Danareksa Credit Score Infrastructure and Property Sector

DEBT RESEARCH

CREDIT REPORT AUGUST 2015

Danareksa Credit Score Infrastructure and Property Sector The Danareksa Credit Score first-half-of-2015 edition focuses on the infrastructure and property sectors. Our analysis includes an overview of the two sectors, complete with credit scores and a brief review of the performance of some of the issuers. Credit score analysis covers 8 companies for the infrastructure sector and 12 companies for the property sector.

Danareksa Credit Score (DCS) edisi semester pertama tahun 2015 berisi pembahasan mengenai sektor infrastruktur dan properti yang mencakup ulasan masing-masing sektor dan obligasi sektor terkait, disertai dengan credit score dan review singkat terhadap kinerja beberapa emiten. Analisa credit score sektor infrastruktur mencakup 8 perusahaan, sedangkan sektor properti mencakup 12 perusahaan.

Infrastructure: Boosting Up Development • State budget : focusing on infrastructure • The budget for capital injections soared

Country INDONESIA

Country Rating S & P

(LTFLC)

BB+

Moody’s

(LTFLC)

Baa3

Fitch

(LTFLC)

BBB-

Infrastructure development has become a key focus of the current Government, and progress on this front has come under the spotlight as a measure of the Government’s success. Infrastructure development will provide significant opportunities to companies in this sector. Of the 8 companies covered, they all have Investment Grade ratings ranging from Ato AAA but with a wider range of credit scores ranging from 11 to 18.

Pembangunan infrastruktur menjadi fokus Pemerintah berjalan dimana progress pembangunannya menjadi sorotan masyarakat dan menjadi salah satu ukuran keberhasilan Pemerintah. Hal ini akan memberikan peluang bagi perusahaan yang berada di sektor ini. Dari 8 perusahaan yang ada, seluruhnya berada dalam Investment Grade dengan rating A- sampai AAA namun dengan range credit score yang lebih luas, yaitu 11 – 18.



Property: New Hope for Brisker Growth • Supportive regulation to encourage growth in the property sector • Residential property: slow growth continues Analyst Melissa Hartono +62-21-29555777 ext. 3402 [email protected]

Please read important disclosure at the back of this report. www.danareksa.com Bloomberg Ticker: DFMJ

Loosening of the LTV regulation and the new government policy which lifts some restrictions on property ownership by foreigners are expected to boost performance of the property sector which has been in a slump the last 2 years. The main factor behind the declining revenues of some companies has been the ongoing economic slowdown. From 12 companies, 6 of them are Investment Grade with ratings of A- and AAA and with credit scores in the safe zone ranging from 12 to 18. The remaining companies are Non Investment Grade with ratings below A and credit scores under 11.99.

Pelonggaran regulasi LTV dan diperbolehkannya warga negara asing untuk membeli properti di Indonesia diharapkan dapat mendorong kinerja sektor properti yang sempat lesu dalam 2 tahun terakhir. Perlambatan ekonomi telah terbukti menjadi faktor menurunnya pendapatan beberapa perusahaan. Dari 12 perusahaan di sektor ini, 6 diantaranya berada dalam Investment Grade dengan rating A- sampai AAA dan credit score 12 sampai 18 yang berada pada zona aman. Selebihnya berada pada Non Investment Grade dengan rating di bawah A- dan credit score di bawah 11,99.

Infrastructure Sector Boosting Up Development State budget: focusing on infrastructure Since infrastructure development is one of the main focuses of the current Government, the prospects for the infrastructure sector look brighter. The Government’s commitment to this sector is reflected in the healthier condition of the APBN following the reduction of fuel subsidies amounting to IDR212.5 trillion (USD16.3 billion) and the allocation of funds to more productive sectors such as infrastructure and capital injections (PMN) into certain State owned Enterprises (SOEs) which support the national priority program. Based on the Revised 2015 State Budget (APBNP), the infrastructure budget was boosted by almost IDR100 trillion from the initial 2015 State Budget. Compared to the 2014 State Budget, the budget for infrastructure has increased by 63.2% from IDR177.9 trillion (USD13.7 billion) to IDR290.3 trillion (USD22.3 billion), the largest infrastructure budget compared to prior years.

APBNP: Fokus pada pembangunan infrastruktur Pembangunan infrastruktur yang menjadi salah satu fokus utama dalam agenda Pemerintahan berjalan turun berperan dalam terciptanya prospek sektor infrastruktur yang lebih baik. Komitmen Pemerintah di sektor ini tercermin dari postur APBN yang lebih sehat melalui terobosannya dalam penghematan subsidi BBM yang mencapai Rp212,5 triliun (US$16,3 miliar). Dana penghematan ini akan dialihkan ke sektor-sektor lain yang lebih produktif, seperti infrastruktur dan Penyertaan Modal Negara (PMN) kepada beberapa Badan Usaha Milik Negara (BUMN) yang mendukung program prioritas nasional. Berdasarkan APBNP 2015, anggaran infrastruktur meningkat hampir Rp100 triliun dari APBN 2015. Sedangkan dibandingkan dengan APBNP 2014, anggaran infrastruktur meningkat 63,2% dari Rp177,9 triliun (US$13,7 miliar) menjadi Rp290,3 triliun (US$22,3 miliar), yang merupakan anggaran infrastruktur tertinggi dibandingkan tahun-tahun sebelumnya.

Exhibit 1. Infrastructure budget over the years

Exhibit 2. Infrastructure budget breakdown

350

Non M/I 290.3

300

Other Ministry/Institution (M/I) Ministry of Housing

IDR trillion

250 200 150

145.5

156

177.9

191.3

114.2

100

Ministry of Transportation

50 0 2015 (APBNP)

2015 (APBN)

2014

2013

2012

2011

Ministry of Energy & Mineral Resources

2011 2012 2013 2014 2015 2015 (APBN) (APBNP) Ministry/Institution: 91.2 122.7 135 149.4 155.4 209.8 Ministry of Public Works 41.8 56.5 63.5 63.8 68.1 105 & Housing Ministry of Energy & 6.2 6.7 7.7 9.3 5.9 5.9 Mineral Resources Ministry of Transportation 16 25.3 26 27.3 35 52.5 Ministry of Housing 1.4 1.6 1.9 3.3 3.7 Other (M/I) 25.8 32.6 35.9 45.7 42.7 46.4 Non M/I 23 22.8 21 28.5 35.9 80.5 Total

114.2 145.5 156 177.9 191.3 290.3

Ministry of Public Works & Housing

Source: Ministry of Finance

Source: Ministry of Finance

The budget for capital injections soared In the 2015 Revised State Budget, the infrastructure budget of the Non Ministry/Institution (Non M/I) group more than doubled compared to its level in the 2015 State Budget. Details of the infrastructure budget allocation in the Non M/I group is displayed in Exhibit 3. The largest budget increase is for capital injections into SOEs to support the national priority program agenda, including infrastructure. The SOEs engaged in the connectivity and infrastructure development program are PT Angkasa Pura II, PT Hutama Karya, PT Waskita Karya Tbk (WSKT), PT Adhi Karya Tbk (ADHI), and some other SOEs.

Anggaran PMN meningkat pesat Dalam APBNP 2015, belanja infrastruktur dari kelompok Non Kementerian/Lembaga (Non K/L) meningkat lebih dari 100% dibandingkan APBN 2015. Rincian atas pengalokasian anggaran infrastruktur Non K/L dapat dilihat pada Exhibit 3. Pos yang mendapatkan penambahan anggaran paling besar adalah Penyertaan Modal Negara (PMN) kepada BUMN yang digunakan untuk mendukung agenda program prioritas nasional, termasuk pembangunan infrastruktur. BUMN yang mendapatkan PMN untuk program pembangunan infrastruktur dan konektivitas antara lain PT Angkasa Pura II, PT Hutama Karya, PT Waskita Karya Tbk (WSKT), PT Adhi Karya Tbk (ADHI), dan beberapa BUMN lain.

2

Infrastructure Sector Exhibit 3. Changes in the Non M/I Budget as stated in the Revised 2015 State Budget 2015 (APBN) 8

9 1

2015 (APBNP) 91 2

2

7

3

3

6

8

4 5

7

4



Non M/I Budget Breakdown

Total

5

2015 (APBN) (IDR tn) 2015 (APBNP) (IDR tn)

1 Land capping 2 Viability Gap Funding (VGF) 3 Grant 4 Special Allocation Fund 5 Additional autonomy for infrastructure (Province of Papua and Papua Barat) 6 Government investment for infrastructure 7 Government Guarantee on Coal Power Plant Project 8 Capital Injection (PMN) 9 Revolving Fund Management Institution of Small & Medium Enterprises and Cooperatives (LPDB KUKM)

6

1 1.8 3.4 14.5 2.5 5.1 0.8 2 1

1 1.2 4.5 29.7 3 5.1 0.8 28.8 1

32.1 75.1

Source: Ministry of Finance Infrastructure development in the next 5 years: electricity comes first In the National Medium-Term Development Plan (RPJMN) 2015-2019, the Government has budgeted IDR5,519 trillion (USD424.5 billion) for infrastructure development. The infrastructure segment needing the largest allocation of funds is electricity (amounting to IDR980 trillion or USD75.4 billion), followed by sea transportation (IDR900 trillion or USD69.2 billion) and roads (IDR805 trillion or USD62 billion). Details of the infrastructure budget allocation can be seen in Exhibit 4. With the huge amount of funds needed for infrastructure, the source of funding is expected to come from other sources besides the Government. Indeed, the State Budget is predicted to only contribute about 40% of the total amount of IDR5,519 trillion, or equal to IDR2,216 trillion (USD170.5 billion). To fulfill the financing needs, participation from the Local Government Budget (APBD), SOEs and the private sector is also required. Details on the sources of funding needed are depicted in Exhibit 5.

Pembangunan infrastruktur untuk 5 tahun ke depan: ketenagalistrikan diprioritaskan Dalam Rencana Pembangunan Jangka Menengah Nasional (RPJMN) 2015-2019, Pemerintah menganggarkan dana sebesar Rp5.519 triliun (US$424,5 miliar) untuk pembangunan infrastruktur. Bidang infrastruktur yang mendapatkan alokasi dana paling besar adalah ketenagalistrikan yang mencapai Rp980 triliun (US$75,4 miliar), diikuti dengan anggaran infrastruktur perhubungan laut sebesar Rp900 triliun (US$69,2 miliar) dan jalan dengan jumlah Rp805 triliun (US$62 miliar). Rincian pengalokasian anggaran infrastruktur per bidang dapat dilihat pada Exhibit 4. Dengan besarnya dana infrastruktur yang dibutuhkan, sumber pendanaannya diharapkan tidak hanya berasal dari Pemerintah pusat. APBN diperkirakan hanya dapat berkontribusi 40% atau senilai Rp2.216 triliun (US$170,5 miliar). Untuk memenuhi anggaran yang telah ditetapkan, dibutuhkan partisipasi dari APBD, BUMN dan pihak swasta. Exhibit 5 menampilkan rincian sumber pendanaan infrastruktur yang dibutuhkan.

3

Infrastructure Sector Exhibit 4. Estimated funds needed for infrastructure development in RPJMN 2015-2019 6,000 5,000 980

3,000

401

5,519

1,692 2,216

Total

Housing

Water resources

Drinking water and waste

Communication and…

Land (incl. ASDP)

Air

Train & Railroads

Sea Transportation

-

Electricity

805 283 Energy (oil & gas)

1,000

507 278

528

900 165 60 115

City Transportaion

2,000

Road

IDR trillion

4,000

499

Exhibit 5. Sources of funding estimates (IDR trillion)

1,066 545

State Budget

Local State Budget

SOEs

Private sector

Source: Bappenas

Source: Bappenas

Bonds sector overview From 2010 until 7M15, the infrastructure sector has issued 42 bonds worth IDR20.81 trillion (USD1.6 billion). These bonds were issued with tenors varying from 1 to 12 years with 5-year tenor bonds dominating, followed in turn by 3-year tenor bonds. The characteristics of infrastructure development (long term in nature) explains why the majority of the bonds have medium tenors.

Ulasan obligasi sektoral Sejak tahun 2010 sampai 7M15, sektor infrastruktur telah menerbitkan 42 obligasi dengan nilai mencapai Rp20,81 triliun (US$1,6 miliar). Obligasi diterbitkan dengan tenor yang bervariasi dari 1 sampai 12 tahun dengan mayoritas obligasi bertenor 5 tahun, kemudian diikuti oleh obligasi bertenor 3 tahun. Karakteristik pembangunan infrastruktur yang umumnya membutuhkan waktu yang tidak singkat menjadi salah satu penyebab sebagian besar obligasi di sektor infrastruktur diterbitkan dengan tenor menengah. Exhibit 7. Number of bonds based on tenor

Exhibit 6. Bonds issuance volume in infrastructure sector 8,000

7,713

7,500

2

7,000

2

6

6,000

9

IDR billion

5,000 4,000

7

3,000

2,500

2,500

2,000 16

600

1,000 0 2010

2011

2012

2013

2014

1Q-2015

Year Source: IDX As of July 2015, total outstanding bonds in the infrastructure sector reached IDR27.78 trillion (USD2.1 billion), comprising 49 bonds with 3 of them maturing in 2H15. Based on the maturity profile of the outstanding bonds in the infrastructure sector as displayed in Exhibit 8, the largest amount of bonds maturing will take place in 2017 reaching IDR7.8 trillion (USD0.6 billion). Bond issuers are predicted to issue new debts either for refinancing purposes or to expand their businesses.

1yr

3yr

5yr

7yr

10yr

12yr

Source: IDX Berdasarkan data bulan Juli 2015, jumlah obligasi outstanding sektor infrastruktur mencapai Rp27,78 triliun (US$2,1 miliar) yang terdiri dari 49 obligasi dimana 3 diantaranya akan jatuh tempo pada 2H15. Berdasarkan profil jatuh tempo obligasi outstanding di sektor infrastruktur yang dapat dilihat pada Exhibit 8, jatuh tempo dengan nilai terbesar akan terjadi di tahun 2017 yang mencapai Rp7,8 triliun (US$0,6 miliar). Para emiten diperkirakan akan menerbitkan surat hutang baru di tahun tersebut, baik untuk refinancing maupun untuk ekspansi perusahaan. 4

Infrastructure Sector Exhibit 8. Maturity profile of outstanding bonds in the infrastructure sector 9,000 7,806

8,000

IDR billion

7,000 6,000 5,000

4,378

4,152

4,000

3,454

3,395

3,000 2,000 1,000

1,456

1,250

1,024

865

2015

2016

2017

2018

2019

2020

2021

2022

2023

Year Source: IDX Stable rating and credit score Despite the less favorable macroeconomic conditions in 2013 and economic slowdown in 2014, companies in the infrastructure sector have been able to maintain their performance. As seen in Exhibit 9, companies in this sector have steady ratings and credit scores. As of 1Q15, the number of companies included in the universe to calculate the credit score has been increased since the rating of Perusahaan Gas Negara (Persero) Tbk. (PGAS) and Wijaya Karya Beton Tbk. (WTON) are now undertaken by Pefindo. From 8 companies, 6 of them have had consistent ratings while 1 company received a ratings upgrade and another company’s rating expired. As for credit scores, they moved in a relatively slim range with the difference between the highest and the lowest scores standing at 0.9-2.14, with CMNP as an exception due to major improvements taking place in 2Q13 only.

Rating dan credit score yang stabil Meskipun menghadapi makroekonomi yang kurang kondusif di tahun 2013 dan melambatnya perekonomian di tahun 2014, perusahaan di sektor ini terbukti mampu mempertahankan kinerjanya. Seperti yang terlihat di Exhibit 9, perusahaan di sektor infrastruktur memiliki rating dan credit score yang stabil. Per 1Q15, jumlah perusahaan di sektor ini yang menjadi universe dalam menghitung credit score bertambah dengan telah dicatatkannya rating Perusahaan Gas Negara (Persero) Tbk. (PGAS) dan Wijaya Karya Beton Tbk. (WTON) di Pefindo. Dari 8 perusahaan yang ada, 6 diantaranya memiliki rating yang konsisten, sedangkan 1 perusahaan mengalami upgrade rating dan 1 perusahaan lainnya memiliki rating yang expired. Sedangkan credit score bergerak dengan range yang tidak lebar dimana selisih antara nilai maksimum dan nilai minimum berada di level 0,9-2,14, dengan pengecualian CMNP yang mengalami peningkatan signifikan di 2Q13.

Exhibit 9. Ratings and Danareksa credit score for infrastructure sector companies Rating Jasa Marga Citra Marga Nusaphala Persada Perusahaan Gas Negara (Persero) Wijaya Karya Adhi Karya (Persero) Pembangunan Perumahan Waskita Karya (Persero) Wijaya Karya Beton

Ticker 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 JSMR AA AA AA AA AA AA AA AA AA CMNP A- - - - - - - - PGAS - - - - - - AAA AAA AAA WIKA A+ A+ A+ A+ A+ A+ A+ A+ A+ ADHI A A A A A A A A A PTPP A- A- A- A A A A A A WSKT A A A A A A A A A WTON - - A+ A+ A+ A+ A+ A+ A+

Credit Score Jasa Marga Citra Marga Nusaphala Persada Perusahaan Gas Negara (Persero) Wijaya Karya Adhi Karya (Persero) Pembangunan Perumahan Waskita Karya (Persero)

Ticker JSMR CMNP PGAS WIKA ADHI PTPP WSKT

1Q13 2Q13 12.96 13.57 12.46 18.00 14.91 16.08 12.67 12.91 12.52 12.39 12.17 11.80 11.79 11.41

3Q13 13.11 15.91 16.40 12.57 12.60 12.01 11.73

4Q13 1Q14 14.40 15.07 16.02 15.76 16.92 16.85 13.75 14.36 12.98 12.75 12.66 12.54 12.53 12.11

2Q14 3Q14 4Q14 1Q15 13.80 14.79 13.80 14.50 15.08 14.67 15.15 15.44 15.34 14.78 15.18 15.11 13.67 14.21 13.69 13.61 12.91 13.29 12.85 12.89 12.74 13.50 12.45 12.07 12.33 13.38 12.20 12.32

Source: Pefindo, Bloomberg, Danareksa Estimates 5

Infrastructure Sector Exhibit 10. Ratings and Danareksa credit score graph for infrastructure sector companies 18 CMNP*

16 14

ADHI

WTON

WSKT

12

PGAS

JSMR

WIKA

PTPP 10 8 6 4

AAA

AA+

AA

AA-

A+

A

A-

BBB+

BBB

BBB-

BB+

BB

BB-

B+

B

CCC

SD

D

0

B-

2

Source: Pefindo, Bloomberg, Danareksa Estimates *using the last rating for currently non-rating company

Exhibit 10 demonstrates the relationship between the ratings and the credit scores of companies in the infrastructure sector. The 45° line in the middle of the chart represents the company’s fair value for its rating. As depicted in the picture, only WIKA was valued at its fair value while 4 companies were close to their fair value (ADHI, WSKT, PTPP and WTON). A rating lower than the credit score implies less favorable business prospects with the Company’s business considered to have limited room to grow. By contrast, a rating higher than the credit score suggests good business prospects and optimism toward the company’s future expansion.

Exhibit 10 menggambarkan hubungan antara rating dan credit score perusahaan di sektor infrastruktur. Garis 45 derajat di tengah area grafik merupakan nilai wajar (fair value) rating yang sesuai dengan perusahaan. Dari gambar terlihat bahwa hanya WIKA yang berada pada nilai wajarnya dan terdapat 4 perusahaan yang mendekati nilai wajar, yaitu ADHI, WSKT, PTPP dan WTON. Rating yang lebih rendah dibandingkan credit score menunjukkan prospek bisnis perusahaan yang dinilai kurang kondusif dan bisnis perusahaan yang dipandang memiliki ruang perkembangan yang terbatas. Sebaliknya, rating yang lebih tinggi dari credit score menandakan prospek bisnis perusahaan yang baik dan optimisme atas ekspansi perusahaan.

JSMR: Intensive toll road construction As seen in Exhibit 11, JSMR has successfully maintained its rating at AA over the last 5 years and the credit scores have been in an increasing trend. The company’s rating has been consistently higher than the credit score, suggesting optimism towards the company’s business potential in the coming years. JSMR’s revenues come from 3 segments, namely: toll revenues, construction revenues and other business revenues. In 2014, revenues declined by 11% due to falling construction revenues. Toll revenues still rose by 14.5% from IDR5.8 trillion to IDR6.6 trillion. Total assets increased due to the addition of intangible assets (toll concession rights), while growth in liabilities owed to higher long term liabilities through bank loans and IDR1 trillion of bonds issuance in 2014. As of 1Q15, JSMR operated 590 km of toll road, or representing 63% of the total toll roads in Indonesia.

Seperti yang terlihat pada Exhibit 11, JSMR berhasil mempertahankan ratingnya di level AA dalam 5 tahun terakhir dan credit score perusahaan berada dalam tren yang meningkat. Rating perusahaan secara konsisten lebih tinggi dari credit score, mengimplikasikan optimisme atas potensi bisnis perusahaan di masa yang akan datang. Pendapatan JSMR dibagi menjadi 3, yaitu pendapatan tol, pendapatan konstruksi dan pendapatan usaha lainnya. Di tahun 2014, pendapatan menurun 11% yang disebabkan oleh menurunnya pendapatan konstruksi. Pendapatan tol meningkat 14,5% dari Rp5,8 triliun menjadi Rp6,6 triliun. Total aset meningkat dengan adanya penambahan aset tak berwujud dalam bentuk hak pengusahaan (konsesi) jalan tol. Sedangkan peningkatan pada liabilitas turut disebabkan oleh meningkatnya liabilitas jangka panjang melalui pinjaman bank dan penerbitan obligasi sejumlah Rp1 triliun di tahun 2014. Per 1Q15, JSMR mengelola jalan tol sepanjang 590 km yang merepresentasikan 63% dari total panjang jalan tol di Indonesia.

6

Infrastructure Sector Exhibit 11. JSMR ratings and credit scores 18

AA AA

AA

AA

AA

AA

AA

AA

AA

AA

AA

AA

AA

AA

AA

AA

AA

16

3 2.5

14 12

2

10

1.5

8 6

1

4

0.5

2

Debt to Equity (RHS)

Debt to Equity Industry (RHS)

Rating (LHS)

1Q15

4Q14

3Q14

2Q14

1Q14

4Q13

3Q13

2Q13

1Q13

4Q12

3Q12

2Q12

1Q12

4Q11

3Q11

2Q11

0

1Q11

0

Credit Score (LHS)

Source: Pefindo, Bloomberg, Danareksa Estimates

Although there is no change in JSMR’s rating, the ratings agency Pefindo has revised the company’s outlook from “Stable” to “Negative” due to expectations that substantial debt will be needed to fund capital expenditure in the near term. This reflects intensifying toll roads construction to hasten infrastructure development. Looking at Exhibit 11, the company’s debt to equity ratio (DER) has always been higher than the industry average. As of 1Q15, the DER stood at 1.2x, yet far lower than the bonds and bank loans covenant maximum level of 5x.

Meskipun tidak ada perubahan rating yang terjadi, lembaga rating Pefindo melakukan revisi atas outlook perusahaan dari sebelumnya “Stabil” menjadi “Negatif” yang disebabkan oleh ekspektasi pembiayaan capital expenditure melalui hutang dengan jumlah substansial yang akan terjadi dalam waktu dekat. Hal ini sehubungan dengan pembangunan jalan tol yang kian intensif demi mempercepat pembangunan infrastruktur. Melihat Exhibit 11, rasio debt to equity (DER) perusahaan memang selalu berada di atas rata-rata industri. Per 1Q15, DER perusahaan berada di level 1,2x, jauh di bawah covenant pada perjanjian obligasi dan pinjaman bank dimana nilai maksimum DER yang diperbolehkan adalah 5x.

Exhibit 12. JSMR’s financial highlights (IDR bn)

Exhibit 13. JSMR’s outstanding bonds

2013 2014 change 1Q14 1Q15 change (%) (%) Revenue 10,271 9,175 -10.7% 2,080 1,971 -5.2% Operating Expense (8,012) (6,131) -23.5% -1,318 -1,209 -8.3% Operating Income 2,259 3,044 34.7% 762 762 0.0% Net Income 929 1,215 30.9% 343 280 -18.4% Total Assets 28,059 31,858 13.5% 31,858 31,690 -0.5% Total Liabilities 17,501 20,433 16.8% 20,824 20,831 0.0% Total Equity 10,558 11,425 8.2% 11,034 10,859 -1.6%

Bond ID JSMR01CN2T JSMR01BCN1S JSMR01CCN1S JMPD14JM10 JMPD13R JMPD12Q

Source: Company

Source: IDX

Issue Mature Rating Tenor Coupon Par Value Date Date (%) (IDR bn) 19-Sep-14 19-Sep-19 idAA 5 9.85 1,000 27-Sep-13 27-Sep-16 idAA 3 8.7 400 27-Sep-13 27-Sep-18 idAA 5 8.9 1,000 12-Oct-10 12-Oct-20 idAA 10 9.35 1,000 21-Jun-07 21-Jun-17 idAA 10 10.25 1,500 6-Jul-06 6-Jul-16 idAA 10 13.5 1,000

Total

5,900

7

Infrastructure Sector PTPP: Solid bottom line By the end of 2013, PTPP’s rating had been upgraded from A- to A. Based on Exhibit 14, we can see that the rating and credit score have moved in the same direction with a small gap. This suggests that PTPP has been able to take advantage of all its accessible opportunities. In 2014, the company’s revenues increased by 6.6% to IDR12.4 trillion. Although this number was only 75% of the 2014 target, the company’s net income in the year of IDR532 billion managed to surpass the target.

Pada akhir tahun 2013, PTPP mengalami rating upgrade dari A- menjadi A. Berdasarkan Exhibit 14, dapat dilihat bahwa rating dan credit score perusahaan bergerak sejalan dengan gap yang minim. Hal ini menunjukkan bahwa perusahaan telah memberdayakan seluruh potensi yang ada. Pendapatan perusahaan meningkat 6,6% menjadi Rp12,4 triliun di tahun 2014. Meskipun jumlah pendapatan hanya mencapai 75% dari target perusahaan di tahun 2014, jumlah laba tahun berjalan perusahaan berhasil melebihi target dengan nilai Rp532 miliar.

Exhibit 14. Exhibit 14. PTPP ratings and credit scores 18

3

16

A-

14

A-

A-

A

A-

A

A

A

A

A

12

2

10

1.5

8 6

1

4

0.5

Debt to Equity (RHS)

Debt to Equity Industry (RHS)

Rating (LHS)

1Q15

4Q14

3Q14

2Q14

1Q14

4Q13

3Q13

2Q13

1Q13

4Q12

3Q12

2Q12

1Q12

4Q11

3Q11

2Q11

1Q11

2 0

2.5

0

Credit Score (LHS)

Source: Pefindo, Bloomberg, Danareksa Estimates

There is no change in rating after the last upgrade in 4Q13 and the company’s outlook remains ‘Stable’ as rated by Pefindo. This outlook implies there is a chance for a ratings upgrade if PTPP is able to increase its profitability and successfully expand its property business. Conversely, its rating may be downgraded if expansion in the property business negatively affects its financial performance. Looking at PTPP’s debt profile, its debt to equity ratio (DER) has always been under 2x in the last 2 years where it stood at 1.3x in 1Q15.

Setelah mengalami upgrade pada 4Q13, rating PTPP belum mengalami perubahan dan outlook perusahaan masih tercatat ‘Stabil’ pada lembaga pemeringkat Pefindo. Outlook ini menggambarkan peluang kenaikan rating apabila perusahaan mampu meningkatkan profitabilitasnya yang diiringi dengan ekspansi bisnis properti yang sukses dan penurunan rating jika ekspansi properti berdampak negatif terhadap kinerja keuangan. Melihat pada profil hutang perusahaan, rasio debt to equity (DER) perusahaan berada di bawah level 2x selama 2 tahun terakhir dan berada di level 1,3x pada 1Q15.

Exhibit 15.PTPP’s financial highlights (IDR bn)

Exhibit 16. PTPP’s outstanding bonds

2013 2014 change 1Q14 1Q15 change (%) (%) Revenue 11,656 12,427 6.6% 1,999 1,982 -0.9% Operating Expense* (10,582) (11,171) 5.6% 1,861 1,790 -3.8% Operating Income 1,073 1,257 17.1% 139 192 38.2% Net Income 421 532 26.5% 61 94 52.4% Total Assets 12,416 14,612 17.7% 12,052 13,910 15.4% Total Liabilities 10,431 12,222 17.2% 10,006 11,426 14.2% Total Equity 1,985 2,390 20.4% 2,046 2,484 21.4%

Bond ID PTPP01CN1 PTPP01CN2

Source: Company

Source: IDX

Issue Mature Rating Tenor Coupon Par Value Date Date (%) (IDR bn) 19-Mar-13 19-Mar-18 idAA 5 8.38 700 24-Feb-15 24-Feb-20 idAA 3 10.2 300

Total

1,000

*incl. cost of goods sold and operating expense

8

Infrastructure Sector ADHI: Subdued growth ADHI has successfully maintained its rating at A over the last 3 years. As seen in Exhibit 17, its rating has moved in line with its credit score with a small gap and an overlapping tendency during the last year. This shows that the company has been able to take advantage of its opportunities. In 2014, the company’s revenues dropped 11.7% to IDR8.6 trillion, or 72.3% of 2014’s target. This owed to the postponement of several projects as a result of Indonesia’s changing macroeconomic conditions in 2014.

ADHI mempertahankan rating di level A selama 3 tahun terakhir. Seperti yang tergambar pada Exhibit 17, rating dan credit score perusahaan bergerak sejalan dengan gap yang minim, bahkan berhimpitan pada periode 1 tahun terakhir. Dengan kata lain, perusahaan telah dapat memanfaatkan peluang yang ada secara optimal. Di tahun 2014, pendapatan perusahaan turun -11,7% menjadi Rp8,6 triliun, atau hanya mencapai 72,3% dari target yang telah ditetapkan. Tidak tercapainya target ini disebabkan oleh penundaan beberapa proyek akibat perubahan iklim makro ekonomi di Indonesia.

Exhibit 17. ADHI ratings and credit scores 18

3

16 14

A-

A-

A-

A-

A-

A

A

A

A

A

A

A

A

A

A

A

A

12

2

10

1.5

8 6

1

4

0.5

Debt to Equity (RHS)

Debt to Equity Industry (RHS)

Rating (LHS)

1Q15

4Q14

3Q14

2Q14

1Q14

4Q13

3Q13

2Q13

1Q13

4Q12

3Q12

2Q12

1Q12

4Q11

3Q11

2Q11

1Q11

2 0

2.5

0

Credit Score (LHS)

Source: Pefindo, Bloomberg, Danareksa Estimates Ratings agency Pefindo gave ADHI a ‘Negative’ outlook given that no significant improvement in ADHI’s financial performance was expected in the near term. In a peers’ comparison, ADHI’s debt to equity ratio (DER) has always been above the industry average (it stood at 1.4x in 1Q15).

Lembaga pemeringkat Pefindo memberikan outlook ‘Negatif’ terhadap ADHI untuk mengantisipasi tidak adanya peningkatan pada kinerja keuangan dalam waktu dekat. Dibandingkan dengan perusahaan sejenis lainnya, rasio debt to equity (DER) perusahaan selalu berada di atas rata-rata industri dimana rasio ini berada di level 1,4x pada 1Q15.

Exhibit 18.ADHI’s financial highlights (IDR bn)

Exhibit 19. ADHI’s outstanding bonds

2013 2014 change 1Q14 1Q15 change (%) (%) Revenue 9,800 8,654 -11.7% 1,440 1,241 -13.8% Operating Expense* 8,977 7,915 -11.8% 1,354 1,160 -14.3% Operating Income 823 738 -10.3% 86 80 -6.2% Net Income 408 327 -20.0% 17 11 -35.1% Total Assets 9,721 10,459 7.6% 9,335 10,975 17.6% Total Liabilities 8,172 8,707 6.5% 7,892 9,278 17.6% Total Equity 1,548 1,752 13.1% 1,443 1,697 17.6%

Bond ID Issue Mature Rating Tenor Coupon Par Value Date Date (%) (IDR bn) ADHI01ACN1 3-Jul-12 3-Jul-17 idA 5 9.35 375 ADHI01BCN1 3-Jul-12 3-Jul-19 idA 7 9.8 250 ADHISM1CN1 3-Jul-12 3-Jul-17 idA(sy) 5 0 125 ADHI01ACN2 15-Mar-13 15-Mar-18 idA 5 8.1 125 ADHI01BCN2 15-Mar-13 15-Mar-20 idA 7 8.5 500 ADHISM1CN2 15-Mar-13 15-Mar-18 idA(sy) 5 8.1 125

Source: Company *incl. cost of revenues and operating expense

Source: IDX

Total

1,500

9

Property Sector New Hope for Brisker Growth Supportive regulation to encourage growth in the property sector In an effort to boost growth in Indonesia’s property sector which has faced strong headwinds recently - Bank Indonesia (BI) has loosened its down payment regulation for the House Ownership Program (KPR). As such, under the new Loan-toValue policy, the down payment for property credit has been reduced to 20% from 30% previously, even though the down payment amount gets progressively higher for additional house purchases. Furthermore, the Government is also revising the law which will eventually allow foreigners to buy, own, inherit and trade luxury apartments with a minimum value of IDR5 billion (USD0.38 million). This policy move will not only generate more tax income, but also help to deepen the Indonesian property market.

Peraturan yang mendorong pertumbuhan sektor properti

Residential property: slow growth continues A slowing pace of price increases and slower sales growth are likely to be sustained in Indonesia’s property market. In 1Q15, the residential property price index stood at 184.25, reflecting soft growth in both quarterly terms of 1.44% (vs 1.54% in the previous quarter) and yearly terms with growth of 6.27% (vs 6.29% in 4Q14). Residential property sales also recorded slower growth of 26.63% qoq compared to 40.07% qoq in the previous quarter. The sluggish growth is also reflected in House Ownership Credit (KPR) growth which only reached 0.12% qoq (vs 2.56% in 4Q14), amounting to IDR317.8 trillion.

Properti residensial: perlambatan masih berlanjut Perlambatan kenaikan harga rumah dan melambatnya pertumbuhan penjualan properti residensial masih mewarnai kinerja properti Indonesia. Harga properti residensial pada 1Q15 berada pada level 184,25, angka ini menggambarkan perlambatan yang terjadi baik secara triwulanan sebesar 1,44% (vs 1,54% pada triwulan sebelumnya) maupun secara tahunan dengan pertumbuhan 6,27% (vs. 6,29% di 4Q14). Penjualan properti residensial di 1Q15 juga menunjukkan perlambatan dengan pertumbuhan 26,63% qoq dibandingkan 40,07% qoq pada triwulan sebelumnya. Perlambatan juga tercermin dari total Kredit Pemilikan Rumah (KPR) yang hanya tumbuh 0,12% qoq (vs 2,56% di 4Q14) ke level Rp317,8 triliun.

Untuk mendukung pertumbuhan sektor properti Indonesia di tengah melambatnya pertumbuhan ekonomi, Bank Indonesia (BI) melonggarkan kewajiban uang muka bagi kredit kepemilikan rumah (KPR). Kebijakan Loan-to-Value (LTV) yang semula mewajibkan pembayaran uang muka sebesar 30% untuk kredit properti diturunkan menjadi 20%, namun besaran uang muka tetap berlaku progresif untuk setiap unit kepemilikan rumah. Selain itu, Pemerintah juga merevisi hukum yang nantinya akan mengizinkan Warga Negara Asing (ekspatriat) untuk membeli, memiliki, mewarisi dan memperdagangkan apartemen mewah dengan nilai minimum Rp5 miliar (US$0,38 juta). Langkah ini tidak hanya dapat menaikkan penerimaan pajak Negara, tetapi juga dapat memperluas pasar properti Indonesia.

Exhibit 1. Residential Property Price Index (IHPR) 180

15

150

12

120

Index**

6 60 3

30 0

% of change

9 90

0 I

II

III

2009

IV

I

II

III

2010 IHPR (LHS)

IV

I

II

III

IV

2011

I

II

III

2012 qoq (%) (RHS)

IV

I

II

III

2013

IV

I

II

III

IV

2014

I

II*

2015

yoy(%) (RHS)

Source: Pefindo, Bloomberg, Danareksa Estimates *prediction **base year 2002=100

10

Property Sector Commercial property: soft growth continues Lethargic growth has also been seen in commercial property, consisting of 2 groups: leased and strata. Leased property supply was relatively stagnant in 1Q15, whilst the occupancy rate dropped 29.17% (qoq) or down by 25.74% (yoy) as the holiday season ended and there were fewer meetings in hotels, especially for government institutions. The supply of strata property in 1Q15 was about the same as in 1Q14, although the sales and selling prices did show an increase.

Properti komersial: turut melambat Perlambatan juga terjadi pada properti komersial yang dibagi menjadi 2 kelompok, yaitu properti komersial sewa (leased) dan properti komersial jual (strata). Pasokan properti komersial sewa relatif stagnan pada 1Q15, sedangkan tingkat hunian menurun sebesar -29,17% (qoq) atau -25,74% (yoy) sehubungan dengan berakhirnya musim liburan dan penurunan kegiatan meeting di hotel terutama bagi instansi pemerintah. Pasokan properti komersial jual pada 1Q15 relatif sama dengan 1Q14, namun tingkat penjualan dan harga jual menunjukkan peningkatan. Exhibit 2. Occupancy/sales rate & rent tariffs/selling price growth in 1Q15 Leased Property Occupancy rate growth (%) qoq

Rent tariff growth (%)

yoy

qoq

yoy

Office

-3.33

-3.46

0.83

8.38

Retail

-0.19

-0.58

-2.84

-0.59

Apartment Hotel Convention Hall

-3.02

-3.92

-5.11

40.33

-29.17

-25.74

-22.57

2.9

-5.55

9.8

Strata Property Selling price growth (%)

Sales rate growth (%) qoq

yoy

qoq

yoy

Office

-0.24

-0.19

4.63

9.39

Retail

0.7

1.94

16.83

28.09

Condominium

4.9

0.75

-9.29

-7.4

Industrial land

13.57

15.18

19.64

33.34

Warehouse

2.29

Source: Bank Indonesia Bonds sector overview In the period 2011 – 7M15, the property sector issued 30 bonds amounting to IDR12.92 trillion (USD0.9 billion). These bonds comprised of 3, 5 and 7 year tenors with the majority being 5 year bonds. As seen in Exhibit 3, the largest amount of issuances in the property sector was done in 2013 amounting to IDR4.3 trillion (USD0.3 billion)

Exhibit 3. Bonds issuance in the property sector

17.64

Ulasan obligasi sektoral Sektor properti telah menerbitkan 30 obligasi dengan total nilai Rp12,92 triliun (US$0,9 miliar) sejak tahun 2011 sampai 7M15. Obligasi yang diterbitkan dalam rentang waktu ini tidak memiliki variasi tenor yang luas, yaitu hanya terdiri dari tenor 3, 5 dan 7 tahun dan didominasi oleh obligasi bertenor 5 tahun. Seperti yang terlihat pada Exhibit 3, volume penerbitan obligasi tertinggi sektor properti terjadi di tahun 2013 dengan nilai Rp4,3 triliun (US$0,3 miliar). Exhibit 4. Number of bonds based on tenor

6,000 2

5,000

IDR billion

4,300 4,000

9

3,400 2,801

3,000 2,000

1,221

1,200

19

1,000 0 2011

2012

2013

2014

7M15

3yr

Year Source: IDX

5yr

7yr

Source: IDX 11

Property Sector Exhibit 5. Maturity profile of outstanding bonds in property sector 6,000 4,854

5,000

IDR billion

4,000 3,000

2,957

2,679

2,000 1,221 1,000

485

321

2015

2016

2017

2018

2019

2020

Year Source: IDX As of July 2015, there were 29 outstanding bonds in the property sector amounting to IDR12.6 trillion (USD0.9 billion) with 3 of them maturing in 2H15. Based on the maturity profile as displayed in Exhibit 5, it can be seen that the largest amount of bonds maturing will take place in 2018 reaching IDR4.85 trillion (USD0.3 billion). Bond issuers are expected to issue new debts for either refinancing purposes or for business expansion.

Per Juli 2015, jumlah obligasi outstanding sektor properti berjumlah 29 obligasi dengan jumlah mencapai Rp12,6 triliun (US$0,9 miliar) dengan 3 obligasi yang akan jatuh tempo di 2H15. Dengan melihat profil jatuh tempo obligasi outstanding sektor properti pada Exhibit 5, dapat diketahui bahwa nilai jatuh tempo terbesar akan terjadi di tahun 2018 yang berjumlah Rp4,85 triliun (US$0,3 miliar). Para emiten diperkirakan akan menerbitkan surat hutang baru di tahun tersebut, baik untuk refinancing maupun untuk ekspansi perusahaan.

Exhibit 6. Ratings and danareksa credit score for property sector companies Rating Ticker 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 Agung Podomoro Land APLN A A A A A A A A A Duta Pertiwi DUTI - - - - - - - - Duta Anggada Realty DART - - A- A- A- A- A- A- ASummarecon Agung SMRA A - A+ A+ A+ A+ A+ A+ A+ Bakrieland Development ELTY CCC - - - - - - - Alam Sutera Realty ASRI A - - - - - - - Bumi Serpong Damai BSDE A+ AA- AA- AA- AA- AA- AA- AA- AAModernland Realty MDLN A- A- A- A- A- A- A- A A Perdana Gapura Prima GPRA - BBB+ BBB+ BBB+ BBB+ BBB+ BBB+ BBB+ Surya Semesta Internusa SSIA A A A A A A A A Intiland Development DILD - A A A A A A A A PT Nusa Konstruksi Enjiniring DGIK - - - - - - - - Credit Score Agung Podomoro Land Duta Pertiwi Duta Anggada Realty Summarecon Agung Bakrieland Development Alam Sutera Realty Bumi Serpong Damai Modernland Realty Perdana Gapura Prima Surya Semesta Internusa Intiland Development PT Nusa Konstruksi Enjiniring

Ticker 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 APLN 12.44 12.98 13.32 12.54 13.32 13.12 13.57 13.03 13.15 DUTI 10.24 15.65 15.55 14.09 14.89 15.14 14.03 15.22 14.47 DART 14.06 13.84 13.63 13.75 14.72 14.22 14.11 14.37 13.95 SMRA 14.19 13.93 13.98 13.66 15.19 14.21 14.32 14.37 13.97 ELTY 11.08 11.63 12.34 12.94 13.82 12.42 14.23 12.77 13.46 ASRI 13.25 13.35 14.52 12.78 13.60 13.71 14.38 13.92 14.26 BSDE 12.58 12.24 12.63 12.54 12.70 13.06 13.98 14.08 14.36 MDLN 12.18 11.49 11.07 11.87 13.57 13.03 14.19 16.37 14.94 GPRA 13.27 12.60 13.36 12.05 13.04 13.19 11.49 11.88 13.02 SSIA 12.78 13.71 13.53 12.80 13.66 13.92 13.14 14.06 14.14 DILD 12.62 12.23 11.94 11.98 12.81 12.61 12.39 13.98 12.93 DGIK 13.88 12.83 12.32 12.86 13.00 13.07 13.27 13.07 13.26

Source: Pefindo, Bloomberg, Danareksa Estimates 12

Property Sector Rating dan credit score masih di level yang sama Perlambatan pertumbuhan yang terjadi di sektor properti tidak mengakibatkan adanya penurunan rating pada perusahaan di sektor ini. Dari 12 perusahaan yang tercatat pada Exhibit 6, 3 perusahaan memiliki rating yang konsisten, 3 perusahaan mengalami rating upgrade, dan 6 perusahaan dengan rating expired. Perusahaan di sektor ini juga relatif mampu mempertahankan kinerja, dilihat dari nilai credit score dengan level yang stabil meskipun beberapa emiten memiliki range credit score yang cukup besar seperti DUTI dan MDLN.

Ratings and credit scores remained the same Sluggish growth in the property sector did not result in any rating downgrades for companies in this sector. From 12 of the companies displayed in Exhibit 6, 3 companies have consistently maintained their ratings, 3 companies experienced rating upgrades and 6 companies saw their ratings expire. The ability of companies in this sector to maintain their performance was reflected in their stable credit scores, albeit in a fairly wide range (DUTI and MDLN).

Exhibit 7. Ratings and Danareksa credit score graph for property sector companies 18 ASRI*

16

DUTI* ELTY*

14

GPRA*

12

MDLN SMRA

DART DGIK* DILD

BSDE SSIA*

APLN

10 8 6 4

AAA

AA+

AA

AA-

A+

A

A-

BBB+

BBB

BBB-

BB+

BB

BB-

B+

B

CCC

SD

D

0

B-

2

Source: Pefindo, Bloomberg, Danareksa Estimates *using the last rating for currently non-rating company

Exhibit 7 shows the relationship between the ratings and the credit scores of companies in the infrastructure sector. The 45° line in the middle of the chart represents the company’s fair value for its rating. As seen in the exhibit, none of the companies are at their fair value. However, there are 4 companies close to their fair value, namely DILD, APLN, SMRA and BSDE. A rating lower than the credit score implies less favorable business prospects which could limit business growth going forward. By contrast, a rating higher than the credit score suggests good business prospects and optimism toward the company’s future expansion.

Exhibit 7 menggambarkan hubungan antara rating dan credit score perusahaan di sektor properti. Garis 45 derajat di tengah area grafik merupakan nilai wajar (fair value) rating yang sesuai dengan perusahaan. Dari gambar terlihat bahwa meskipun tidak ada perusahaan yang berada pada nilai wajarnya, terdapat 4 perusahaan yang mendekati nilai nilai wajarnya, yaitu DILD, APLN, SMRA dan BSDE. Rating yang lebih rendah dibandingkan credit score menunjukkan prospek bisnis perusahaan yang dinilai kurang kondusif sehingga membatasi perkembangan bisnis perusahaan. Sebaliknya, rating yang lebih tinggi dari credit score menandakan prospek bisnis perusahaan yang baik dan optimisme atas ekspansi perusahaan.

13

Property Sector BSDE: Marketing sales above the target As seen in Exhibit 8, BSDE’s rating and credit score have moved inline with its rating consistently higher than its credit score, implying sound business prospects going forward. As of December 2014, the company’s marketing sales reached IDR6.5 trillion, or above the initial target of IDR6 trillion. Along with this increase, the company’s net income rose by 37.5% from IDR2.9 trillion to IDR4 trillion. Total assets grew by 11% to IDR31.1 trillion in 1Q15 due to increasing cash and cash equivalent and prepaid expenses. As of 1Q15, BSDE owned 39.3m2 of land bank worth IDR8.1 trillion.

Seperti yang terlihat pada Exhibit 8, rating dan credit score BSDE berjalan searah dimana rating secara konsisten lebih tinggi dari credit score, mengimplikasikan potensi bisnis perusahaan untuk berkembang di masa yang akan datang. Per Desember 2014, marketing sales perusahaan mencapai Rp6,5 triliun, melebihi target yang telah ditetapkan sebelumnya sebesar Rp6 triliun. Peningkatan penjualan ini diikuti dengan kenaikan laba bersih sebesar 37,5% dari Rp2,9 triliun menjadi Rp4 triliun. Total aset meningkat 11% menjadi Rp31,1 triliun pada 1Q15 yang antara lain berasal dari peningkatan kas dan setara kas serta biaya dibayar di muka. Per 1Q15, BSDE memiliki land bank seluas 39,3 juta m2 yang bernilai Rp8,1 triliun.

Exhibit 8. BSDE ratings and credit scores 16

A+

A+

A+ A+

AA- AA- AA- AA-

AA-

AA- AA- AA-

14

3 2.5

12 2

10 8

1.5

6

1

4 0.5

Debt to Equity

Debt to Equity Industry

Rating

1Q15

4Q14

3Q14

2Q14

1Q14

4Q13

3Q13

2Q13

1Q13

4Q12

3Q12

2Q12

1Q12

4Q11

3Q11

2Q11

0

1Q11

2

0

Credit Score

Source: Pefindo, Bloomberg, Danareksa Estimates BSDE has a relatively low debt profile compared to similar companies, as reflected in its debt to equity ratio (DER) which has always been under 0.5x and often lower than the industry DER average. With equity exceeding its debts, the company has mostly depended on internal funds to undertake expansion. From 2Q14 to 1Q15, the company’s DER stood at around 0.2x.

BSDE memiliki profil hutang yang relatif rendah dibandingkan perusahaan sejenis lainnya, tercermin dari rasio debt to equity(DER) perusahaan yang selalu dibawah 0,5x dan seringkali lebih rendah dari rata-rata DER industri. Dengan jumlah ekuitas perusahaan yang lebih besar dari hutang, dapat dikatakan bahwa perusahaan mengandalkan dana internal untuk dalam melakukan ekspansi. Sejak 2Q14 sampai 1Q15, DER perusahaan berada di kisaran level 0,2x.

Exhibit 9. BSDE’s financial highlights (IDR bn)

Exhibit 10. BSDE’s outstanding bonds

2013 2014 change 1Q14 1Q15 change (%) (%) Revenue 5,741 5,572 -3.0% 1,262 1,624 28.7% Operating Expense* (2,832) (2,940) 3.8% (644) (700) 8.7% Operating Income 2,910 2,632 -9.6% 618 924 49.5% Net Income 2,906 3,996 37.5% 554 844 52.5% Total Assets 22,572 28,135 24.6% 23,577 31,188 32.3% Total Liabilities 9,157 9,661 5.5% 9,340 10,261 9.9% Total Equity 13,415 18,473 37.7% 14,238 20,927 47.0%

Bond ID BSDE01CN2 BSDE01ACN1 BSDE01BCN1 BSDE01CCN1

Source: Company *incl. cost of revenues and operating expense

Source: IDX

Issue Mature Rating Tenor Coupon Par Value Date Date (%) (IDR bn) 5-Jun-13 5-Jun-18 idAA- 5 8.375 1,750 4-Jul-12 4-Jul-15 idAA- 3 8 85 4-Jul-12 4-Jul-17 idAA- 5 9.25 479 4-Jul-12 4-Jul-19 idAA- 7 9.5 436

Total

2,750

14

Property Sector SSIA: Steady performance SSIA’s rating has remained at A since 3Q12. Exhibit XX shows that the credit score has often been higher than the company’s rating. Although the company has recorded sound financial performance with a relatively high credit score, there is concern the company would be hit by unfavorable business conditions. Economic slowdown has led to lower revenues from the property business unit. As a consequence, the company’s revenues dropped by 3% from IDR4.6 trillion to IDR4.4 trillion. Along with higher direct costs and higher operating costs, net income for the year dropped by 31.1% from IDR749 billion to IDR516 billion in 2014. As of 1Q15, SSIA owned 429 Ha (4.2 million m2) of land bank worth IDR408 billion).

Rating SSIA stabil di level A sejak 3Q12. Exhibit 11 menunjukkan bahwa seringkali credit score lebih tinggi dari rating perusahaan. Meskipun dilihat dari aspek keuangan perusahaan memiliki kinerja yang baik dengan credit score yang cukup tinggi, kinerja perusahaan dikhawatirkan terkena dampak negatif dari lingkungan usaha yang tidak kondusif. Perlambatan ekonomi yang terjadi telah menyebabkan turunnya pendapatan usaha dari unit usaha properti sehingga pendapatan perusahaan di tahun 2014 turun 3% dari Rp4,6 triliun menjadi 4,4 triliun. Selain penurunan pendapatan, adanya kenaikan pada beban langsung dan beban usaha juga turut menyebabkan turunnya laba tahun berjalan SSIA turun 31,1% dari Rp749 miliar menjadi Rp516 miliar di tahun 2014. Per 1Q15, SSIA memiliki land bank seluas 429 Ha (4,2 juta m2) bernilai Rp408 miliar.

Exhibit 11. SSIA ratings and credit scores 16

3

14

2.5

12

A

A

A

A

A

A

A

A

A

A

A

10 8

2 1.5

6

1

4 0.5

2

Debt to Equity

Debt to Equity Industry

Rating

1Q15

4Q14

3Q14

2Q14

1Q14

4Q13

3Q13

2Q13

1Q13

4Q12

3Q12

2Q12

1Q12

4Q11

3Q11

2Q11

0

1Q11

0

Credit Score

Source: Pefindo, Bloomberg, Danareksa Estimates Even though SSIA’s debt to equity ratio (DER) has always been above the industry average, the ratio has stayed at a relatively low level below 1x. The ratio stood at 0.38x in 1Q15, or lower than the bonds’ covenant maximum level of 2x.

Meskipun rasio debt to equity (DER) SSIA selalu berada di atas rata-rata industri, rasio ini sebenarnya berada di level yang cukup rendah, yaitu < 1x. DER perusahaan berada di level 0,38x pada 1Q15, angka ini masih lebih rendah dari covenant pada perjanjian obligasi dimana nilai maksimum DER yang diperbolehkan adalah 2x.

Exhibit 12.SSIA’s financial highlights (IDR bn)

Exhibit 13. SSIA’s outstanding bonds

2013 2014 change 1Q14 1Q15 change (%) (%) Revenue 4,583 4,464 -2.6% 918 1,317 43.5% Operating Expense* (3,607) (3,887) 7.8% (859) (1,031) 20.0% Operating Income 976 578 -40.8% 59 287 385.0% Net Income 749 516 -31.1% 32 227 600.6% Total Assets 5,817 5,993 3.0% 5,853 6,185 5.7% Total Liabilities 3,226 2,985 -7.5% 3,233 2,838 -12.2% Total Equity 2,589 3,009 16.2% 2,621 3,348 27.7%

Bond ID SSIA01A SSIA01B

Source: Company *incl. direct cost and operating expense

Source: IDX

Issue Mature Rating Tenor Coupon Par Value Date Date (%) (IDR bn) 6-Nov-12 6-Nov-15 idA 3 8.3 150 6-Nov-12 6-Nov-17 idA 5 9.3 550

Total

700

15

Property Sector MDLN: Still going strong After having its rating upgraded in 4Q14, MDLN’s rating has stayed at A. In Exhibit 14, it can be seen that the credit score was in an increasing trend and that it exceeded the rating since 2Q13. A higher credit score indicates sound performance but the business prospects are considered limited. In this case, the agency rating Pefindo stated that MDLN’s rating reflects the concerns of execution risks involved in developing new projects in new areas. In 2014, the company’s revenues grew 54% from IDR1.8 trillion to IDR2.8 trillion with net income amounting to IDR711 billion. In 2013, MDLN made acquisitions which caused the operating income and net income to surge. The table in Exhibit 15 shows that even without the impact from acquisitions, the company’s operating income and net income still recorded growth in 2014.

Setelah mengalami upgrade pada 4Q14, rating MDLN berada di level A. Pada Exhibit 14 dapat terlihat credit score MDLN yang memiliki tren meningkat dan melebihi ratingnya sejak 2Q13. Credit score yang lebih tinggi menunjukkan kinerja perusahaan yang baik namun prospek usaha dinilai masih terbatas. Dalam hal ini, lembaga pemeringkat Pefindo menyatakan bahwa rating yang diberikan kepada MDLN menggambarkan concernnya terhadap risiko atas pengembangan proyek baru MDLN di area baru. Di tahun 2014, MDLN berhasil mencatat kenaikan pendapatan sebesar 54% dari Rp1,8 triliun menjadi Rp2,8 triliun dengan laba bersih Rp711 miliar. Pada tahun 2013, perusahaan melakukan akuisisi yang menyebabkan naiknya laba usaha dan laba bersih. Tabel di Exhibit 15 menampilkan ikhtisar keuangan MDLN. Tanpa mengikutsertakan efek dari adanya akuisisi, dapat dilihat bahwa laba usaha dan laba bersih di tahun 2014 masih menunjukkan peningkatan.

Exhibit 14. MDLN ratings and credit score 18

3

16

2.5

14 12

A-

10

A-

A-

A-

A-

A-

A-

A-

A-

A

A

1.5

8 6

1

4

0.5

Debt to Equity

Debt to Equity Industry

Rating

1Q15

4Q14

3Q14

2Q14

1Q14

4Q13

3Q13

2Q13

1Q13

4Q12

3Q12

2Q12

1Q12

4Q11

3Q11

2Q11

1Q11

2 0

2

0

Credit Score

Source: Pefindo, Bloomberg, Danareksa Estimates MDLN’s debt to equity ratio (DER) has always been higher than the industry average yet manageable below 1x. With the DER standing at 0.6x in 1Q15, the company was still able to meet the requirements in its bonds agreement with a maximum permitted figure of 1.5x.

MDLN mempunyai rasio debt to equity (DER) yang selalu berada di atas rata-rata industri namun dengan nilai yang terjaga di bawah 1x. Dengan DER yang berada di level 0,6x pada 1Q15, perusahaan masih memenuhi persyaratan dalam perjanjian hutang obligasinya dimana nilai maksimal DER yang diperbolehkan adalah 1,5x.

Exhibit 15. MDLN’s financial highlights (IDR bn)

Exhibit 16. MDLN’s outstanding bonds

2013 2014 change 1Q14 1Q15 change (%) (%) Revenue 1,844 2,840 54.0% 789 906 14.9% Operating Expense* (922) (1,591) 72.6% (279) (574) 105.9% Operating Income** 922 1,249 35.4% 510 332 -34.9% Net Income** 709 711 0.3% 390 181 -53.5% Total Assets 9,648 10,447 8.3% 9,525 10,993 15.4% Total Liabilities 4,972 5,116 2.9% 4,460 5,478 22.8% Total Equity 4,676 5,331 14.0% 5,065 5,515 8.9%

Bond ID MDLN02B MDLN02A

Source: Company *incl. cost of revenues and operating expense **excl. gain of previously held equity interest of IDR1,742

Source: IDX

Issue Mature Rating Tenor Coupon Par Value Date Date (%) (IDR bn) 27-Dec-12 27-Dec-17 idA- 5 11 250 27-Dec-12 27-Dec-15 idA- 3 10.75 250

Total

500

16

Appendices Appendix 1. Outstanding bonds in the infrastructure sector Bond ID Bond Name Issue Date Mature Date Rating Tenor Coupon (%) Par Value (IDR bn) BRAP01 PTPP01CN2 WSKT01CN1 JSMR01CN2T PRTL01 TBIG01BCN1 PPLN01ACN2 PPLN01BCN2 SIPPLN01ACN2 SIPPLN01BCN2 JSMR01BCN1S JSMR01CCN1S PPLN01ACN1 PPLN01BCN1 SIPPLN01CN1 PTHK01A PTHK01B PTHK01C PTPP01CN1 ADHI01ACN2 ADHI01BCN2 ADHISM1CN2 SSMM01A SSMM01B SISSMM01 ADHI01ACN1 ADHI01BCN1 ADHISM1CN1

Obligasi I Brantas Abipraya Tahun 2015 Obligasi Berkelanjutan I PP Tahap II Tahun 2015 Obligasi Berkelanjutan I Waskita Karya Tahap I Tahun 2014 Obligasi Berkelanjutan I Jasa Marga Tahap II Tahun 2014 Seri T Dengan Tingkat Bunga Tetap Obligasi Protelindo I Tahun 2014 Obligasi Berkelanjutan I Tower Bersama Infrastructure Tahap I Tahun 2013 Seri B Obligasi Berkelanjutan I PLN Tahap II Tahun 2013 Seri A Obligasi Berkelanjutan I PLN Tahap II Tahun 2013 Seri B Sukuk Ijarah Berkelanjutan I PLN Tahap II Tahun 2013 Seri A Sukuk Ijarah Berkelanjutan I PLN Tahap II Tahun 2013 Seri B Obligasi Berkelanjutan I Jasa Marga Tahap I Tahun 2013 Seri S Seri B Obligasi Berkelanjutan I Jasa Marga Tahap I Tahun 2013 Seri S Seri C Obligasi Berkelanjutan I PLN Tahap I Tahun 2013 Seri A Obligasi Berkelanjutan I PLN Tahap I Tahun 2013 Seri B Sukuk Berkelanjutan I PLN Tahap I Tahun 2013 Obligasi I Hutama Karya Tahun 2013 Seri A Obligasi I Hutama Karya Tahun 2013 Seri B Obligasi I Hutama Karya Tahun 2013 Seri C Obligasi Berkelanjutan I PP Tahap I Tahun 2013 Obligasi Berkelanjutan I ADHI Tahap II Tahun 2013 Seri A Obligasi Berkelanjutan I ADHI Tahap II Tahun 2013 Seri B Sukuk Mudharabah Berkelanjutan I ADHI Tahap II Tahun 2013 Obligasi Sumberdaya Sewatama I 2012 Seri A Obligasi Sumberdaya Sewatama I 2012 Seri B Sukuk Ijarah Sumberdaya Sewatama I 2012 Obligasi Bekelanjutan I ADHI Tahap I Tahun 2012 Seri A Obligasi Bekelanjutan I ADHI Tahap I Tahun 2012 Seri B Sukuk Mudharabah Berkelanjutan I ADHI Tahap I Tahun 2012

8-Apr-15 24-Feb-15 18-Nov-14

8-Apr-18 24-Feb-20 18-Nov-17

idBBB+ idA idA

3 5 3

11.5 10.2 10.4

300 300 500

19-Sep-14

19-Sep-19

idAA

5

9.85

1,000

28-Feb-14 12-Dec-13

28-Feb-17 12-Dec-16

AA-(idn) AA-(idn)

3 3

10.5 10

1,000 190

10-Dec-13

10-Dec-18

idAAA

5

9

593

10-Dec-13

10-Dec-23

idAAA

10

9.6

651

10-Dec-13

10-Dec-18 idAAA(sy)

5

9

321

10-Dec-13

10-Dec-23 idAAA(sy)

10

9.6

108

27-Sep-13

27-Sep-16

idAA

3

8.7

400

27-Sep-13

27-Sep-18

idAA

5

8.9

1,000

5-Jul-13

5-Jul-20

idAAA

7

8

182

5-Jul-13

5-Jul-23

idAAA

10

8.25

697

5-Jul-13 28-Jun-13 28-Jun-13 28-Jun-13 19-Mar-13 15-Mar-13

5-Jul-20 28-Jun-16 28-Jun-18 28-Jun-20 19-Mar-18 15-Mar-18

idAAA idA- idA- idA- idA- idA

7 3 5 7 5 5

8 8.75 9.1 9.5 8.375 8.1

121 135 290 325 700 125

15-Mar-13

15-Mar-20

idA

7

8.5

500

15-Mar-13

15-Mar-18

idA(sy)

5

8.1

125

30-Nov-12 30-Nov-12 30-Nov-12 3-Jul-12

30-Nov-15 30-Nov-17 30-Nov-17 3-Jul-17

idA idA idA(sy) idA

3 5 5 5

8.6 9.6 9.6 9.35

219 581 200 375

3-Jul-12

3-Jul-19

idA

7

9.8

250

3-Jul-12

3-Jul-17

idA(sy)

5

0

125

Source: IDX

17

Appendices Appendix 1. Outstanding bonds in the infrastructure sector (cont’d) Bond ID Bond Name Issue Date Mature Date Rating Tenor Coupon (%) Par Value (IDR bn) WSKT02B JMPD14JM10 PPLN12A PPLN12B SIKPPLN04A SIKPPLN04B PPLN11A PPLN11B SIKPPLN03A SIKPPLN03B PPLN10B SIKPPLN02B PPLN09A PPLN09B SIKPPLN01 JMPD13R JMPD12Q PPLN08A PPLN08B PPLN08C

Obligasi II Waskita Karya Tahun 2012 Seri B Obligasi Jasa Marga XIV Seri JM-10 Obligasi PLN XII Tahun 2010 Seri A Obligasi PLN XII Tahun 2010 Seri B Sukuk Ijarah PLN V Tahun 2010 Seri A Sukuk Ijarah PLN V Tahun 2010 Seri B Obligasi PLN XI Tahun 2010 Seri A Obligasi PLN XI Tahun 2010 Seri B Sukuk Ijarah PLN IV Tahun 2010 Seri A Sukuk Ijarah PLN IV Tahun 2010 Seri B Obligasi PLN X Tahun 2009 Seri B Sukuk Ijarah PLN III Tahun 2009 Seri B Obligasi PLN IX Tahun 2007 Seri A Obligasi PLN IX Tahun 2007 Seri B Sukuk Ijarah PLN II Tahun 2007 Jasa Marga XIII Seri R Tahun 2007 Jasa Marga XII Seri Q Tahun 2006 PLN VIII Tahun 2006 Seri A PLN VIII Tahun 2006 Seri B Syariah Ijarah PLN I Tahun 2006

5-Jun-12 12-Oct-10 8-Jul-10 8-Jul-10 8-Jul-10 8-Jul-10 12-Jan-10 12-Jan-10 12-Jan-10 12-Jan-10 9-Jan-09 9-Jan-09 10-Jul-07 10-Jul-07 10-Jul-07 21-Jun-07 6-Jul-06 21-Jun-06 21-Jun-06 21-Jun-06

5-Jun-17 12-Oct-20 8-Jul-15 8-Jul-22 8-Jul-15 8-Jul-22 12-Jan-17 12-Jan-20 12-Jan-17 12-Jan-20 9-Jan-16 9-Jan-16 10-Jul-17 10-Jul-22 10-Jul-17 21-Jun-17 6-Jul-16 21-Jun-16 21-Jun-21 21-Jun-16

idA- idAA idAA+ idAA+ idAA+(sy) idAA+(sy) idAA+ idAA+ idAA+(sy) idAA+(sy) AA- AA- idAA+ idAA+ idAA+(sy) idAA idAA idAA+ idAA+ idAA+(sy)

5 10 5 12 5 12 7 10 7 10 7 7 10 15 10 10 10 10 15 10

9.75 9.35 9.7 10.4 9.7 10.4 11.95 12.55 11.95 12.55 15 15 10.4 12.25 10.4 10.25 13.5 13.6 13.75 13.6

675 1,000 645 1,855 160 340 920 1,783 130 167 425 467 1,500 1,200 300 1,500 1,000 1,335 865 200

Total

27,780

Source: IDX

18

Appendices Appendix 2. Outstanding bonds in the property sector Bond ID Bond Name Issue Date Mature Date Rating Tenor Coupon (%) Par Value (IDR Bn) MDLN01ACN1 MDLN01BCN1 SMRA01CN3 SISMRA01CN3 APLN01CN4 GWSA01CN1 APLN01CN3 SMRA01CN2 SISMRA01CN2 APLN01CN2 CTRR01A CTRR01B CTRR01C SMRA01CN1 SISMRA01CN1 DART01CN1 DILD01A DILD01B APLN01CN1 BSDE01CN2 MDLN02B MDLN02A SSIA01A SSIA01B APLN02 BSDE01ACN1 BSDE01BCN1 BSDE01CCN1 APLN01B

Obligasi Berkelanjutan I Modernland Realty 7-Jul-2015 7-Jul-2018 idA 3 12 600 Tahap I Tahun 2015 Seri A Obligasi Berkelanjutan I Modernland Realty 7-Jul-2015 7-Jul-2020 idA 5 12.5 150 Tahap I Tahun 2015 Seri B Obligasi Berkelanjutan I Summarecon Agung 22-Apr-15 22-Apr-18 idA+ 3 10.5 150 Tahap III Tahun 2015 Dengan Tingkat Bunga Tetap Sukuk Ijarah Berkelanjutan I Summarecon 22-Apr-15 22-Apr-18 idA+(sy) 3 10.5 150 Agung Tahap III Tahun 2015 Obligasi Berkelanjutan I Agung Podomoro 25-Mar-15 25-Mar-20 idA 5 11.25 99 Land Tahap IV Tahun 2015 dengan Tingkat Bunga Tetap Obligasi Berkelanjutan I Greenwood Sejahtera 14-Jan-15 14-Jan-20 BBB+(idn) 5 14.25 72 Tahap I Tahun 2014 Dengan Tingkat Bunga Tetap Obligasi Berkelanjutan I Agung Podomoro 19-Dec-14 19-Dec-19 idA 5 12.5 451 Land Tahap III Tahun 2014 Dengan Tingkat Bunga Tetap Obligasi Berkelanjulan I Summarecon Agung 10-Oct-14 10-Oct-19 idA+ 5 11.5 800 Tahap II Tahun 2014 Dengan Tingkat Bunga Tetap Sukuk Ijarah Berkelanjutan I Summarecon 10-Oct-14 10-Oct-19 idA+(sy) 5 11.5 300 Agung Tahap II Tahun 2014 Obligasi Berkelanjutan I Agung Podomoro 6-Jun-14 6-Jun-19 idA 5 12.25 750 Land Tahap II Tahun 2014 Dengan Tingkat Bunga Tetap Obligasi I Ciputra Residence Tahun 2014 2-Apr-14 2-Apr-17 A(idn) 3 11.4 200 Dengan Tingkat Bunga Tetap Seri A Obligasi I Ciputra Residence Tahun 2014 2-Apr-14 2-Apr-19 A(idn) 5 12.4 220 Dengan Tingkat Bunga Tetap Seri B Obligasi I Ciputra Residence Tahun 2014 2-Apr-14 2-Apr-21 A(idn) 7 13 80 Dengan Tingkat Bunga Tetap Seri C Obligasi Berkelanjutan I Summarecon 11-Dec-13 11-Dec-18 idA+ 5 10.85 450 Agung Tahap I Tahun 2013 Sukuk Ijarah Berkelanjutan I Summarecon 11-Dec-13 11-Dec-18 idA+(sy) 5 10.85 150 Agung Tahap I Tahun 2013 Obligasi Berkelanjutan I Duta Anggada Realty 8-Oct-13 8-Oct-18 idA- 5 12.25 250 Tahap I Tahun 2013 Obligasi PT Intiland Development 2013 Seri A 9-Jul-13 9-Jul-16 idA 3 9.75 346 Obligasi PT Intiland Development 2013 Seri B 9-Jul-13 9-Jul-18 idA 5 10 154 Obligasi Berkelanjutan I Agung Podomoro 27-Jun-13 27-Jun-18 idA 5 9.25 1200 Land Tahap I Tahun 2013 Obligasi Berkelanjutan I Bumi Serpong 5-Jun-13 5-Jun-18 idAA- 5 8.375 1750 Damai Tahap II Tahun 2013 Obligasi II Modernlend Realty Tahun 2012 27-Dec-12 27-Dec-17 idA- 5 11 250 Dengan Tingkat Bunga Tetap Seri B Obligasi II Modernlend Realty Tahun 2012 27-Dec-12 27-Dec-15 idA- 3 10.75 250 Dengan Tingkat Bunga Tetap Seri A Obligasi Surya Semesta Internusa I 2012 Seri A 6-Nov-12 6-Nov-15 idA 3 8.3 150 Obligasi Surya Semesta Internusa I 2012 Seri B 6-Nov-12 6-Nov-17 idA 5 9.3 550 Obligasi II Agung Podomoro Tahun 2012 15-Aug-12 15-Aug-17 idA 5 9.375 1200 Obligasi Berkelanjutan I Bumi Serpong 4-Jul-12 4-Jul-15 idAA- 3 8 85 Damai Tahap I Tahun 2012 Seri A Obligasi Berkelanjutan I Bumi Serpong 4-Jul-12 4-Jul-17 idAA- 5 9.25 479 Damai Tahap I Tahun 2012 Seri B Obligasi Berkelanjutan I Bumi Serpong 4-Jul-12 4-Jul-19 idAA- 7 9.5 436 Damai Tahap I Tahun 2012 Seri C Obligasi I Agung Podomoro Land 2011 Seri B 25-Aug-11 25-Aug-16 idA 5 11 875

Total

12,597

Source: IDX

19

Appendices Appendix 3. Danareksa Credit Score: A closer look Danareksa Credit Score is a quantitative measurement method to ascertain the creditworthiness of a company by undertaking statistical analysis of the company’s financial indicators. Some of these financial indicators are revenues, total assets, working capital, retained earnings, and cash flow from operations. The model uses quarterly data since 2007. As of 1Q15, 132 companies were included in developing the DCS model.

Danareksa Credit Score (DCS) merupakan metode penilaian kuantitatif untuk mengetahui creditworthiness suatu perusahaan melalui analisa statistik atas indikator-indikator keuangan perusahaan tersebut. Indikator keuangan yang digunakan untuk membangun model DCS antara lain pendapatan, total aset, modal kerja, laba ditahan, dan arus kas dari operasi. Model ini menggunakan data kuartal tiap perusahaan sejak tahun 2007. Per 1Q15, terdapat 132 perusahaan non keuangan di Indonesia yang digunakan dalam membangun model DCS.

To develop a reliable credit score model which can be applied to all the companies listed on the Indonesian Stock Exchange (BEI) and to companies that have issued corporate bonds, a benchmark is needed to measure the suitability of the model in comparison to the company’s position in the market as shown by its rating. DCS uses the rating from PT Pemeringkat Efek Indonesia (Pefindo) as the main parameter. The credit score ranges from 0 – 18, whereby each value corresponds to a particular Pefindo rating, as depicted in the table below.

Untuk mendapatkan model credit score handal yang dapat diaplikasikan terhadap setiap perusahan yang tercatat di Bursa Efek Indonesia (BEI) dan perusahaan yang telah menerbitkan obligasi korporasi, diperlukan suatu parameter utama untuk mengukur kesesuaian model dengan posisi perusahaan di dalam pasar yang dicerminkan oleh ratingnya. DCS menggunakan rating dari PT Pemeringkat Efek Indonesia (Pefindo) sebagai parameter utama. Dalam model ini dilakukan numerisasi credit score dengan nilal yang berkisar antara 0-18 dimana tiap-tiap nilai tersebut mencerminkan kesetaraan dengan tingkat rating tertentu dari Pefindo, seperti yang tergambar pada tabel berikut:

Safe Zone

Distress Zone

Grey Zone

Credit Score

Rating

Credit Score

Rating

Credit Score

Rating

= 18 17.00 - 17.99 16.00 - 16.99 15.00 - 15.99 14.00 - 14.99 13.00 - 13.99 12.00 - 12.99

AAA AA+ AA AA- A+ A A-

11.00 - 11.99 10.00 - 10.99 9.00 - 9.99 8.00 - 8.99 7.00 - 7.99 6.00 - 6.99

BBB+ BBB BBB- BB+ BB BB-

5.00 - 5.99 4.00 - 4.99 3.00 - 3.99 2.00 - 2.99 1.00 - 1.99 0 - 0.99

B+ B B- CCC SD D

Each credit score falls into one of three investment zones. The safe zone is for companies with credit scores ranging from 12 – 18, depicting companies with low default risk and a high probability of fulfilling all their obligations, including making principal and coupon payments on the bonds. The grey zone covers credit scores ranging from 6 – 11.99, depicting companies with moderate to high default risk. As for the distress zone, the credit score ranges from 0 – 5.99 and depicts companies with extremely high default risk with a high probability that the company is not able to meet its obligations which includes making principal and coupon payments.

Hasil credit score yang didapatkan akan dikelompokkan menjadi 3 zona investasi. Safe zone dikategorikan untuk perusahaan dengan credit score antara 12 - 18, merepresentasikan perusahaan dengan risiko gagal bayar yang rendah dan memiliki probabilita tinggi untuk memenuhi semua kewajiban obligasinya berupa pokok dan kupon. Grey zone diperuntukkan perusahaan dengan credit score antara 6 - 11.99, mewakili perusahaan dengan risiko gagal bayar yang moderat dan tinggi. Sedangkan Distress zone untuk perusahaan dengan credit score antara 0 – 5.99 yang menggambarkan perusahaan dengan risiko gagal bayar sangat tinggi dengan probabilita yang juga tinggi bahwa perusahaan tidak dapat memenuhi kewajiban obligasi, baik pokok maupun kuponnya.

20

DEBT RESEARCH TEAM Telp No. Fax No.

+62-21-29555777 +62-21-3501709



Head of Debt Research Yudistira Slamet [email protected] ext. 3400 Credit Analyst Production & Database Management Amir A. Dalimunthe Eka Nuraini [email protected] ext. 3405 [email protected] ext. 3407 Ayesha Ardelia [email protected] ext. 3406 Market Analyst Melissa Hartono Rifki Rizal [email protected] ext. 3402 [email protected] ext. 3404 DEBT CAPITAL MARKET TEAM Telp No. Fax No. Head of Debt Capital Market Breisga Nawangsidi [email protected]

+62-21-29555777 +62-21-3501724/25

ext. 3217

Debt Sales & Brokerage Debt Trading & Investment Setyo H. Purnomo Romi Mulyadi [email protected] ext. 3226 [email protected] Rina Rimawati D Indra Figrachanda [email protected] ext. 3223 [email protected] Putrika Mayadipta [email protected] ext. 3215 Ariningtyas W. Agustina [email protected] ext. 3224 Hernita Dwi Ariesandhy [email protected] ext. 3216 Tia Aprianti [email protected] ext. 3225

ext. 3213 ext. 3214







21

PT Danareksa Sekuritas 1st-3rd Fl, Danareksa Building Jl. Merdeka Selatan No. 14 Jakarta, INDONESIA Tel : (62-21) 3509888 Fax : 62 21 3501709 DISCLAIMER The information contained in this report has been taken from sources which we deem reliable. However, none of P.T. Danareksa Sekuritas and/or its affiliated companies and/or their respective employees and/or agents makes any representation or warranty (express or implied) or accepts any responsibility or liability as to, or in relation to, the accuracy or completeness of the information and opinions contained in this report or as to any information contained in this report or any other such information or opinions remaining unchanged after the issue hereof. This document does not constitute, nor is it calculated to invite, an offer or invitation to subscribe for or purchase any securities or financial instruments and neither this document nor anything contained herein shall form the basis for or be relied upon in connection with any contract or commitment whatsoever. To the extent that any securities or financial instruments or issues are discussed in this report, please note that P.T. Danareksa Sekuritas and/or its affiliated companies and/or their respective employees and/or agents may from time to time make markets in such securities or financial instruments, hold share options, rights and/or warrants in respect thereof and may, as principal or agent, buy or sell such securities or financial instruments. No action has been or will be taken in any country or jurisdiction that would permit a public offering of any investments referred to in this document, or possession or distribution of this document, or any other offering or publicity material relating to any company or investment mentioned in this document, in any country or jurisdiction where action for that purpose is required. We have no responsibility to update this report in respect of events and circumstances occurring after the date of this report. We expressly disclaim any responsibility or liability (express or implied) of P.T. Danareksa Sekuritas and/or its affiliated companies and/or their respective employees and/or agents whatsoever and howsoever arising (including, without limitation for any claims, proceedings, actions, suits, losses, expenses, damages or costs) which may be brought against or suffered by any person as a result of acting in reliance upon the whole or any part of the contents of this report and neither P.T. Danareksa Sekuritas and/or its affiliated companies and/or their respective employees and/or agents accepts liability for any errors, omissions or mis-statements, negligent or otherwise, in this report and any liability in respect of this report or any inaccuracy herein or omission herefrom which might otherwise arise is hereby expressly disclaimed. Accordingly, none of P.T Danareksa Sekuritas and/or its affiliated companies and/or their respective employees and/or agents shall be liable for any direct, indirect or consequential loss or damage suffered by any person as a result of relying on any statement or omission in any information contained in this report. The information contained in this report is not to be taken as any recommendation made by P.T. Danareksa Sekuritas and/or its affiliated companies and/or their employees and/or agents to enter into any agreement with regard to any investment mentioned in this document. This report is prepared for general circulation. It does not have regard to the specific person who may receive this report. In considering any investment you should make your own independent assessment and seek your own professional financial and legal advice. U.S. Distribution: This report is only intended for distribution in the United States to “major U.S. institutional investors” as defined by Rule 15a-6 under the Securities Exchange Act of 1934 and may not be reproduced, transmitted and/or distributed, directly or indirectly, to any other person in the United States. Hong Kong Distribution: This document has not been registered as a prospectus with the Registrar of Companies in Hong Kong and may not be issued or passed on in Hong Kong to any persons other than to a person whose ordinary business is to buy and sell shares or debentures. UK Distribution : This document has not been approved as an investment advertisement in the United Kingdom pursuant to Section 57 of the Financial Services Act 1986 and may not be issued or passed on in the United Kingdom except to a person who is of a kind described in Article 11(3) of the Financial Services Act 1986 (Investment Advertisements) (Exemption) Order 1996 or is a person to whom the document may otherwise lawfully be issued or passed on. At your request, this report is being provided to you as a potential investor who is a person of a kind described in Article 11(3) of the Financial Services Act 1986 (Investment Advertisement) (Exemption) Order 1995 despite our pointing out to you that this report should not be relied upon by you. Accordingly any degree of reliance placed on this report in your decision to make any investment will be at your own risk. Japanese Distribution: This report is not intended to serve as a solicitation in connection with any offering or secondary distribution of securities under the Securities and Exchange Law, nor does it contain any ‘investment judgment’ under the Investments Advisory Business Law.

22