INDONESIA EQUITY

Investment Research

13 November 2012 Good morning,

UNTR to expand to Independent Power Plan business
TOP GAINERS (%)
Stock Change (%)
CEO of PT United Tractors Tbk (UNTR) Djoko Pranoto stated to Kompas yesterday
ASSA 25.6
KOIN 15.8 that his company would expand to the Independent Power Plan (IPP) business,
BABP 13.3 leveraging its coal production at TTA and PMM as a source of energy. Mr. Pranoto
GAMA 13.2 stated that UNTR is gearing up for two IPP tenders located in South Sumatera. At
BCAP 9.6 present, Indonesias demand for steam-coal powered plants reaches 12m tonnes/
year, which can hardly be fulfilled by current production. Should UNTR wins the
TOP LOSERS (%)
Stock Change (%) tender, Mr. Pranoto predicts that the company would be able to operate their IPPs by
PNSE -23.8 FY16 upon a 2-year infrastructure completion. (Kompas)
IBST -15.5
EMDE -8.3 Commentary: We see positively UNTRs move to expand its value chain into IPPs.
MYTX -7.8 Approximately 50% of UNTRs revenue is generated from coal mining related
WAPO -7.4
businesses through mining contractor PT Pamapersada Nusantara and Tuah
TOP VOLUME (mn shares) Turangga Agung & Prima Multi Mineral mines. Approximately 46% of all Komatsu
Stock Volume machines are directed to serve the mining sector clients. This large mining exposure
ELTY 218.3 has led to a sharp downturn at UNTR in recent time, with the company revising its
IPOL 210.9 target sales as well as accepting contracts for lower stripping ratios. Our channel
ASSA 172.0
SUGI 158.6
checks stated that mining companies have largely been under the mercy of spot
TRAM 134.8 prices these days on the back of somber coal outlook. Should the tender be
successful, we think that UNTRs would be able to expand its value chain to
TOP VALUE (Rp bn) generate higher margins from the desperately-needed power generation in the
Stock Value nation. This business would also reduce UNTRs fragility from the volatile world
ASII 211.8
BBRI 199.2
commodity prices. This move is also an answer badly needed by the market over
TRAM 131.4 UNTRs acquisition of three additional coal mines in Kalimantan earlier this year --
BBCA 100.0 despite the very bleak coal outlook. ASII has mandated UNTR to acquire up to 500m
MNCN 87.7 tonnes of coal reserves by FY15. UNTRs coal reserves currently stands at ~380m
tonnes.

Key Market Indices Key Statistics

Value Change % Change Value Change % Change

JCI 4,318.6 -15.0 -0.3% Volume (mn shares) 4,245.7 828.9 24.3%
DJI 12,815.1 -0.3 0.0% Value (IDR bn) 3,810.4 -166.4 -4.2%
Nasdaq 2,904.3 -0.6 0.0% WTI oil price (USD/bl) 85.6 -0.5 -0.6%
Hang Seng 21,430.3 45.9 0.2% CPO price (USD/ton) 800 0 0.0%
Nikkei 8,676.4 -81.2 -0.9% Coal price (USD/ton) 79.9 1.1 1.3%
KOSPI 1,900.9 -3.5 -0.2% Nickel price (USD/ton) 16,036 129 0.8%
TWSE 7,267.8 -25.5 -0.3% Tin price (USD/ton) 20,408 78 0.4%
STI 3,007.6 -2.0 -0.1% Inflation YoY (%) 4.31 -0.3 -6.3%
KLCI 1,637.6 -3.5 -0.2% BI Rate (%) 5.75 0.0 0.0%
SET 1,294.5 3.7 0.3% IDR/USD 9,633 430 4.7%

OSK Research | See important disclosures at the end of this report 1

 13 November 2012

MEDIA HIGHLIGHTS

Media Nusantara net profit reached IDR1,336bn (+45% y-o-y) in 10M12

Indonesia largest media company, Media Nusantara (MNCN) booked net profit of IDR1,336bn (+45% y-o-y) in January-October
2012, driven by higher advertising revenue which was driven by increased rate-card and occupancy levels. (Company)

Comment: 10M12 realized earning has reached 88.5% of our full-year estimates, in line with our expectation. We see that the
company succeeded rebranding its MNC TV program base from music to drama programs. This increased MNC TV audience
rating, also raising its profit margin. MNCNs core EBITDA margin improved to 37% in 10M12 from 36% in 10M11. The counter
is trading at 21.8x-18.9x FY12-13F PE, for comparison its closest peer, SCMA is trading at 19.6x-17.3x FY12-13F PE. We
maintain Neutral on the counter.

Exhibit: Indonesias FTA monthly audience rating

45.0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
-
Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12

MNC Group Trans TV - Trans7 SCTV IVM

Source: Company

Ramayana gross-sales reached IDR6,345bn (+13.0% y-o-y) in 10M12

Indonesia retailer, Ramayana (RALS) reported that gross-sales has achieved IDR6,345bn (+13.0% y-o-y), reaching 84.6% of
full-year estimate. Same-store sales growth reached 9.3% y-o-y. (Company, Kontan)

Comment: 10M12 realized sales are in line with our expectation. October sales growth is slightly faster than September sales
growth (total growth 12.9% y-o-y, SSSG of 9.2% y-o-y). Going forward, we see RALS sales growth to remain strong as income
of low-end consumers RALS based market to strengthen next year. The Jakarta government has determined Jakarta
residents modest living expenditures of IDR1.9m/month, a 31% higher than current regional minimum wage. It is worth noting
that regional minimum wage may not be lower than modest living expenditures. Hence, we see that Jakarta regional minimum
wage may increase faster in 2013 for comparison minimum wage growth was 18% y-o-y in 2012. In fact, Jakarta labors 2013
wage demand is around IDR2.7-2.8m/month, much higher than modest living expenditures. Jakarta increased minimum wage
is commonly based for other provinces wage increase. Monthly modest living expenditures in Bogor, Depok, and Tangerang
are IDR1.6m-IDR1.7m-IDR1.6m, respectively, 33.3%-21.4%-23.1% higher than those areas regional minimum wages.
Ramayana is trading at 18.5x-16.5x FY12-13F PE, lower than its peers which averagely trading at 23.7x-19.1x FY12-13F PE.
We maintain BUY on the counter with target price IDR1,400, implying 21.9x-19.6x FY12-13F PE.

Exhibit: RALS sales growth

30.0%

25.0%

20.0%

15.0%

10.0%

5.0%

0.0%
Feb-11

Apr-11

Sep-11

Feb-12

Apr-12

Sep-12
Mar-11

Jun-11
Jul-11
Aug-11

Oct-11

Dec-11

Mar-12

Jun-12
Jul-12
Aug-12

Oct-12
Jan-11

May-11

Nov-11

Jan-12

May-12

SSSG (YTD) Sales growth (YTD)

Source: Company

OSK Research | See important disclosures at the end of this report 2

 13 November 2012

Exhibit: Regional minimum wage, Minimum decent living expenditures, Labor wage demand

Regional Minimum Modest Living Labor wage

Region Wage Expenditures Differences demand
(IDR m/month) (IDR m/month) (%) (IDR m/month)
2012 2012 2013

Jakarta 1.5 1.9 31.0% 2.7-2.8

Bogor 1.2 1.6 33.3% 2.7
Depok 1.4 1.7 21.4% 2.6
Tangerang 1.3 1.6 23.1% 2.5
Source: Kontan

Asahimas Flat Glass expects 7% sales growth in this year

Asahimas Flat Glass (AMFG) expects IDR2.78 trn sales for this year (+7% y-o-y), boosted by higher demand from local
construction firms and automobile makers. In 9M12, sales grew by 13% y-o-y with domestic sales growth reached 24% and
export slumped by 4%. ~70% of revenue came from construction sector, while the rest come from automotive sector.
Operational income, however, only rose by 1% on higher cost increase. The company plans to gradually increase its selling
price by 5-7% to anticipate further cost pressure from higher gas price and electricity tariff. AMFG just finished the automotive
glass production capacity expansion which brought its capacity to 1.3m unit from previously ~850k unit. The company is
expected to be one of the suppliers for Agya and Ayla cars. (Jakarta Post, Company)

Comment: The ASP increase may not be sufficient to fully cope the cost pressure considering that besides higher energy
prices (~30% of COGS), management also indicates higher raw material prices (also ~30% of COGS).

Ciputra Development pre-sales reached IDR5.5trn

CTRA recorded pre-sales of IDR5.5trn up to October 2012, or 84.62% from its FY12 traget f IDR6.4trn. Looking at the satisfying
pre-sales performance in companys overall projects, the company is optimist to reach target sales of IDR6.5trn to IDR6.6trn.
Capex absorption up to Oct12 is IDR900bn where most of the allocation goes to Ciputra World I project. (Bisnis Indonesia)

Comments: Seeing the companys marketing sales where sales in month October remain stable at IDR610bn (note monthly
sales range between IDR413bn to IDR768bn), we believe that negative impact from enforcement of minimum downpayment of
30% has less significance on demand for CTRAs property. CTRAs 9M12 results also beat our and concensus estimate,
subject to upgrade. We are reviewing our forecast and TP but maintain our BUY call.

OSK Research | See important disclosures at the end of this report 3

 13 November 2012
CORPORATE ACTION CALENDER

Cash dividend
Ex-date Company Ticker Type Cash (IDR)
27-Sep-12 Berlina BRNA Cash dividend 90
1-Oct-12 Sumi Indo Kabel IKBI Cash dividend 42
2-Oct-12 Alumindo Light Metal Industry ALMI Cash dividend 50
4-Oct-12 Catur Sentosa CSAP Cash dividend 5
10-Oct-12 Pabrik Kertas Tjiwi Kimia TKIM Cash dividend 25
10-Oct-12 Pakuwon Jati PWON Cash dividend 1.45
19-Oct-12 Astra International ASII Cash dividend 66
1-Oct-12 Sumi Indo Kabel IKBI Cash dividend 42
2-Oct-12 Alumindo Light Metal ALMI Cash dividend 50
4-Oct-12 Catur Sentosa Adiprana CSAP Cash dividend 5
10-Oct-12 Pabrik KertasTjiwi TKIM Cash dividend 25
10-Oct-12 Pakuwon Jati PWON Cash dividend 1
16-Oct-12 Astra Graphia ASGR Interim 15
17-Oct-12 Astra Agro Lestari AALI Interim 230
17-Oct-12 Hexindo Adiperkasa HEXA Cash dividend USD0.387
17-Oct-12 United Tractors UNTR Interim 210
19-Oct-12 Astra International ASII Cash dividend 66
23-Oct-12 Gowa Makassar GMTD Cash dividend 38
30-Oct-12 Indo Tambangraya Megah ITMG Interim 1,666
4-Dec-12 Sepatu Bata BATA Interim 1,565
4-Dec-12 Selamat Sempurna SMSM Interim 30
4-Dec-12 Bank Central Asia BBCA Interim 44

IPO
Listing date Company Ticker Initial Price (IDR)
31-Aug-12 Inti Bangun Sejahtera IBST 1,000
13-Sep-12 Nirvana Developm ent NIRO 105
28-Sep-12 Sekar Bumi SKBM 155
8-Oct-12 Provident Agro PALM 450
11-Oct-12 Pelayaran Nelly Dwi Putri NELY 205
2-Nov-12 Express Transindo Utama TAXI 560
8-Nov-12 Baramulti Suksessarana BSSR 1,950
12-Nov-12 Adi Sarana Armada ASSA 390

Stock split
Ex-date Company Ticker Adjustment
28-Sep-12 Pudjiadi & Sons PNSE 5 for 1
3-Oct-12 Indosiar Karya Media IDKM 5 for 1
8-Oct-12 Kalbe Farma KLBF 5 for 1
29-Oct-12 Surya Citra Media SCMA 5 for 1
1-Nov-12 Ace Hardware Indonesia ACES 10 for 1
6-Nov-12 Berlina BRNA 5 for 1

Rights issue
Ex-date Company Ticker Adjustment Subscribed Price (IDR)
29-Oct-12 Modern Internasional MDRN 3 per 10 550
19-Nov-12 Bank Tabungan Negara BBTN 0.1711:1 1,235
20-Nov-12 Cowell Development COWL 109 per 20 220
21-Nov-12 Hotel Mandarine Regency HOME 17 per 20 100
30-Nov-12 Bank Permata BNLI 2 per 11 1,215
30-Nov-12 Bank Artha Graha Internasional INPC 10 per 19 111
6-Dec-12 Bhuwantala Indah Permai BIPP 41 per 69 151
6-Dec-12 Samindo Resources MYOH 1 per 2 830
14-Dec-12 Exploitasi Energi Indonesia CNKO 61 per 55 500
19-Dec-12 Sejahtera Raya Anugrahjaya SRAJ 1 per 1 260

OSK Research | See important disclosures at the end of this report 4

 13 November 2012

OSK Research Guide to Investment Ratings

Buy: Share price may exceed 10% over the next 12 months
Trading Buy: Share price may exceed 15% over the next 3 months, however longer-term outlook remains uncertain
Neutral: Share price may fall within the range of +/- 10% over the next 12 months
Take Profit: Target price has been attained. Look to accumulate at lower levels
Sell: Share price may fall by more than 10% over the next 12 months
Not Rated: Stock is not within regular research coverage

All research is based on material compiled from data considered to be reliable at the time of writing. However, information and opinions expressed
will be subject to change at short notice, and no part of this report is to be construed as an offer or solicitation of an offer to transact any securities or
financial instruments whether referred to herein or otherwise. We do not accept any liability directly or indirectly that may arise from investment
decision-making based on this report. The company, its directors, officers, employees and/or connected persons may periodically hold an interest
and/or underwriting commitments in the securities mentioned.

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This research report produced by OSK Nusadana Securities Indonesia is distributed in Singapore only to Institutional Investors, Expert Investors
or Accredited Investors as defined in the Securities and Futures Act, CAP. 289 of Singapore. If you are not an Institutional Investor, Expert
Investor or Accredited Investor, this research report is not intended for you and you should disregard this research report in its entirety. In respect
of any matters arising from, or in connection with, this research report, you are to contact our Singapore Office, DMG & Partners Securities Pte Ltd
(DMG).

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OSK Research | See important disclosures at the end of this report 5