BUY Dec 2016 TP (IDR) 24,050 Consensus Price (IDR) 19,939 TP to Consensus Price +20.6% vs. Last Price +22.1%

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1 PT Indocement Tunggal P Tbk (INTP) Sign of turnaround Revenue meets our expectation INTP posted IDR 17.8 trillion in FY2015, meeting our estimate. This result declined by 11.0% compared to IDR 20.0 trillion in FY2014. Cement segment s revenue fell by 11.3% after 7.7% drop in domestic volume and 4.4% decline in domestic ASP. For FY2016, we estimate INTP s revenue to grow by 8.3% supported by 7.1% increase in domestic sales volume and 2.2% of domestic ASP growth. Favorable interest rate sentiment in addition to government s massive infrastructure development will likely stimulate demand for cement. Margins bounce back in Q4 On bottom line, INTP recorded IDR 4.36 trillion of net profit, slightly lower than our forecast of IDR 4.51 trillion. However, looking quarterly basis, in Q4 2015, INTP has turned the trend of declining margin which started from Q Net profit margin picked up by 0.5% from 22.7% to 23.2%. For FY 2016 we estimate INTP to book 24.9% of net profit margin or 0.4% higher compared to 24.5% in FY Lower world commodity prices will help INTP to reduce fuel and power costs which constitute largest composition of manufacturing cost. Set TP of 24,050 with Buy rating We revise down our target price from 24,250 into 24,050 for the end of FY2016. Our target price is derived from residual income model with cost of equity of 12.1% and target P/B ratio of 3.3x. Our target price is equivalent to 15.8x of forward P/E at the end of FY 2016 (vs 5 year average of 15.7x) Indocement Tunggal Prakarsa, Tbk Summary (IDR bn) 2014/12A 2015/12E 2016/12E 2017/12E Revenue 19,996 17,798 19,271 22,455 Revenue growth 7.0% -11.0% 8.3% 16.5% EBITDA 6,879 6,011 6,447 7,722 Net profit 5,290 4,357 4,802 5,613 EPS (IDR) 1,437 1,183 1,304 1,525 EPS growth 5.6% -17.6% 10.2% 16.9% BVPS (IDR) 6,676 6,483 7,140 7,952 EBITDA margin 34.4% 33.8% 33.5% 34.4% NPM 26.5% 24.5% 24.9% 25.0% ROE 22.4% 18.0% 19.1% 20.2% ROA 19.1% 15.4% 16.7% 17.8% ROIC 19.6% 16.0% 17.0% 18.1% P/E 17.4x 18.9x 18.4x 15.8x P/BV 3.7x 3.4x 3.4x 3.0x EV/EBITDA 11.8x 12.3x 12.5x 10.3x DPS (IDR) 900 1, Dividend yield 3.6% 6.0% 2.7% 3.0% Source: Company Data, Bloomberg, NHKS Research Please see the last page for rating criteria & important disclaimer NH Korindo Securities Company Report Mar 28, 2016 BUY Dec 2016 TP (IDR) 24,050 Consensus Price (IDR) 19,939 TP to Consensus Price +20.6% vs. Last Price +22.1% Shares data Last Price (IDR) 19,700 Price date as of Mar 24, wk range (Hi/Lo) 23,700/16,000 Free float (%) 36.0 Outstanding sh.(mn) 3,681 Market Cap (IDR bn) 72,152 Market Cap (USD mn) 5,408 Avg. Trd Vol - 3M (mn) 2.61 Avg. Trd Val - 3M (bn) Foreign Ownership 82.7% Basic Industry Cement Bloomberg Reuters Raphon Prima Analyst , ext:214 raphon@nhsec.co.id Share Price Performance INTP.IJ INTP.JK YTD 1M 3M 12M Abs. Ret % 3.1% -12.2% -9.0% Rel. Ret % -0.5% -18.2% 2.4%

2 Summary of Financials INTP Summary Last Price (IDR) March 24, ,700 Target Price (IDR) Dec , /12A 2015/ /12E 2017/12F Analyst: Raphon Prima Rating: Buy ROE 22.4% 18.0% 19.1% 20.2% ROA 19.1% 15.4% 16.7% 17.8% ROIC 19.6% 16.0% 17.0% 18.1% INCOME STATEMENT EBITDA/Equity 29.1% 24.8% 25.7% 27.8% In IDR bn 2014/12A 2015/ /12E 2017/12F EBITDA/Assets 24.8% 21.3% 22.4% 24.4% Net Sales 19,996 17,798 19,271 22,455 Cash Dividend (IDR bn) 3,313 4,970 2,396 2,641 Growth (% y/y) 7.0% -11.0% 8.3% 16.5% Dividend Yield (%) 3.6% 6.0% 2.7% 3.0% COGS (10,890) (9,889) (10,566) (12,323) Payout Ratio (%) 66.1% 94.3% 55.0% 55.0% Gross Profit 9,106 7,909 8,705 10,132 DER 0.0x 0.0x 0.0x 0.0x Gross Margin 45.5% 44.4% 45.2% 45.1% Net Gearing 0.6% 0.6% 0.9% 0.7% Operating Expenses (3,105) (2,852) (3,112) (3,553) LT Debt to Equity 0.0x 0.0x 0.0x 0.0x EBIT 6,001 5,057 5,593 6,579 Capitalization Ratio 0.0x 0.0x 0.0x 0.0x EBIT Margin 30.0% 28.4% 29.0% 29.3% Equity Ratio 0.9x 0.9x 0.9x 0.9x Depreciation ,143 Debt Ratio 0.0x 0.0x 0.0x 0.0x EBITDA 6,879 6,011 6,447 7,722 Financial Leverage 1.2x 1.2x 1.1x 1.1x EBITDA Margin 34.4% 33.8% 33.5% 34.4% Current Ratio 4.9x 4.9x 5.6x 4.9x Interest (net) (22) (27) (15) (31) Quick Ratio 4.3x 4.2x 4.6x 4.2x EBT 6,815 5,645 6,266 7,312 Cash Ratio 3.5x 3.2x 3.5x 3.2x Income Tax (1,522) (1,288) (1,464) (1,699) Cash Conversion Cycle Minority Interest Par Value (IDR) Net Profit 5,290 4,357 4,802 5,613 Total Shares (mn) 3,681 3,681 3,681 3,681 Growth (% y/y) 5.6% -17.6% 10.2% 16.9% Share Price (IDR) 25,000 22,325 24,050 24,050 Net Profit Margin 26.5% 24.5% 24.9% 25.0% Market Cap (IDR tn) BALANCE SHEET In IDR bn 2014/12A 2015/ /12E 2017/12F 2014/12A 2015/ /12E 2017/12F Cash 11,256 8,656 8,398 9,302 Price /Earnings 17.4x 18.9x 18.4x 15.8x Receivables 2,671 2,535 2,745 2,915 Price /Book Value 3.7x 3.4x 3.4x 3.0x Inventories 1,666 1,521 1,779 1,867 Price/Sales 4.6x 4.6x 4.6x 3.9x Total Current Assets 16,087 13,134 13,378 14,492 PE/EPS Growth 3.1x -1.1x 1.8x 0.9x Net Fixed Assets 12,144 13,814 15,720 18,158 EV/EBITDA 11.8x 12.3x 12.5x 10.3x Other Non Current Assets EV/EBIT 13.5x 14.6x 14.4x 12.1x Total Assets 28,885 27,638 29,887 33,351 EV (IDR bn) 80,900 73,649 80,347 79,408 Payables 1,175 1,103 1,039 1,189 Sales CAGR (3-Yr) 0.0% 1.0% 1.0% 3.9% ST Bank Loan EPS CAGR (3-Yr) 0.0% -2.9% -1.4% 2.0% Curr Maturities of LT Debt Basic EPS (IDR) 1,437 1,183 1,304 1,525 Other Current Liab. 2,037 1,524 1,356 1,711 Diluted EPS (IDR) 1,437 1,183 1,304 1,525 LT Debt BVPS (IDR) 6,676 6,483 7,140 7,952 Other Non Current Liab , ,003 Sales PS (IDR) 5,432 4,835 5,235 6,100 Total Liabilities 4,308 3,772 3,602 4,079 DPS (IDR) 900 1, Shareholders' Equity 24,577 23,866 26,285 29,272 CASH FLOW STATEMENT DCF, RIM & EVA In IDR bn 2014/12A 2015/ /12E 2017/12F 2014/12A 2015/ /12E 2017/12F Net Income 5,290 4,357 4,802 5,613 DCF (IDR bn) Deprec & Amortization ,143 NOPAT 4,661 3,903 4,286 5,050 Chg. In Working Capital (822) (261) (734) 295 +Depr./Amor ,143 CFO 5,347 5,049 4,921 7,051 -CAPEX (3,867) (2,708) (2,766) (3,601) Capex (3,867) (2,708) (2,766) (3,601) -Incr. (Decr.) in Working Cap. 1,280 2,380 (525) (581) CFI (3,398) (2,697) (2,886) (3,487) (Unlevered) FCFF 2,952 4,529 1,850 2,011 Dividends Paid (3,313) (4,970) (2,396) (2,641) WACC Net Borrowing (PMT) (35) (4) 90 (34) Cost of Debt (Tax Adj.) 8.0% 9.0% 9.4% 11.3% CFF (3,365) (4,993) (2,293) (2,660) Cost of Equity (COE) 10.3% 11.4% 12.1% 12.1% Net Changes in Cash (1,416) (2,641) (257) 904 WACC (%) 10.3% 11.4% 12.0% 12.1% RIM OWNERSHIP PROFITABILITY & STABILITY VALUATION INDEX Spread (FROE-COE) (%) 15.7% 12.9% 6.3% 8.1% Residual Income (IDR) 3,049 2,946 1,555 1,923 By Geography % Shareholders % Equity Charge 1,961 2,344 2,802 2,879 Britain 67.2 Birchwood Omnia Ltd 51.0 EVA 17.3 PT Mekar Perkasa 13.0 Invested Capital (IDR bn) 26,472 23,987 26,496 29,449 United States 9.5 Aberdeen 3.8 ROIC-WACC (%) 7.3% 4.1% 4.9% 6.0% Luxembourg 3.2 Massachusetts Mutual 2.9 EVA (IDR bn) 1, ,309 1,766 PT NH Korindo Securities Company Research Page 22

3 Quarterly Financial Performance Q Q Q Q Q Q Q Q Q1 2016E y-y q-q Net Revenue 4,500 4,999 4,668 5,829 4,328 4,547 4,011 4,912 4, % -9.2% Cement 4,102 4,572 4,277 5,343 3,957 4,138 3,667 4,457 4, % -8.3% RMC % -17.4% Aggregates % -15.4% Inter-segment (257) (331) (303) (359) (260) (284) (239) (308) (256) -1.4% -16.9% Domestic Cement Revenue 4,071 4,505 4,267 5,294 3,927 4,071 3,620 4,389 4, % -7.4% Volume ('000 tons) 4,296 4,676 4,226 5,301 3,947 4,300 3,965 4,870 4, % -13.9% ASP (IDR '000/ton) , % 7.6% Gross Profit 1,974 2,240 2,134 2,739 1,928 2,066 1,758 2,157 1, % -10.2% Gross Margin 43.9% 44.8% 45.7% 47.0% 44.5% 45.4% 43.8% 43.9% 43.4% Operating Profit 1,221 1,557 1,356 1,841 1,276 1,325 1,091 1,365 1, % -10.7% Operating Margin 27.1% 31.1% 29.1% 31.6% 29.5% 29.1% 27.2% 27.8% 27.3% EBITDA 1,433 1,780 1,569 2,071 1,508 1,554 1,319 1,626 1, % -11.7% EBITDA Margin 31.8% 35.6% 33.6% 35.5% 34.8% 34.2% 32.9% 33.1% 32.2% Net Profit 1,134 1,385 1,198 1,555 1,146 1, ,138 1, % -5.5% Net Profit Margin 25.2% 27.7% 25.7% 26.7% 26.5% 25.6% 22.7% 23.2% 24.1% Balance Sheet Net Fixed Asset 9,426 9,660 10,923 12,144 12,713 13,246 13,533 13,814 14, % 4.5% Total Asset 27,214 28,781 26,397 28,885 28,927 25,354 25,930 27,638 28, % 2.6% Total Liabilities 3,170 6,654 3,135 4,308 3,231 3,491 3,148 3,772 3, % -10.1% Total Equity 24,044 22,128 23,262 24,577 25,696 21,863 22,781 23,866 24, % 4.6% Cash Flow CFO 475 1, , , , % -61.1% CFI (453) (444) (1,474) (1,025) (1,169) (618) (670) (268) (1,014) -12.7% 279.0% CFF (15) (14) (3,324) (12) 5 (4,951) 34 (6) % % Net Changes in CF 7 1,199 (4,210) 1,588 (463) (4,159) (101) 2,149 (46) -90.3% % Source: Company, NHKS research PT NH Korindo Securities Company Research Page 33

4 Multiple Valuation Forward P/E Dynamic Forward P/E Rating and target price update Target Price Revision Date Rating Target Price Last Price Consensus vs Last Price vs Consensus 07/11/2015 BUY 23,300 (Dec 2015) 19,800 22, % +3.5% 01/29/2016 BUY 24,250 (Dec 2016) 20,000 19, % +22.4% 03/28/2016 BUY 24,050 (Dec 2016) 19,700 19, % +20.6%, Bloomberg Analyst Coverage Rating Closing and Target Price Source: Bloomberg PT NH Korindo Securities Company Research Page 44

5 NH Korindo Securities (NHKS) stock ratings 1. Period: End of year target price 2. Rating system: Based on a stock s absolute return from the date of publication Strong Buy: high conviction Buy rated stocks Buy: greater than 15% Hold: between 0% and +15% Reduce: less than 0% DISCLAIMER This report, and any electronic access to it, is restricted to and intended only for clients of PT NH Korindo Securities or a related entity to PT NH Korindo Securities. This document is for information only and for the use of the recipient. It is not to be reproduced or copied or made available to others. Under no circumstances is it to be considered as an offer to sell or solicitation to buy any security. Any recommendation contained in this report may not to be suitable for all investors. Moreover, although the information contained herein has been obtained from sources believed to be reliable, its accuracy, completeness and reliability cannot be guaranteed. We expressly disclaim any responsibility or liability (express or implied) of PT NH Korindo Securities, its affiliated companies and their respective employees and agents whatsoever and howsoever arising (including, without limitation for any claims, proceedings, action, suits, losses, expenses, damages or costs) which may be brought against or suffered by any person as a results of acting in reliance upon the whole or any part of the contents of this report and neither PT NH Korindo Securities, its affiliated companies or their respective employees or agents accepts liability for any errors, omissions or misstatements, negligent or otherwise, in the report and any liability in respect of the report or any inaccuracy therein or omission therefrom which might otherwise arise is hereby expresses disclaimed. All rights reserved by PT NH Korindo Securities PT. NH Korindo Securities Member of Stock Exchange Head Office : Wisma Korindo 7 th Floor Jl. M.T. Haryono Kav. 62 Pancoran, Jakarta Telp: Fax : Branch Office Pluit: Jl. Pluit Kencana Raya Blok O No. 79 B-C, Pluit Penjaringan Jakarta Telp : Fax : Representative Office Solo : Jl. Ronggowarsito No. 8 Kota Surakarta Jawa Tengah Telp: Fax : A Member of NongHyup Financial Group Seoul New York London Hong Kong Singapore Shanghai Beijing Hanoi Ho Chi Minh City Jakarta PT NH Korindo Securities Company Research Page 55