Deutsche Bank

Markets Research
Asia

Indonesia

Strategy

Indo Strategy

Date

27 August 2015

Strategy Update
Heriyanto Irawan

DB Portfolio

PT Deutsche Bank Verdhana Indonesia

Research Analyst
(+62) 21 2964 4521
heriyanto.irawan@db.com

The twist in commodity dynamics

Oddly, Indonesia is now a beneficiary of weak commodity prices. Plunging oil
prices may be responsible for a US$20bn (2/3) this year. Compared to the peak
in 2011, imports of oil and its derivatives may drop by US$44bn a 56%
collapse. Other commodities made up for another US$5bn fall, or one-sixth of
this years import decline. Contrary to perceptions, non-commodity imports
make up a smaller portion of import decline. The shift in commodity dynamics
may now put Indonesia into a trade surplus after three years of deficits;
potentially pushing CAD well below 2.5%. This, combined with inflation that is
on track to end the year below 5%, suggests the rupiah should be stable,
notwithstanding subdued local business confidence and external risk-off
sentiment.

August 2015

July 2015

June 2015

May 2015

April 2015

March 2015

February 2015

January 2015

December 2014

Plugging lost income

The global turmoil has erased some US$30bn from non-oil commodity exports DB Portfolio and JCI Index
DB Portfolio Index
JCI Index
so far this year (c.3.5% GDP). However, we think this can be more than 110
105
compensated for by US$73bn in planned infrastructure spending and regional 100
government transfers next year. Granted, the absorption rate may remain low 95
going into next year. However, even 60% absorption (equivalent to US$43bn) 90
should have a powerful and immediate compensating impact, and this does 85
not include the longer-term multiplier effect. This should help provide a base 80
for the weak economy. We note that political consolidation, which gives the
president better control of things, is a very pertinent non-technical aspect that
could unclog spending. Encouragingly, the political dynamics of late do Source: Bloomberg L.P., Deutsche Bank
provide some comfort. Moreover, the presidents hands-on approach with law
enforcement institutions and regional governments recently may help improve
overall spending as well.
DB Portfolio Whats in?
Since its inception, our portfolio of 15 stocks has moved by -17.0% vs. -17.3%
for JCI and -20.1% for MXID. We have added in BNI in the latest portfolio
update as it has relatively defensive earnings (front-loaded credit costs) and a
P/BV valuation that is 1SD below its mean since 2005. Further details on BNI,
including a summary of earnings, can be found later in this report.
- BNIs profits to turn around in 2H15
While 1H15 profits were poor relative to other banks, 2H15 should be better
for BNI and its net profit turnaround could be much more pronounced than
peers. The turnaround should be led by decreasing credit costs, as the
management has frontloaded NPL downgrades and topped up provisioning
aggressively in 1H15. After the top-up, BNIs provisioning coverage is
comparable to the other top four Indonesian banks by assets, in contrast to the
lowest previously.

________________________________________________________________________________________________________________
Deutsche Bank AG/Hong Kong
This research has been prepared in association with PT Deutsche Bank Verdhana Indonesia. The opinions contained in
this report are those of PT Deutsche Bank Verdhana Indonesia.
Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should
be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should
consider this report as only a single factor in making their investment decision. DISCLOSURES AND ANALYST
CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MCI (P) 124/04/2015.

- Depressed valuation and turnaround could lead to re-rating

Amidst fears of an industry-wide NPL uptrend, BNIs share price has seen the
steepest fall from its 2015 peak (-41% for BNI, -28% on average for the other
top four banks), while its forward P/BV has dropped to 1SD below its mean
P/BV since 2005. This depressed valuation coupled with low expectations for
net profits despite a potential 2H15 turnaround should eventually result in a
re-rating and share price outperformance.
What's out?
We have taken out BMRI. Below, we highlight the reasons for its removal.
- The highest increase in restructured loans
Amongst the major banks, BMRI had the largest increase in restructured loans
of 120bps qoq to 4.2% in 2Q15 (versus the major banks average of 50bps
qoq). While BMRI has taken the necessary steps to review its loan accounts,
we note that its classified loan coverage of 42% in 2Q15 was down the most
on a qoq basis.
- Further risk of loan downgrades
Management is directing its focus to maintaining asset quality this year. The
bank has evaluated all corporate accounts to assess risks so that it can offer
proactive restructuring. A risk assessment at Bank Syariah Mandiri (BSM)
indicated a potential downgrade of Rp1.7tr. The bank is currently reviewing the
BSM business model to improve its asset quality.

Figure 1: Deutsche Bank Portfolio constituents

Company name

Ticker

Current
Mkt cap
Price
(lcy)

BIG CAPS
BCA
Telkom
BNI
Gudang Garam
Kalbe Farma
Indofood CBP
Indofood
Mitra Keluarga
Bumi Serpong Damai
Mayora Indah
MID/SMALL CAPS
Summarecon Agung
PTPP
Siloam Hospital
Wijaya Karya
Matahari Putra Prima

Daily
T/O

(US$ bn) (US$mn)

PER

BBCA.JK
TLKM.JK
BBNI.JK
GGRM.JK
KLBF.JK
ICBP.JK
INDF.JK
MIKA.JK
BSDE.JK
MYOR.JK

11,625
2,705
4,350
41,425
1,565
12,400
4,680
27,300
1,440
25,975

20.4
19.0
5.8
5.7
5.2
5.2
2.9
2.8
1.8
1.7

30.5
18.9
17.0
2.0
5.1
3.6
8.3
4.5
2.1
0.1

2015F
2015
16.6
16.9
9.4
14.7
31.1
21.6
9.4
67.9
10.8
28.6

SMRA.JK
PTPP.JK
SILO.JK
WIKA.JK
MPPA.JK

1,445
3,145
13,850
2,570
2,130

1.5
1.1
1.1
1.1
0.8

2.8
2.7
6.7
5.3
0.9

16.7
21.3
291.0
23.9
18.1

Source: Company data, Bloomberg Finance LP, Deutsche Bank estimates

EV/EBITDA

PBV

Sales growth

2016F
2016
15.1
15.8
7.6
13.2
25.8
19.3
8.4
56.3
9.3
20.8

2015F
2015
NA
5.8
NA
10.9
20.5
15.4
4.8
48.7
5.9
13.7

2016F
2016
NA
5.5
NA
10.0
17.0
13.3
4.1
40.6
4.2
10.9

2015F
2015
3.1
3.1
1.3
2.2
6.4
4.5
1.4
11.6
1.4
4.9

2016F
2016
2.7
2.9
1.1
2.0
5.6
4.0
1.3
9.9
1.3
4.1

2015F
2015
10.2
5.1
7.0
5.9
11.9
9.3
8.7
12.5
25.9
14.7

2016F
2016
12.1
7.4
10.4
10.3
14.2
10.9
9.7
20.4
15.8
17.3

14.9
16.2
202.2
18.0
15.9

11.2
9.4
32.7
11.9
10.5

9.7
7.5
23.8
9.4
8.8

3.3
4.6
9.2
3.6
3.4

2.8
3.6
8.8
3.1
2.9

8.1
38.6
25.2
14.7
15.3

22.5
21.3
24.3
29.1
14.6

EPS growth
2015F 2016F
2015
2016
4.5
10.2
5.7
7.0
(19.7)
22.6
1.2
10.8
15.2
20.4
28.4
11.9
13.4
10.9
7.6
20.6
(33.6)
16.3
84.1
37.0
(10.5)
32.3
(17.8)
7.6
13.9

12.0
30.8
43.9
34.6
14.5

ROE
2015F
2015
20.4
20.4
14.0
15.6
22.3
22.2
15.9
22.6
14.8
18.5

2016F
2016
19.2
19.1
15.3
15.7
23.3
21.8
15.9
19.0
14.6
21.3

21.2
25.0
3.2
14.7
20.4

20.5
25.5
4.5
17.1
19.9

27 August 2015
Indo Strategy

Benefiting from lower oil prices

Changing dynamics between soft and hard commodity prices shifted Indonesia
from having a hefty US$15bn p.a. commodity trade surplus in 2010 to being a
marginal net importer with a net commodity deficit of US$1bn p.a. by 2012.
But the sharply lower prices for oil and its petrochemical derivatives may now
see Indonesia register a commodity trade surplus of US$10bn p.a. this year.
This may reverse its overall external trade position into a surplus after three
years in deficit.
Much of Indonesias CAD improvement is obviously due to imports contracting
more than exports, but less well known is the fact that the major chunk of the
decline came from commodity imports. In fact, of the estimated US$31bn drop
this year (-17% yoy), some 80% can be attributed to the contraction in
commodity imports of -US$24bn yoy. The sharp decline in the prices of oil and
its derivatives (we assume a 2H oil price at US$55/bbl) may help push imports
down by US$19bn this year. Interestingly, we note that from the peak, imports
of oil and its derivatives may collapse by an enormous US$44bn, from
US$78bn in 2011 to an estimated US$34bn this year.
Contrary to perceptions, non-commodity imports, which have also declined as
purchasing power has been cut by the sharp rupiah losses, account for a
smaller portion of declining imports, estimated at -US$6bn yoy for the this year
(see Figure 6). Persistently weak oil prices may propel trade into a surplus after
three years of deficit; pushing CAD well below 2.5%.
Figure 2: Trade balance reversal into surplus

Figure 3: Lower oil prices have tilted the balance

25.0

200

20.0

180

15.0

160

10.0

140

5.0

120

100

(5.0)

80
FY08

FY09

FY10

FY11

FY12

Trade Balance US$bn (LHS)

FY13

78

80
70

53

50

30
20
FY09

FY10

FY11

FY12

FY13

O&G related Import

Other comdty import

Figure 5: Commodity imports down US$50bn from peak

130

14

120

12

120

Cmdty Imports US$bn

100

110

10

100

90

60

12
5

40

20

80

70

20

60

FY10

FY11

FY12

FY13

(4)

FY14

FY15F

50

40
"Cmdty TB US$bn (LHS)"

Source: Deutsche Bank and CEIC

Deutsche Bank AG/Hong Kong

Comdty Ex

Cmdty Im

12
9

80

FY09

40

Source: Deutsche Bank and CEIC

Figure 4: Commodity trade back into surplus, US$bn

FY08

60

34

Import US$bn (LHS)

Non Comdty import

Import

Source: Deutsche Bank and CEIC

(2)

90

FY08

FY14 FY15F

Exports

100

180
160
140
120
100
80
60
40
20
-

30
FY08

10
6

28

7
4
11

18

18

27

FY09

FY10

Crude Oil
Plastics, rubber
Soybean, wheat, corn, rice
Pulp & Paper

39

FY11

Oil products
Iron and Steel
Sugar

15

14

17

18

13
10

29

29

27

11

14

13

FY12

FY13

FY14

FY15F

10
8
16

Gas
Cotton
Organics Chemical

Source: Deutsche Bank and CEIC

Page 3

27 August 2015
Indo Strategy

Figure 6: Trade balance Commodity dynamics

US$bn

FY08

FY09

FY10

FY11

137

117

158

203

190

183

176

155

39

39

76

60

89

122

90

100

90

70

19

18

62

56

69

82

100

83

86

85

20

21

129

97

136

177

192

187

178

147

37

37

- Comdty

79

50

74

108

92

95

84

60

15

15

- Non-Comdty

50

47

61

69

100

91

94

88

22

22

20

22

26

(4)

10

15

14

10

12

Ex ports
- Comdty
- Non-Comdty
Import

Tra de ba la nce
- Comdty
- Non-Comdty

12

Imports US$bn

FY08

FY09

FY10

FY12

FY13

(2)

(4)

(1)
-

FY11

FY14

FY12

FY15F

(2)

(9)

(8)

FY13

1Q15

11
(3)

FY14

2Q15

FY15F

(1)

(1)

1Q15

2Q15

Oil and Gas (incl derivatives)

56

34

52

78

59

63

53

34

Other Comdty

23

16

23

30

33

32

31

25

Non Comdty

50

47

61

69

100

91

94

88

22

22

129

97

136

177

192

187

178

147

37

37

Tota l Imports

Source: Ministry of Finance, Deutsche Bank

Plugging lost income

In the shift from boom to bust, Indonesia saw USD30bn wiped out from total
non-oil commodity exports in the past 4 years, of which US$20bn came from
its top three commodity champions (coal, CPO and rubber). At the peak in
2011, combined commodity (non-O&G) exports were a sizeable US$80bn (9%
of GDP). This is far higher than the estimated US$52bn (6% of GDP) this year
and is partly attributed to the economic slowdown.
However, we note that this should be offset by infrastructure spending and
larger allocations to regional governments next year, totaling US$73bn. Due to
various factors, it makes sense to assume a lower absorption rate. But even on
a modest 60%, it would still be a hefty US$43bn (assuming absorption rates of
80% for infrastructure spending worth US$22bn and 50% for regional transfers
worth US$50bn). This should have a powerful and immediate compensating
impact, not including the longer-term multiplier effect, providing a base for the
weak economy.
Figure 7: Some US$30bn wiped out (3.5% GDP)

Figure 8: Commodity non-oil & gas exports

80

Cmdty Non O&G Exports US$bn

80
61

50

54
46

40

52

41

40

30
20
10

20

10
FY09

FY10

FY11

FY12

FY13

FY14

FY15F

Source: Ministry of Finance. Deutsche Bank

8
4
8

30

FY08

14

50

60

60

60

67

70

Cmdty Non O&G Exports US$bn

70

80

9
16

16

6
5
11

11

14

19

FY08

FY09

FY10

Coal
Ore, Slag, Ash
Aluminium

22

5
8

7
9

2
7

19

21

14
27

FY11

18
FY12

CPO
Iron and Steel etc
Nickel

24
FY13

3
6
19

21

17

FY14

FY15F

Rubber
Copper
Tins

Source: Ministry of Finance, Deutsche Bank

Figure 9: Infrastructure spending and regional government transfers US$73bn in FY16

FY15 Rptrn

FY16 Rptrn

FY16 US$bn

Infra spending

290

314

22

Absorption %
81%

FY16 US$bn spending

18

- central govt

214

184

13

90%

12

- regional govt

41

79

50%

- direct injection to SOE

36

50

100%

Regional transfer ex-infra

624

703

50

50%

25

Total spending

914

1,016

73

60%

43

Source: Ministry of Finance, Deutsche Bank

Page 4

Deutsche Bank AG/Hong Kong

27 August 2015
Indo Strategy

Figure 10: BNI summary

Assumptions

2014

Rptr

2013

2014

2015F

LDR (%)

86

88

87

87

Interest Income

26.5

33.4

34.8

38.9

Loan % Total Assets

65

67

66

66

- Loan Related

22.6

28.6

30.4

33.2

Bonds % Total Assets

14

15

20

21

- Others (incl govt. bonds)

3.9

4.8

4.4

5.7

CAR (%)

14.9

16.3

16.3

16.4

NPL (%)

2.2

2.0

2.0

2.0

Net interest Income

Coverage (%)

127

128

240

327

Other operating revenue

20

20

14

15

ROAE (%)

2015F

2016F

Income Statement Summary

2013

Interest expense

7.4

11.0

10.2

11.4

19.1

22.4

24.5

27.5

9.4

10.7

10.9

11.6

Total operating income

28.5

33.1

35.4

39.1

Total operating expense

17.3

19.7

24.7

26.0

Net operating income

11.2

13.3

10.7

13.1

Pre-provision income

14.0

17.2

18.5

21.1

9.1

10.8

8.7

10.6

Net income

Valuation

2013

2014

2015F

2016F

23

17

10

12

PE (x)

10

PB (x)

CAR (%)

15

16

16

ROE (%)

20

20

14

Quarterly Earnings Summary

Rptr

NII grow th

Price vs Earnings (Index = 100 in Jan'14)

170

Share price

2016F

3Q14

4Q14

1Q15

2Q15

NII

5.5

5.8

5.9

5.9

Total op. income

9.5

9.4

9.3

7.0

PPOP

4.5

4.2

4.7

4.0

16

PBT

3.3

3.8

3.5

(0.4)

15

Net profit

2.6

3.1

2.7

(0.4)

Consensus Earnings Estimate (Rptr)

15F Earnings

14

160

150

13

140

12

130

120

11

110
100

10

90
Jan-14 Apr-14

Jul-14

Oct-14

Jan-15 Apr-15

Mar-14
Jul-15

PB (x)
2.0

Jun-14

Sep-14

Dec-14

FY15 Cons

Mar-15

Jun-15

FY16 Cons

Share Price Performances YTD

30%
20%
10%
0%

1.5

-10%
-20%

1.0
Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15

-30%
Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15

BBNI IJ Equity

JCI

Source: Company, Deutsche Bank

Deutsche Bank AG/Hong Kong

Page 5

27 August 2015
Indo Strategy

Appendix 1
Important Disclosures
Additional information available upon request
*Prices are current as of the end of the previous trading session unless otherwise indicated and are sourced from
local exchanges via Reuters, Bloomberg and other vendors . Other information is sourced from Deutsche Bank,
subject companies, and other sources. For disclosures pertaining to recommendations or estimates made on
securities other than the primary subject of this research, please see the most recently published company report or
visit our global disclosure look-up page on our website at http://gm.db.com/ger/disclosure/DisclosureDirectory.eqsr

Analyst Certification
The views expressed in this report accurately reflect the personal views of the undersigned lead analyst(s). In addition,
the undersigned lead analyst(s) has not and will not receive any compensation for providing a specific recommendation
or view in this report. Heriyanto Irawan
Equity rating key
Buy: Based on a current 12- month view of total
share-holder return (TSR = percentage change in
share price from current price to projected target price
plus pro-jected dividend yield ) , we recommend that
investors buy the stock.
Sell: Based on a current 12-month view of total shareholder return, we recommend that investors sell the
stock
Hold: We take a neutral view on the stock 12-months
out and, based on this time horizon, do not
recommend either a Buy or Sell.
Notes:
1. Newly issued research recommendations and
target prices always supersede previously published
research.
2. Ratings definitions prior to 27 January, 2007 were:

Equity rating dispersion and banking relationships

450
400
350
300
250
200
150
100
50
0

52 %
38 %

24 %

Buy

18 %
Hold

Companies Covered

10 %
16 %
Sell

Cos. w/ Banking Relationship

Asia-Pacific Universe

Buy: Expected total return (including dividends)

of 10% or more over a 12-month period
Hold:
Expected
total
return
(including
dividends) between -10% and 10% over a 12month period
Sell: Expected total return (including dividends)
of -10% or worse over a 12-month period

Regulatory Disclosures
1.Important Additional Conflict Disclosures
Aside from within this report, important conflict disclosures can also be found at https://gm.db.com/equities under the
"Disclosures Lookup" and "Legal" tabs. Investors are strongly encouraged to review this information before investing.

2.Short-Term Trade Ideas

Deutsche Bank equity research analysts sometimes have shorter-term trade ideas (known as SOLAR ideas) that are
consistent or inconsistent with Deutsche Bank's existing longer term ratings. These trade ideas can be found at the
SOLAR link at http://gm.db.com.

Page 6

Deutsche Bank AG/Hong Kong

27 August 2015
Indo Strategy

Additional Information
The information and opinions in this report were prepared by Deutsche Bank AG or one of its affiliates (collectively
"Deutsche Bank"). Though the information herein is believed to be reliable and has been obtained from public sources
believed to be reliable, Deutsche Bank makes no representation as to its accuracy or completeness.
Deutsche Bank may consider this report in deciding to trade as principal. It may also engage in transactions, for its own
account or with customers, in a manner inconsistent with the views taken in this research report. Others within
Deutsche Bank, including strategists, sales staff and other analysts, may take views that are inconsistent with those
taken in this research report. Deutsche Bank issues a variety of research products, including fundamental analysis,
equity-linked analysis, quantitative analysis and trade ideas. Recommendations contained in one type of communication
may differ from recommendations contained in others, whether as a result of differing time horizons, methodologies or
otherwise. Deutsche Bank and/or its affiliates may also be holding debt securities of the issuers it writes on.
Analysts are paid in part based on the profitability of Deutsche Bank AG and its affiliates, which includes investment
banking revenues.
Opinions, estimates and projections constitute the current judgment of the author as of the date of this report. They do
not necessarily reflect the opinions of Deutsche Bank and are subject to change without notice. Deutsche Bank has no
obligation to update, modify or amend this report or to otherwise notify a recipient thereof if any opinion, forecast or
estimate contained herein changes or subsequently becomes inaccurate. This report is provided for informational
purposes only. It is not an offer or a solicitation of an offer to buy or sell any financial instruments or to participate in any
particular trading strategy. Target prices are inherently imprecise and a product of the analysts judgment. The financial
instruments discussed in this report may not be suitable for all investors and investors must make their own informed
investment decisions. Prices and availability of financial instruments are subject to change without notice and
investment transactions can lead to losses as a result of price fluctuations and other factors. If a financial instrument is
denominated in a currency other than an investor's currency, a change in exchange rates may adversely affect the
investment. Past performance is not necessarily indicative of future results. Unless otherwise indicated, prices are
current as of the end of the previous trading session, and are sourced from local exchanges via Reuters, Bloomberg and
other vendors. Data is sourced from Deutsche Bank, subject companies, and in some cases, other parties.
Macroeconomic fluctuations often account for most of the risks associated with exposures to instruments that promise
to pay fixed or variable interest rates. For an investor who is long fixed rate instruments (thus receiving these cash
flows), increases in interest rates naturally lift the discount factors applied to the expected cash flows and thus cause a
loss. The longer the maturity of a certain cash flow and the higher the move in the discount factor, the higher will be the
loss. Upside surprises in inflation, fiscal funding needs, and FX depreciation rates are among the most common adverse
macroeconomic shocks to receivers. But counterparty exposure, issuer creditworthiness, client segmentation, regulation
(including changes in assets holding limits for different types of investors), changes in tax policies, currency
convertibility (which may constrain currency conversion, repatriation of profits and/or the liquidation of positions), and
settlement issues related to local clearing houses are also important risk factors to be considered. The sensitivity of fixed
income instruments to macroeconomic shocks may be mitigated by indexing the contracted cash flows to inflation, to
FX depreciation, or to specified interest rates these are common in emerging markets. It is important to note that the
index fixings may -- by construction -- lag or mis-measure the actual move in the underlying variables they are intended
to track. The choice of the proper fixing (or metric) is particularly important in swaps markets, where floating coupon
rates (i.e., coupons indexed to a typically short-dated interest rate reference index) are exchanged for fixed coupons. It is
also important to acknowledge that funding in a currency that differs from the currency in which coupons are
denominated carries FX risk. Naturally, options on swaps (swaptions) also bear the risks typical to options in addition to
the
risks
related
to
rates
movements.
Derivative transactions involve numerous risks including, among others, market, counterparty default and illiquidity risk.
The appropriateness or otherwise of these products for use by investors is dependent on the investors' own
circumstances including their tax position, their regulatory environment and the nature of their other assets and
liabilities, and as such, investors should take expert legal and financial advice before entering into any transaction similar
Deutsche Bank AG/Hong Kong

Page 7

27 August 2015
Indo Strategy

to or inspired by the contents of this publication. The risk of loss in futures trading and options, foreign or domestic, can
be substantial. As a result of the high degree of leverage obtainable in futures and options trading, losses may be
incurred that are greater than the amount of funds initially deposited. Trading in options involves risk and is not suitable
for all investors. Prior to buying or selling an option investors must review the "Characteristics and Risks of Standardized
Options, at http://www.optionsclearing.com/about/publications/character-risks.jsp. If you are unable to access the
website please contact your Deutsche Bank representative for a copy of this important document.
Participants in foreign exchange transactions may incur risks arising from several factors, including the following: ( i)
exchange rates can be volatile and are subject to large fluctuations; ( ii) the value of currencies may be affected by
numerous market factors, including world and national economic, political and regulatory events, events in equity and
debt markets and changes in interest rates; and (iii) currencies may be subject to devaluation or government imposed
exchange controls which could affect the value of the currency. Investors in securities such as ADRs, whose values are
affected by the currency of an underlying security, effectively assume currency risk.
Unless governing law provides otherwise, all transactions should be executed through the Deutsche Bank entity in the
investor's
home
jurisdiction.
United States: Approved and/or distributed by Deutsche Bank Securities Incorporated, a member of FINRA, NFA and
SIPC. Non-U.S. analysts may not be associated persons of Deutsche Bank Securities Incorporated and therefore may not
be subject to FINRA regulations concerning communications with subject company, public appearances and securities
held by the analysts.
Germany: Approved and/or distributed by Deutsche Bank AG, a joint stock corporation with limited liability incorporated
in the Federal Republic of Germany with its principal office in Frankfurt am Main. Deutsche Bank AG is authorized under
German Banking Law (competent authority: European Central Bank) and is subject to supervision by the European
Central Bank and by BaFin, Germanys Federal Financial Supervisory Authority.
United Kingdom: Approved and/or distributed by Deutsche Bank AG acting through its London Branch at Winchester
House, 1 Great Winchester Street, London EC2N 2DB. Deutsche Bank AG in the United Kingdom is authorised by the
Prudential Regulation Authority and is subject to limited regulation by the Prudential Regulation Authority and Financial
Conduct Authority. Details about the extent of our authorisation and regulation are available on request.
Hong Kong: Distributed by Deutsche Bank AG, Hong Kong Branch.
Korea:

Distributed

by

Deutsche

Securities

Korea

Co.

South Africa: Deutsche Bank AG Johannesburg is incorporated in the Federal Republic of Germany (Branch Register
Number
in
South
Africa:
1998/003298/10).
Singapore: by Deutsche Bank AG, Singapore Branch or Deutsche Securities Asia Limited, Singapore Branch (One Raffles
Quay #18-00 South Tower Singapore 048583, +65 6423 8001), which may be contacted in respect of any matters
arising from, or in connection with, this report. Where this report is issued or promulgated in Singapore to a person who
is not an accredited investor, expert investor or institutional investor (as defined in the applicable Singapore laws and
regulations),
they
accept
legal
responsibility
to
such
person
for
its
contents.
Japan: Approved and/or distributed by Deutsche Securities Inc.(DSI). Registration number - Registered as a financial
instruments dealer by the Head of the Kanto Local Finance Bureau (Kinsho) No. 117. Member of associations: JSDA,
Type II Financial Instruments Firms Association, The Financial Futures Association of Japan, and Japan Investment
Advisers Association. Commissions and risks involved in stock transactions - for stock transactions, we charge stock
commissions and consumption tax by multiplying the transaction amount by the commission rate agreed with each
customer. Stock transactions can lead to losses as a result of share price fluctuations and other factors. Transactions in
foreign stocks can lead to additional losses stemming from foreign exchange fluctuations. We may also charge
commissions and fees for certain categories of investment advice, products and services. Recommended investment
strategies, products and services carry the risk of losses to principal and other losses as a result of changes in market
and/or economic trends, and/or fluctuations in market value. Before deciding on the purchase of financial products
Page 8

Deutsche Bank AG/Hong Kong

27 August 2015
Indo Strategy

and/or services, customers should carefully read the relevant disclosures, prospectuses and other documentation.
"Moody's", "Standard & Poor's", and "Fitch" mentioned in this report are not registered credit rating agencies in Japan
unless Japan or "Nippon" is specifically designated in the name of the entity. Reports on Japanese listed companies not
written by analysts of DSI are written by Deutsche Bank Group's analysts with the coverage companies specified by DSI.
Some of the foreign securities stated on this report are not disclosed according to the Financial Instruments and
Exchange
Law
of
Japan.
Malaysia: Deutsche Bank AG and/or its affiliate(s) may maintain positions in the securities referred to herein and may
from time to time offer those securities for purchase or may have an interest to purchase such securities. Deutsche Bank
may
engage
in
transactions
in
a
manner
inconsistent
with
the
views
discussed
herein.
Qatar: Deutsche Bank AG in the Qatar Financial Centre (registered no. 00032) is regulated by the Qatar Financial Centre
Regulatory Authority. Deutsche Bank AG - QFC Branch may only undertake the financial services activities that fall
within the scope of its existing QFCRA license. Principal place of business in the QFC: Qatar Financial Centre, Tower,
West Bay, Level 5, PO Box 14928, Doha, Qatar. This information has been distributed by Deutsche Bank AG. Related
financial products or services are only available to Business Customers, as defined by the Qatar Financial Centre
Regulatory Authority.
Russia: This information, interpretation and opinions submitted herein are not in the context of, and do not constitute,
any appraisal or evaluation activity requiring a license in the Russian Federation.
Kingdom of Saudi Arabia: Deutsche Securities Saudi Arabia LLC Company, (registered no. 07073-37) is regulated by the
Capital Market Authority. Deutsche Securities Saudi Arabia may only undertake the financial services activities that fall
within the scope of its existing CMA license. Principal place of business in Saudi Arabia: King Fahad Road, Al Olaya
District,
P.O.
Box
301809,
Faisaliah
Tower
17th
Floor,
11372
Riyadh,
Saudi
Arabia.
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by the Dubai Financial Services Authority. Deutsche Bank AG - DIFC Branch may only undertake the financial services
activities that fall within the scope of its existing DFSA license. Principal place of business in the DIFC: Dubai
International Financial Centre, The Gate Village, Building 5, PO Box 504902, Dubai, U.A.E. This information has been
distributed by Deutsche Bank AG. Related financial products or services are only available to Professional Clients, as
defined by the Dubai Financial Services Authority.
Australia: Retail clients should obtain a copy of a Product Disclosure Statement (PDS) relating to any financial product
referred to in this report and consider the PDS before making any decision about whether to acquire the product. Please
refer
to
Australian
specific
research
disclosures
and
related
information
at
https://australia.db.com/australia/content/research-information.html
Australia and New Zealand: This research, and any access to it, is intended only for "wholesale clients" within the
meaning of the Australian Corporations Act and New Zealand Financial Advisors Act respectively.
Additional information relative to securities, other financial products or issuers discussed in this report is available upon
request. This report may not be reproduced, distributed or published by any person for any purpose without Deutsche
Bank's
prior
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consent.
Please
cite
source
when
quoting.
Copyright 2015 Deutsche Bank AG

Deutsche Bank AG/Hong Kong

Page 9

David Folkerts-Landau
Group Chief Economist
Member of the Group Executive Committee
Raj Hindocha
Global Chief Operating Officer
Research

Marcel Cassard
Global Head
FICC Research & Global Macro Economics

Steve Pollard
Global Head
Equity Research

Michael Spencer
Regional Head
Asia Pacific Research

Ralf Hoffmann
Regional Head
Deutsche Bank Research, Germany

Andreas Neubauer
Regional Head
Equity Research, Germany

International locations
Deutsche Bank AG
Deutsche Bank Place
Level 16
Corner of Hunter & Phillip Streets
Sydney, NSW 2000
Australia
Tel: (61) 2 8258 1234

Deutsche Bank AG
Groe Gallusstrae 10-14
60272 Frankfurt am Main
Germany
Tel: (49) 69 910 00

Deutsche Bank AG London

1 Great Winchester Street
London EC2N 2EQ
United Kingdom
Tel: (44) 20 7545 8000

Deutsche Bank Securities Inc.

60 Wall Street
New York, NY 10005
United States of America
Tel: (1) 212 250 2500

Deutsche Bank AG
Filiale Hongkong
International Commerce Centre,
1 Austin Road West,Kowloon,
Hong Kong
Tel: (852) 2203 8888

Deutsche Securities Inc.

2-11-1 Nagatacho
Sanno Park Tower
Chiyoda-ku, Tokyo 100-6171
Japan
Tel: (81) 3 5156 6770