PORTFOLIO THEORY AND INVESTMENT ANALYSIS

INDUSTRY ANALYSIS PT. CIPUTRA DEVELOPMENT Tbk and PT ASTRA INTERNATIONAL ANALYSIS Tbk

GROUP 2Wahyunda Risa Putri 1210534008Raissa Rahma 1210534012Atikah Galuh Wilandra 1210534013Dewi Fitrah Ilahi- 1210534025

INTERNATIONAL CLASS OF ACCOUNTINGFACULTY OF ECONOMICSANDALAS UNIVERSITY2015

COMPANY PROFILE PT CIPUTRA DEVELOPMENT Tbk.

The long history of PT Ciputra Development Tbk as one of Indonesia's leading property companies started from a development company of large-scale residential and commercial projects, pioneered by Dr. (HC) Ir. Ciputra and family. By applying firm strategy and performance oriented, the Company has currently developed and recognized as the leading property company in Indonesia.On 22 October 1981, the Company was established under the name of PT Citra Habitat Indonesia. Along with the success achieved, the Company changed its name into PT Ciputra Development on 28 December 1990. In 1994, the Company conducted Initial Public Offering (IPO) and listed on the Indonesia Stock Exchange (BEI), followed by its two subsidiaries, PT Ciputra Surya Tbk ("CTRS") in 1999 and PT Ciputra Property Tbk ("CTRP") in 2007. Through its unique and modern concept which can be seen in the whole architecture that they developed along with the excellent reputation and expertise in development of residential and commercial property projects, the Company became widely known and currently gains high level of trust from society to develop more than 50 projects spreading in 28 big cities across Indonesia including landed residentials, apartments, office towers, shopping centers, hotels, golf courses, and hospitals.The Company always runs the business based on its philosophy and corporate core values, which are Integrity, Professionalism, and Entrepreneurship. Through those values, the Company doesn't only run the project due to targets but also maintaining quality and beauty. Therefore, it got a privileged position as leading property company in the heart of the public.Nowadays, the Company has several project portfolios with large amount of the total area that positioned it as one of the biggest and most diversified property company in Indonesia in terms of product, location, and market segments.Analysis of the industry plays an important role in determining the investment for the long term. Jones in his book wrote "over long periods some sectors / industries have greatly outperformed other, an over shorter periods of time the differences in one sector's performance can be dramatic". Thus it is important to determine what type of industry should investors invest their funds and when to move to another industry types. In an industry known as the industry life cycle. This cycle describes whether the company in a state of growing, stable or has started to decline. Investors can also analyze qualitatively in estimating the ability of an industry in the future by taking into account the past performance of the industry, competition factors occurring in the industry, the effect of government policies as well as structural changes in the economy such as the movement of a country from an agrarian country into industrialized countries. From these observations investor can determine when to enter in any industry to get the maximum benefit.

HISTORICAL PERFORMANCEAnnually Income Statement

One of the indicators used in assessing property industry is a comparison of the share price compared with the book value of the company (Price / Book value). Comparison of price per book value (P / BV) of the property industry is as follows:

From the comparison chart stock price divided by its book value, P / BV CTRA is the smallest compared to industry. This means that the stock price CTRA may climb higher still by looking at the book value of the company. If the SMRA investors willing to bear the P / BV is higher, then the price CTRA potential to increase.

Seen that the P / BV CTRA during 2011 and 2012, still the lowest in the industry. In fact, according to CIMB P / BV CTRA will still be the lowest in 2013. Other financial indicators that might indicate the condition of the industry and position CTRA is EPS growth, ROE from operating activities, and dividend yield. Data obtained from CIMB is as follows:

EPS growth data in 2012, CTRA grew by 53%. This is below the growth SMRA and ASRI. Nevertheless, estimates of sales and business development make CIMB believes CTRA EPS growth will reach 52.5% in 2013, well above its competitors.

Judging from the data ROE, in 2011 and 2012, ROE CTRA is the lowest among its competitors. Nevertheless ROE CTRA experienced a significant upward trend. The average ROE increased the property industry indicates that the industry is growing well. The development is also evident from the data dividend yield an average increase from 2011. Although financial conditions CTRA unnoticeable compared to other companies in the property industry, the results of interviews with the management CIMB CTRA reveal that CTRA will have promising growth in the coming years. Up to the month of August 2012, CTRA has experienced sales growth of 107%. Besides, the company also is targeting a 50% year on year sales growth marketing at the end of 2013. This increase will be obtained from their current projects and five residential projects to be launched in 2013. Thus CTRA targets sales of 6.4 trillion rupiah at the end of 2012 and 9.6 trillion in 2013. This figure is the target sales figures among the largest property industry in Indonesia.

Besides the amazing sales, estimated CTRA not experience excessive interest costs in project development. CTRA projects that are being worked on has much booked. Advance payment from the buyer until the first half of 2012 amounted to 3 trillion rupiah. This figure adds to the belief that the annual sales target will be exceeded.

COMPETITION1. Rivalry Among Existing FirmsCompany engaged in quite a lot of property, where the property company incorporated in APERSI (Association of Indonesian Housing and Settlement) up to December 22, 2013 amounted to 1 681 members, and property company incorporated in the REI (Real Estate Indonesia) until the year 2013 amounted to approximately 2000 members. Property and Real Estate company incorporated in Indonesia Stock Exchange is numbered 44 Company We take samples for comparison company of PT Ciputra Property Tbk include PT Alam Sutera Realty Tbk and PT Summarecon Agung Tbk. Comparison of total sales for these companies is:

2. Threat of New EntranceNewcomers have influence in the industry, this is because new entrants will bring the industry to the new capacity, the desire to seize and important resource. In the industrial property contained Entry Barrier or obstacle for companies to enter in this industry, among others: many regulations that must be obeyed. In addition, the property industry is more costly and time in its development, so it tends to be difficult for newcomers to enter the property industry. So we conclude that the threat of new competitors is Low.

3. Bargaining Power of CustomersConsumers affecting this industry demand, which this warning will determine the price of a product. This consumer demand not only be met PT Ciputra Property Tbk , but also can be met by competitors. PT Ciputra Property Tbk have levels / classification of the products so as to reach the various levels of society. Similarly, the other competitors in the property industry that provides products with various levels / classification. We therefore conclude that the bargaining power of buyers is high, because consumers can choose other competitors comparison PT Ciputra Property Tbk.

4. Threat of Substitute ProductIn an industrial property replacement or substitute product is a product that benefit from a decrease in sales of other products. In terms of industrial property, PT Ciputra Property Tbk under threat of substitute products is quite high, because the players in the property industry causing too many similar products manufactured by other companies. For example, as a product of residential houses that can be replaced with the presence of a more practical apartment.

5. Bargaining Power of SuppliesThe bargaining powr supplies for PT Ciputra Property Tbk is low because the supplier PT Ciputra Property Tbk still subsidiaries and other companies already have agreements.

GOVERNMENT EFFECTHouse with a selling price above 2 billion or building area of over 400 square meters, is expected to be increasingly expensive. Because the government is planning to impose income tax (VAT) of Article 22 by 5% against the class of the house. Thus, the cost of buying the property will increase as a result of income tax luxury home over USD 2 billion will be charged an extra tax of 5 percent of the selling price. It is quite burdensome consumers, developers will also be affected.

STRUCTURAL CHANGESRapid changes in information technology (IT) will not effect PT Ciputra Property because IT help the industry to run their business. Such as hotel and shopping centre need IT, more sophisticated of the IT, better the industry to develop the business.

INDUSTRY ANALYSIS PT. ASTRA INTERNASIONAL

Company Profile PT. Astra Internasional tbk. PT Astra International Tbk is one of the largest diversified conglomerates in Indonesia. This investment holding company is often regarded as the barometer of the Indonesian economy due to its presence in various sectors. Astra, Indonesia's biggest publicly traded company, is currently engaged in six business lines: Automotives Agribusiness Heavy equipment, mining and energy Financial services Information technology Infrastructure and logistics

Astra has shown strong and sustained growth after Indonesia was hit by the Asian Financial Crisis in the late 1990s. This severe crisis forced the company to restructure and reorganize its business model (including a takeover by the Hong Kong based Jardine Matheson Group in 1999 through its subsidiary Jardine Cycle & Carriage Ltd).The company has won numerous corporate awards - both national and international - in recent years and has set the ambitious goal of establishing its brand name globally as the pride of Indonesia by 2020. Starting as a small trading business founded by the brothers William Soerjadjaya and Tjia Kian Tie, PT Astra International Tbk has developed into an impressive conglomerate that operates predominantly in Indonesia and forms the largest listed company on the Indonesia Stock Exchange (IDX) with a total market capitalization of more than seven percent. The company is Southeast Asia's largest automotive group and provides a full range of automobile and motorcycle products, although in recent years it has lessened its traditional dependency on the automotive industry by expanding into other sectors to grow other revenue streams. In the automotive industry, Astra International's core business, the company holds a domestic market share of between 50 and 60 percent. Through a jointly-controlled entity with the Toyota Motor Corporation, Astra holds the exclusive right to sell Toyota vehicles on the Indonesian market. This Toyota brand is the dominant leader in Indonesia's wholesale car market. Astra also partners with Daihatsu, Isuzu,Nissan Diesel, Peugeot, BMW automobiles, and Honda motorcycles.In addition to the production and distribution of its automobile lines, Astra offers consultation services for the purchases of new cars, as well as insurance and financing services to support its automotive, motorcycle and heavy equipment sales. For mining, plantation, construction and forestry it delivers heavy equipment, related parts and after sales services.Other sectors that Astra has started to tap (through its subsidiaries) are coal mining, agribusiness (palm oil), information technology, infrastructure (toll roads, water supply in Jakarta and an oil tanking terminal in Gresik), as well as IT solutions services.Industry Analysis

In the analysis of the industry, investors are trying to compare the performance of variousindustry, to be able to know what types of industries that provide better prospectsor vice versa. Based on industry analysis result, investors will use the informationsuch as an input for consideration shares of industry groups which are to be included in portfolio. Industry analysis is a stage grouping an important industry in reality it is not as simple as that conceivably, as many companies are engaged in a distinct business lines get around these problems, we need a method of industry classification. Stocks-shares listed on the JSE are grouped into 9 sectors accordingindustry classifications defined the JSE, JASICA (Jakarta Stock Exchange IndustrialClassification), namely: Agriculture Mining base and chemical industry Miscellaneous Industry consumer goods industry Property and real estate Infrastructure, utilities, and transportation Finance Trade, services and investment

Some of the results of empirical studies summarized by Reilly and Brown (1997),concludes:1. Different industries have different return, so the analysis industry needs to be done to determine the differences in performance between industries.2.The rate of return of each industry is different in each year. Therefore, analysts and investors also need to add a few other relevant data to estimate the industrial return in the future to come.3. The rate of return of the companies in a similar industry, looks prettydiverse.4. The level of risk of a wide range of industries are also diverse, so analysts and investors needstudying and estimating the risk factors relevant to an industry as well as the return of certain estimates.5. The level of risk of an industry is relatively stable over time, so that the risk analysisbased on historical data can be used to estimate the risk of future industrycome.

1. Historical Performance

Based on stock prices of PT ASTRA INTERNATIONAL Tbk, we can see start from 2014 to 2015, the price is closely stable. Although, in September 2014 and October 2014 the price is decreased but it doesnt really significant in overall.

PT. Astra International Tbk experienced a slight decrease in 2013 in comparison with the previous year. Astra's net income per September 2013 reached Rp 141.8 trillion, down 1% compared to the same period in 2012. Net profit reached Rp 13.5 trillion, decreased by 8% from Rp 14.7 trillion. Earnings per share fell by 8% in addition to the PT. Astra International Tbk also focuses on six lines of business:

1. Automotive Division Automotive Division's net profit fell by 5% to Rp 6.9 trillion, consisting of Rp 3.2 trillion from the Company and its subsidiaries, as well as Rp 3.7 trillion of associates and jointly controlled entities in the automotive field .

2. Financial Services Division Financial Services Division's net income increased 17% to Rp 3.3 trillion. Total financing through automotive finance business Astra which consists of PT Federal International Finance (FIF), PT Astra Sedaya Finance (known as the Astra Credit Companies - ACC) and PT Toyota Astra Financial Services (TAFS) increased 11% to Rp 43 trillion, including pembiayaanmelalui joint bank financing without recourse.

3. Heavy Equipment Division and the Mining Division's net profit Heavy Equipment and Mining dropped 23% to Rp 2.1 trillion. PT United Tractors Tbk (UT), which is 59.5% owned by the Company, reported net income decreased by 15%, while net profit fell 24% to Rp 3.4 trillion.

4. Division Agribusiness Agribusiness Division's net profit decreased by 45% to Rp 726 billion. PT Astra Agro Lestari Tbk (AAL), which is 79.7% owned by the Company, reported a decline in net income to Rp 911 billion compared to the same period in 2012 amounting to Rp 1.7 trillion

5. Infrastructure and Logistics Division Net profit for Infrastructure and Logistics Division declined by 28% to Rp 339 billion.

6. And Information Technology Division net profit and Information Technology Division amounted to Rp 101 billion, up 23% compared to the same period in 2012.Astra International is likely to retain its position as a top Indonesian company in the foreseeable future. With its expanding diversified businesses, the company is present in almost every major sector of the Indonesian economy and thus not so much dependent on the volatility of one specific sector as most other Indonesian companies. The automotive business is still Astra's core business although it has drastically lessened its traditional dependency on car sales. In the early 2000s, around 80 percent of Astra's revenue came from the automotive business but currently this number has declined to 50 percent. The Astra Group is financially sound and has a strong presence in various markets. As such, the company is well positioned to benefit from Indonesias economic growth, natural resources and infrastructure development. The outlook for 2014 remains positive, despite heightened competition in the car market and weak coal prices, while concerns about possible increases in interest rates as well as rupiah volatility remain.1. CompetitorsAccording to Michael Porter (1996), the industry focus of the analysis is on the introduction of traits underlying an industry which is based on the economic situation and technology that shape the arena in which competitive strategy to be laid out. It can be said industry analysis is a planning occurs within a group of business when an attempt has been running. Plan of business environment, economic trends, technology and politics will have a strong influence on an undertaking.

Porter Five-Forces PT ASTRA INTERNATIONAL Tbk

The following is an analysis of Porter's Five Forces enterprise-based observation team concluded GFP and interviews with the management and main dealers, and company data obtained.

1. Competition in the spare parts industry:- Astra Honda Motor (Genuine Part)- Product China and Thailand (Asia)- Imitation of local products

2. New Competitors in the spare parts industryWith a low entry barrier, new players will be very easy to enter the market given the automobile parts are not too concerned with the brand and focus more on price.

3. Item substitutionThe absence of substitutes that can replace its function.

4. Bargaining Power of Buyers The bargaining power of buyers (main dealer) is very low relative to PT. ASKI so it can not influence the price policy of products, logistics, payment and others.

5. Supplier Bargaining PowerThe bargaining power of suppliers is relatively balanced against PT. ASKI so they can participate policies affecting product pricing, logistics, payment and others.Substitutes for parts can be said to be nothing but competition in the same industry is quite high. Product parts are widely available in local markets either genuine or imitation. Indonesian consumers are more sensitive to price so that genuine products should still be able to offer prices competitive enough with the imitation.

Five Porters Model

2. Government EffectsA deliberate change of course as prospects of the car industry are increasingly frustrated by government policy. The government is trying to curb huge subsidies on fuel, raised taxes for the possession of more than one car and has curbed excessive lending for vehicle purchases (by stipulating a higher downward payment for car purchases). This can cause profits from the automotive industry to become less robust in the future. On the other hand, Indonesia's current low car per capita ratio in combination with expanding purchasing power keeps car sales on track. In 2013, car sales hit a record high of over 1.2 million sold vehicles.A plan of economic tightening measures will the government make the performance of the shares of PT Astra International Tbk depressed. Within a week, ASII coded stock was down 5.5 percent. Thendra Crisnanda, an analyst at BNI Securities, said one sentiment that affects the performance of Astra is the discourse of the new government will raise the price of fuel oil (BBM) subsidy. The fuel price hike will affect the rated motor vehicle sales. In fact, the automotive industry is still a mainstay of Astra. This sector accounted for 50 percent of earnings Astra. In addition to fuel prices, policy in a number of areas which plans to reduce the use of private cars also make the Astra's performance is getting to the front. The Jakarta administration, for example, plans to implement a pay road system or electronic road pricing (ERP) and raise parking rates. "These policies make Astra future prospects are less favorable," said Thendra, when contacted Katadata, Monday (15/9). While commodity prices still weakening also affect the performance of subsidiary Astra, PT United Tractors Tbk and PT Astra Agro Lestari Tbk3. ConclusionThe dominant industries in the various sectors of the automotive industry is, with the main motor ASII. Such as a textile manufacturer, electronics are not too liquid. Viewed from the condition economy is experiencing post-global financial crisis issuer miscellaneous industry such as PT. Astra International (ASII) will be the main target market players, because it could potentially provide a sizeable capital gain than other sectors. This sector highly dependent on bank interest / inflation to high inflation expansion. With the support of the Indonesian economic fundamentals circumstances is currently stable, the various sectors of the industry as host in his country yourself with where market can grow more rapidly. Various sectors of the automotive industry and heavy equipment is the largest contributor to various industry boom movement of stocks.