BH - Mandiri Update PDF

OFFICE OF CHIEF ECONOMIST
September 2010
Contents
BI rate unchanged at 6.5%, p.02

Reserves requirement increased
Long rally after long holiday
Reviewing the Efforts towards
Sugar Self-Sufficiency 2014
p.03
p.08 Indonesia Update
p.16
Multistrada Arah Sarana: Indonesian’s Tire
Manufacturer
BI rate unchanged at 6.5%, Reserves requirement increased
Perusahaan Gas Negara: 65.7% grossp.34
Bank Indonesia decided to leave the benchmark rate unchanged at the board
margin post tariff hike meeting in September at 6.5%, inline with our and consensus estimate, although
Adaro Energy: Rupiah Attrition p.37 rising inflationary pressure is still pointed out as central bank’s main consideration.
Mandiri Current Forecast p.42 The central bank prefers to remove persistent excess liquidity by introducing higher
reserves requirement, which we believe, would also have tightening effect.
Indonesia Current Data (Table) p.43
After long holiday due to Ied celebration, the government’s rupiah bonds rose quite
Chief Economist significantly. From Sept 6 to 24, on average bond prices rose by 2.5%, providing a
Mirza Adityaswara total return investing in rupiah government bonds of 21.3%ytd. In term of USD the
Mirza.Adityaswara@bankmandiri.co.id return is higher, namely 26%, as rupiah strengthened against USD.
Reviewing the Efforts towards Sugar Self-Sufficiency 2014
Analyst Indonesia is currently playing a very insignificant role in the global sugar production.
Moch. Doddy Ariefianto Out of the total volume of global sugar production of 153 million tons, Indonesia only
Faisal Rino Bernando has a share of less than 2%, compared to Brazil which has a share of 22%, followed by
India with a share of 11%. Indonesia is recorded to have per capita consumption of
Nina Anggraeni sugar of 19 kgs/year, relatively lower than the consumption in Brazil, Europe, USA
Rini Setyowati and Thailand.
M. Ajie Maulendra
Multistrada Arah Sarana: Indonesian’s Tire Manufacturer
Nadia Kusuma Dewi We forecast the company’s revenue to grow at 33.9% CAGR over the next 2 years to
Nurul Yuniataqwa Karunia IDR3.7tn in FY2012 in accordance with capacity expansion. The growth will be
Sindi Paramita supported by increasing sales volume in radial tires and motorcycle tires, which we
Reny Eka Putri forecast to grow by CAGR of 23.1% and 26.5%, respectively in the year 2010F-12F.
Ahmad Subhan Irani Perusahaan Gas Negara: 65.7% gross margin post tariff hike
PGAS recorded a gross margin of 65.7% in 2Q10, up from 60.8% in 1Q10, and 59.3%
Publication Address: in 1H09. An increase in average gas price of 8.6% in Q2 to USD6.84/MMBTU helped
Bank Mandiri Head Office beefed up the margin
Office of Chief Economist
st Adaro Energy: Rupiah Attrition
21 Floor, Plaza Mandiri
Jalan Jend. Gatot Subroto Kav.36-38 ADRO’s 1H10 revenue of IDR12 tn was only 43.8% of our FY10 target, due to lower
average selling price and the US dollar’s depreciation. However coal production in
Jakarta 12190, Indonesia 1H10 increased 20% yoy to 21.6Mt and sales volume rose 22% to 21.8Mt.
Phone: (62-21) 5245516 / 5272
Fax: (62-21) 5210430
Sugar Production by Countries
Email:
Moch.Ariefianto@bankmandiri.co.id
Rino.Bernando@bankmandiri.co.id Others Brazil
24% 24%
Nina.Anggraeni@bankmandiri.co.id
Rini.Setyowati@bankmandiri.co.id
Ajie.Maulendra@bankmandiri.co.id
Nadia.Dewi@bankmandiri.co.id Indonesia
Nurul.Karunia@bankmandiri.co.id 2% Russia
2%
Sindi.Paramita@bankmandiri.co.id Pakistan India
Australia 11%
Reny.Putri@bankmandiri.co.id 2%
3%
Ahmad.Subhan@bankmandiri.co.id Mexico USA
3% 5%
W. Europe
See important disclaimer at the end of Thailand 10%
5% China
this material 9%
BI rate unchanged at 6.5%, Reserves requirement increased
Destry Damayanti (destry.damayanti@mandirisek.co.id),
Aldian Taloputra (aldian.taloputra@mandirisek.co.id),
BI rate stay unchanged Bank Indonesia decided to leave the benchmark rate
at 6.5% unchanged at the board meeting in September at 6.5%, inline
with our and consensus estimate, although rising inflationary
pressure is still pointed out as central bank’s main
consideration.
% Dec-09 Mar-10 Jun-10 Aug-10 Sep-10

Actual 6.5 6.5 6.5 6.5 6.5
Mandiri's Forecast 6.5 6.5 6.5 6.5 6.5
Consensus 6.5 6.5 6.5 6.5 6.5
CPI Inflation (% yoy) 2.78 3.43 5.05 6.44
Figure 1. BI Rate Summary. (Source: CEIC, Bloomberg, Mandiri Sekuritas)
Domestic demand However, the central bank choose introducing new reserves
remained as growth requirement (RR) arrangement in order to absorb persistent
backbone excess liquidity that potentially could drive inflationary
pressure and to push bank lending. The arrangement includes
increasing primary RR to 8% from previously 5% of the third
party fund (additional 3% will be remunerated around 2.5%)
and additional RR related to the loan-to-deposit ratio. The
banks that fail to meet the LDR target (78% to 100%) would be
penalized with higher RR (see figure 2).
Current New Effective Date Note

Primary 5% 8% 1-Nov-10 2.5% interest will be given to
additional 3% RR
No Interest will be given for bank
with below 8% primary RR
Secondary 2.50% 2.50% Still effective No interest
LDR linked - 0.1-0.2 of third party fund 1-Mar-11 No interest

should actual LDR missed
the targetted LDR (78%-
100%)
0.1 of third party fund will be
charged for evey 1ppt below
targetted LDR
0.2 of third party fund will be
charged for every 1ppt above
targetted LDR for banks with below
14% CAR
No charges for banks that exceed
targetted LDR that have CAR equal
to or above 14%
Figure 2. New Reserves Requirement. (Source: CEIC)
© Office of Chief Economist Page 2 of 26

Handy Yunianto (handy.yunianto@mandirisek.co.id)
10 year bond yields Weekly Currency Weekly YTD Inflation

yield YTD yield currency currency YoY %
Country
changes changes changes changes
24-Sep-10 3-Sep-10 (bps) (bps) 24-Sep-10 3-Sep-10 (%) (%) 24-Sep-10
Thailand 3.19 2.96 23 -99 30.71 31.17 -1.48 -7.97 3.4
Philippine 6.24 6.67 -43 -187 43.99 44.68 -1.54 -4.7 3.9
Vietnam 11.16 11.20 -4 -29 19,015 19,495 -2.46 2.90 8.2
Indonesia 7.75 8.16 -41 -231 8,958 9,004 -0.51 -4.74 6.2
Figure 3. Asian Bond Market Yield Movements. (Source: Bloomberg)
Review: Bond market rallied after long holiday. After long

holiday due to Ied celebration, the government’s rupiah bonds
rose quite significantly. From Sept 6 to 24, on average bond
prices rose by 2.5%, providing a total return investing in rupiah
government bonds of 21.3%ytd. In term of USD the return is
higher, namely 26%, as rupiah strengthened against the USD.
Yield curve bullish flattened. The 10-year rupiah sovereign

bond yield has dropped significantly to 7.75%- the lowest ever
as of 24-Sept after rising to 8.26% on 31-Aug. Meanwhile, the
short tenor 1-year yield was relative stable at 6%. This make
yield curve flattened the most since July-10. Bullish flattened
yield curve made the long duration portfolio (more than 7
years) to outperform by 6.2ppt ytd, compared to our Mandiri
Sekuritas Government Bond Index (MSGBI) for all tenors.
300
Al l tenors (more tha n
1yrs )
7-yea r Tenor
250
Total Return (Base year Dec-03=100)
200
150
100
50
Oct-06
Nov-03
Apr-04
Mar-07
Aug-07
Nov-08
Apr-09
May-
Sep-04
Feb-05
Jul-05
Dec-05
Jan-08
Jun-08
Sep-09
Feb-10
Jul-10
Figure 4. Flattening Yield Curve Make Long Duration Portfolio to Outperform (Source: Mandiri
Sekuritas Estimate)
Average YTM Total Return (incl. coupon rate %)
(%) MoM YoY YTD
Sep-10 MSGBI 7.8 3.5 24.3 21.3
Tenor more
than 7yr 8.3 4.5 30.8 27.5
Figure 5. Bullish Flattened Yield Curve Made The Long Duration Portfolio Duration Outperform.
(Source: Mandiri Sekuritas Estimate)
Spread 1/10yr
yield (ppt)
4
1
Jan-10
Feb-10
Mar-10
May-10
Jun-10
Jul-10
Sep-10
Figure 6. Yield Curve Flattened After BI Increased Reserve Requirement and Pessimism Over
The US Economy Has Eased. (Source: Bloomberg and Mandiri Sekuritas Estimate)
Two factor behind the rally

We think, there were two positive news to support bonds rally
in September. (1) In the global side: global risk appetite
increased as pessimism over the US economy has eased. The
US stock market has risen significantly by 3% after National
Bureau of Economic Research (NBER) said that US recession
was over. Although US passed the recession but the economic
growth is still expected to be lower as unemployment is still
high. Consensus forecasts 3Q GDP growth to be lower to
1.9%, with unemployment still high at 9.7%. This condition
will make the Fed to continue injecting liquidity in the market.
(2) On the domestic side: BI’s decision to increase reserve
requirement by 3ppt starting Nov-2010 will reduce inflation
expectation and it may push back any rate hike scenario
further to 1Q2011. August inflation was also reported below
market consensus 6.4% vs. 6.7%.

Foreign fund inflows still the main key driver for bond rally.
After slightly reducing their portfolio in the last two weeks by
almost IDR1tn, foreign investors became net buyers during the
week by mostly increasing their holdings of the long-end
tenors. Their holdings for the notes over 10-years increased
by IDR3.1tn during the weeks to IDR96.7tn. Thus foreigners’
total portfolio of bonds over 10-years rose slightly to 54.9%
from 54% in the week (picture 8)
Portfolio 1 Month- 2 Month- 3 Month- Year-to-

Net Buy/Sell Outstanding Weekly to-date to-date to-date date
TTM 0-2yr 22,499 560 -790 870 5,751 12,564
TTM 2-5yr 32,601 -134 98 864 3,969 11,240
TTM 5-10yr 26,139 553 76 9 66 2,681
TTM >10yr 98,834 2,173 2,698 6,110 8,232 45,591
TOTAL 180,073 3,152 2,082 7,852 18,018 72,076
as of 24-Sept, foreign holding stood at IDR180tn, accounting for 28% of total outstanding value
Figure 7. Foreigners Still Bullish on Rupiah Bond Market (IDR bn). (Source: DMO)
Tenor (yrs) Dec-08 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 24-Sep-10
0-2 7.05 9.20 9.83 9.38 9.39 8.79 8.43 10.33 12.56 13.08 12.49
2-5 23.26 19.78 18.08 18.08 16.35 15.52 14.54 17.67 18.43 18.26 18.10
5-10 16.89 21.72 23.37 23.77 22.79 21.34 20.70 16.09 15.17 14.64 14.52
>10 52.80 49.30 48.73 48.77 51.46 54.35 56.33 55.91 53.84 54.01 54.89
TOTAL 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Figure 8. Foreigners Portfolio in Government Bonds Portion by Tenor (%). (Source: DMO)
Primary and secondary market still has good demand

Total value of the transaction in the secondary bond market
was IDR5.6tn (vs. IDR4.8tn on the previous week) on average
per day. The most actively traded security was the long-end
series such as the 15-year FR40 and the 20-year FR52; both
comprising about 38% of the total trading volume during the
week. The FR40 was traded at 120, up by 1.1 percentage
points yielding 8.60% from a week earlier. Meanwhile, the
FR52 was also up by 0.2 percentage points to 112.29, yielding
9.15%. Our fair prices for those bonds are 118.50 and 112.39,
thus we think FR40 is traded above its fair value, meanwhile
we have no recommendation for the FR52 as it’s already
traded at its fair value.

Government bond auction: still has good demand. Total bid
on the bond auction on Tuesday was still high reaching
IDR15.1tn— slightly lower than in the previous auction of
IDR16.1tn. Demand for the long-term paper was strong with
the bid for the FR54 and newly issued FR56 reaching IDR9.0tn,
in contrast with demand for the short-term paper
SPN20110922 that reached only IDR2.8tn. The average yields
awarded were slightly below our fair yield estimate.
Government rejects the SPN issuances. The average yield
awarded for newly issued FR55, FR56 and FR54 were 7.58%
(vs. our estimates: 7.66% ranging 7.62-7.69%), 8.53% (8.53%
ranging 8.49%-8.57%) and 8.86% (8.87% ranging 8.82%-
8.92%), with the highest yields awarded being 7.59%, 8.56%,
and 8.875% respectively.
Thus the government has issued IDR142.4tn (incl. global bonds

issuances i.e. USD2bn) or more than 87% of the new total
target to finance budget deficit, which is projected to be 1.5%
of GDP this year. With seven bonds auction schedules for the
rest of the year, and assuming the government will issue
IDR3tn samurai bonds, thus on average the government will
only needs to issue IDR2.5tn in each auction.
Auction Date Bond Series

ON 6, 11, 21 year
28-Sep-10
SPN 1 year
5-Oct-10 IFR 5, 7, 10, 15, 20 year
ON 11, 20 year
12-Oct-10
SPN 1 year
ON 15, 20 year
26-Oct-10
SPN 1 year
ON 5, 11 year
9-Nov-10
SPN 1 year
ON 20, 30 year
23-Nov-10
SPN 1 year
14-Dec-10 ON 15, 30 year
(Revised) SPN 1 year
Figure 9. Government bonds scheduled: seven bond auctions left until year-end. (Source:
DMO)

2008 2009 2010F 2010F* 2010 YTD Remaining*
Budget deficit (% of GDP) (2.10) (2.40) (2.10) 1.50
Net Issuances 86.0 99.3 107.5 92.5 93.9 (1.4)
Domestic Bonds 46.6 97.3 140.1 125.1 123.8 1.2
Global bonds 39.3 46.7 38.0 38.0 18.6 19.5
Redemption+buybacks (40.3) (44.7) (70.6) (70.6) (48.5) (22.1)
Gross Issuances 126.3 144.6 178.1 163.1 142.4 20.7
Domestic Bonds 87.0 97.3 140.1 125.1 123.8 1.2
Convebtional FR/VR 46.5 54.5 59.4
T-bills/ZC bonds 19.6 25.2 32.8
Retail bonds (ORI & Sukuk) 16.2 8.5 16.0
Domestic sukuk 4.7 5.8 4.8
Private placement - 3.2 10.8
Global bonds 39.3 46.7 38.0 38.0 18.6 19.5
Yankee bonds 39.3 36.1 18.6
Global sukuk - 7.0 -
Samurai bonds - 3.6 -
Figure 10. Government has issued IDR142.4tn or more than 87% of the target this year.
(Source: DMO and Mandiri Sekuritas Estimate)
Outlook: Inflation and bond auctions the main factors to be

watched carefully .
September’s inflation figure will be released on 1-October. In
the last five years, average September inflation reached 0.64%
m-o-m. Our economist expects 0.5-0.7% m-o-m and 5.86%-
6.07% y-o-y inflation. Meanwhile, market consensus expected
inflation at upper range in September i.e. 0.7% m-o-m (5.9% y-
o-y). Bank Indonesia sees easing inflationary pressure as
demand for food has normalized after Moslem festivities. If
inflation is again below market consensus it will give further
positive sentiment to the bonds.

Reviewing the Efforts towards Sugar Self-Sufficiency 2014
M. Ajie Maulendra (ajie.maulendra@bankmandiri.co.id),
Indonesia is currently playing a very insignificant role in the

global sugar production. Out of the total volume of global
sugar production of 153 million tons, Indonesia only has a
share of less than 2%, compared to Brazil which has a share of
22%, followed by India with a share of 11%. Indonesia is
recorded to have per capita consumption of sugar of 19
kgs/year, relatively lower than the consumption in Brazil,
Europe, USA and Thailand. However, Indonesia has the
potentials to increase per capita consumption of sugar
considering its large population and strong basis of domestic
market, such as the food and beverage production.
Global Sugar Production & Sugar Production by Countries
Consumption (mn ton)
Million
Millionton
ton
Others Brazil
166.1 167.1 167.1 24% 24%
164.3
160.7
159.9
156.9 Indonesia
2% Russia
153 2% India
Pakistan
Australia 11%
2%
3%
Mexico USA
3% 5%
W. Europe
Thailand 10%
2006/2007 2007/2008 2008/2009 2009/2010 5% China
9%
Consum ption Production
Figure 11. Outlook of the global supply-demand of sugar. The Global Consumption of Sugar
increases on average by 2.1% during the last four years, which is not balanced by the growth of
sugar production of only –1.1% on average during the same period. (Source : Virtual Metals
Group Research).
Increasing Domestic Demands

Indonesia has relatively high demands for sugar. This is
because of the large size of its population as well as the
relatively high level of growth of the food and beverages
industry. The development of various sugar-based food and
beverage products provides a large market for sugar industry.
Out of approximately 4.6 million tons of sugar produced
domestically, 70% is consumed by households in the form of
white sugar, 23% is absorbed by food and beverage industry
and the rest is used by other industries (pharmacy and
alcohol-bioetanol).

Sugar Consumption per Capita Sugar Consumption by
(kg/year) Sector
Indonesia 18.9 Other

Industrie
Brazil 62.5
s
EU 36.4 Food & 7%
Beverage
US 30.5 Industry
Mexico
23%
44.3
Australia 49.6
Househol
Thailand 35.6 ds
70%
Pakistan 23
India 20.6
China 11.2
Figure 12. Per Capita Consumption of Sugar. Indonesia is very likely to become a large sugar
consuming country despite the fact that the current per capita consumption of sugar is still
relatively low. Such condition is caused by strong domestic market and the growth of food and
beverage industry. (Source: LMC International, Depperin)
Indonesian sugar industry has slightly different characteristics

than sugar industry in other countries. In everyday life, there
are two types of sugar, namely white crystal sugar and refined
sugar. Such classification is conducted based on its use, where
white crystal sugar is consumed by households while refined
sugar is used by industries. For example, food and beverage
industries use refined sugar as raw or additional materials in
processing their products.
Industries prefer refined sugar because its quality meets their
requirements in producing food and beverage products. The
quality of sugar can be seen clearer from the level of ICUMSA
in each of the types of sugar produced. ICUMSA also measures
the purity of sugar from other foreign particles during the
manufacturing process. The lower the level of ICUMSA of
sugar, the higher it’s quality. For example, food and beverage
industries need sugar with ICUMSA level of 45 in
manufacturing their products. Sugar with ICUMSA level of 45
is classified as refined sugar. As for sugar directly consumed by
households or better known as white crystal sugar has a level
of ICUMSA of 200-300.

Indonesia Sugar Consumption
(mn ton) 5.7
4.85 5.01
4.69
3.88 4 4.11
3.73
3.3 3.41 3.53
3.09
2.74
2.26
2.15
2.04
1.51
1.37
1.45
1.27
1.11
1.04
0.97
0.8
2.29
2.33
2.37
2.42
2.46
2.51
2.55
2.60
2.65
2.70
2.75
2.96
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010F 2014F
Household Consumption Industry Consumption
Figure 13. Domestic demands for sugar. The consumption of sugar by industries during the
period of 2000-2009 has increased by 11.6%, higher than the increase in the growth of
household sugar consumption by 2% during the same period. (Source: Ministry of State-owned
enterprises in agroindustry sector)
Sugar needed by industries, especially food and beverage

industry, is expected to have a high increase in several years
to come. The performance of food and beverage industry is
strongly supported by extensive domestic market, as most of
Indonesian population is within the range of young-productive
ages who tend to consume more instant food and beverage
products for practical reason. Therefore, the needs for sugar
up to 2014 is estimated to reach 5.7 million tons.
Suboptimal production
Out of the total current volume of 4.6 million tons of sugar
produced nationally, 56% is the production of white crystal
sugar, while 44% is the production of refined sugar. If we take
a closer look, during the period of 2003 – 2009, the production
of white crystal sugar has increase on average by 9% each
year, while refined sugar production has increased on average
by 40% each year.
2704
2624.1
2448.1 2400
2307
2217.7
2031.3
1617
2003 2004 2005 2006 2007 2008 2009 2010F
Figure 14. Production of white crystal sugar. Most white crystal sugar mills are located in Java
(47 units) and the rest are outside Java (14 units). Technically, sugar mills in Java are old, so that
their production is no longer optimal. (Source: Ministry of Trade and Industry, Ministry of State-
owned enterprises)
Currently, there are 61 white crystal sugar mills operating in
Indonesia. The total production capacity of those mills is 237
thousand tons per day. Those sugar mills are spread across
Java, Kalimantan and Sulawesi. The largest sugar producer is a
state-owned plantation, namely PTPN XI with a production
capacity of 46.4 thousand tons per day, followed by PTPN X
with a production capacity of 39 thousand tons per day. In
general, large-scale white crystal sugar mills have already
been integrated with sugar cane plantations as the provider of
their raw materials. White crystal sugar production process is
performed from the collection of sugar canes up to the phase
white crystal sugar.
The production of white crystal sugar in 2010 is estimated to
grow by -8.5% (yoy), or indicating a decrease to 2.4 million
tons from 2.6 million tons in 2009. The Government revised
the target of sugar production this year to be lower than the
initial target of 2.7 million tons. According to the Government,
this was because of the recent extreme climate change which
has lead to reduced sugar concentrate and decreased sugar
production.
In addition to white crystal sugar mills, there are several
refined sugar mills operating in Indonesia, which process raw
sugar as their raw material into refined sugar that is ready to
be consumed by industries. Raw sugar used as raw material
for refined sugar industry is mostly imported from various
countries, such as Thailand, Brazil and Australia. Raw sugar is
still not manufactured domestically because of several factors.
The first one is that sugar mills prefer to produce white crystal
sugar for economic reasons. The second one is that not all
domestic sugar mills are able to produce raw sugar meeting
the standards required by refined sugar industry.
Currently, there are eight players in refined sugar industry in
Indonesia with a total production capacity of 3.2 million tons
per year. The largest production capacity is currently held by
PT. Sentra Usahatama with a production capacity of 540
thousand tons per year. Furthermore, another player having
large capacity is PT. Jawamanis Rafinasi with a production
capacity of 533 thousand tons per year. Refined sugar is
required for fulfilling the needs of food and beverage industry
which needs sugar with certain standards, namely sugar with
ICUMSA level of 45. The existence of refined sugar industry is
expected to reduce imports of refined sugar.

Refined Sugar Production
(thousands ton)
2257
2031.8
1445.2
1256.4
1138.2
722
330.5 380.5
2003 2004 2005 2006 2007 2008 2009 2010F
Figure 15. Refined sugar. Domestic sale of refined sugar is only to industries and it does not
affect the market of white crystal sugar as confirmed by the Minister of Trades in Decree of
Industry and Trade No.527/MPP/Kep/9/2004. This is further confirmed in the letter of the
Minister of Trade to refined sugar producers Number 111/M-DAG/2/2009 dated 6 February
2009. (Source: Indocommercial, Ministry of Trade)
Domestic needs of sugar (household and industries) are

currently estimated to reach 4.85 million tons, while the total
sugar productions only reach 4.66 million tons. Such
inadequate supply of sugar has forced the Government to
import sugar in order to fulfill domestic needs. According to
the national balance of sugar, in 2009 Indonesia has actually
been able to fulfill the needs for white crystal sugar as
indicated by the fact that Indonesia did not need to import
white crystal sugar. However, in 2010 due to the decrease in
the production of white crystal sugar, it can be assured that
the Government would need to import white crystal sugar to
fulfill domestic needs.
Similarly, imports are also conducted to fulfill the domestic
needs for refined sugar, in fact the volume of imports of
refined sugar each year is larger than the volume of white
crystal sugar. With such data, we can conclude that thus far
the fulfillment of the needs for sugar for industrial purposes
are still far below the fulfillment of sugar for domestic
consumption. Whereas if we take a closer look at the data of
national sugar consumption, refined sugar indicates higher
growth than the growth of white crystal sugar.
There are several factors causing the suboptimal production of
sugar are as follows:
• Low level of land productivity and sugar concentrate at
some of sugar mills owned by PTPN compared to the same
of private sugar mills. One of the causes is the fact that
sugar mills owned by PTPN (mostly located in Java) have
old production machines, as they were constructed during

the Dutch colonial era, so that they are no longer efficient
in producing.
• Raw sugar for the refined sugar industry is still imported
entirely.
• The development of raw sugar industry for supplying raw
material for domestic refined sugar industry has not been
realized.
• Sugar cane and sugar production are still concentrated in
Java and Sumatra.
• In general, the production machinery of white sugar
companies are old, whereas the sugar company
revitalization program has not been implemented as
expected.
• Extreme climate change is affecting the productivity of
sugar cane crops.
Sugar Concentrate (%)
14
12
10
0
1930 1940 1955 1965 1975 1985 1995 1997 1999 2001 2003 2009
Figure 16. Sugar concentrate. In 1940s sugar concentrate could reach more than 10% One of
the factors was efficiency whenever sugar mills could not obtain supply of raw materials during
milling season. (Source: Bahari, Anonymous, DGI, Ditjenbun )
Towards sugar self-sufficiency

Domestic or industrial demands for sugar will surely be
increasing every year. It is estimated that in 2014 the total
national sugar consumption will reach 5.7 million tons. In
relation to that matter, the Government has launched a sugar
self-sufficiency program in 2014 with regard to three types of
sugar, namely white crystal sugar, refined sugar and raw
sugar.
Considering the currently existing capacity of the sugar
industry, both white crystal sugar and refined sugar, it seems
difficult to reach a production level of 5.7 million tons in 2014.
Therefore, to reach such production target of 5.7 million tons,
it is necessary to make new investments in sugar mills which

are integrated with sugar cane plantation, in addition to the
revitalization of sugar mills in order to increase their efficiency
in production activities. In a presentation in an international
seminar on sugar in Bali in July 2010, Agus Pakpahan in his
paper mentioned that 15 – 20 new sugar mills are required,
which are integrated to sugar cane plantations and building
synergy with the refinement industry. Such synergy with
refined sugar industry means that in addition to producing
white crystal sugar, the new sugar mills will be able to produce
raw sugar as raw materials required by the refined sugar
industry. Therefore, the refined sugar industry would not need
to import raw sugar.
The process to reach sugar self-sufficiency is currently
underway as several investors have conveyed their interest to
build new sugar mills. Previously, the government has
prepared a number of locations throughout the country to be
used for investment in sugar mills and sugar cane plantations.
The locations for investment in sugar are concentrated
outside Java, where the largest location prepared is in
Merauke Papua, sizing 300,000 hectares. The plan for building
new sugar mills will provide sugar mills with production
capacity from 8000 – 12000 tons cane per day.
Capacity
Potential Reserve
Company (TCD=Ton Cane Province Development Plan
Area (ha)
per Day)
PT. Wilmar 10000 8000 Merauke (Papua) 2011 – 2013
PT Bakrie Sumatera 50000 12000 Merauke (Papua) 2011 – 2013
PT Rosan Kencana Perkasa 19000 6000-10000 Mojokerto (East Java) 2010 – 2011
PT Bina Muda Perkasa 12000 8000 Konsel (South East Sulawesi) 2010 – 2012
PT Gemilang Unggul Luhur Abadi 21000 6000-8000 Tuban (East Java) 2011 – 2013
PT Gula Manis Tinanggea 10000 8000 Konsel (South East Sulawesi) 2011 – 2013
PT Permata Hijau Resources 5000 4500 Sambas (West Kalimantan) 2010 – 2012
PT Bina Muda Perkasa 20000 8000 Rembang (Central Java) 2010 – 2012
PT Sumber Mutiara Indah Perdana 20000 5000-10000 P.Rupat-Riau Islands 2009 – 2010
PT Duta Plantation Nusantara 4500 4500 Malang-Blitar (East Java) 2011 - 2013
PT. Sukses Mantap Sejahtera 15000 12000 Dompu (West Nusa Tenggara) 2010 – 2012
PT. Semesta Berjaya 18000 6000-8000 Damasraya (West Sumatera) 2010 – 2011
PT. Tripanca Group 7500 4000 Lamput (Lampung) 2009 – 2011
PT. ECO – X Energy Jaya 1000 5000-10000 Rembang (Central Java) Preliminary Study
PT. Cipta Agung Manis 18000 10000 Konsel (South East Sulawesi) Preliminary Study
PT. Sumber Mutiara Indah Perdana 36000 5000 Maros (South Sulawesi) Preliminary Study
PT. Santos Jaya Abadi 7000 5000 Konsel (North Sulawesi) Preliminary Study
PT. Nurindo Trade 5000 2000 Kampar (Riau) Preliminary Study
PT. Sabda Agung Yamato Persada 18000 8000 Rembang (Central Java) Preliminary Study
Figure 17. New investment plan in Sugar Mills. Investment required for building one sugar mill
with a capacity of 15,000 TCD is in the amount of IDR 1.5 trillion, while sugar mill with a capacity
of 10,000 TCD requires IDR 1 trillion and sugar mill with a capacity of 6,000 TCD needs IDR 600
billion.(source : Indonesian Sugar Association)
Investment in new sugar mills are mostly focused on locations
outside Java considering the limited availability of land for the
opening of sugar cane plantations. The availability of lands
outside Java is deemed to be high because there still many
locations remaining unused. However, the classic problem
occurring is the obstacles faced by investors when they are
arranging for land acquisition. The main problem is related to
overlapping of authorities in relation to forests (Ministry of
Forestry) especially with regard to spatial layout plan
throughout Indonesia, such as the conversion of forest areas
and clarity as to the status of land. Investors are often
confused whether the lands available can be converted for the
purpose of building sugar mills or they are categorized as
conservation forests.
In addition to the problem related to land status, another
important problem is the availability of adequate
infrastructure, such as roads and electricity. Inadequate
infrastructure, such as damaged roads and unstable supply of
electricity, will cause high costs for investors and such
conditions certainly constitute obstacles for investors in
realizing their investments.
In view of the aforementioned obstacles, the concrete
participation of the central and local governments must
absolutely be implemented, especially with regard to the
quick settlement of problems related to land permits and the
provision of adequate infrastructure. This must be
immediately conducted because 2014 will soon come.
The program for sugar self-sufficiency in 2014 will actually be

very useful for Indonesian people. One of the effects which
will surely occur is that this program will be able to reduce the
instability of domestic sugar prices. As we all have already
known, sugar is currently still imported, especially raw sugar
as raw materials for refined sugar produced for food and
beverage industry. Imports of raw sugar will indirectly make
food and beverage products vulnerable to exchange rate
fluctuation. In the end, in the event of depreciation of rupiah,
it will contribute to domestic inflation (imported inflation). In
short, sugar self-sufficiency can eliminate inflation to domestic
sugar prices so that there will be no need to import sugar.

However, the stability of sugar prices cannot be enforced by
only relying on sugar self-sufficiency. The Government must
observe and monitor properly the sugar distribution chain to
consumers. Usually, increase of the price of a commodity may
occur when there is an illegal action at the distribution level.
Therefore, the government and other relevant parties must

ensure the smooth flow of domestic sugar distribution so that
sugar prices will remain reasonable.
Internationa Sugar Price Domestic White Crystal

35 (USD/lb) Sugar price (IDR/kg)
12,000
30
25.94 10,000
25
8,000
20 19.59
6,000
15
4,000
10
5 2,000
0 0
Nov-06
Feb-07
May-07
Aug-07
Nov-07
Feb-08
May-08
Aug-08
Nov-08
Feb-09
May-09
Aug-09
Nov-09
Feb-10
May-10
Jan-07
Apr-07
Jul-07
O ct-07
Jan-08
Apr-08
Jul-08
O ct-08
Jan-09
Apr-09
Jul-09
O ct-09
Jan-10
Apr-10
Jul-10
Raw Sugar White Sugar
Figure 18. Movements of sugar prices. In 2010, it is projected that there would be a deficit in
the global production of sugar which would increase international sugar prices. Domestic price
of white crystal sugar in the first 6 months of 2010 has already increased by 43% (yoy). (Source:
USDA, CEIC )

Multistrada Arah Sarana: Indonesian’s Tire Manufacturer
Maria Renata (maria.renata@mandirisek.co.id)
Company in brief
PT Multistrada Arah Sarana Tbk (MASA) was initially
established as PT Oroban Perkasa in 1988. In 2001, the
company started producing and distributing PCR (passenger
car radial) under brand names of Corsa and Strada. The
company conducted an initial public offering (IPO) in 2005 by
issuing 1 billion of new shares at IDR170/share and launched a
new brand of PCR – “Achilles”.
In 2007, the company conducted rights issue, with 2.6 billion
new shares issued, at IDR200/share. The proceeds were used
to expand the production capacity. In the same year,
Multistrada also commenced producing motorcycle tires with
brand name “Corsa”.
Multistrada started production of 22-inches tires, it was the
first Indonesian company to produce that size, and
commenced research on producing winter tires in 2008.
Currently, Multistrada produces PCR tire size 13-inches until
24-inches and motorcycle tires.
PVP XVIII Pte.Ltd., Prudent Capital Ltd., The Bank of New

Public
Singapore Malaysia York Melon, US
27.7% 14.9% 7.3% 50.1%
PT Multistrada Arah Sarana Tbk
Figure 19. shareholder structure per June 2010. (Source: company).
Growing tire market

We expect that robust domestic automotive sales will lead to
strong demand in tire replacement, around 70% of total
Multistrada’s tires sales come from replacement market. By
end 2010, outstanding cars in Indonesia may reach 19 million
and around 60 million of motorcycles. Gaikindo estimates car
sales will grew by 15.8% CAGR over the next five years.
Capacity expansion.
Multistrada plans to expand its PCR tire (passenger car radial)
and motorcycle tire, with total investment valued USD182mn.
PCR tire production capacity is targeted to become 28,500
tire/day in 2012 from 14,200 tire/day by end 2009.

Meanwhile, motorcycle tire capacity is targeted to rise to
16,000 /day in 2012 from 4,900 in 2009.
Financial outlook. We forecast its revenue will grow by 33.9%
CAGR in the next two years to IDR3.7tn in 2012, generating
IDR381bn in net profit in 2012 compared with IDR230bn in
2009. The company booked 1H10 revenue of IDR1.0tn
(+23.8%yoy) and net profit at IDR89bn due to 18.9% yoy
increase in PCR tire sales volume.
Risks. Increasing rubber price volatility, competition from
domestic and foreign players, foreign exchange rate volatility
(as Multistrada’s revenue and cost mainly based in US dollar).
FINANCIAL SUMMARY
YE Dec (IDR bn) 2008A 2009A 2010F 2011F 2012F
EBITDA 265 310 369 605 680
Net Profit 3 175 183 213 286
EPS (IDR) 0 29 30 35 47
EPS growth (%) (91.50) 5,779.6 4.5 16.4 34.5
P/E Ratio (x) 720.1 12.2 11.7 10.1 7.5
EV/EBITDA (x) 10.9 8.9 7.7 6.5 5.5
P/B ratio (x) 1.7 1.5 1.3 1.2 1.1
Dividend Yield (%) 0.4 0.0 2.4 2.3 3.0
ROAE (%) 0.2 12.7 12.0 12.7 15.4
Figure 20. Financial Summary. (Source: Company, Mandiri Sekuritas)
Valuations
To arrive at our DFC value of IDR520/share, we have assumed
WACC of 12.7% and terminal growth of 3%. The WACC consist
of cost of equity of 13.6% and cost of debt of 10.5%.
Currently, the company trading at a PER11F of 10.1x lower
compared with its global peers’ average of 10.6x. Multistrada
booked the highest operating growth profit of CAGR 167.0%
between 2005-2011F, compared with its peers’ 21.3% CAGR.
Meanwhile, we estimate MASA to post strong operating profit
growth, offering CAGR of 37.3% over the next two years.
Bloomberg P/E EV/EBITDA Op profit
Company name
ticker FY10F FY11F FY10F FY11F CAGR 05-11F
Continental CTTAY US 18.8 14.2 na na 5.9%
Michelin ML FP 11.0 9.2 5.4 4.8 1.7%
Bridgestone BRDCY US 12.7 11.7 0.0 0.0 -53.2%
Pirelli PC IM 29.4 13.7 7.1 6.3 2.0%
Goodyear GT US 25.1 7.4 4.8 3.5 2.1%
Gajah Tuggal GJTL IJ 9.5 7.7 6.1 5.3 23.6%
Multistrada Arah Sarana MASA IJ 11.1 10.1 7.7 6.5 167.0%
Simple average 16.8 10.6 5.2 4.4 21.3%
Figure 21. Peer Comparison. (Source: Bloomberg, Mandiri Sekuritas estimates).

Expanding capacity
Capacity expansion. The company plans to increase its
production capacity to 28,500 radial tires/day and 16,000
motor cycle tires/day by end 2012, bringing out CAGR growth
of 20.0% year 07-12F for radial tire capacity and CAGR growth
by 67.9% for motorcycle tire year 07-12F. By end Jun10,
capacity production reached 16,500 radial tires/day and 7,900
motorcycle tires/day. The expansion is done in stages with
total investment amounting to USD182mn financed by bank
loans.
ti re/da y
30,000
100%
25,000
80%
20,000
60%
15,000
40%
10,000
5,000 20%
0 0%
2007 2008 2009 2010F 2011F 2012F
Ins tal l ed capa ci ty - da i l y Uti li zati on ra te
Figure 22. Car Tires Production Capacity and Utilization Rate. (Source: Company, Mandiri Sekuritas
Estimates).
tire/day
12,000
100%
10,000
80%
8,000
60%
6,000
40%
4,000
2,000 20%
0 0%
2007 2008 2009 2010F 2011F 2012F
Installed capacity - daily Utilization rate
Figure 23. Motor Tires Production Capacity and Utilization Rate. (Source: Company, Mandiri
Sekuritas Estimates).

Robust production volume.
The company’s radial tire production has grown by 29% CAGR
in the past four years, from 1.8mn units in FY05 to 5.0mn units
in FY09. Meanwhile, the company started to produce
motorcycle tires in 2007. Since then, motorcycle tires
production has grown by 312% CAGR, from 100k units in FY07
to 1.7mn units in FY09. The utilization rate by end 2009 for car
tires has reached 92% and 85% of motorcycle tires.
Strong demand to support sales volume
We forecast the company’s revenue to grow at 33.9% CAGR
over the next 2 years to IDR3.7tn in FY12 in accordance with
capacity expansion. The growth will be supported by
increasing sales volume in radial tires and motorcycle tires,
which we forecast to grow by CAGR of 23.1% and 26.5%,
respectively in year 10F-12F.
Strong domestic car sales
The Association of Indonesia Automotive Industries (Gaikindo)
estimates domestic car sales volume in FY10 to exceed
600,000 units, surpassing the record high in FY08 of 608.000
units. Strong domestic car sales are expected due to stronger
consumer purchasing power and low interest rates. Gaikindo
estimates car production will grew by 15.8% CAGR for the next
5 years. In 1H10 domestic car sales reached 370.208 units,
increasing 76.1%yoy.
000 unit
1,400
1,200
1,250
1,000
1,050
800 890
780
600
680
604 600
400 534
483
433
200 319
0
2005 2006 2007 2008 2009 2010F 2011F 2012F 2013F 2014F 2015F
Figure 24. Indonesia Automotive Market and Forecast. (Source: Gaikindo).
Indonesia motorcycle sales.

Motorcycles are the common means of daily transportation of
the Indonesian people to avoid traffic jams in big cities and

due to lack of public transportations. In 1H10 motorcycle sales
reached 3.6mn units, up 17.8%yoy. Gaikindo estimates that
FY10 motorcycle sales will exceed 7mn, breaking the highest
record in 2008 of 6.2mn motorcycle.
000
1,949
2,000
1,749 1,712
1,629 1,593 1,650
1,600 1,427 1,412
1,329
1218
1,200
800
400
0
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10
Figure 25. Quarterly Domestic Motorcycyle Sales. (Source: GAIKINDO).
Indonesia tire industry

Based on the Association of Indonesian Tire Company (APBI)
data, currently there are 8 tire producers in Indonesia, with
total capacity amounting to 50mn tires per year. In 2009,
Indonesia produced around 37.7mn tires and around 77% of
them were for export. In FY10, APBI expected tire production
to reach 41mn.
mn units
50
43.9
41.9 41.0
40 38.0 37.7
36.0
32.0 32.0
29.9 29.0
30 28.0 26.5
20
10
0
2005 2006 2007 2008 2009 2010F
Production Export
Figure 26. Indonesia’s Tire Production and Export Volume. (Source: APBI).
Tire production in Indonesia amounted to USD1.0bn in FY09

and is estimated to reach USD1.1bn in FY10, growing by 11.1%
CAGR since 2005.

USD bn
1,500
1,193
1,200 1,133
1,041
949
885
900 813 800
669 676
570 600
600 520
300
0
2005 2006 2007 2008 2009 2010F
Production Export
Figure 27. Indonesia’s Tire Production and Export in Value. (Source: APBI).
Based on APBI data per April-10, OEM segments only

penetrated around 7.7% of total car tire production, and
around 70% are for export.
000 Unit Car tire yoy (%) Sales Segments Motorcycle tire yoy (%) Sales Segments
Production 16,154 51.7% 12,221 42.0%
Sales 16,241 50.9% 100.0% 12,022 37.0% 100.0%

Replacement 3,407 41.8% 21.0% 6,864 35.0% 57.1%
OEM 1,258 67.2% 7.7% 4,735 42.0% 39.4%
Export 11,577 52.1% 71.3% 423 37.0% 3.5%
Figure 28. Indonesia PCR Production and Sales Segments by April-10. (Source: APBI).
Demand over supply

Based on the basic survey, separate from road quality and
mileage used, on average car needs tire replacement for every
two years, meanwhile for motorcycle is one year. According to
the Indonesia Statistics Agency (BPS), there were 17.6mn
vehicles in Indonesia as of the end of 2008, consisting of
passenger cars, buses and trucks and 47.7mn of motorcycles.
Meanwhile, Gaikindo recorded car sales and motorcycle sales
in FY09 reached 0.5mn and 5.9mn, respectively, bringing the
total number to 18.1mn for automobiles and 53.6mn for
motorcycle as of end 2009.
Our illustration below shows that in FY10F tire supply only
meets around 50% of domestic demand tire; even though we
use conservative assumptions on our illustration (two tires of
replacements for every two years and one tire for motorcycle
every one year), that Indonesian people replace tires more to
economic consideration than safety reason.

Estimation Supply Over Demand
Scenario 1 Scenario 2
Vehicles Tire 4W 2W Total Prod/ 4W 2W Total Prod/
4W 2W Prod. (n-2)*2 (n-1)*1 demand Demand (n-3)*2 (n-2)*1 demand demand
Year (mn) (mn) (mn) (mn) (mn) (mn) (mn) (mn) (mn)
2005 9.6 28.6 36.0 13.5 23.1 36.5 98.6% 12.0 20.0 31.9 112.7%
2006 11.7 33.4 38.0 15.4 28.6 44.0 86.4% 13.5 23.1 36.5 104.1%
2007 15.8 42.0 41.9 19.2 33.4 52.6 79.6% 15.4 28.6 44.0 95.3%
2008 17.6 47.7 43.9 23.3 42.0 65.3 67.2% 19.2 33.4 52.6 83.4%
2009F 18.1 53.6 37.7 31.6 47.7 79.3 47.5% 23.3 42.0 65.3 57.7%
2010F 18.8 60.6 41.0 35.2 53.6 88.8 46.2% 31.6 47.7 79.3 51.7%
Figure 29. Supply Under Demand. (Source: BPS, Mandiri Sekuritas Estimates).
Maintain local and overseas customers
Multistrada’s sales segment
Around 70% of radial and motorcycle sales volume are for
replacement market and 30% are for off-take market;
meanwhile OEM (original equipment manufacturer) only
contributes less than 1% of the total sales. “Off-take”
manufacturing means that Multistrada produces tire for tire
distributors under their brands. Currently, Multistrada has 10
brand off-takes, and 3 house brands, namely: Strada, Corsa,
and Achilles. OEM tires are delivered to the vehicles
manufacturer’s assembly plants, and sometimes they are built
to the vehicle manufacture’s specifications. The “off-take”
brand contributes around 35% to the company’s revenue.
Multistrada booked PCR sales in 4.9mn tire in FY09, growing
by 30.3% CAGR since 2005, in line with PCR production hike of
29.1% CAGR totaling 5.0mn tire by FY09. Around 60% of
production is commodity passenger radial (rim size between
13-inches to 15-inches) and the remaining 40% are UHPT
(Ultra-High Performance Tire, with sizes ranging between 17
and 24 inches).
mn unit
6.0
5.0 4.9
5.0 4.5
4.2
3.9 3.8
4.0
3.0 2.8
3.0
1.8 1.7
2.0
1.0
0.0
2005 2006 2007 2008 2009
PCR production PCR sales
Figure 30. Multistrada’s PCR Production and Sales. (Source: Company).

Revenue from overseas.
In 2009, around 78% of Multistrada’s revenue was generated
from export sales, as around 80% of its car tires are for
exports. On product base, car tire sales contributed 92% of
total revenue and the remaining of 8% from sales of motor
cycle tires. The main export destination is Asia Pacific, which
contributes around 25% of total sales.
FY2009 1Q10
Africa
Ameri ca
Afri ca 5%
4% Domes ti c (incl.
Ameri ca 6% Domes tic (incl.
10% MC) MC)
22% 26%
As i a Pa ci fi c
33%
Mi ddl e Ea st
As i a Pa ci fic 18%
25% Mi ddl e Ea st
Domesti c (i ncl . MC)
15%
Mi ddl e Ea st
Europe Europe
Europe Asi a Pa ci fic 17%
19% Ameri ca
Afri ca
Figure 31. MULTISTRADA Sales Distribution. (Source: Company). Deleted: Indonesia
Rank no. 4 in domestic car tire industry

Among PCR producers In Indonesia, Multistarda’s sales
volume has no. 4 position with market shares of around 17%
after Bridgestone, Dunlop and Gajah Tunggal. In domestic
market, replacement tires contribute 80% to total sales
volume and the remaining around 20% comes from original
equipment sales.
Industri Karet Deli

15% Bridgestone
26%
Goodyear 3%
Elang Perdana
7%
Multistrada
14% Sumi
Rubber/Dunlop
20%
Gajah Tunggal
15%
Multistrada’s motorcycle tires.
Figure 32. INDONESIA'S tire Marketshare. (Source: APBI).

Even though motorcycle tires are new segment, but since
2007 motorcycle production and sales have been showing
significant improvement. Motorcycle production and sales
growth exceeded 300% CAGR in the past 2 years. All
Multistrada’s motorcycle tires are for the domestic market.
mn unit
1.8 1.7
1.5 1.4
1.2
0.9 0.8 0.8
0.6
0.3 0.1 0.1

0.0
2007 2008 2009
Motorcycle tire production Motorcycle tire sales
Figure 33. MULTISTRADA’S MOTOR Cycle Tire Production and Sales. (Source: Company).
Financial
Net profit to expand by 25% CAGR over the next two years.
We expect net profit to increase by 25.0% CAGR over the next
two years and will reach IDR286bn by 2012F. Several factors
that will drive the growth, in our view, are strong top-line
growth and margin expansion.
IDR bn
350
300 286
250 213
200 175 183
150
100
50 29
3
0
2007 2008 2009 2010F 2011F 2012F
Figure 34. Net Profit. (Source: Company, Mandiri Sekuritas Estimates).
Double digit revenue growth.

Over the next two years, we expect Multistrada to book CAGR
revenue growth of 33.9% for period 2010F-2012F. This will be

triggered by strong sales volume growth in line with
production capacity expansion.
• Strong demand. Strong demand will come from local and
overseas markets. Robust domestic automotive sales will
boost demand for tires for replacement as around 70% of
the company’s sales come from replacement market.
• Capacity expansion. To meet strong demand, Multistrada
increases its capacity by expanding its factory area in
Cikarang and add production machinery to support
production process. Now the company occupies a spacious
51ha-factory ward in the Cikarang Industrial Park, West Java.
New equipments are purchased from Germany and other
advanced countries for better and quality tires at lower
overall costs.
• New product development. Multistrada continues to widen
its product variations with the launch of 22-inches PCR tire
in 2008 and in 2009 the company started to produce 24-
inches PCR and winter tires, supported by sophisticated
equipments. We believe, by producing various sizes, the
company has a strong image as a PCR producer on end
automotive users and various product sales will boost the
company’s total revenue .
IDR bn
4,000
475
3,000 433
2,000 110 252

3,264
49 2,679
1,000 7 1,832
1,669
887 1,178
0
2007 2008 2009 2010F 2011F 2012F
PCR (IDR bn) Motorcycle tire (IDR bn)
Figure 35. Revenue. (Source: Company, Mandiri Sekuritas Estimates)
Various products lead to improving margin.

We forecast operating margin to widen to 14.6% in FY12F
from 13.6% in FY09, supported by strong gross profit margin
and efficiency in operating cost. By selling various types of
tires, Multistrada will be able to improve gross margin. In tire

industry, the bigger the tire rim the higher the selling prices
are and the greater the margin. This is because around 70% of
cost of goods sold is derived from raw material cost, which is
calculated by weighing the raw materials for each tire
produce. Meanwhile bigger rim needs less raw materials.
Weight per ASP FY09 Rubber Cost per Rubber gross

tire (kg) (USD/tire) tire* (USD/tire) profit margin (%)
Car tyres
13" 6.90 20.7 15.5 25.0
14" 7.90 27.7 17.8 35.9
15" 9.00 32.9 20.3 38.4
16" 9.80 40.7 22.1 45.8
17" 10.10 40.3 22.7 43.6
18" 11.29 45.1 25.4 43.7
19" 11.66 51.5 26.2 49.1
20" 12.79 55.5 28.8 48.1
22" 19.68 75.6 44.3 41.4
24" 20.16 106.3 45.3 57.3
Motor tyres
14" 2.10 7.8 4.7 39.4
17" 2.25 7.3 5.1 30.6
18" 3.50 9.9 7.9 20.3
*) Assume rubber price @USD2.25/kg
Figure 36. Rubber Required per Tire. (Source: Company, Mandiri Sekuritas Estimates)
000 unit
10,000
9,061
8,000 CAGR 18.9% 8,155
6,000 5,980
4,899
3,808 4,368
4,000
2,000
0
2007 2008 2009 2010F 2011F 2012F
13" 14" 15" 16" 17" >18"
Figure 37. PCR Sales volume. (Source: Company, Mandiri Sekuritas Estimates)

100% 5% 8% 10% 10% 10% 10%
8% 9%
8% 10% 10% 10% 10%
80% 11%
13% 13% 13% 13%
26%
60% 21%
20% 20% 20% 20%
40% 28% 26%

25% 25% 25% 25%
20%
24% 22% 18% 18% 18% 18%
0%
2007 2008 2009 2010F 2011F 2012F
13" 14" 15" 16" 17" >18"
Figure 38. PCR Sales Breakdown by Type. (Source: Company, Mandiri Sekuritas Estimates)
Meanwhile, in motorcycle tire, the company produces three

various tire sizes, namely: 14, 17, and 18 inches. We expect
motorcycle tire sales to grow by 26.5% CAGR for year 2010F-
2012F. Around 80% of total motorcycle sales are contributed
by the 17-inches tire.
000 unit
6,000 5,544 5,544
5,000
4,000 3,465
3,000
2,000 1,372
1,000 808
128
0
2007 2008 2009 2010F 2011F 2012F
14" 17" 18"
Figure 39. Motorcycyle Sales Breakdown by Type. (Source: Company, Mandiri Sekuritas
Estimates)
1H10 net profit up by 37.1% yoy

The company booked 1H10 revenue of IDR1.0tn (+23.8%yoy)
due to higher sales volume and selling prices. PCR sales
volume in 1H10 increased by 18.9%yoy totaling to 2.8mn tires.
Higher UHPT sales portion totaling to 38.5% of total PCR sales
in 1H10 compared with 34.6% in FY09 has widen the gross
margin to 21.2% from 19.2% in 1H09. The company booked
lower G&A expenses, resulting in operating profit of

IDR122.8bn (+59.7%yoy). Hence, net profit was IDR89.4bn, up
37.1%yoy.
IDR bn 1H10 1H09 2Q10 1Q10 YoY(%) QoQ (%) FY10F % to FY10F
Total revenue 1,007 814 486 521 23.8 (6.6) 2,084 48.3
Gross profit (Loss) 213 156 94 120 36.7 (21.6) 463 46.1
Operating profit (Loss) 123 77 53 70 59.7 (24.7) 254 48.3
Pre-tax profit (Loss) 115 87 46 69 32.6 (33.6) 244 47.2
Net profit (Loss) 89 65 34 55 37.1 (37.4) 183 48.9
Gross margin (%) 21.2 19.2 19.3 23.0 22.2

Operating margin (%) 12.2 9.5 10.8 13.5 12.2
Pre-tax margin (%) 11.4 10.7 9.4 13.3 11.7
Net margin (%) 8.9 8.0 7.1 10.6 8.8
Figure 40. 1H10 Results. (Source: Company, Mandiri Sekuritas Estimates)
Healthy balance sheet

Fund needed and sources
The company needs USD182mn for expansion program and
USD30mn for working capital. In July 2010, Multistrada has
signed loan facility from local banks and one overseas
financing company, amounting to USD185mn. The bank loans
have gradual principal repayment schedule over the next five
years starting in 2011 with portion repayment of 10%, 15%,
20%, 25% and 30%, respectively. The interest rate based on
Libor + 425bps for local bank syndication, meanwhile
USD40mn debt from UniCredit, German has interest rate of
1.8%.
Expansion: Cash internal:

CIMB Niaga
USD182mn USD27 mn
Bank loans:
HSBC
USD155mn
BII
Working Cap. : Bank loans:
USD30mn USD30mn
UniCredit,
German
Figure 41. Fund Needed and Resources. (Source: Company, Mandiri Sekuritas Estimates)
Gearing ratio will up next year

As the results of such syndicated facilities, the gearing ratio
will reach it peak in 2011 and decline afterwards in line with

the agreed repayment schedule. We estimates Multistrada’s
net gearing ratio for 2011F will increase to 1.02x from 0.45x in
FY10F.
IDR bn x
2,500 1.2
1,970 1.0
2,000 1,795
1,748 1,628
1,590
1,460 0.8
1,500 1,285
0.6
1,000 742
635 714 0.4
500 0.2
0 0.0
2008 2009 2010F 2011F 2012F
Net Debt (LHS) Equity (LHS) Net gea ring (RHS)
Figure 42. Net Gearings. (Source: Company, Mandiri Sekuritas Estimates)
IDR bn
600
331
300 224 203 166
(5)
0
(100)
(300) (117) (230)
(600) (407)
(900)
(1,200)
(1,192)
(1,500)
2008 2009 2010F 2011F 2012F
Net ca s h from opera ti on Net cas h from i nves ting
Figure 43. Net Cash From Operation vs Net Cash From Investing. (Source: Company, Mandiri
Sekuritas Estimates)
What are the risks?

We view that there are several key risks for Multistrada.
Rubber price volatility. The volatility of rubber price will
affect the cost of revenue and will impact Multistrada’s
margin. Even though the company can increase the selling
prices, but there will be around 1-month time lag from
increasing rubber price to increasing tire selling prices.

Competition from domestic and foreign players. Both
domestic and foreign tire manufacturers can take over
Multistradas’s market share. Hence, Multistrada needs
actively to explore new products and apply fresh marketing
strategy.
Foreign exchange fluctuation. Most of Multistrada’s
revenue and cost are denominated in the US dollar. Around
80% of PCR for export market based on US dollar
denomination. Meanwhile, for raw rubber material, the
company buys from local suppliers but the transaction is in
the US dollar.
Width/thick/rim GT Radial Michelin Multistrada Bridgestone

165/65/R13 Champiro BXT 165/65 R13 XM1 165/65 R13 77H Platinum 165/65 R 13H -
IDR507,000 IDR523,000 IDR445,000
175/70/R13 Champiro GTR 175/70 R13 XM1 175/70 R13 82H Platinum 175/70 R13H Techno 175/70/SR13 S-350T
IDR484,000 IDR512,000 IDR445,000 IDR853,000
185/70/R13 Classiro 185/70 R13 XM1 185/70 R13 86H Platinum 185/70 R 13H -
IDR543,000 IDR546,000 IDR490,000
195/70/R14 Champiro GTR 378 195/70 R14 Energy XM1 195/70 R14 91H Platinum 195/70 R 14H Techno 195/70/SR 14 S-236T
IDR694,000 IDR637,000 IDR600,000 IDR921,000
175/65/R14 Champiro BXT 175/65 R14 Energy XM1 175/65 R14 82H Platinum 175/65 R 14 H B-series 175/65/TR 14 B-391T
IDR534,000 IDR627,000 IDR492,000 IDR803,000
185/70/R14 Champiro GTR 175/70 R13 Energy XM1 185/70 R14 88H Platinum 185/70 R 14H B-series 185/70/SR 14 B-250T
IDR484,000 IDR608,000 IDR539,000 IDR787,000
185/55/R15 Champiro 185/55 R15 Pilot Preceda PP2 185/55/R15 82V Corsa 185/55 R 15 H Potenza 185/55/VR15 E-030T
IDR658,000 IDR907,000 IDR681,000 IDR1,306,000
195/55/R15 Champiro 195/55 R15 Pilot Preceda PP2 195/55/R15 85V Corsa 195/55 R 15 H Turanza 195/55/VR 15 ER-30T
IDR664,000 IDR882,000 IDR710,000 IDR1,136,000
205/65/R15 Champiro GTX 205/65 R15 Primacy LC 205/65/R15 94V Strada 205/65 R 15 H Regno 205/65/HR 15 S-325T
IDR798,000 IDR943,000 IDR711,000 IDR1,188,000
205/55/R16 Champiro 205/55 R16 Pilot Preceda PP2 205/55/ZR16 91W Corsa 205/55 R 16W Turanza 205/55/VR 16 ER-30T
IDR782,000 IDR1,129,000 IDR785,000 IDR1,735,000
215/55/R16 Champiro 215/55 R16 Pilot Preceda PP2 215/55/R16 93W Corsa 215/55 R 16W -
IDR804,000 IDR1,475,000 IDR878,000
225/55/R16 Champiro 225/55 R16 Pilot Preceda PP2 225/55/ZR16 95V Corsa 225/55 R 16W -
IDR883,000 IDR1,341,000 IDR910,000
205/50/R17 Champiro HPX 205/50 ZR17 Pilot Sport3 205/50 ZR17 89W Corsa 2233 205/50 R 17W -
IDR984,000 IDR1,194,000 IDR934,000
215/45/R17 Champiro HPX 215/45 ZR17 Pilot Sport3 215/45 R17 91W ATR Sport 215/45 R 17W Potenza 215/45VR 17 RE-050
IDR1,088,000 IDR1,250,000 IDR910,000 IDR2,758,000
245/45/R17 Champiro HPX 245/45 ZR17 Pilot Sport3 245/45 ZR17 99Y ATR Sport 245/45 R 17W Potenza 245/45VR 17 RE-050
IDR1,305,000 IDR1,648,000 IDR1,040,000 IDR3,953,00
Figure 44. Tire Price Comparasion (Source: Mobilmotor No. 16/ 4-17 August 2010)

Profit and loss

Revenue 1,334 1,691 2,084 3,112 3,738
Gross profit 291 371 463 708 853
Operating profit 176 231 254 396 479
EBITDA 265 310 369 605 680
Net Interest (47) (57) (30) (90) (75)
Interest expense (47) (57) (30) (90) (75)
Interest income 0 0 0 0 0
Forex losses/gains (119) 86 30 (4) (4)
Net other (4) (30) (10) (19) (19)
Pre-tax profit 6 230 244 283 381
Income tax (4) (55) (61) (71) (95)
Others 0 0 0 0 0
Minority interests 0 0 0 0 0
Net Profit 3 175 183 213 286
Figure 45. Company Profit and Loss. (Source: Company)
Balance Sheet

Cash and ST Investment
(incl. cash equiv) 79 14 71 478 547
Acc receivable 98 120 147 220 265
Inventory 356 433 532 789 947
Others 83 168 196 267 311
Current assets 616 735 946 1,754 2,069
Investment 0 0 0 0 0
Fixed assets 1,622 1,693 1,628 2,855 2,754
Others 141 108 288 45 45
Total assets 2,379 2,536 2,862 4,654 4,868
Current liabilities 689 856 1,060 1,173 1,376

Acc. payable 177 246 302 447 537
ST borrowings 448 468 613 580 694
Others 64 142 145 145 145
Long-term liabilities 405 221 212 1,733 1,522
Long-term payable 374 180 172 1,693 1,482
Others 32 40 40 40 40
Total liabilities 1,094 1,076 1,272 2,906 2,898
Shareholder's equity 1,285 1,460 1,590 1,748 1,970
Figure 46. Company Balance Sheet. (Source: Company)

Cash Flow Statement

Operating profit 176 231 254 396 479
Other recurring income/
(Expenses) (51) (87) (41) (108) (94)
Depr & Amort 88 80 115 209 201
Other Gain/Loss 0 0 0 0 0
Tax (4) (55) (61) (71) (95)
Change in working capital (96) (30) (94) (256) (156)
Operating Cash Flow 114 138 173 170 335
Capital expenditure (407) (117) (230) 1,192 (100)
Free Cash Flow (293) 21 (57) (1,022) 235
Other investing cash flow 3 1 0 0 0
Cash Flow From
Investing (404) (116) (230) 396 479
Net change in debts 479 (172) 136 1,489 (98)
Equity funds raised 0 0 0 0 0
Other financing cash flow (9) (1) (52) (55) (64)
Cash Flow From
Financing 470 (173) 83 1,434 (161)
Non-recurring income
(Expenses) (119) 86 30 (4) (4)
Net change in cash 61 (65) 57 407 69
Cash at beginning 17 79 14 71 478
Cash at End 79 14 71 478 547
Figure 47. Company Cash Flow. (Source: Company)
Key ratios
YE Dec 2008A 2009A 2010F 2011F 2012F

Growth ( yoy)
Sales 48.5 26.8 23.2 49.3 20.1
EBIT 94.5 30.8 10.1 55.9 21.0
EBITDA 61.8 17.2 18.9 64.0 12.5
Net Profit (89.8) 5,779.6 4.5 16.4 34.5
Profitability (%)
Gross Profit Margin 21.8 21.9 22.2 22.7 22.8
Oper. Margin 13.2 13.6 12.2 12.7 12.8
EBITDA Margin 19.9 18.3 17.7 19.4 18.2
Net Margin 0.2 10.3 8.8 6.8 7.6
ROAA 0.1 7.1 6.8 5.7 6.0
ROAE 0.2 12.7 12.0 12.7 15.4
Leverage
Net debt/equity (%) 57.8 43.5 44.9 102.7 82.7
EBITDA/Gross Interest (x) 5.6 5.4 12.1 6.7 9.0
Per share data (IDR)
EPS 0 29 30 35 47
CFPS 15 42 49 69 80
BVPS 210 239 260 286 322
DPS 143 15 857 896 1,042
Valuation
YE Dec 2008A 2009A 2010F 2011F 2012F
PER (x) 720.1 12.2 11.7 10.1 7.5
EV/EBITDA (x) 10.9 8.9 7.7 6.5 5.5
P/BV (x) 1.7 1.5 1.3 1.2 1.1
P/CF (x) 23.4 8.4 7.2 5.1 4.4
Dividend Yield (%) 0.4 0.0 2.4 2.6 3.0
Figure 48. Company Key Ratios and Valuation. (Source: Company)

Perusahaan Gas Negara: 65.7% gross margin post tariff hike
Ari Pitoyo, CFA (ari.pitoyo@mandirisek.co.id)
A thicker margin
PGAS recorded a gross margin of 65.7% in 2Q10, up from
60.8% in 1Q10, and 59.3% in 1H09. An increase in average gas
price of 8.6% in Q2 to USD6.84/MMBTU helped beefed up the
margin. Transmission and fiber optics was up 8.5% QoQ to
IDR424bn.
No short-term catalysts seen

PGAS is currently implementing a thorough FSRT (Floating
Storage Re-gasification Terminal) tendering process. A
valuation discount has to be applied for the 2012 target of
completion to prevent over optimistic expectation. There
were also scant progress in gas fields’ acquisitions and
additional supplies from gas producers. PGAS CEO, Hendy P.
Santoso quoted by Bloomberg, said that he saw limited
additional supply in 2011
Higher target price

We revised down our cost of gas on improved gas supply from
Conoco Phillips (CoPhi). As CoPhi volume has improved, cost
of gas have to be lowered since CoPhi’s gas is priced at
USD1.85/MMBTU which is lower than average cost of gas of
USD2.53/MMBTU. Our new target price of IDR5,260/share is
13.1% higher than our previous target.
FINANCIAL SUMMARY

EBITDA 6,845 8,542 10,628 11,239 11,127
Net Profit 634 6,229 6,403 6,490 6,364
EPS (IDR) 28 274 282 286 280
EPS Growth (%) (59.7) 882.7 2.8 1.4 (1.9)
P/E Ratio (x) 136.1 13.8 13.5 13.3 13.6
EV/EBITDA (x) 14.3 11.0 8.2 7.2 6.7
P/B Ratio (x) 12.1 7.4 5.3 4.2 3.4
Dividend Yield (%) 0.9 1.2 2.2 2.2 2.3
ROAE (%) 9.4 66.1 45.9 35.1 27.7

USD mn 1H10 1H09 2Q10 1Q10 yoy (%) qoq (%) FY10F % of FY10F
Total revenue 9,539 9,005 5,053 4,486 5.9 12.7 18,037 52.9
Gross Profit (Loss) 6,048 5,341 3,323 2,725 13.2 21.9 10,820 55.9
Operating profit (Loss) 4,566 3,930 2,456 2,110 16.2 16.4 7,523 60.7
Pretax profit (Loss) 4,465 4,488 2,009 2,456 (0.5) (18.2) 7,319 61.0
Net profit (Loss) 3,206 3,186 1,435 1,771 0.6 (19.0) 5,372 59.7
Gross margin (%) 63.4 59.3 65.7 60.8 60.0

Pretax margin (%) 46.8 49.8 39.8 54.8 40.6
Net margin (%) 33.6 35.4 28.4 39.5 29.8
Dist. Flow (mmscfd) 827 756 813 841 9.4 (3.3) 810 102.1
Trans. Flow (mmscfd) 848 763 937 758 11.1 23.6 927 91.5
FY10F FY11F
Old New % Changes Old New % Changes
IDR bn
Total revenue 4,001.7 4,001.7 - 4,976.1 4,976.1 -
Gross profit (Loss) 1,739.2 1,739.2 - 2,368.8 2,368.8 -
Operating Profit (Loss) 1,075.3 1,075.3 - 1,560.4 1,560.4 -
Net proffit (Loss) 216.9 333.8 53.9 366.1 446.4 21.9
Gross margin (%) 43.5 43.5 47.6 47.6

Operating margin (%) 26.9 26.9 31.4 31.4
Net margin (%) 5.4 8.3 7.4 9.0
Assumptions
Volume distributed (MMSCFD) 65.6 65.6 - 80.5 80.5 -
Volume transmitted (MMSCFD) 68.8 68.8 - 69.8 69.8 -
Average selling price (USD/MMBtu) 33.4 33.4 - 31.5 31.5 -
IDR/USD EOY 8,927 8,927 - 8,927 8,927 -
Figure 51. Forecast Changes. (Source: Mandiri Sekuritas Estimates)
Profit and loss

Revenue 12,794 18,024 18,766 19,664 20,567
Gross profit 7,566 10,804 12,151 12,834 12,794
Operating profit 4,657 7,676 8,898 9,427 9,258
EBITDA 6,845 8,542 10,628 11,239 11,127
Net Interest (488) (398) (275) (317) (305)
Forex losses/gains (3,014) 1,245 359 0 0
Net other 126 (275) (289) (303) (319)
Pre-tax profit 1,281 8,247 8,693 8,806 8,635
Income tax (476) (1,814) (2,171) (2,200) (2,157)
Others 0 0 0 0 0
Minority interests (171) (204) (119) (117) (114)
Net Profit 634 6,229 6,403 6,490 6,364
Figure 52. Company Profit and Loss (Source: Company, Mandiri Sekuritas Estimates)

Balance Sheet

(incl. cash equiv) 3,500 6,593 10,030 15,504 21,528
Acc receivable 1,589 1,650 2,879 3,016 3,155
Inventory 15 14 13 13 15
Others 2,061 2,297 1,171 1,272 1,121
Current assets 7,164 10,555 14,093 19,806 25,819
Investments 0 0 0 0 0
Fixed assets 17,633 17,329 15,763 14,129 12,439
Others 773 786 775 822 867
Total assets 25,570 28,670 30,632 34,757 39,125
Current liabilities 3,198 3,651 3,857 3,838 4,052

Acc. payable 1,288 1,088 1,448 1,501 1,691
ST borrowings 354 995 385 381 381
Others 1,556 1,567 2,024 1,956 1,979
Long-term liabilities 14,302 12,242 9,549 9,095 8,805
Long-term payable 14,116 12,069 9,433 8,978 8,689
Others 186 173 117 117 117
Figure 53. Company Balance Sheet. (Source: Company, Mandiri Sekuritas Estimates)
Cash Flow Statement

(Expenses) (362) (673) (564) (621) (623)
Depr & Amort 2,187 866 1,730 1,813 1,869
Tax (476) 1,814 2,171 2,200 2,157
Change in working capital (1,520) (466) 716 (254) 224
Operating Cash Flow 4,315 5,384 8,490 8,048 8,457
Capital expenditure (3,355) (581) (165) (179) (179)
Free Cash Flow 960 4,803 8,325 7,869 8,279
Other investing cash flow 0 5 0 0 0
Cash Flow From
Investing (3,355) 576 (165) 9,427 9,258
Net change in debts 4,678 (1,434) (3,247) (457) (290)
Equity funds raised (182) 165 (15) 28 27
Other financing cash flow (175) (1,672) (1,983) (1,965) (1,990)
Cash Flow From
Financing 4,321 (2,940) (5,245) (2,394) (2,253)
Non-recurring income
(Expenses) (3,014) 1,245 359 0 0
Net change in cash 2,268 3,112 3,439 5,475 6,026
Cash at beginning 1,232 3,500 6,593 10,030 15,504
Cash at End 3,500 6,612 10,032 15,506 21,530
Figure 54. Company Cash Flow Statement. (Source: Company, Mandiri Sekuritas Estimates)

Key ratios
YE Dec 2008A 2009A 2010F 2011F 2012F

Growth ( % yoy)
Sales 45.4 40.9 4.1 4.8 4.6
EBIT 51.1 64.8 15.9 5.9 (1.8)
EBITDA 63.2 24.8 24.4 5.7 (1.0)
Net Profit (59.7) 882.7 2.8 1.4 (1.9)
Profitability (%)
Oper. Margin 36.4 42.6 47.4 47.9 45.0
EBITDA Margin 53.5 47.4 56.6 57.2 54.1
Net Margin 5.0 34.6 34.1 33.0 30.9
ROAA 2.8 23.0 21.6 19.8 17.2
ROAE 9.4 66.1 45.9 35.1 27.7
Leverage
Net debt/equity (%) 135.9 50.6 (1.2) (28.2) (47.4)
EPS 28 274 282 286 280
CFPS 124 313 358 366 363
BVPS 313 517 713 915 1,109
DPS 35 44 82 85 86
Figure 55. Company Key Ratios. (Source: Company, Mandiri Sekuritas Estimates)
Valuation
YE Dec 2008A 2009A 2010F 2011F 2012F

PER (x) 136.1 13.8 13.5 13.3 13.6
EV/EBITDA (x) 14.3 11.0 8.2 7.2 6.7
P/BV (x) 12.1 7.4 5.3 4.2 3.4
P/CF (x) 30.6 12.2 10.6 10.4 10.5
Dividend Yield (%) 0.9 1.2 2.2 2.2 2.3
Figure 56. Company Valuation. (Source: Company, Mandiri Sekuritas Estimates)

Adaro Energy: Rupiah Attrition
Maria Renata (maria.renata@mandirisek.co.id)
1H10 results below expectation. ADRO’s 1H10 revenue of

IDR12.0tn was only 43.8% of our FY10 target, due to lower
average selling price and the US dollar’s depreciation. ASP in
1H10 was only USD55/ton (-10.6%yoy) compared with
USD62/ton in 1H09, and the 17.0% drop in the US dollar’s
value against the rupiah oppressed revenue when expressed
in the local currency. However coal production in 1H10
increased 20% yoy to 21.6Mt and sales volume increased 22%
to 21.8Mt.
Higher stripping ratio. Higher stripping ratio and higher

production volume are the main factors that increased cost by
7.9%yoy. Stripping ratio in 1H10 was 5.5x compared with 5.0
in 1H09, meanwhile overburden removal was up by 11.7%yoy
to 106.7Mbcm, due to higher coal production.
Adjusted our forecast. We maintain our FY10 coal production

estimate at 46Mt. We adjusted our stripping ratio to 5.5x from
5.0x previously and lowered our ASP assumption to
USD56/Mt, generating FY10 revenue of IDR25.0tn, based on
FY10F average US dollar exchange rate of IDR9,100/USD.
FINANCIAL SUMMARY

EBITDA 4,832 11,211 8,448 13,877 15,367
Net Profit 887 4,367 2,424 4,638 5,442
EPS (IDR) 28 137 76 145 170
EPS Growth (%) 903.0 392.3 (44.5) 91.3 17.3
P/E Ratio (x) 69.2 14.1 25.3 13.2 11.3
EV/EBITDA (x) 14.3 5.8 7.5 4.3 3.6
P/B Ratio (x) 4.4 3.5 3.1 2.6 2.2
Dividend Yield (%) 0 1 0.9 0.8 1.6
ROAE (%) 11.0 27.8 13.0 21.2 20.8

% to % to
IDR bn 1H10 1H09 2Q10 1Q10 yoy (%) qoq (%) FY10F FY10F Consensus
Total revenue 11,985 12,897 5,706 6,279 (7.1) (9.1) 27,334 52.9 45.3
Gross Profit (Loss) 3,947 5,444 1,701 2,246 (27.5) (24.3) 10,108 55.9 na
Operating profit (Loss) 3,570 4,931 1,513 2,057 (27.6) (26.4) 8,915 60.7 42.2
Pretax profit (Loss) 2,537 4,359 837 1,700 (41.8) (50.8) 7,629 61.0 61.0
Net profit (Loss) 1,153 2,249 292 861 (48.7) (66.1) 3,967 59.7 59.7
Gross margin (%) 32.9 42.2 29.8 35.8 37.0

Pretax margin (%) 21.2 33.8 14.7 27.1 27.9
Net margin (%) 9.6 17.4 5.1 13.7 14.5
ADRO 1H10 Activities report

Coal production (Mt) 21.6 18.0 10.3 11.4 20.2 (37.0) 46.0 47.0
Coal sales (Mt) 21.8 17.8 10.3 11.5 22.0 (10.2) 46.0 47.3
Overburden removal (Mbcm) 106.7 95.5 57.8 48.9 11.7 18.3 230 46.4
Stripping ratio (Bcm/t) 5.50 5.00 5.00 110.0
ADARO's Coal ASP
1H10 1H09 yoy (%) FY09

Revenue from coal mining and trading (IDR bn) 11,063 12,173 (9.1) 25,291
Coal Sales Volume (Mt) 21.8 17.8 22.5 41.4
Average exchange rate (Rp/USD) 9,189 11,067 (17.0) 10,398
Actual ASP (IDR/Mt) 507,454 683,877 (25.8) 610,896
Actual ASP (UD/Mt) 55.2 61.8 (10.6) 58.8
Figure 59. Adaro’s Coal ASP. (Source: Company, Mandiri Sekuritas Estimates)
Forecast Changes
FY10F FY11F
IDR bn Old New % Changes Old New % Changes
Revenue - net 27,334 24,977 (8.6) 33,254 33,723 1.4
Gross profit (Loss) 10,108 7,942 (21.4) 13,232 13,285 0.4
Operating Profit (Loss) 8,915 7,012 (21.3) 11,903 12,230 2.8
Pre-tax Profit (Loss) 7,629 5,387 (29.4) 10,355 10,307 (0.5)
Net proffit (Loss) 3,967 2,424 (38.9) 5,385 4,638 (13.9)
Gross margin (%) 37.0 31.8 39.8 39.4

Operating margin (%) 32.6 28.1 35.8 36.3
Pre-tax margin (%) 27.9 21.6 31.1 30.6
Net margin (%) 14.5 9.7 16.2 13.8
Assumptions
Coal production (Mt) 46.0 46.0 52.0 52.0
Coal sales (Mt) 46.0 46.0 52.0 52.0
ASP (USD/Mt) 60.8 56.3 66.0 67.5
Overburden removal (Mbcm) 33.4 33.4 260 299
Stripping ratio (Bcm/t) 8,927 8,927 5.0 5.8
Figure 60. Forecast Changes. (Source: Company, Mandiri Sekuritas Estimates)

Profit and loss

Revenue 18,093 26,938 24,977 33,723 20,567
Gross profit 4,943 11,038 7,942 13,285 12,794
EBITDA 4,832 11,211 8,448 13,877 11,127
Net Interest (568) (848) (776) (965) (305)
Forex losses/gains (455) 100 (161) (270) 0
Net other (263) (603) (688) (688) (688)
Pre-tax profit 2,925 8,578 5,387 10,307 12,093
Income tax (1,602) (4,119) (2,963) (5,669) (6,651)
Others (499) (43) 0 0 0
Minority interests 64 (49) 0 0 0
Net Profit 887 4,367 2,424 6,490 6,364
Figure 61. Company Profit and Loss (Source: Company, Mandiri Sekuritas Estimates)
Balance Sheet

(incl. cash equiv) 2,416 11,275 7,967 13,060 15,083
Acc receivable 2,332 2,882 2,775 3,372 3,840
Inventory 305 250 268 322 373
Others 2,804 1,429 1,333 1,773 2,008
Current assets 7,857 15,837 12,344 18,527 21,304
Investments 0 0 0 0 0
Fixed assets 5,924 7,416 8,294 9,047 9,654
Others 19,939 19,213 19,218 18,152 17,002
Total assets 33,720 42,465 39,857 45,727 47,959
Current liabilities 6,722 7,996 8,063 10,675 11,302

Acc. payable 2,602 2,168 2,323 2,787 3,229
ST borrowings 1,734 2,044 2,112 3,951 3,944
Others 2,386 3,784 3,628 3,938 4,129
Long-term liabilities 12,971 16,957 11,885 11,019 8,166
Long-term payable 8,326 13,047 8,015 7,148 4,296
Others 4,645 3,911 3,870 3,870 3,870
Figure 62. Company Balance Sheet. (Source: Company, Mandiri Sekuritas Estimates)

Cash Flow Statement

(Expenses) (832) (673) (564) (621) (623)
Depr & Amort 620 866 1,730 1,813 1,869
Tax (1602) 1,814 2,171 2,200 2,157
Change in working capital (64) (466) 716 (254) 224
Other operating cash flow (765)
Operating Cash Flow 1,837 5,384 8,490 8,048 8,457
Capital expenditure (2,193) (581) (165) (179) (179)
Free Cash Flow (356) 4,803 8,325 7,869 8,279
Other investing cash flow (8797) 5 0 0 0
Cash Flow From
Investing (10,990) 576 (165) 9,427 9,258
Net change in debts 3,003 (1,434) (3,247) (457) (290)
Equity funds raised 11,869 165 (15) 28 27
Other financing cash flow (3,180) (1,672) (1,983) (1,965) (1,990)
Cash Flow From
Financing 11,692 (2,940) (5,245) (2,394) (2,253)
Extraordinaries income
(Expenses) (499) (43) 0 0 0
Net change in cash 1,584 8,772 (3,307) 5,092 2,023
Cash at beginning 832 2,416 11,275 7,967 13,060
Cash at End 2,416 11,188 7,967 13,060 15,083
Figure 63. Company Cash Flow Statement. (Source: Company, Mandiri Sekuritas Estimates)
Key ratios
YE Dec 2008A 2009A 2010F 2011F 2012F

Growth ( % yoy)
Sales 56.1 48.9 (7.3) 35.0 13.9
EBIT 87.0 135.7 (29.4) 74.4 10.3
EBITDA 85.8 132.0 (24.6) 64.3 10.7
Net Profit 903.0 392.3 (44.5) 91.3 17.3
Profitability (%)
Oper. Margin 23.3 36.9 28.1 36.3 35.1
EBITDA Margin 26.7 41.6 33.8 41.1 40.0
Net Margin 4.9 16.2 9.7 13.8 14.2
ROAA 3.7 11.5 5.9 10.8 11.6
ROAE 11.0 27.8 13.0 21.2 20.8
Leverage
Net debt/equity (%) 54.5 21.8 10.8 (8.2) (24.0)
EPS 28 137 76 145 170
CFPS 47 177 121 196 229
BVPS 438 545 620 749 889
DPS 0 24 17 16 31
Valuation
YE Dec 2008A 2009A 2010F 2011F 2012F
PER (x) 69.2 14.1 25.3 13.2 11.3
EV/EBITDA (x) 14.3 5.8 7.5 4.3 3.6
P/BV (x) 4.4 3.5 3.1 2.6 2.2
P/CF (x) 40.7 10.9 15.9 9.8 8.4
Dividend Yield (%) 0 1 0.9 0.8 1.6
Figure 64. Company Key Ratios and Valuation. (Source: Company, Mandiri Sekuritas Estimates)

MACRO ECONOMIC INDICATORS AND FORECAST
2007 2008 2009 2010(f) 2011 (f) 2012 (f)
Q1 (A) Q2 (A) Q3 Q4 Full Year
National Output (Summary)
Real GDP (% yoy) 6.3 6.1 4.5 5.7 6.2 6.1 6.2 6.0 6.3 6.6
GDP (US$ bn) - nominal 432 511 541.0 - - - - 717 842 956
GDP per capita (US$) - nominal 1,938 2,270 2,590 - - - - 3,055 3,537 3,963
GDP (current price, Rp tn) 3,949 4,954 5,613 - - - - 6,512 7,553 8,762
GDP (constant price at 2000, Rp tn) 1,964 2,082 2,177 - - - - 2,308 2,454 2,616
National Output (By Expenditure), % yoy

Domestic Demand 6.0 7.4 5.4 3.9 4.4 6.4 7.4 5.6 7.0 7.6
Real Consumption: Private 5.0 5.3 4.9 3.9 5.0 5.4 5.5 5.0 5.2 5.4
Real Gross Fixed Capital Formation 9.4 11.8 3.3 7.8 8.0 8.3 10.0 8.6 10.4 12.1
Government Expenditure (%yoy) 3.9 10.4 15.7 (8.8) (9.0) 7.3 11.4 1.5 9.7 9.3
National Output (By Sector), % yoy

Agriculture, Livestock's, Forestry and Fisheries 3.5 4.8 3.3 3.0 3.1 3.0 3.0 3.0 3.3 3.4
Mining and Quarrying 1.9 0.7 2.4 3.1 3.8 3.8 3.8 3.6 3.2 3.2
Manufacturing Industries 4.7 3.7 1.5 3.7 4.3 4.3 4.3 4.2 4.7 5.0
Electricity, Gas and Watersupply 10.3 10.9 14.5 8.2 4.8 4.3 4.1 5.3 6.5 6.9
Construction 8.5 7.5 6.4 7.1 7.2 7.2 7.0 7.1 7.4 8.0
Trade, Hotel and Restaurant 8.9 6.9 0.6 9.4 9.6 9.6 9.6 9.6 8.0 8.3
Transportation and Communication 14.0 16.6 17.1 11.9 12.9 12.0 12.0 12.2 15.0 14.5
Financial, Ownership and Business Services 8.0 8.2 5.7 5.3 6.1 6.1 6.2 5.9 6.2 6.9
Services 6.4 6.2 7.2 4.6 5.3 5.3 5.3 5.1 5.5 5.6
2007 2008 2009 2010(f) 2011 (f) 2012 (f)

Q1 (A) Q2 (A) Q3 Q4 Full Year
External Sector
Exports (%yoy,USD) - Merchandise 14.0 18.3 (14.4) 44.7 34.4 - - 24.2 19.1 20.5
Imports (%yoy,USD) - Merchandise 15.4 36.9 (27.7) 53.7 45.8 - - 40.3 24.9 23.3
Trade Balance (BOP, USD bn) 32.8 22.9 35.1 8.4 9.0 - - 30.1 29.0 30.8
Current Account (% of GDP) 2.4 0.0 2.0 1.2 1.0 - - 1.0 0.3 0.1
Total External Debt (% of GDP) 32.7 30.3 32.0 25.2 - - - 28.7 28.4 28.7
International Reserves (USD bn) 56.0 51.6 66.1 71.8 76.3 - - 80.4 94.4 105.4
Import cover (months) 7.4 4.8 8.2 7.2 7.3 - - 7.4 6.9 6.3
IDR/USD (period average) 9,138 9,691 10,375 9,251 9,135 9,010 8,927 9,081 8,972 9,161
IDR/USD (year end) 9,419 10,950 9,400 9,115 9,083 - - 8,927 9,083 9,274
Capital Market
JCI Index 2746 1355 2925 - - - - 3345 - -
Sovereign Yield 5 Y 9.2 11.8 9.6 9.7 9.7 9.8 9.9 9.9 10.8 -
Sovereign Yield 10 Y 10.0 11.9 10.2 10.3 10.3 10.4 10.5 10.5 11.6 -
Other
BI rate (% period average) 8.44 8.75 6.94 - - - - 6.63 7.48 7.50
BI rate (% end period) 8.00 9.25 6.50 6.50 6.50 6.50 7.00 7.00 7.50 7.50
Headline Inflation (% yoy, period average) 6.04 9.75 4.90 - - - - 5.10 6.63 -
Headline Inflation (% yoy, end period) 5.42 11.06 2.78 3.43 5.05 5.85 6.30 6.30 6.60 6.10
Fiscal Balance (% of GDP) (1.30) (0.10) (2.10) (1.40) (1.50) (1.50)
S&P's Rating - FCY BB- BB- BB- BB+ BBB- BBB
S&P's Rating - LCY BB+ BB+ BB+ BBB- BBB- BBB

INDONESIA CURRENT DATA
2010
Indicators Unit 2006 2007 2008 2009
Jan Feb Mar Apr May Jun Jul Aug
Exchange Rate
End of Period IDR/USD 8995 9393 10900 9390 9348 9335 9100 9013 9180 9061 8950 9016
Average IDR/USD 9082 9354 1167 9462 9284 9344 9167 9029 9180 9147 9043 8973
Monetary Sector
Base money M0, eop IDRtn 297.08 379.58 344.69 402.12 384.18 380.14 374.41 385.43 391.85 401.43 408.97 426.87
Narrow money M1 IDRtn 361.07 450.06 456.79 515.82 496.53 490.08 494.46 494.72 514.01 545.41 539.74
Broad Money M2 IDRtn 1,382.07 1,649.66 1,883.85 2,141.38 2,073.86 2,066.48 2,111.35 2,115.13 2,142.34 2,230.24 2,216.10
Outstanding Loan IDRtn 787.14 995.11 1,313.87 1,446.81 1,414.26 1,436.34 1,463.15 1,492.28 1,534.83 1,589.66 1,605.81
Outstanding Deposit IDRtn 1,230.97 1,459.44 1,673.82 1,914.11 1,861.46 1,854.12 1,905.73 1,903.16 1,927.05 2,006.83 1,987.02
1-month SBI rate % p.a 9.92 8.00 10.95 6.46 6.45 6.42 6.37 6.20 6.20 6.26 N/A N/A
Lending rate (working capital) % p.a 15.07 13.00 15.22 13.69 13.75 13.68 13.54 13.42 13.26 13.17 13.21
3-month deposit rate, eop % p.a 9.71 7.42 11.97 6.85 7.33 7.14 7.09 6.86 6.85 6.79 6.79
Overnight rate, eop % p.a 6.06 4.50 9.40 6.24 6.24 6.15 6.15 6.17 6.31 6.25 6.25 6.46
Prices
Headline CPI (2007=100) Index 145.89 155.5 113.86 117.03 118.01 118.36 118.19 118.37 118.71 119.86 121.74 122.67
Year on year inflation rate % 6.60 6.59 11.06 2.78 3.72 3.81 3.43 3.91 4.16 5.05 6.22 6.44
Month on month inflation rate % 1.21 1.1 -0.04 0.33 0.84 0.30 -0.14 0.15 0.29 0.97 1.57 0.76
Year to date inflation rate % N/A 11.06 2.78 0.84 1.14 0.99 1.15 1.44 2.42 4.02 4.82
Wholesale Price Index
Index 178 217 238.0 166 167 167 168 169 170 173 174
(2000=100)
Trade
Export USDbn 9.61 10.86 8.69 13.35 11.60 11.17 12.77 12.04 12.66 12.33 12.49
Oil USDbn 1.90 2.51 1.24 2.50 2.34 2.18 2.17 2.20 2.37 1.90 1.88
Non oil USDbn 7.72 8.36 7.45 10.85 9.25 8.99 10.61 9.83 10.29 10.43 10.61
Import USDbn 4.97 6.81 6.29 10.33 9.49 9.50 10.97 11.24 10.03 11.76 12.62
Oil USDbn 1.37 2.39 0.98 2.10 1.94 2.05 2.25 2.52 2.03 2.39 2.11
Non oil USDbn 3.60 4.42 5.31 8.22 7.55 7.45 8.72 8.71 8.00 9.37 10.51
Trade Balance USDbn 4.56 4.06 2.40 3.02 2.11 1.67 1.80 0.80 2.62 0.57 -0.13
Output
GDP (current price) IDRtn 873.18 1034.86 1274.29 1450.82 1496.24 1572.40
GDP (constant price at 2000) IDRtn 466.10 493.37 518.94 547.54 558.11 573.71
Real Growth % YoY 6.06 5.88 5.20 5.43 5.69 6.17
Capital Market
JCI Index, eop Index 1805.5 2745.83 1355.41 2534.36 2610.80 2549.03 2777.30 2971.25 2796.96 2913.68 3069.28 3081.88
Volume, avg shares mn

2394.5 3155.65 1743.25 3422.10 4462.40 3661.76 4350.70 5554.89 5639.90 4542.75 4104.74 4190.05
Value, avg IDRbn 1985.7 4340.55 1454.61 2332.42 3599.15 2711.71 3546.06 4167.97 4473.01 2847.71 2910.90 3308.05
Consumer Confidence Index 99.1 99.10 90.60 108.70 110.50 105.30 107.40 110.70 109.90 111.40 105.70 104.00
Disclaimer: This material is for information only, and we are not soliciting any action based upon it. This report is not to be
construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or
solicitation would be illegal. The information herein has been obtained from sources believed to be reliable, but we do not
warrant that it is accurate or complete, and it should not be relied upon as such. Opinion expressed is our current opinion as of
the date appearing on this material only, and subject to change without notice. It is intended for the use by recipient only and
may not be reproduced or copied/photocopied or duplicated or made available in any form, by any means, or redistributed to
others without written permission of PT Bank Mandiri Tbk. Additional information is available upon request. For further
information please contact: Office of Chief Economist, Ph. (021) 524 5516/5272 or Facs. (021) 521 0430.

Head Office Overseas Offices
Plaza Mandiri Hongkong Branch
Jl. Gatot Subroto Kav. 36-38 7th Floor, Far East Finance Centre
Jakarta 12190, Indonesia 16 Harcourt Road, Hongkong
Tel: (62-21) 526 5045 – 526 5095 Tel: 852-2527-6611
Fax: (62-21) 526 8372 – 526 5008 Fax: 852-2529-8131
Website: www.bankmandiri.co.id
Singapore Branch
Zulkifli Zaini 3 Anson Road #12-01/02, Springleaf Tower
President Director & CEO Singapore 079909
Tel: (62-21) 3002 3067, Fax: (62-21) 526 3617 Tel: 65-6213-5688
Riswinandi Fax: 65-6438-3363
Deputy President Director
Tel: (62-21) 3002 3028, Fax: (62-21) 526 3617
Abdul Rachman Cayman Islands Branch
rd
Director Institutional Banking Cardinal Plaza 3 Floor
Tel: (62-21) 3002 3839, Fax: (62-21) 252 4651 30 Cardinal Avenue, PO Box 10198,
Grand Cayman, KY1-1002, Cayman Islands
Sentot A. Sentausa
Tel: 1-345-945-8891
Director Risk Management
Fax: 1-345-945-8892
Tel: (62-21) 3002 3454, Fax: (62-21) 526 8213
Thomas Arifin
Director Treasury, FI & Special Asset Management Bank Mandiri (Europe) Limited, London
Tel: (62-21) 3002 3763, Fax: (62-21) 526 3763 nd
Cardinal Court (2 Floor),
Budi Gunadi Sadikin 23 Thomas More Street
Director Micro & Retail Banking London EIW IYY, United Kingdom
Tel: (62-21) 3002 3079, Fax: (62-21) 252 1585 Tel: 44-207-553-8688
Ogi Prastomiyono Fax: 44-207-553-8699
Director Compliance & Human Capital
Tel: (62-21) 3002 3666, Fax: (62-21) 252 4651
Shanghai Representative Office
Pahala N. Mansury 3401, Bank of China Tower
Director Finance & Strategy 200 Yin Cheng (M) Road,
Tel: (62-21) 3002 3089, Fax: (62-21) 526 8213
Pudong New Area, Shanghai, 200120
Fransisca N. Mok People’s Republic of China
Director Corporate Banking Tel: 86-21-5037-2509
Tel: (62-21) 3002 3847, Fax: (62-21) 526 3617 Fax: 86-21-5037-2507
Sunarso
Director Commercial & Business Banking
Tel: (62-21) 3002 3087, Fax: (62-21) 526 3617 Dilli Branch – Timor Leste
Kresno Sediarsi Avenida Presidente Nicolao Lobato
Director Technology & Operation No.12, Colmera
Tel: (62-21) 524 3092, Fax: (62-21) 252 1585 Dilli – Timor Leste
Tel: +670-331-7777
Haryanto Budiman Fax: +670-331-7190/74444
EVP Coordinator Change Management Office
Tel: (62-21) 3002 3076, Fax: (62-21) 526 8213
Mansyur S. Nasution Mandiri International Remittance Sdn.Bhd.
EVP Coordinator Consumer Finance Wisma Mepro, 29 & 31 Jalan Ipoh 51200 Kuala
Tel: (62-21) 3002 3075, Fax: (62-21) 5296 4116 Lumpur, Malaysia
Riyani T. Bondan Telp : +60-3-4045-988
EVP Coordinator Internal Audit
Tel: (62-21) 3002 3722, Fax: (62-21) 526 3623

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OFFICE OF CHIEF ECONOMIST

BI rate unchanged at 6.5%, p.02

% Dec-09 Mar-10 Jun-10 Aug-10 Sep-10

Figure 1. BI Rate Summary. (Source: CEIC, Bloomberg, Mandiri Sekuritas)

Current New Effective Date Note

LDR linked - 0.1-0.2 of third party fund 1-Mar-11 No interest

Figure 2. New Reserves Requirement. (Source: CEIC)

© Office of Chief Economist Page 2 of 26

10 year bond yields Weekly Currency Weekly YTD Inflation

Figure 3. Asian Bond Market Yield Movements. (Source: Bloomberg)

Review: Bond market rallied after long holiday. After long

Yield curve bullish flattened. The 10-year rupiah sovereign

Two factor behind the rally

© Office of Chief Economist Page 4 of 26

Portfolio 1 Month- 2 Month- 3 Month- Year-to-

Primary and secondary market still has good demand

© Office of Chief Economist Page 5 of 26

Thus the government has issued IDR142.4tn (incl. global bonds

Auction Date Bond Series

© Office of Chief Economist Page 6 of 26

Outlook: Inflation and bond auctions the main factors to be

© Office of Chief Economist Page 7 of 26

Indonesia is currently playing a very insignificant role in the

Increasing Domestic Demands

© Office of Chief Economist Page 8 of 26

Indonesia 18.9 Other

Indonesian sugar industry has slightly different characteristics

© Office of Chief Economist Page 9 of 26

Household Consumption Industry Consumption

Sugar needed by industries, especially food and beverage

2003 2004 2005 2006 2007 2008 2009 2010F

© Office of Chief Economist Page 11 of 26

2003 2004 2005 2006 2007 2008 2009 2010F

Domestic needs of sugar (household and industries) are

© Office of Chief Economist Page 12 of 26

Towards sugar self-sufficiency

© Office of Chief Economist Page 13 of 26

The program for sugar self-sufficiency in 2014 will actually be

© Office of Chief Economist Page 15 of 26

Therefore, the government and other relevant parties must

Internationa Sugar Price Domestic White Crystal

Raw Sugar White Sugar

© Office of Chief Economist Page 16 of 26

PVP XVIII Pte.Ltd., Prudent Capital Ltd., The Bank of New

PT Multistrada Arah Sarana Tbk

Figure 19. shareholder structure per June 2010. (Source: company).

Growing tire market

© Office of Chief Economist Page 17 of 26

Figure 20. Financial Summary. (Source: Company, Mandiri Sekuritas)

Figure 21. Peer Comparison. (Source: Bloomberg, Mandiri Sekuritas estimates).

© Office of Chief Economist Page 18 of 26

Ins tal l ed capa ci ty - da i l y Uti li zati on ra te

Installed capacity - daily Utilization rate

© Office of Chief Economist Page 19 of 26

Figure 24. Indonesia Automotive Market and Forecast. (Source: Gaikindo).

Indonesia motorcycle sales.

© Office of Chief Economist Page 20 of 26

Figure 25. Quarterly Domestic Motorcycyle Sales. (Source: GAIKINDO).

Indonesia tire industry

Tire production in Indonesia amounted to USD1.0bn in FY09

© Office of Chief Economist Page 21 of 26

Based on APBI data per April-10, OEM segments only

Sales 16,241 50.9% 100.0% 12,022 37.0% 100.0%