Initiation of Coverage

Semen Gresik
Cementing Growth
Report date Sector Rating Last price Price Target Potential upside (%) 52 week Lo-Hi price 01-Oct-09 Cement BUY Rp6,300 Rp7,850 25 Rp1,825-Rp6,600

Optimistic cement outlook We expect an upbeat cement sector outlook due to years of underinvestment and low per capita consumption. We forecast domestic cement demand to grow by 9% in 2010 and 10% in 2011 driven by rapid property development and greater government spending on infrastructure, which both will be supported by low interest rates and positive GDP growth. In the longer term, the prospects of the Indonesian cement sector should remain strong as it structurally has huge market potential to exploit while its oligopoly structure would lead to a healthy competition. In expansion mode Semen Gresik (SMGR) is planning to build two new plants in Java and Sulawesi (each has capacity of 2.5 mn ton) to ease its capacity constraint as it is now running at utilization rate of 92%. We estimate total 2009-2014 capex (expansions and maintenance) of around US$1,372 mn, of which the largest chunk will be sourced internally while the rest would be debt funded. SMGR is the only cement company carrying an expansion projects. With these expansion projects, which are expected to gradually increase its production capacity, Semen Gresik would be able to continue to expand its market share and volume growth, raising its position in the Indonesia’s cement market. Expecting net profit to grow at a CAGR of 22% over 2009-11F We forecast revenue to grow by 13% and 12% for 2010F-2011F on a combination of higher selling price and sales volume. We estimate gross profit at Rp7.1 tn (+20% YoY) and Rp8.1 tn (+14% YoY) with gross margin at 48.2% and 48.9% in 2010F and 2011F, respectively, from 45.4% in 2009F. We estimate operating margin at 33.1% in 2010F and 34.0% in 2011F, from 30.1% in 2009F. We forecast strong profitability to drive net profit up by 30% to Rp3.8 tn in 2010F and by 15% to Rp4.3 tn in 2011F. Overall, we foresee net profit rising at 22% CAGR over 2009-11F. Initiate with Buy and TP of Rp7,850 We initiate our coverage on SMGR with TP of Rp7,850 and Buy rating as our TP offers a significant 25% upside potential. We use DCF methodology (assuming WACC of 14.4% and terminal growth rate of 5%) to derive our target price in order to capture the company’s longterm expansions. Compared to its Indonesian peers, SMGR looks attractive in both PER and EV/EBITDA basis. The company is trading at 2010 PER of 9.8x and EV/EBITDA of 6.4x, while its peers are trading at average PER of 14.5x and EV/EBITDA of 8.4x. Risks We view 1) difficulties in getting financing to finance expansions projects, 2) delay in government infrastructure projects and 3) rising energy prices as main risks to our forecasts. SMGR valuation metrics
YE 31 Dec (Rp bn) Revenue EBITDA Net profit Net profit growth (%) PER (x) EV/EBITDA (x) EV/ton (US$) PBV (x) Dividend yield (%) FY07 9,601 2,841 1,755 37.0 21.3 12.2 215.7 5.6 1.7 FY08 12,210 3,865 2,528 42.1 14.8 9.0 191.9 4.6 2.4 FY09F 12,993 4,460 2,933 16.2 12.7 7.8 187.2 3.8 3.4 FY10F 14,698 5,459 3,812 29.9 9.8 6.4 197.5 3.0 3.9 FY11F 16,516 6,240 4,380 14.9 8.5 5.6 178.1 2.5 5.1

Stock data Bloomb./Reuters code Mkt Cap (Rp bn/US$ mn) Issued Shares (mn) Avg. daily val. (Rp bn/US$ mn) SMGR IJ/SMGR.JK 37,369/3,866 5,932 22.3/2.3

Major shareholders & est. FF Gov't of Indonesia Blue Valley Hold. Est. free float 51.0% 24.9% 24.1%

Market view Buy Analysts rating 17 Hold 5 Sell 2

Share price performance 7,000 6,000 5,000 4,000 3,000
1-09 2-09 3-09 4-09 5-09 7-09 8-09 9-09 (Rp)

(%)

30 20 10 0 -10 -20 -30 -40 -50

SMGR(LHS)

Rel. to JCI (RHS)

Arief Budiman arief@optimasecurities.co.id 62-21-5795 0101

Source: Bloomberg and Optima Securities Please see the back page for rating definition, analysts certification, and important disclosure. Optima Securities may seek to do business with companies covered in its reports. As a result investors, should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

In the longer term.5% 5.6% 3.5% 39.7 0. The current low interest rates and unappealing saving/deposit rates have set off property demand (especially apartment) in the middle-upper to upper segments.3 7.8 42.5% 0.8 9.3% 45.9% 2010F 2011F 39.1 11.3% -6.9 12.7% 47.5% 1999 18.2 9.0% -10.6 4.3 80.8% 19.8 0.0% 2009F 36.3 7.4% 47.7 -16.3% 79.9 16.3 5.0% 34.4 30.1 1.capacity Surplus/deficit Utilization rate 27.3 8.4 4.6 8.2% 17.6 9. 1 October 2009 Optimistic cement outlook We expect an upbeat cement sector outlook due to years of under-investment and low per capita consumption.2% 47.8% 52.7 2005 31. We forecast domestic cement demand to grow by 9% in 2010 and 10% in 2011 driven by rapid property development and greater government spending on infrastructure.1 42.3 10.5% 46. the prospects of the Indonesian cement sector should remain strong as it structurally has huge market potential to exploit while its oligopoly structure would lead to a healthy competition.1% 25.7% 0.2 2001 25.9% 73.4 2003 27.5% 6.7% 3.0% -2.3 4.6 37. Interest rate vs.3 2.0 -5.9 12.7% 13.0% 33.8 28.9 12.2 6.5 35 46. Chart 1.8% -12.2 9.1% 84.9% 3.5% 4.8 46.7 2004 30.3 7.7 38.9 43.4% 442.3 23.0% 7.8 8. while this at the same time also driven property demand from the mid-to low-end segment through mortgage growth.8% 12.9 19.5% 47.5 39.5% 1.0% -1.0 2.5 -8.8 2008 38.2 6.4% 5.2 6.0 6. Table 1.6% 10.8 3.1 8.5% 73.2% 4.6 6.2 2000 22.5 8.4% 82.2% -15.8 46.5% 47.9 43. mortgage growth 45 40 35 30 25 20 15 10 5 0 2001 2002 2003 2004 2005 2006 2007 2008 mortgage grow th SBI rate Source: Bank Indonesia Chart 2.9 -6.3 2006 32.3 -29.2% 65.5 8 35.4 52.4 2007 34.3 -8. which both will be supported by low interest rates and positive GDP growth.7 2.3% 4.1 7.6 9.7% 1.8% 0. mortgage growth (%) 18 16 14 12 10 8 6 4 2 0 45 40 35 30 25 20 15 10 5 0 (%) (%) 16 14 12 10 8 6 4 2 0 2001 2002 2003 2004 2005 2006 2007 2008 Cement demand grow th Source: Bank Indonesia and BPS (%) mortgage grow th 2 .8 6.6% 88. : Indonesian key cement data (in mn tons) Domestic demand YoY growth GDP growth GDP multiplier growth ( x) Export (incl clinker) sales YoY growth Domestic + Export YoY growth Inst.9 4.2 0.5 9 27.1% 1.8 5.5% 4.3 1.3% 50.7 0.9 8.6 2002 27.1% 2.6 94.Semen Gresik.4 1997 27.3% 48.5% 46.1% 1998 19.6% 6.7% -13.6 5.2% 142.2% 88.3 1.2 90. : Cement demand growth vs.0% -36.9 -0.5% 73.0% 1.6% 59.8% -3.1 21.9 7. household affordability levels are relatively high this time around due to the higher income levels. Moreover.5% 80.4 84.4 3.2% 108.0% 1.5 3.8% 46.6 1.6% 5.4 7.0% 1.3 6.7 9.3% 1.0% 10.6% -30.1% 14.3 7.1% Source: BPS and Optima Securities Rapid property development Low interest rate environment and relatively aggressive mortgage lending have encouraged strong property development in Indonesia.8% 1996 25.

Muara Bungo. we believe this should fuel the growth of the Indonesian cement industry as all of the projects involve construction activities. We are not able to estimate cement growth resulted from construction activities. Upgrades for the country’s main port : Tanjung Priok (Jakarta). Given the large scale of the planned government spending on infrastructure projects. and more than 100 kilometers of bridges Source: Various newspapers Others Ports 3 .37 bn) on infrastructure projects in 2010 including bridges. 48 km of roads along Java’s south coast . Chart 3. the Cirebon-Kroya line (158 km) and the Mangarai-Cikarang line (20 km) in Greater Jakarta Aviation Projects Building or upgrading airports at Muara Teweh. This is reflected by Indonesian cement consumption data that shows around 80%-90% of cement sold in bags vs. but historical data shows that cement demand growth is closely correlated with GDP growth from construction sector with growth multiplier of around 1.9 tn (US$9. roads and airports that have increased the burden on the economy. The country needs to speed up investment in its poor infrastructure if it wants too boost growth rates and attract more investment. Sorong and Putusibau Repairing and upgrading hundreds of schools. Years of under-investment and obstacles such as bureaucracy have created a dire need in Indonesia for new power plants. ports and roads. accounting for around for 83% of the total cement consumption.Semen Gresik. in bulks (10%-20%. Table 2. lead to huge cement demand in the country. irrigation networks . Indonesia’s population is expected to reach around 240 mn people by the end of 2012. 1 October 2009 Housing sector is the major consumer of cement. : Indonesian population and household number 65 60 55 50 45 40 35 30 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009F 2011F Households (LHS) Source: BPS and Optima Securities Population (RHS) (mn) (mn) 250 240 230 220 210 200 190 180 170 160 150 Greater government spending Indonesia plans to spend about Rp93.3x. 50 km of roads in border areas. Due to this. and 23 km of roads on remote islands. in turn. Belawan (North Sumatra) and Bojonegara (Banten) Railways Double-tracking the Kroya-Kutoarjo line (76. which will lead to higher demand of housing units in the country. which is normally used in large building projects). Seram. Pengganit. : Major government infrastructure projects started in 2010 Type of projects Roads Works Building and upgrading 131 kilometers of arterial highways. the number of houses constructed is expected to increase from 58 mn in 2008 to 62 mn by 2012. This concrete growth in the housing sector will. ports.1 km) in Central Java.

3% and 6. This oligopolistic characteristic of the cement market has the tendency toward creating cartel enabling them to raise annual selling price. cement demand has increased by a CAGR of 7% Indonesia's per capita cement consumption is still the second lowest in Asia after India. and Thailand (410).000 45. The competitive environment improved considerably in 2007 after Semen Gresik initiated price increase in Nov 2006.000 50. Indonesia’s current per-capita consumption of around 170 kg is much lower than its neighboring countries such as Malaysia (543). This favorable environment should continue to lead to greater pricing flexibility and hence further earnings and profitability improvement.000 30. we expect Indonesia’s cement consumption to reach around 220kg per capita by 2015.000 40. We expect cement consumption to increase as income levels rise.Semen Gresik. 1 October 2009 Low per-capita consumption Over the last decade (1998-2008). respectively. which helped stopping price competition in the sector.000 55.0%.000 15. : Indonesian average cement retail price in 27 provinces 60. Chart 4. Assuming Indonesian population and GDP growth for Indonesia of about 1.000 35. : Global per capita cement consumption (kg) S Korea Malaysia China Thailand USA Vietnam Indonesia India 0 170 130 200 400 600 800 1000 1200 410 389 372 543 530 1010 Source: GSR and Optima Securities Oligopolistic structure supports healthy competition Indonesia has nine cement producers whereas three companies largely control the industry. Indocement and Holcim Indonesia with combined market share of 88%.000 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Jul-09 (Rp/sack) Source: BPS and Optima Securities 4 . which is not expected to take place further as cement companies will focus more on profitability rather than market share. Chart 3.000 20. The latest year of declined prices was in 2006 on price war. suggesting that industry has a lot long-term growth potential.000 25. namely Semen Gresik Group.

there is no firm timetable for the regional expansion plan so far. focus more on upgrading plan.372 mn. raising its position in the Indonesia’s cement market. SMGR is the only cement company carrying out an expansion projects while its close competitors. Chart 5.4m tons capacity during 2008-2011. With these expansion projects. Additionally. Indocement and Holcim. sales volume and utilization rate 25 24 23 22 21 20 19 18 17 16 15 2007 2008 2009F 2010F 2011F 2012F 2013F 2014F Production capacity (LHS) Source: Company and Optima Securities (mn tons) 100% 98% 96% 94% 92% 90% 88% 86% 84% 82% 80% Sales Volume (LHS) Utilization rate (RHS) 5 . we forecast that SMGR will be in negative free cashflow status at Rp723 bn in 2010F and Rp1. However. the company is working on de-bottlenecking project expected to add 2. Due to its high capex requirement for expansions. Semen Gresik would be able to continue to expand its market share and volume growth.5 mn ton) to ease its capacity constraint as it is now running at utilization rate of 92%. We estimate total 2009-2014 capex (expansions and maintenance) of around US$1. which are expected to gradually increase its production capacity. which would provide SMGR with immediate capacity addition. may be in Malaysia. of which the largest chunk will be sourced internally while the rest would be debt funded. These new plants are scheduled to complete in 2011 and 2012 and involve a total capex of around USD290 mn and USD305 mn respectively. SMGR is also looking at the possibility of acquiring a regional cement plant. Apart from organic growth projects.484 bn in 2011F with net cash turn to net debt in 2011F. 1 October 2009 In expansion mode Semen Gresik (SMGR) is planning to build two new plants in Java and Sulawesi (each has capacity of 2. : SMGR capacity.Semen Gresik. SMGR will also support its Sulawesi plant with 2x35MW power plant facility requiring capex of some US$115 mn.

from 45. Although SMGR domestic sales volume declined by 3.698 7.9% 37. from 30.210 5. : Our key assumptions on Semen Gresik earnings 2007 Industry sales vol (mn tons) SMGR sales vol (mn tons) SMGR market share Avg selling price (Rp '000/ton) Cash cost (Rp'000/ton) Revenue (Rp bn) Gross profit (Rp bn) EBITDA (Rp bn) Operating profit (Rp bn Net profit (Rp bn) Gross margin EBITDA margin Operating margin Net margin 42.601 4. We forecast strong profitability to drive net profit up by 30% to Rp3.1% 22.9% 2011F 46.4% 34.933 45.615 4.4 mn tons in 2011F. Table 3.1% in 2010F and 34.0% 18.841 2.7% 2009F 39. We assume blended ASP of 799 k/ton and Rp847/ton/ton for 2010-2011 implying a conservative 5% and 6% annual growth.1 tn (+14% YoY) with gross margin at 48.0% 26.865 3.812 48.865 3.993 5.9% 31. We forecast revenue to grow by 13% and 12% for 2010F-2011F on a combination of higher selling price and sales volume.1 19.0% in 2011F.073 6.7% 29.2 388.1% 25.516 8.9 40. respectively.0 17. we expect SMGR sales volume to increase by 8% to 18.8% 34.6 12.1 tn (+20% YoY) and Rp8. we foresee net profit rising at 22% CAGR over 2009-11F.0 390.0% 761.460 3.4% YoY in 1H09 (vs.459 4. the company managed to increase its ASP by 15% YoY to Rp740 k/ton as major cement makers avoided price war to seek profitability.3 mn ton in 2010F and by 6% to 19.9% in 2010F and 2011F.6% 25.397 1.6% 2010F 42.4 18.240 5. We estimate gross profit at Rp7.4% 564. 7.0 43.387 2.Semen Gresik.001 2.528 43.3% 2008 43.5% Source: Company and Optima Securities estimates 6 .2% and 48. We estimate operating margin at 33.1% 847.755 41.895 4.0% industry decline) .081 5.4% in 2009F.380 48.1% in 2009F.7% 20.0 12.3% 30.0 16.2 367. Overall.7% 27.3% 690.2 9. As the economy is expected to speed up together with planned government infrastructure projects mentioned above.8 41.3 tn in 2011F.1 14.3 43. 1 October 2009 Expecting net profit to grow at a CAGR of 22% over 2009-11F We forecast relatively flat volume growth in 2009F due partly to high base effect seen last year.2 407.2% 37.8 tn in 2010F and by 15% to Rp4.4 42.5 17.7 297.1 16.2% 799.355 3.1% 33.907 2.

7 14.554 8.027 9.126 2. especially for company sitting on large US$ debt.294 504 -637 -248 6. Rp 2010F 2011F 2012F 4.404 -1.107 2018F -3.800 2019F -3.850 We initiate our coverage on SMGR with TP of Rp7.2 2011F 8.828 8.6 7.806 6. SMGR looks attractive in both PER and EV/EBITDA basis.351 2017F -2.850 and Buy rating as our TP offers a significant 25% upside potential.823 11.1 10.5x and EV/EBITDA of 8.6 EV/EBITDA 2010F 6. 7 . 31 Dec 10 Equity value Shares.147 31.5 2011F 5.0 7.021 -708 -1.7 6.253 -1.615 4.960 5.238 640 -804 -316 2020F -3.414 46.8 14. 1 October 2009 Initiate with Buy and TP of Rp7.8x and EV/EBITDA of 6.913 2016F -2.239 -5.603 7. We use DCF methodology (assuming WACC of 14.979 -2.725 10.600 1.846 9.303 44. : Indonesian cement sector valuations PER Last price Semen Gresik Indocement Holcim Indonesia 6.305 -1.715 10.211 625 -468 6.313 12.740 2013F 2014F 2015F 7.300 10. 2) delay in government infrastructure projects and 3) rising energy prices as main risks to our forecasts.93 7.264 12.865 3.515 -4.060 Source: Company and Optima Securities estimates Table 5.4 EV/Ton (US$) 2010F 204 216 151 Source: Bloomberg consensus and Optima Securities estimates Risks We view 1) difficulties in getting financing to finance expansions projects.066 9.808 536 -675 -318 7. Compared to its Indonesian peers.507 662 -852 -270 9.216 -1. The company is trading at 2010 PER of 9.Semen Gresik. : DCF calculation DCF valuation (in Rp bn) EBIT Tax on EBIT NOPLAT Depreciation & amortization Capex WC changes Free Cash Flow to Firm (FCFF) PV of FCFF PV of Terminal Value (TV) Enterprise value Net (debt)/cash. bn Equity value/share.938 452 -567 -270 5.4x.4x.520 -4.540 5. as 1) EV/ton pays no heed to different capacity utilization amongst cement companies while PE multiple is sometimes affected by forex volatility.431 7. while its peers are trading at average PER of 14.604 478 -601 -228 6.5 12. Table 6.220 572 -465 1.4% and terminal growth rate of 5%) to derive our target price in order to capture the company’s long-term expansions.411 11.485 569 -716 -231 8.201 -2.649 593 -711 5.953 14.918 5.235 10.4 9.198 605 -759 -244 8.330 2010F 9. We think that EV/EBITDA is arguably a more appropriate comparison for cement industry.

065 180 7.528 20.581 148 7.2 5.470 -31 Net profit Depreciation/amorti.488 12.073 48.939 1.9 ROE (%) ROA (%) 26.238 -1.865 31.8 29.6 31.2 3.6 738.083 3.4 FY10F 9.7 2.5 29.843 1.7 -767 -18 12.467 206 977 254 0 2.0 -0.517 4.3 42.0 -0.net Minority interest 9.221 353 180 2.079 0 -82 -888 -207 -1. Decrease (inc.9 0.4 DPS (Rp) 109 150 213 247 321 Balance sheet As at 31 Dec (Rp bn) Assets Cash and equiv Receivables Inventories Others Total current assets Net fixed assets Other assets Total assets 2.186 1.3 805 94 1.232 FY07 FY08 FY09F FY10F FY11F Key ratio analysis Year-end 31 Dec (Rp bn) Revenue gr.5 23. (%) Net profit gr.6 2.2 29. Change in working capitals Others and non-cash adj CFs from operation 1.4 -1.429 104 8.Semen Gresik.0 41.6 178.865 33.812 593 -711 -178 3.755 18.5 0.8 187.7 2.878 148 9.5 642.) in debt 0 -65 -648 2 -711 1.5 20.812 25.5 Dividend payments Others CFs from financing Net inc/(dec) in cash EPS (Rp) 295.240 37.644 211 17.102 145 8.168 3.309 211 10.119 -365 Net profit Net profit margin (%) 1.836 1.280 -28 16.7 7.882 35.515 3.7 FY08 14.001 41.075 2.355 43.0 127 37 2.428 140 9.2 755 1.628 2.1 FY09F 6.627 8.380 26.6 2.303 -4.164 4.5 5.007 0 2.7 5.717 168 12.280 17.7 198 5 3.3 12.8 3. maturity Other current liabilities LT.998 211 12.9 691 21 1.9 FY11F 8.360.1 243 11 5.7 37.232 2.044.037 1.1 22.117.933 22.4 3.553 1.9 4.8 -1.2 36.8 3.9 FY11F 12.1 190 11 4.6 -1.4 14.4 FY09F 12.294 3.603 4.3 23.7 Current ratio (x) Quick ratio (x) 3.534 211 22.4 0.2 FY10F 13.303 0 -1.7 3.2 -0.3 Valuation Year-end 31 Dec (Rp bn) PER (x) EV/EBITDA (x) EV/ton (US$) PBV (x) Dividend yield (%) FY07 21.0 22.906 537 1.070 10. 1 October 2009 SMGR FINANCIALS Income statement Year-end 31 Dec (Rp bn) FY07 FY08 FY09F FY10F FY11F Cashflow analysis Year-end 31 Dec (Rp bn) CFs from operation FY07 FY08 FY09F FY10F FY11F Revenue Gross profit Gross margin (%) EBITDA EBITDA margin (%) Operating profit Operating margin (%) Net interest inc (exp) Others Pre-tax profit Pre-tax profit margin (%) Income tax .775 444 -82 -63 2.097 2.993 5.592 180 4.048 107 5.750 148 8.4 4.524 509 -240 -164 2.046 -20 12.502 5.1 Source: Company and Optima Securities estimates 8 .560 26.934 12.0 191.733 2.488 -1.3 15. (%) Opr.119 34.519 1.411 2.841 29.239 -5.3 2.0 3.615 34.6 1.9 6.164 2.280 199 14.502 1.) in share cap.4 24.907 30.397 25.3 0.239 0 -4.1 2. Profit gr.1 4.8 6.459 37.309 7.3 Debt to equity (x) Net debt to equity (x) EBITDA/Interest cov.460 34.031 CFs from investments Net capex Others CFs from investments -319 34 -285 -556 28 -528 -1.515 0 -5.0 256 11 5.193 74 264 2.4 15.515 BVPS (Rp) 1.2 215.9 426.5 5.6 0.070.6 3.4 3. (%) EBITDA gr.674.5 4.118.346.4 16.796 92 6.176 924 0 216 -1.380 625 -468 -505 4.2 494.6 2.4 197.4 15.515 CFs from financing activities Decrease (inc. (%) FY07 10.933 553 -330 11 3.895 45.243 4.6 34.1 2.9 4.8 0. debt Other long term liabilities Total Liabilities Minority Interest Shareholders' equity 518 126 802 126 224 1.4 4.197 148 9.387 27.698 7.603 1.9 3.590 29.0 -0.232 2. (x) 244.150 -25 14.8 12. debt and curr.7 19.0 8.4 1.174 1.6 -1.5 Liabilities and equities Payables ST.0 FY08 27.4 2.5 3.262 187 -858 1.2 3.210 5.601 4.081 48.5 7.108 31.4 14.5 652 22 1.268 3.3 3.8 5.8 9.516 8.5 31.487.754 22.0 27.

The research analyst(s) also certify that no part of their compensation was. Ratings for Stocks: Buy : We expect this stock to give total return (price appreciation + dividend yield) of above 15% over the next 12 months. Underweight : Expect the industry to underperform the primary market index (JCI) over the next 12 months. Analyst Certification The research analyst(s) primarily responsible for the preparation of this research report hereby certify that all of the views expressed in this research report accurately reflect their personal views about any and all of the subject securities or issuers. officials and/or employees may have positions in. or will be. and may receive brokerage fees or act as principal or agent in dealings with respect to these companies. Optima Securities and its directors. directly or indirectly. related to the specific recommendations or views expressed in this research report. Hold : We expect this stock to give total return of between -15% and 15% over the next 12 months. is. Investors should consider this report as only a single factor in making their investment decision. Optima Securities accepts no liability whatsoever for any direct or consequential loss arising from any use of this document or any solicitations of an offer to buy or sell any securities. Sell : We expect this stock to give total return of -15% or lower over the next 12 months. Neutral : Expect the industry to perform in line with the primary market index (JCI) over the next 12 months. and may effect transactions in securities mentioned herein from time to time in the open market or otherwise. 1 October 2009 IMPORTANT DISCLOSURES Ratings for Sectors: Overweight : Expect the industry to perform better than the primary market index (JCI) over the next 12 months. Optima Securities may also seek investment banking business with companies covered in its research reports. As a result investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.Semen Gresik. Disclaimers This document has been prepared for general circulation based on information obtained from sources believed to be reliable but we do not make any representations as to its accuracy or completeness. 9 .

Kembangan T: 58357000 F: 58356935 Bandung Branch Jl.32 C.18 T: 022-4266228 F: 022-4266226 Palembang Branch Jl. Magelang KM 4. Pluit Jakarta T: 66691000 F: 66697250 Puri Branch Jl. (62-21) 5795 0101 Fax.co. Pluit Permai No. Merapi No. Puri Niaga III Blok M. (62 21) 576 3345 Emai: research@optimasecurities.1 Tel. Pasir Kaliki No.Semen Gresik. Mega Kuningan Lot #5.8 No. Jl.5 T: 0274-618878 F: 0274-617787 Malang Branch Jl.5 Malang T: 0341-361610 F: 0341-351174 10 .id Pluit Branch Jl. Letkol Iskandar No. 1 October 2009 Menara Rajawali 22nd floor.762 T: 0711-373666 F: 0711-367149 Yogyakarta Branch Jl.28.

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