Indonesia

Daily Focus
DBS Group Research . Equity 13 February 2007

Key Indices

Company
Price (IDR)
12-Feb
Target
Price
Target Mkt Cap
Return (USDm) Comments
Bank Mandiri 2,450 3,220 31% 5,584
Perush. Gas Neg. 9,150 16,000 75% 4,642 Perusahaan Gas Negara: In the case of stuck pigs
(Maintain Strong Buy; IDR9,150; PGAS IJ)
Bank Rakyat Indo 4,825 6,250 30% 6,553
Indofood Sukses 1,720 1,570 -9% 1,621 The company yesterday issued its fortnightly report on the South
Berlian Laju T 1,770 3,000 69% 810 Sumatra West Java (SSWJ) pipeline projects, which described
progresses in all fronts of the pipeline constructions. The focus is
likely to be on the onshore leg of Pagardewa – Labuhan Maringgai,
Market Key Data which spanned for 272kms. The construction of the pipelines has been
Price (IDR) Target Target Mkt Cap completed, and most of the hydrostatic test, dewatering and
swabbing processes have also been completed. However, there was
Company 12-Feb Price Return (USDm) one section where the swabbing process was delayed because of
flooding at nearby river. While the pipe header had already been
Arpeni Ocean L 650 1,050 62% 215 removed to higher place to avoid water backflow, yet the swabbing
Tunas Baru Lampu 345 450 30% 157 process continued to encounter minor problems where three foam
pigs (which are cylindrical in shape and are used to remove the debris
KI Jababeka 181 240 33% 276
left over during the construction phase) were stuck. Only after higher
Enseval Putra M 580 1,000 72% 146 foam density pig was launched, the other pigs could come and the
Mayora Indah 1,400 1,750 25% 119 sectional valve could be installed.
There is no impact from this incident to the company’s target date for
commercialization of first gas, which is at the end of March. However,
Stock Picks – Large Cap (Mkt Cap > USD1bn)
the market has indeed expected full completion of tests by the end of
Close Chg
February, which now expected by the third week of March. As such,
JCI 1,734.5 -0.34%
we might see some selling pressures in the short term, but
LQ45 368.5 -0.36%
nevertheless we maintain our strong buy rating on the counter with
Industry 142.3 0.04%
target price of IDR16,000.
Consumer 393.6 -0.73%
IDR/USD 9,050 0.06%

Daily Vol (m shrs) 2,379.6 Aneka Kimia Raya: Site visit on AKRA’s logistic facility in Ciwandan
Daily Turnover (IDRbn) 2,197.8 (Not Rated; IDR2,525; AKRA IJ)
Daily Turnover (USDm) 242.9
We visited one of PT. AKR Corporation (AKRA) logistic facilities in
Ciwandan, Banten, West Java last week. In this facility, the company
Stock Picks – Small Cap (Mkt Cap < USD1bn) provides logistics services, mainly tank terminals and transportation,
(%) EPS Gth Div Yield to industrial customers, including petroleum companies, namely Shell
2005A 0.9 1.4 and Petronas. The facilities in Ciwandan are well managed and
2006E 24.7 1.6 supported with adequate equipments to ensure high quality and
2007F 21.5 1.9 safety standard, which is important given the highly inflammable
cargo stored in the terminal.
(x) PE EV/EBITDA
2005A 24.8 9.1
2006E 18.1 7.9
2007F 14.1 6.6

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Indonesia Daily Focus

The company highlighted that its petroleum business has been

growing rapidly since its inception in Sept 05, where the company
become the first importer of petroleum product in Indonesia
subsequent to deregulation of downstream petroleum sector.
Monthly sales volume for this division has been growing substantially
from 3k KL/month in Oct 05 to c.40k KL/month in Dec 06 and
potentially to increase further to c.50k KL/month this year and c. 80-
85k KL/month next year. The growth is well supported by the fact that
Indonesia reliance on fuel import would increase in the future on the
back of growing demand coupled with stagnant supply due to limited
refinery capacity. Further, the company expects its revenues to grow
by c.40% y-o-y this year to IDR5.6tr, which mostly driven by its
petroleum business (+c.115% y-o-y to IDR2.8tr from IDR1.3tr in 2006).
Capex this year is expected to be c.USD70m, more than double
compared to last year of USD33m, which mainly would be allocated to
petroleum business (USD30m) and river port investment in China
(USD25m). For petroleum business, the company is planning to
expand operation in Sumatra, Bali and Kalimantan with combined
additional tank storage c.100k KL during 2007-08. Note that the
company currently has 161.5k KL of tank storage, which almost half of
it is allocated for petroleum distribution. Funding would be sourced
internally (USD30m or c.43%) and externally through bank loan of
USD40m.
Net profit is expected to reach IDR170bn this year or c.30% growth
from the expected last year net profit of IDR130bn. Lower margin of
petroleum business than other business segment could partially
explain why bottom line growth is lower than top line growth. This
would translate to 2007 EPS of IDR272.4 and is implying PER of 9.3x.
Although it is trading at significant discount to broader market of
14.3x but valuation seems to be fair compared to distribution
companies. We understand that AKRA is not a pure distribution play
but we view that earnings contribution from distribution business
would continue to dominate its earnings mix going forward.

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 Indonesia Daily Focus

ANALYST CERTIFICATION
The analyst certifies that the views about the companies and their securities expressed in this report
accurately reflect his/her personal views. The analyst also certifies that no part of his/her compensation was,
is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report.

This document is published by PT DBS Vickers Securities Indonesia (“DBSVI”), a direct subsidiary of DBS
Vickers Securities Holdings Pte Ltd ("DBSVH"). The research is based on information obtained from sources
believed to be reliable, but we do not make any representation or warranty as to its accuracy, completeness
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general circulation. Any recommendation contained in this document does not have regard to the specific
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