Designed for InfrastructureProfindo Market Outlook 2015
PT Profindo International SecuritiesGedung Permata Kuningan Lt. 19. Jl. Kuningan Mulia Kav 9C. Guntur Jakarta Selatan 12980
Profindo Research TeamBayu Cahyadi
Abdul Aziz
DISCLAIMERThis research report is prepared by PT PROFINDO INTERNATIONAL SECURITIES for information purposes only and is not to be used or considered as an offer or thesolicitation of an offer to sell or to buy or subscribe for securities or other financial instruments. The report has been prepared without regard to individual financialcircumstance, need or objective of person to receive it. The securities discussed in this report may not be suitable for all investors. The appropriateness of anyparticular investment or strategy whether opined on or referred to in this report or otherwise will depend on an investors individual circumstance and objectiveand should be independently evaluated and confirmed by such investor, and, if appropriate, with his professional advisers independently before adoption orimplementation (either as is or varied).
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AGENDA
2014
2015
Recommendation
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2014
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July 9Pemilu 2014
Jokowi Effect after Quick
Count DampakPengesahan
RUU Pilkada 25 September
2014
PelantikanPresiden Jokowi
Harga BBM Subsidi Naik
6500 8500
Jokowimengumumkan
jadi calonpresiden
POLITICAL SWING IN 2014
Pelaranganekspor mineral
The Fed tidakakan terburu-
buru menaikkansuku bunga
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HIGH INFLATION IN 2014
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Stable Currency Movement
CURRENCY REMAINS STRONG
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FOREIGN BUY/SELL IN 2014 (RG + NG)
STOCK VALUE (BILLION) PERCENTAGE
BTPN 5,430 8.2%
BBRI 4,318 6.5%
BMRI 4,035 6.1%
TLKM 3,551 5.4%
KPIG 3,184 4.8%
BBNI 2,588 3.9%
TBIG 2,472 3.7%
JSMR 2,313 3.5%
MYRX 2,193 3.3%
SCMA 2,103 3.2%
OTHERS 33,791 51.2%
TOTAL NET BUY 65,978 100%
NET BUY 2014 (ALL)
STOCK VALUE (BILLION) PERCENTAGE
MAIN 1,784 11.6%
SIAP 1,673 10.9%
SUGI 1,123 7.3%
AALI 970 6.3%
TELE 948 6.2%
BCAP 931 6.1%
BBTN 545 3.6%
BABP 456 3.0%
MASA 402 2.6%
DILD 401 2.6%
OTHERS 6,119 39.9%
TOTAL NET SELL 15,352 100%
NET SELL 2014 (ALL)
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FOREIGN TOP 10 SECTOR BUY/SELL IN 2014 (RG + NG)
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FOREIGN BUY/SELL IN 2014 (RG)
STOCK VALUE (BILLION) PERCENTAGE
BBRI 3,998 9.9%
BMRI 3,519 8.7%
TLKM 3,007 7.4%
BBNI 2,667 6.6%
PGAS 2,370 5.8%
JSMR 2,330 5.7%
ASII 2,099 5.2%
UNTR 1,243 3.1%
LPPF 1,211 3.0%
ADRO 1,068 2.6%
OTHERS 17,020 42.0%
TOTAL NET BUY 40,532 100%
NET BUY 2014 (REGULER)
STOCK VALUE (BILLION) PERCENTAGE
AALI 1,011 16.1%
BBTN 467 7.4%
BUMI 298 4.8%
WTON 255 4.1%
AKRA 242 3.9%
ASRI 202 3.2%
PTBA 199 3.2%
VIVA 194 3.1%
UNVR 186 3.0%
JPFA 174 2.8%
OTHERS 3,041 48.5%
TOTAL NET SELL 6,269 100%
NET SELL 2014 (REGULER)
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FOREIGN TOP 10 SECTOR BUY/SELL IN 2014 (RG)
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SECTOR PERFORMANCE IN 2014
Top GainerProperty +53%Finance +34%Infrastructure +24%
Top Loser IndexAgriculture -4%
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PROPERTY STOCKS PERFORMANCE 2014
Top GainerSMRA +85%PWON +84%
LaggardAPLN +23%LPKR +12%
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CONSTRUCTION NAMES 2014
Top GainerWSKT +250%PTPP +200%
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MAJOR GLOBAL EVENT IN 2014
Plunging Global Oil Price
5 Year Oil Price Chart 1 Year Oil Price Chart
Positive Impact on Indonesia
Oil Net Importer
Better Consumer Purchasing Power
Budget Allocation: subsidy to infrastructure
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2015
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2015: MORE UPSIDE ON PROPERTY?
Property index outperforms other sector indices, while agriculture and basic industry underperform JCI
Consumer outperforms JCI, betting on better purchasing power
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20% NET BUY ON BMRI AND BBRI
Jan 1 Jan 23, 2015
STOCK VALUE (BILLION) PERCENTAGE
BMRI 622 11.8%
SDRA 436 8.3%
MNCN 439 8.4%
BBRI 435 8.3%
AKRA 244 4.6%
EXCL 225 4.3%
TLKM 206 3.9%
PTPP 214 4.1%
NIRO 192 3.7%
BSDE 163 3.1%
OTHERS 2,075 39.5%
TOTAL NET BUY 5,251 100%
NET BUY 2015 (ALL)
STOCK VALUE (BILLION) PERCENTAGE
PGAS 1,083 16.5%
SMGR 806 12.3%
SIAP 605 9.2%
PWON 483 7.4%
MSKY 474 7.2%
GGRM 276 4.2%
ICBP 327 5.0%
BBCA 233 3.6%
WIKA 204 3.1%
BBTN 238 3.6%
OTHERS 1,826 27.9%
TOTAL NET SELL 6,555 100%
NET SELL 2015 (ALL)
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BANKS ARE STILL FOREIGNS TOP 10 FAVORITE
Jan 1 Jan 23, 2015
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23% BMRI AND BBRI ON REGULAR MARKET
STOCK VALUE (BILLION) PERCENTAGE
BMRI 555 15.2%
BBRI 286 7.9%
BSDE 277 7.6%
AKRA 238 6.5%
MPPA 150 4.1%
EXCL 144 4.0%
SCMA 136 3.7%
PTPP 131 3.6%
LPKR 116 3.2%
SSMS 105 2.9%
OTHERS 1,505 41.3%
TOTAL NET BUY 3,643 100%
NET BUY 2015 (REGULER)
STOCK VALUE (BILLION) PERCENTAGE
PGAS 1,061 22.3%
SMGR 831 17.5%
PWON 265 5.6%
GGRM 218 4.6%
BBTN 247 5.2%
INTP 178 3.7%
WIKA 199 4.2%
BBNI 159 3.3%
ICBP 247 5.2%
BBCA 167 3.5%
OTHERS 1,186 24.9%
TOTAL NET SELL 4,758 100%
NET SELL 2015 (REGULER)
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BANKS DOMINATE FOREIGN NET BUY
Jan 1 Jan 23, 2015
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GOVERNMENT PROGRAMS
Consumer outperforms JCI, betting on better purchasing power
Infrastructure Program Sea Toll Road 24 seaports 10 airports 1000 KM New Toll Road 35K MW Power Plant
Healthcare Program BPJS targets 168 million population
JKN
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OUR ASSUMPTION FOR 2015
Yearly Inflation 3-5%
JCI: 5750-5850GDP +5.4-5.5% YOY
Exchange Rate: 12000-12500
BI Rate 7.25-7.75% CAD < 3% GDP
Fed Rate ~1.25%US Inflation ~2%
China economy grows ~7%More stimulus from Japan
ECB QE 60 bn Euro / month Program Execution from President Jokowi
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RecommendatioN
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OUR RECOMMENDATION
Construction
Pharmacy
Consumer
Banks
Infrastructure
Construction Top Pick Target PricePT Waskita Karya Tbk 1750PT PP Tbk 4250
Pharmacy Top Pick Target PricePT Kalbe Farma Tbk 1885PT Kimia Farma Tbk 1530
Consumer Top Pick Target PricePT Tiga Pilar Sejahtera Tbk 2300PT Charoen Pokphand Tbk 4200
Banks Top Pick Target PricePT Bank Mandiri Tbk 11500PT Bank Rakyat Indonesia Tbk 12500
Infrastructure Top Pick Target PricePT Telekomunikasi Indonesia Tbk 3150PT Jasa MargaTbk 7500
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CONSTRUCTION
Government Incentives to
Capital Injection to ADHI, WSKT
Dividend allocation for working capital: WIKA, WSKT, ADHI, WTON and PTPP
Lower Cement Price
One million houses per year
Government budget for construction increases 100% from 150-200 Tn to 300-400 Tn
Recommendation
WSKT Target Price Rp 1.750 (assuming 47% RI)
WIKA Target price Rp 4.000
PTPP Target price Rp 4.250
ADHI Target price Rp 4.500
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PHARMACY
In 2015, BPJS Targets 168 Million People, +26% YOY
More budget allocation for healthcare
FY09-13 CAGR of 10.95% and still growing
Recommendation
KAEF Target price Rp1.530
INAF Target price Rp465
KLBF Target price Rp1.885
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CONSUMER
Consumer Spending 3Q14 +2.7% to 407.134
Lower gasoline price will add consumer purchasing power
Japan allow Indonesia poultry companies to export processed chicken products to Japan
Government limit Grand Parent Stock (GPS) Import
Recommendation AISA Target price Rp 2.300 CPIN Target price Rp 4.200
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BANKS
Steady Interest Rates 7.75%
Infrastructure programs need financing
Dividend pay out ratio is cut by 10%
Still double digit loan growth in 2015
Growing fee based income
Recommendation BBRI Target price Rp 12.500 BMRI Target price Rp 11.500
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INFRASTRUCTURE
Telco Growing subscribers of 37% per year from 2005 to 2015 Fourth biggest mobile phone market in the world, 278 million population
Toll Road Tariff adjustment in accordance with regional inflation rate Growing vehicles by 24%/year Trans Sumatera, Trans Java and 1000 KM new Toll Road Program
Recommendation TLKM Target price Rp 3.150 ISAT Target price Rp 4.300 JSMR Target price Rp 7.500
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THANK YOU
Research Team
PT Profindo International Securities
DISCLAIMERThis research report is prepared by PT PROFINDO INTERNATIONAL SECURITIES for information purposes only and is not to be used or considered as an offer or thesolicitation of an offer to sell or to buy or subscribe for securities or other financial instruments. The report has been prepared without regard to individual financialcircumstance, need or objective of person to receive it. The securities discussed in this report may not be suitable for all investors. The appropriateness of anyparticular investment or strategy whether opined on or referred to in this report or otherwise will depend on an investors individual circumstance and objectiveand should be independently evaluated and confirmed by such investor, and, if appropriate, with his professional advisers independently before adoption orimplementation (either as is or varied).