCI Index

6,450

Rp bn
6,400
5,000
Strong cash balance; Potential high dividend yield.
4,000

6,350 3,000 Maintain Buy with 16% upside to new TP of Rp4,600 (prev.
2,000
6,300
1,000 Rp5,100).
6,250 -
Results came below expectation. PTBA recorded lower than expected results as
8-Feb

1-Mar

4-Mar

5-Mar

6-Mar

8-Mar

11-Mar
11-Feb

12-Feb

13-Feb

14-Feb

15-Feb

18-Feb

19-Feb

20-Feb

21-Feb

22-Feb

25-Feb

26-Feb

27-Feb

28-Feb

net profit decreased 19% qoq and 41% yoy to Rp1.09tn in 4Q18. This brought net
Foreign net buy (sell) profit to Rp5.02tn in FY18, up 12% yoy, but came below consensus (93%) and our
5,000 80%
(83%) forecasts for the period. Operating profit dropped 33% qoq and 49% yoy to
4,000
70%
Rp1.11tn in 4Q18, bringing FY18 operating profit to Rp6.28tn, up 6.5% yoy, but
60%

came below consensus (88%) and our (80%) forecasts for FY18. These were
% net buy/market turnover

3,000 50%
Net buy (sell) in Rp bn

40% mainly caused by higher than expected production costs of Rp13tn (+18% yoy) in
2,000
30%

20%
FY18, higher than our forecast of Rp12.1tn. Revenues dropped 6.9% qoq and 18%
1,000

10% yoy to Rp5.13tn in 4Q18, bringing top-line to Rp21.2tn in FY18, up 8.7% yoy,
- 0%
which came below consensus (95%) and our (98%) forecasts for FY18.
-10%
22-Feb

25-Feb

26-Feb

27-Feb

28-Feb

1-Mar

4-Mar

5-Mar

6-Mar

8-Mar

11-Mar

(1,000)
-20%

(2,000) -30%
We revise down earnings estimate for FY19F-20F. We revise down our
earnings forecasts by 9% and 12% for FY19F-20F, respectively (Fig. 9) as we
apply higher production costs for PTBA and lower revenues from DMO quota
Key Indexes
transfer. We note that on its production costs, PTBA recorded higher expenses for
Index Closing 1 day 1 year YTD
third party services of Rp680bn in FY18, vs. Rp187bn recorded in FY17. With our
JCI 6,366 -0.3% -2.1% 2.8% new estimates, we forecast PTBA’s earnings would be flat in FY19F (+0.8%) before
LQ45 995 0.0% -7.4% 1.3% increasing by 16% in FY20F. We apply flat benchmark coal price assumption of
DJI 25,651 0.8% 1.9% 10.0% US$85 per ton for FY19F-20F.
SET 1,627 -0.2% -9.6% 4.1%
HSI 28,503 1.0% -9.8% 10.3%
NKY 21,125 0.5% -3.2% 7.1%
Attractive dividend yield of 8% - 11%. PTBA would likely distribute high
FTSE 7,131 0.4% -1.2% 6.0% dividend in the next 1-2 months. Initially, PTBA plans to hold annual shareholders
FSSTI 3,191 -0.1% -9.9% 4.0% meeting on 1 April 2019. We estimate shareholders meeting would be held in the
EIDO 25 1.1% - 11.3% 2.1%
end of April or early May 2019. With PTBA’s strong cash balance of Rp6.3tn, we
estimate dividend payout ratio would range between 75% to 100%, translating to
Commodity price
attractive dividend yield of 8.2% - 10.9%. Please note that PTBA distributed
Commodities Last price Ret 1 day Ret 1 year
(in USD)
dividend per share of ~Rp318 with payout ratio of 75% in May 2018.
Oil/barrel (WTI) 56.8 1.3% -8.5%
CPO/tonne 519.2 -0.3% -10.8% Maintain Buy with 16% upside to new TP of Rp4,600 (prev. Rp5,100).
Soy/bushel 8.5 0.0% -15.8% Despite our earnings downgrade, we maintain our Buy rating for PTBA with 16%
Rubber/kg 1.6 -1.1% -22.2%
potential upside to our new target price (DCF-based, WACC: 14.3%, TG: 2%) of
Nickel/tonne 12,808 -1.5% -7.3%
Tins/tonne 21,091 -1.5% -1.8%
Rp4,600 (prev. Rp5,100) which implies FY19F-20F P/E of 10.5x and 9.0x,
Copper/tonne 6,435 0.2% -7.2% respectively. PTBA is a good short-term bargain with potential high dividend yield
Gold/try.oz (Spot) 1,293 -0.4% -2.2% of 8.2% - 10.9% which we believe would be distributed in the next 1-2 months.
Coal/tonne 94.6 -1.0% -4.9%
Corn/bushel 3.3 -0.6% -10.4%
Year To 31 Dec 2017A 2018A 2019F 2020F 2021F
Wheat/bushel* 146.5 5.8% -7.0%
Revenue (RpBn) 19,471 21,167 23,113 25,751 29,126
* : 1 month change
EBITDA (RpBn) 6,575 6,997 7,019 8,074 8,984
Source : Bloomberg
EBITDA Growth (%) 122.2 6.4 0.3 15.0 11.3
Net Profit (RpBn) 4,476 5,024 5,063 5,857 6,450
EPS (Rp) 425 436 440 508 560
EPS Growth (%) 123.1 2.7 0.8 15.7 10.1
Net Gearing (%) (23.3) (36.8) (19.6) (22.2) (21.8)
PER (x) 9.4 9.1 9.1 7.8 7.1
PBV (x) 3.0 2.8 2.6 2.4 2.2
Dividend Yield (%) 1.4 7.3 8.2 8.8 11.5
EV/EBITDA (x) 5.9 5.7 6.0 5.1 4.6
Source: PTBA, IndoPremier Share Price Closing as of : 11-March-2019

Refer to Important disclosures in the last page of this report

PremierInsight

News & Analysis

Corporates

EXCL: XL Axiata (EXCL IJ; Rp2,390; Buy) cooperates with Ericsson for network
modernization with 5G-ready router in the next 3 years. Erricson’s sytem (router)
could give better connectivity for LTE, LTE-Advance, and 5G application.
(Selular.id)

Comment: Slight positive sentiment to EXCL as network modernization may help

to improve EXCL’s network quality (better subscriber’s experience). We expect
EXCL’s 2019F data revenue to grow by +15%YoY (vs. FY18 14%YoY), mainly
driven by data traffic growth of 72%YoY. We have a Buy for EXCL with TP
Rp2,800.

LPKR: Lippo Karawaci (LPKR IJ; Rp1,770; Not Rated) plans to sell its shares in
Lippo Mall Puri worth Rp3.7tn to PT Puri Bintang Terang. (IDX)

Comment: The mall contributes less than 20% to LPKR’s total asset. We believe
the divestment will positively impact company’s cash flow in short term.

PEHA: Phapros (PEHA IJ; Rp2,200; Not Rated) recorded FY18 net profit of
Rp133bn (+6.4% yoy). However, net profit margin considered flat at 13.03% (vs
12.50% FY17). As for revenue, PEHA booked a relatively stable revenue at
Rp1,023bn (+2.08% yoy). Operating margin also maintained at 18.94% (vs
18.70% FY17). (Bisnis Indonesia)

SCMA: Surya Citra Media (SCMA IJ; Rp256; Non-rated) Announced plan to
acquire strategic shares and interest in several new online media companies. This
is to drive and strengthen company’s position as media and content company.
The company disclosed the announcement yesterday after market closed. Details
on the acquisition plan: 1) 99% ownership in PT Vidio Dot Com (“Vidio.com”); 2)
50% plus 1 shares of PTKapanlagi Dot Com Networks (“KLY”); 3) 99% ownership
of PT Binary Ventura Indonesia (“BVI)” that owned 60% of PT Estha Yudha
Ekatama (“EYE”), and 4) 50% shares in Samara Media Entertainment (PT Benson
Media Kreasi) which have ownership in serveral events/initiatives, e.g. IDEAFest,
Jakarta Halal Things. SCMA, KMK, MAC, and BVI are direct subsidiaries of PT
Elang Mahkota Teknologi Tbk (EMTK IJ; Non rated). Total amount of this
acquisition plan does not constitute a Material Transaction, according to
company. Company’s internal cash flow is mre than enough to fund acquisition
plan and its working capital. (Company)

WSKT: Waskita Karya (WSKT IJ; Rp1,880; Hold) created a JV with Modernland
Realty (MDLN IJ; Rp; Not Rated) to develop 300ha land in Bekasi for warehousing
and property. WSKT has 60% of shares in the JV where the rest is 40% is
controlled by Modern Realty. The JV will buy the 349ha of land from MDLN
subsidiary with total worth of Rp1.1tn. (Bisnis Indonesia)

Comment: We are positive towards the news, as WSKT is currently construction

the development of Cibitung-Cilincing toll road which were located just north of
the land location, which will provide an access to Tanjung Priok Port. However at
this stage we still maintain our Hold call for WSKT given company’s high debt
level and financing expense.

Markets & Sector

Automotive: The Finance Minister Sri Mulyani Indrawati stated that there will be
new tax calculations on vehicle tax (PPnBM). Governtment offers tax incentives
for low carbon emission vehicles (LCEV) including Hybrid Electric Vehicle (HEV),
Battery Electric Vehicle (BET), Plug-in hybrid electric vehicle (PHEV). The new tax
calculations will be based on number of passengers per vehicle, carbon
emissions, engine capacity, and fuel consumption from previously only based on
engine capacity and vehicle type. (Kontan)

Refer to Important disclosures in the last page of this report 2

PremierInsight

Infrastructure: DKI Jakarta provincial government will accelerate the

development of Jakarta infrastructure from 30 years to 10 years. The plans
include the development of: 1) MRT track from 16km to 223km, 2) LRT frim
5.8km to 116km, and 3) Trans Jakarta from 431km to 2,149km. The DKI
Government has submitted a budget of 571tn for infrastructure improvements
such as public transportation, houses, clean water and waste water management.
Financing for this development will be carried out through bank loans,
investments and private partnerships. (Bisnis Indonesia)

Comment: The plan would positively impact the construction sector; however as
the plan is still in nascent stage, we would wait for further update regarding the
plan. As for now, maintain Buy on WIKA as our top pick in construction sector.

Property: According to Summarecon Agung (SMRA IJ; Rp865; Hold) around

75% of their apartment projects were positioned for mid class segment with price
below Rp1bn. The only exception (25%) would be apartment projects which
located in middle of Jakarta with high land prices. In the other hand, Ciputra
Development (CTRA IJ; Rp; Buy) offes The Newton 2 aparment with price point
start from Rp1bn, as the project was located in mid Jakarta. Back in 2016,
Newton 1 was offered with price start from Rp800mn/unit. (Kontan)

Comment: We believe that middle segment will continue to compose the property
market in the near term, especially product with price point below Rp2bn. We
believe property demand will continue to be dominated by end-user, at least until
the election time is over. Maintain Buy on CTRA and PWON as our top pick in
residential property sector.

Economics

Retail survey: Retail sales activity grew 7.2% yoy (Dec18: 7.7% yoy),
according to BI’s retail survey. Contributors were mainly cultural goods (+21.5%
yoy) and clothing, which had seen strong expansion since 2H18. Information and
communication goods sales in retail spaces declined by 14.2% yoy (Dec18: -
10.3% yoy). It is expected retail sales to yet rise again in Feb19 by c. 11% yoy
with the increase in sales of spare parts, food & beverages, cultural goods, and
clothing goods. (Bank Indonesia)

Refer to Important disclosures in the last page of this report 3

 Head Office
PT INDO PREMIER SEKURITAS
Wisma GKBI 7/F Suite 718
Jl. Jend. Sudirman No.28
Jakarta 10210 - Indonesia
p +62.21.5793.1168
f +62.21.5793.1167

INVESTMENT RATINGS
BUY : Expected total return of 10% or more within a 12-month period
HOLD : Expected total return between -10% and 10% within a 12-month period
SELL : Expected total return of -10% or worse within a 12-month period

ANALYSTS CERTIFICATION.
The views expressed in this research report accurately reflect the analyst;s personal views about any and all of the subject securities or issuers; and no part of the
research analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in the report.

DISCLAIMERS
This reserch is based on information obtained from sources believed to be reliable, but we do not make any representation or warraty nor accept any responsibility
or liability as to its accruracy, completeness or correctness. Opinions expressed are subject to change without notice. This document is prepared for general
circulation. Any recommendations contained in this document does not have regard to the specific investment objectives, finacial situation and the particular
needs of any specific addressee. This document is not and should not be construed as an offer or a solicitation of an offer to purchase or subscribe or sell any
securities. PT. Indo Premier Sekuritas or its affiliates may seek or will seek investment banking or other business relationships with the companies in this report.
 12 March 2019
Premier Insight
Bukit Asam (PTBA IJ; Buy)
JCI Index Weak results as costs rising
Equity | Indonesia | Research Daily

6,600 10,000 FY18 earnings below estimates as production costs increased

9,000
6,550
8,000 18%.
6,500 7,000

6,000
We revise down our earnings forecasts by 9%-12% for FY19F-20F.
JCI Index

6,450

Rp bn
6,400
5,000
Strong cash balance; Potential high dividend yield.
4,000

6,350 3,000 Maintain Buy with 16% upside to new TP of Rp4,600 (prev.
2,000
6,300
1,000 Rp5,100).
6,250 -
Results came below expectation. PTBA recorded lower than expected results as
8-Feb

1-Mar

4-Mar

5-Mar

6-Mar

8-Mar

11-Mar
11-Feb

12-Feb

13-Feb

14-Feb

15-Feb

18-Feb

19-Feb

20-Feb

21-Feb

22-Feb

25-Feb

26-Feb

27-Feb

28-Feb

net profit decreased 19% qoq and 41% yoy to Rp1.09tn in 4Q18. This brought net
Foreign net buy (sell) profit to Rp5.02tn in FY18, up 12% yoy, but came below consensus (93%) and our
5,000 80%
(83%) forecasts for the period. Operating profit dropped 33% qoq and 49% yoy to
4,000
70%
Rp1.11tn in 4Q18, bringing FY18 operating profit to Rp6.28tn, up 6.5% yoy, but
60%

came below consensus (88%) and our (80%) forecasts for FY18. These were
% net buy/market turnover

3,000 50%
Net buy (sell) in Rp bn

40% mainly caused by higher than expected production costs of Rp13tn (+18% yoy) in
2,000
30%

20%
FY18, higher than our forecast of Rp12.1tn. Revenues dropped 6.9% qoq and 18%
1,000

10% yoy to Rp5.13tn in 4Q18, bringing top-line to Rp21.2tn in FY18, up 8.7% yoy,
- 0%
which came below consensus (95%) and our (98%) forecasts for FY18.
-10%
22-Feb

25-Feb

26-Feb

27-Feb

28-Feb

1-Mar

4-Mar

5-Mar

6-Mar

8-Mar

11-Mar

(1,000)
-20%

(2,000) -30%
We revise down earnings estimate for FY19F-20F. We revise down our
earnings forecasts by 9% and 12% for FY19F-20F, respectively (Fig. 9) as we
apply higher production costs for PTBA and lower revenues from DMO quota
Key Indexes
transfer. We note that on its production costs, PTBA recorded higher expenses for
Index Closing 1 day 1 year YTD
third party services of Rp680bn in FY18, vs. Rp187bn recorded in FY17. With our
JCI 6,366 -0.3% -2.1% 2.8% new estimates, we forecast PTBA’s earnings would be flat in FY19F (+0.8%) before
LQ45 995 0.0% -7.4% 1.3% increasing by 16% in FY20F. We apply flat benchmark coal price assumption of
DJI 25,651 0.8% 1.9% 10.0% US$85 per ton for FY19F-20F.
SET 1,627 -0.2% -9.6% 4.1%
HSI 28,503 1.0% -9.8% 10.3%
NKY 21,125 0.5% -3.2% 7.1%
Attractive dividend yield of 8% - 11%. PTBA would likely distribute high
FTSE 7,131 0.4% -1.2% 6.0% dividend in the next 1-2 months. Initially, PTBA plans to hold annual shareholders
FSSTI 3,191 -0.1% -9.9% 4.0% meeting on 1 April 2019. We estimate shareholders meeting would be held in the
EIDO 25 1.1% - 11.3% 2.1%
end of April or early May 2019. With PTBA’s strong cash balance of Rp6.3tn, we
estimate dividend payout ratio would range between 75% to 100%, translating to
Commodity price
attractive dividend yield of 8.2% - 10.9%. Please note that PTBA distributed
Commodities Last price Ret 1 day Ret 1 year
(in USD)
dividend per share of ~Rp318 with payout ratio of 75% in May 2018.
Oil/barrel (WTI) 56.8 1.3% -8.5%
CPO/tonne 519.2 -0.3% -10.8% Maintain Buy with 16% upside to new TP of Rp4,600 (prev. Rp5,100).
Soy/bushel 8.5 0.0% -15.8% Despite our earnings downgrade, we maintain our Buy rating for PTBA with 16%
Rubber/kg 1.6 -1.1% -22.2%
potential upside to our new target price (DCF-based, WACC: 14.3%, TG: 2%) of
Nickel/tonne 12,808 -1.5% -7.3%
Tins/tonne 21,091 -1.5% -1.8%
Rp4,600 (prev. Rp5,100) which implies FY19F-20F P/E of 10.5x and 9.0x,
Copper/tonne 6,435 0.2% -7.2% respectively. PTBA is a good short-term bargain with potential high dividend yield
Gold/try.oz (Spot) 1,293 -0.4% -2.2% of 8.2% - 10.9% which we believe would be distributed in the next 1-2 months.
Coal/tonne 94.6 -1.0% -4.9%
Corn/bushel 3.3 -0.6% -10.4%
Year To 31 Dec 2017A 2018A 2019F 2020F 2021F
Wheat/bushel* 146.5 5.8% -7.0%
Revenue (RpBn) 19,471 21,167 23,113 25,751 29,126
* : 1 month change
EBITDA (RpBn) 6,575 6,997 7,019 8,074 8,984
Source : Bloomberg
EBITDA Growth (%) 122.2 6.4 0.3 15.0 11.3
Net Profit (RpBn) 4,476 5,024 5,063 5,857 6,450
EPS (Rp) 425 436 440 508 560
EPS Growth (%) 123.1 2.7 0.8 15.7 10.1
Net Gearing (%) (23.3) (36.8) (19.6) (22.2) (21.8)
PER (x) 9.4 9.1 9.1 7.8 7.1
PBV (x) 3.0 2.8 2.6 2.4 2.2
Dividend Yield (%) 1.4 7.3 8.2 8.8 11.5
EV/EBITDA (x) 5.9 5.7 6.0 5.1 4.6
Source: PTBA, IndoPremier Share Price Closing as of : 11-March-2019

Refer to Important disclosures in the last page of this report

PremierInsight

News & Analysis

Corporates

EXCL: XL Axiata (EXCL IJ; Rp2,390; Buy) cooperates with Ericsson for network
modernization with 5G-ready router in the next 3 years. Erricson’s sytem (router)
could give better connectivity for LTE, LTE-Advance, and 5G application.
(Selular.id)

Comment: Slight positive sentiment to EXCL as network modernization may help

to improve EXCL’s network quality (better subscriber’s experience). We expect
EXCL’s 2019F data revenue to grow by +15%YoY (vs. FY18 14%YoY), mainly
driven by data traffic growth of 72%YoY. We have a Buy for EXCL with TP
Rp2,800.

LPKR: Lippo Karawaci (LPKR IJ; Rp1,770; Not Rated) plans to sell its shares in
Lippo Mall Puri worth Rp3.7tn to PT Puri Bintang Terang. (IDX)

Comment: The mall contributes less than 20% to LPKR’s total asset. We believe
the divestment will positively impact company’s cash flow in short term.

PEHA: Phapros (PEHA IJ; Rp2,200; Not Rated) recorded FY18 net profit of
Rp133bn (+6.4% yoy). However, net profit margin considered flat at 13.03% (vs
12.50% FY17). As for revenue, PEHA booked a relatively stable revenue at
Rp1,023bn (+2.08% yoy). Operating margin also maintained at 18.94% (vs
18.70% FY17). (Bisnis Indonesia)

SCMA: Surya Citra Media (SCMA IJ; Rp256; Non-rated) Announced plan to
acquire strategic shares and interest in several new online media companies. This
is to drive and strengthen company’s position as media and content company.
The company disclosed the announcement yesterday after market closed. Details
on the acquisition plan: 1) 99% ownership in PT Vidio Dot Com (“Vidio.com”); 2)
50% plus 1 shares of PTKapanlagi Dot Com Networks (“KLY”); 3) 99% ownership
of PT Binary Ventura Indonesia (“BVI)” that owned 60% of PT Estha Yudha
Ekatama (“EYE”), and 4) 50% shares in Samara Media Entertainment (PT Benson
Media Kreasi) which have ownership in serveral events/initiatives, e.g. IDEAFest,
Jakarta Halal Things. SCMA, KMK, MAC, and BVI are direct subsidiaries of PT
Elang Mahkota Teknologi Tbk (EMTK IJ; Non rated). Total amount of this
acquisition plan does not constitute a Material Transaction, according to
company. Company’s internal cash flow is mre than enough to fund acquisition
plan and its working capital. (Company)

WSKT: Waskita Karya (WSKT IJ; Rp1,880; Hold) created a JV with Modernland
Realty (MDLN IJ; Rp; Not Rated) to develop 300ha land in Bekasi for warehousing
and property. WSKT has 60% of shares in the JV where the rest is 40% is
controlled by Modern Realty. The JV will buy the 349ha of land from MDLN
subsidiary with total worth of Rp1.1tn. (Bisnis Indonesia)

Comment: We are positive towards the news, as WSKT is currently construction

the development of Cibitung-Cilincing toll road which were located just north of
the land location, which will provide an access to Tanjung Priok Port. However at
this stage we still maintain our Hold call for WSKT given company’s high debt
level and financing expense.

Markets & Sector

Automotive: The Finance Minister Sri Mulyani Indrawati stated that there will be
new tax calculations on vehicle tax (PPnBM). Governtment offers tax incentives
for low carbon emission vehicles (LCEV) including Hybrid Electric Vehicle (HEV),
Battery Electric Vehicle (BET), Plug-in hybrid electric vehicle (PHEV). The new tax
calculations will be based on number of passengers per vehicle, carbon
emissions, engine capacity, and fuel consumption from previously only based on
engine capacity and vehicle type. (Kontan)

Refer to Important disclosures in the last page of this report 2

PremierInsight

Infrastructure: DKI Jakarta provincial government will accelerate the

development of Jakarta infrastructure from 30 years to 10 years. The plans
include the development of: 1) MRT track from 16km to 223km, 2) LRT frim
5.8km to 116km, and 3) Trans Jakarta from 431km to 2,149km. The DKI
Government has submitted a budget of 571tn for infrastructure improvements
such as public transportation, houses, clean water and waste water management.
Financing for this development will be carried out through bank loans,
investments and private partnerships. (Bisnis Indonesia)

Comment: The plan would positively impact the construction sector; however as
the plan is still in nascent stage, we would wait for further update regarding the
plan. As for now, maintain Buy on WIKA as our top pick in construction sector.

Property: According to Summarecon Agung (SMRA IJ; Rp865; Hold) around

75% of their apartment projects were positioned for mid class segment with price
below Rp1bn. The only exception (25%) would be apartment projects which
located in middle of Jakarta with high land prices. In the other hand, Ciputra
Development (CTRA IJ; Rp; Buy) offes The Newton 2 aparment with price point
start from Rp1bn, as the project was located in mid Jakarta. Back in 2016,
Newton 1 was offered with price start from Rp800mn/unit. (Kontan)

Comment: We believe that middle segment will continue to compose the property
market in the near term, especially product with price point below Rp2bn. We
believe property demand will continue to be dominated by end-user, at least until
the election time is over. Maintain Buy on CTRA and PWON as our top pick in
residential property sector.

Economics

Retail survey: Retail sales activity grew 7.2% yoy (Dec18: 7.7% yoy),
according to BI’s retail survey. Contributors were mainly cultural goods (+21.5%
yoy) and clothing, which had seen strong expansion since 2H18. Information and
communication goods sales in retail spaces declined by 14.2% yoy (Dec18: -
10.3% yoy). It is expected retail sales to yet rise again in Feb19 by c. 11% yoy
with the increase in sales of spare parts, food & beverages, cultural goods, and
clothing goods. (Bank Indonesia)

Refer to Important disclosures in the last page of this report 3

 Head Office
PT INDO PREMIER SEKURITAS
Wisma GKBI 7/F Suite 718
Jl. Jend. Sudirman No.28
Jakarta 10210 - Indonesia
p +62.21.5793.1168
f +62.21.5793.1167

INVESTMENT RATINGS
BUY : Expected total return of 10% or more within a 12-month period
HOLD : Expected total return between -10% and 10% within a 12-month period
SELL : Expected total return of -10% or worse within a 12-month period

ANALYSTS CERTIFICATION.
The views expressed in this research report accurately reflect the analyst;s personal views about any and all of the subject securities or issuers; and no part of the
research analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in the report.

DISCLAIMERS
This reserch is based on information obtained from sources believed to be reliable, but we do not make any representation or warraty nor accept any responsibility
or liability as to its accruracy, completeness or correctness. Opinions expressed are subject to change without notice. This document is prepared for general
circulation. Any recommendations contained in this document does not have regard to the specific investment objectives, finacial situation and the particular
needs of any specific addressee. This document is not and should not be construed as an offer or a solicitation of an offer to purchase or subscribe or sell any
securities. PT. Indo Premier Sekuritas or its affiliates may seek or will seek investment banking or other business relationships with the companies in this report.