Hold Dec 2016 TP (IDR) 4,275 Consensus Price (IDR) 4,744 TP to Consensus Price -9.9% vs. Last Price +6.9%

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1 PT Sarana Menara Nusantara Tbk (TOWR) Finding new growth driver Revenue start to grow slowly TOWR posted IDR 4.47 trillion of revenue in FY2015 or 8.9% higher compared to IDR 4.11 trillion in FY2014. This growth is significantly slower compared to double digit growth in prior two years. Total tenant grew by 4.5% from 20,138 to 21,038. Meanwhile company s tower increased by 5.5% from 11,595 to 12,237 resulting tenancy ratio of Looking on the pattern of growth in several previous year, it is clearly that growth has started to slow since last year. In period of FY2013 to FY2014, operational indicators and revenue grew by double digit. But in FY2015, all these indicators grew by only one digit. This change is significantly driven by change in cellular market which experienced many consolidation among participants, reducing competition. Largest customer is not big player in cellular market Currently top contributor of TOWR s revenue is PT Hutchinson 3. In last year, this customer contributed 38.3% of total TOWR s revenue. We view this as significant risk for TOWR s revenue considering Hutchinson 3 is not big player in s cellular market. Realizing limited opportunity of expansion from Hutchinson 3, TOWR must increases portion from other operators. Set TP of 4,275 with Hold rating We set our target price of IDR 4,275 for the end of FY2016. Our target price is derived from target of 14.1x forward EV/EBITDA multiple in the end of FY This multiple is the level of average for last 3 years. Currently TOWR is traded on discount at 13.3x of forward EV/EBITDA. Sarana Menara Nusantara, Tbk Summary (IDR bn) 2014/12A 2015/12A 2016/12E 2017/12E Revenue 4,106 4,470 4,592 4,744 Revenue growth 28.4% 8.9% 2.7% 3.3% EBITDA 3,152 3,266 3,566 3,608 Net profit 1,100 2,958 1,097 1,140 EPS (IDR) EPS growth 552.7% 169.0% -62.9% 3.9% BVPS (IDR) EBITDA margin 76.8% 73.1% 77.7% 76.1% NPM 26.8% 66.2% 23.9% 24.0% ROE 26.2% 47.7% 13.3% 12.2% ROA 6.7% 15.3% 5.1% 5.1% ROIC 8.1% 18.7% 6.1% 6.3% P/E 38.5x 16.4x 39.8x 38.3x P/BV 9.0x 6.3x 5.0x 4.4x EV/EBITDA 15.8x 17.0x 14.2x 13.7x DPS (IDR) Dividend yield 0.0% 0.0% 0.0% 0.0% Data, Bloomberg, NHKS Research Please see the last page for rating criteria & important disclaimer NH Korindo Securities Company Report Apr 27, 2016 Hold Dec 2016 TP (IDR) 4,275 Consensus Price (IDR) 4,744 TP to Consensus Price -9.9% vs. Last Price +6.9% Shares data Last Price (IDR) 4,000 Price date as of Apr 26, wk range (Hi/Lo) 4,850 / 3,650 Free float (%) 67.3 Outstanding sh.(mn) 10,203 Market Cap (IDR bn) 40,182 Market Cap (USD mn) 3,097 Avg. Trd Vol - 3M (mn) 0.23 Avg. Trd Val - 3M (bn) 0.94 Foreign Ownership 21.6% Infrastructure Telecommunication Tower Bloomberg Reuters Raphon Prima Analyst , ext:214 raphon@nhsec.co.id Share Price Performance TOWR.IJ TOWR.JK YTD 1M 3M 12M Abs. Ret % -2.1% -11.0% 0.0% Rel. Ret % -2.9% -17.7% 8.2%

2 Summary of Financials TOWR Summary Last Price (IDR) April 26, ,000 Target Price (IDR) Dec , /12A 2015/12A 2016/12E 2017/12E Analyst: Raphon Prima Rating: Hold ROE 26.2% 47.7% 13.3% 12.2% ROA 6.7% 15.3% 5.1% 5.1% ROIC 8.1% 18.7% 6.1% 6.3% INCOME STATEMENT EBITDA/Equity 75.0% 52.7% 43.4% 38.6% In IDR bn 2014/12A 2015/12A 2016/12E 2017/12E EBITDA/Assets 19.2% 16.9% 16.4% 16.2% Net Sales 4,106 4,470 4,592 4,744 Cash Dividend (IDR bn) Growth (% y/y) 28.4% 8.9% 2.7% 3.3% Dividend Yield (%) 0.0% 0.0% 0.0% 0.0% Cost of Revenue (576) (572) (1,570) (1,736) Payout Ratio (%) 0.0% 0.0% 0.0% 0.0% Gross Profit 3,530 3,898 3,022 3,009 DER 2.0x 1.3x 1.1x 0.8x Gross Margin 86.0% 87.2% 65.8% 63.4% Net Gearing 2.0x 1.3x 1.1x 0.8x Operating Expenses (716) (1,022) (846) (918) LT Debt to Equity 2.0x 1.3x 1.1x 0.8x EBIT 2,814 2,876 2,176 2,090 Capitalization Ratio 0.7x 0.6x 0.5x 0.4x EBIT Margin 68.5% 64.3% 47.4% 44.1% Equity Ratio 0.3x 0.4x 0.4x 0.4x Depreciation ,390 1,518 Debt Ratio 0.5x 0.5x 0.4x 0.4x EBITDA 3,152 3,266 3,566 3,608 Financial Leverage 3.9x 3.1x 2.6x 2.4x EBITDA Margin 76.8% 73.1% 77.7% 76.1% Current Ratio 1.3x 1.8x 0.7x 0.7x Interest (net) (856) (563) (724) (579) Quick Ratio 1.3x 1.7x 0.7x 0.6x EBT 1,557 3,958 1,461 1,520 Cash Ratio 1.0x 1.5x 0.6x 0.5x Income Tax (458) (993) (364) (380) Cash Conversion Cycle N/A N/A N/A N/A Minority Interest 1 (6) (0) (0) Par Value (IDR) Net Profit 1,100 2,958 1,097 1,140 Total Shares (mn) 10,203 10,203 10,203 10,203 Growth (% y/y) 552.7% 169.0% -62.9% 3.9% Share Price (IDR) 4,150 4,750 4,275 4,275 Net Profit Margin 26.8% 66.2% 23.9% 24.0% Market Cap (IDR tn) BALANCE SHEET In IDR bn 2014/12A 2015/12A 2016/12E 2017/12E 2014/12A 2015/12A 2016/12E 2017/12E Cash 2,010 2,987 2,392 2,074 Price /Earnings 38.5x 16.4x 39.8x 38.3x Receivables Price /Book Value 9.0x 6.3x 5.0x 4.4x Inventories Price/Sales 10.3x 8.2x 4.9x 4.5x Total Current Assets 2,642 3,533 3,077 2,654 PE/EPS Growth 0.1x 0.1x -0.6x 9.7x Net Fixed Assets 12,438 14,841 15,963 17,053 EV/EBITDA 15.8x 17.0x 14.2x 13.7x Intangible Assets 603 1,187 1, EV/EBIT 17.7x 19.3x 23.3x 23.7x Other Non Current Assets 1,599 1,856 1,849 1,845 EV (IDR bn) 49,679 55,378 50,678 49,504 Total Assets 17,282 21,417 21,972 22,538 Sales CAGR (3-Yr) 35% 25% 13% 5% Payables ,332 EPS CAGR (3-Yr) 57% 104% 87% 1% Curr Maturities of LT Debt ,491 1,617 Basic EPS (IDR) Other Current Liab. 1,365 1,315 1,176 1,111 Diluted EPS (IDR) LT Debt 9,151 9,456 6,966 6,348 BVPS (IDR) Other Non Current Liab. 1,376 2,304 2,095 2,194 Sales PS (IDR) Total Liabilities 12,566 13,738 13,199 12,602 DPS (IDR) Shareholders' Equity 4,716 7,679 8,772 9,936 CASH FLOW STATEMENT PROFITABILITY & STABILITY VALUATION INDEX DCF, RIM & EVA In IDR bn 2014/12A 2015/12A 2016/12E 2017/12E 2014/12A 2015/12A 2016/12E 2017/12E Net Income 1,100 2,958 1,097 1,140 DCF (IDR bn) Deprec & Amortization ,104 1,220 NOPAT 1,985 2,155 1,634 1,568 Chg. In Working Capital 1, (22) 900 +Depr./Amor ,104 1,220 CFO 3,337 3,417 2,178 3,261 -CAPEX (1,730) (2,106) (2,122) (2,214) Capex (1,730) (2,106) (2,122) (2,214) -Incr. (Decr.) in Working Cap. 1, (22) 900 CFI (2,147) (1,961) (2,324) (2,111) (Unlevered) FCFF 2, ,475 Dividends Paid WACC Net Borrowing (PMT) (446) (1,491) Cost of Debt (Tax Adj.) 7.4% 9.0% 9.0% 9.0% CFF (792) (707) (449) (1,467) Cost of Equity (COE) 8.4% 9.6% 8.7% 8.7% Net Changes in Cash (595) (318) WACC (%) 8.2% 9.5% 8.9% 8.8% RIM Spread (FROE-COE) (%) 21.4% 53.1% 5.6% 4.3% OWNERSHIP Residual Income (IDR) 790 2, By Geography % Shareholders % Equity Charge PT Sapta Adhikari Inv EVA United States 20.7 T Rowe Price Assoc. 6.5 Invested Capital (IDR bn) 13,001 14,070 17,581 18,229 Luxembourg 0.7 Bamco Inc 2.1 ROIC-WACC (%) 0.3% 11.5% -2.6% -2.6% Canada 0.1 Invesco Ltd 0.3 EVA (IDR bn) 34 1,622 (460) (470) PT NH Korindo Securities Company Research Page 22

3 Performance Highlights Number of tower FY FY 2015 Number of tenant FY FY 2015 Tenancy Ratio FY FY 2015 Revenue composition by customer FY 2015 Revenue breakdown based on customer (IDR bn) FY FY 2015 FY 2012 FY 2013 FY 2014 FY 2015 Hutchison ,162 1,594 1,714 yoy 31.7% 37.1% 7.6% Telkomsel yoy 81.7% 57.1% 16.8% XL yoy 35.3% 53.5% 7.8% Others (< 10%) 715 1, yoy 40.8% -8.9% 5.4% Total Revenue 2,265 3,197 4,106 4, % 28.4% 8.9% PT NH Korindo Securities Company Research Page 33

4 Multiple Valuation Forward EV/EBITDA Last 3 years Dynamic Forward EV/EBITDA Last 3 years Rating and target price update Target Price Revision Date Rating Target Price Last Price Consensus vs Last Price vs Consensus 4/27/2016 Hold 4,275 (Dec 2016) 4,000 4, % -9.9%, 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