2015 12 21 SMBR 01 en

Equity Valuation
Semen Baturaja (Persero), Tbk
December 21, 2015

Target Price
Low
359
Primary Report
High
444
Cement
Historical Chart
Cementing the growth
Source : Bloomberg
Stock Information
Ticker code
IDR
SMBR
Market price as of December 18, 2015
296
Market price 24 week high
404
Market price 24 week low
250
Market cap 24 week high (bn)
3,974
Market cap 24 week low (bn)
2,459
Last 4 Weeks of Price and Volume
Source: Bloomberg. PEFINDO Research and Consulting Equity & Index Valuation
Shareholders
(%)
Government of the Republic of Indonesia
76.24
Public (below 5% ownership)
23.76
Contact:
Equity & Index Valuation Division
Phone: (6221) 7884 0200
info-equityindexvaluation@pefindoconsulting.co.id
Disclaimer statement in the last page is an
integral part of this report
www.pefindo-consulting.co.id
PT Semen Baturaja (Persero) Tbk (SMBR) is a state owned Indonesian

company established in 1974. The Company mainly engaged in cement
industry producing cement under Portland brand. The Company is the
largest cement producer in South Sumatera with 70%-75% of the total sales
contributed to serve the area. The Company focuses to cover the south area
of Sumatera and Bengkulu through its 2.0 mn tons/year plants spread in
Palembang, Baturaja and Lampung. The Company produces two types of
products, consisting of bagged cement (70%) and bulk cement (30%);
bagged cement is used mainly for housing (retail or residential sector)
which is the largest consumer of cement in Indonesia, while bulk cement is
mainly for infrastructure and fabricator sector.
The Company is currently undertaking the construction of a new plant
Baturaja II consisting of clinker plants, cement plants and packing plants
from the funds obtained from the IPO in June 2013. Upon completion of its
plants expansion (which is targetted to be completed and begin commercial
operation in early 2017), the Company will be able to produce 3.85 mn
tons/year.
Page 1 of 13

INVESTMENT PARAMETER
Infrastructure development to boost cement demand
Economy now is in the downswing. To overcome the situation government
continue to push structural reforms through a wide range of economic
policy packages and the realization of basic infrastructure projects which
then expected to boost the economy. Despite facing tougher environment,
we expect the infrastructure development to boost cement demand. As in
August, cement sales rose 15% YoY and 57% MoM, reflecting strong
demand potential inline government spending in the infrastructure
development has started to bring impact for the demand. Cement industry
is also facing tighter competition as the new players is entering the market
and total national production capacity is also expanding. Nonetheless, we
see that the growing room for cement consumption remains substantial.
Domestic market consumed only 238 kg cement per capita in 2014, lower
than that of peers such as Thailand, Vietnam and Malaysia, which have
reached above 500 kg per capita.
Eyeing stronger growth by adding plant
SMBR is upgrading the plants capacity to nearly double to 3.85 mn
tons/year from 2 mn tons/year. The new plant (Baturaja II), which is
currently in construction stage, would cost about IDR3.3 tn, stemming
from clinker, cement and packing plant. The Company will utilize the fund
from IPO proceed (IDR 1.3 tn) and the rest will be from bank loans and
internal cash as well. We expect the new plant would come on stream in
early 2017.
Robust revenue growth in 9M15
SMBR recorded a 26.4% YoY increase of revenue to IDR1.032 tn during
9M15, particularly due to soaring bag and bulk cement sales of 17.5% and
42.4%, respectively. By having bulk cements as one of its products, which
is less expensive than bag cement, SMBR still can booked a positive sales
volume amid slowing growth of property and construction.
Business Prospect
We view Indonesia cement sector is going to experience supply shock in
2016 with total of potential excess capacity of 30 mn tons and utilization
around 67%. Despite being overshadowed by unfavorable economic
conditions, we foresee domestic cement consumption will remain solid,
citing the Government plan to boost infrastructure. Therefore, we believe
bulk cement portion will go faster than the bag. For SMBR, we estimate its
revenue to grow at CAGR 13.3% in 20142017.
Table 1: Performance Summary

2012
2013
2014
2015P
2016P
1,098
1,169
1,215
1,462
1,640
EBITDA
418
396
318
359
391
Pre-tax Profit [IDR bn]
395
400
395
443
489
Net Profit [IDR bn]
299
312
328
365
403
30
32
33
37
41
Revenue [IDR bn]
EPS [IDR]
18.6
4.6
5.2
11.2
10.5
P/E [x]
10.4
11.5
7.7*
7.0*
PBV [x]
1.3
1.3
0.9*
0.8*
EPS Growth [%]
Sources: PT Semen Baturaja (Persero) Tbk., PEFINDO Research and Consulting - Equity & Index Valuation Estimates
* Based on the SMBRs share price as of December 18, 2015 IDR296/share
Disclaimer statement in the last page

is an integral part of this report
December 21, 2015
Page 2 of 13

MACROECONOMY & BUSINESS INFORMATION
Economic slowdown is about to continue
We view that recent economic slowdown is constraining the cement industry to grow
optimally. Construction activity are also seen growing slower, thus potentially affect
the cement demand in domestic market throughout 2015. Overall, Bank Indonesia
projects the economic tends to grow at a range of 4.7-5,1% in 2015, slower than
previous projection (5.4-5.8%).
Figure 1: GDP & Construction Sector slowdown
Sources: Bank of Indonesia, PEFINDO Research and Consulting, Equity & Index
Valuation Division
Government consistency in pushing structural reforms through a wide range of

economic policy packages and the realization of infrastructure projects are expected to
boost the economy. Government plans to invest more on infrastructure projects, such
as the construction of toll roads, power plants and dams as stated in the medium term
plan of 2015-2019, which some of the projects have been in the construction phase. If
successfully executed, we believe the infrastructure improvement would support
economic growth more sustainably.
Domestic cement consumption 2015 is flat
However, the cumulative consumption over January-August still dropped about 2.9% to
20.4 million tons, based on the lastest data from Association. By the end of this year,
overall domestic consumption is expected to be flat at around 60 million ton, given the
recent the slowdown of activity in the several sectors, as reflected in a slower economic
growth.
Figure 2: Cement Consumption tend to stagnant in 2015
Sources: PEFINDO Research and Consulting, Equity & Index Valuation Division Estimates

December 21, 2015
Page 3 of 13
Cement outlook: still wide room to grow

Although facing tougher environment, we expect the infrastructure projects to be
executed successfully. Thus, it will be a catalyst for cement demand. The government
estimates that infrastructure investment needs reached IDR6,780 trillion during 20152019, jumped from IDR1,923,8 trillion during 2010-2014.
In addition, we also see that the growing room of cement consumption remains
substantial. Domestic market consumed 238 kg cement per capita as of 2014, lower
than the peers such as Thailand, Vietnam and Malaysia, which have been above 500 kg
per capita. Thus, domestic consumption have potential to grow sustainably in the
future and to be equal with the peers.
Figure 3: Low Consumption per capita of cement

(in kg)
Sources: PT Semen Indonesia (Persero) Tbk, PEFINDO Research and Consulting Equity
& Index Valuation Division
More intense competition in the near-terms

We see the competition in the cement industry will be increasingly stringent. Domestic
supply is expected to be flooded in line with the presence of new players and the
expansion of the existing players companies. Among the new players are PT. Cemindo
Gemilang with Semen Merah Putih, UltraTech Cement Ltd, PT Fajar Semen Barru,
which have declared a capacity production of 11.5 million tons, 4.5 million tons and 3.3
million tons. In total, domestic capacity of production is projected to increase to 97.7
million tons in 2016, increased by 13.3 million tons from 71.6 million tons in 2014.
With a larger supplies, the players have to compete intensively for their respective
markets, particularly in facing the current sluggish growth in the domestic market.

December 21, 2015
Page 4 of 13

SMBR at a Glance
SMBR is a state-owned cement producer whose manufacture plants in Baturaja,
Palembang and Lampung under the brand of Portland. The Company currently
operates 3 grinding plants and 1 clinker plants in South Sumatera region with a
combined capacity of 2.0 mn tons/year. The Company distributes 70%-75% of the
production to cover South Sumatera and 25%-30% Lampungs market. This is an
advantage as Sumatera is the second most populated area in Indonesia and has the
second biggest cement demand after Java (22.48%). After series times of ownership
changes, SMBR is now currently owned by the Government of Indonesia (76.23%)
and public (23.76%).
Figure 4: SMBRs Ownership Structure and Key Milestones
Sources: PT Semen Baturaja (Persero) Tbk, PEFINDO Research and Consulting, Equity & Index Valuation Division
Plan for additional capacity in 1Q17

Governments innitiatives to boost infrastructure development have been identified.
Government took several actions such as the reduction of fuel subsidies by IDR291 tn
to be transferred to enhance infrastructure development, loosened property credit by
reduction of Loan to Value (LTV) as well as the commencing construction of Trans
Sumatera Tollroad project in the Special Economic Zone (KEK) of Sei Mangke, and the
upcoming celebration of Asian Games 2018 hosted by Indonesian in DKI Jakarta and
South Sumatera will provide additional growth opportunity for SMBR.
In addition, based on data from Committee of Accelleration and Expansion of
Indonesias Economic Development (KP3EI), economic development will be centered
to Java and Sumatera. There will be 12 projects worth IDR111 tn will be implemented
in Sumatera, 3 projects have been inaugurated in 2014 and 9 groundbreaking of
projects will be done in 2017. These projects for example are port, airport, bridge, and
road construction project.
To cater with these opportunities, SMBR is currently undertaking the construction of a
new plant Baturaja II amounting to IDR3.32 tn consisting of clinker, cement and
packing plants. The funds will be obtained from the previous IPO proceed (IDR 1.3 tn)
and the rest will be from bank loans and internal cash. Upon completion of its plants
expansion (which is targetted to be completed and begin commercial operation in
early 2017), the Company will be able to produce 3.85 mn tons/year of cements.

December 21, 2015
Page 5 of 13

Figure 5: SMBRs Plant Location in South Sumatera
Favorable capital structure

As shown in the below figure, Debt to Equity Ratio (DER) had ben declining from
0.52X to 0.08X reflecting low use of leverage. As the Company is expanding their
plants (Baturaja II in 1Q2017 and Baturaja III in FY2018/FY2019 in the pipeline) for
1.85 mn tons/year for each, potential external funding to fund the expansion will sttill
be feasible.
Amid the conservative capital structure (as shown in Figure 6 below) which potentially
benefits its expansion plan in the future, we like the Company achievement to book
solid revenue growth in 9M15, after declining growth trend in 2014 of 3.9% YoY from
6.5% YoY in 2013.
Figure 6: SMBRs Utilization Rate, Sales Growth
and Debt to Equity Ratio (DER)

December 21, 2015
Page 6 of 13

FINANCE
Robust growth of revenue, margins improving
By becoming a king of cement sales in South Sumatera and Lampung area, SMBRs
growth of revenue remained 26.4% positive in 9M15. By having bulk cements as one
of its products, which is less expensive than bagging cement, further SMBR still can
book a positive sales volume, mostly from bulk cements, amid slowing growth of
property and construction during 1H2015. However, on the back of slightly rebound of
Indonesia economy during 3Q15 and strong infrastructure spending from the
government during 3Q15 hoist SMBRs sales from bagging cements. As a result,
SMBRs operating margin improved from 20.54% as of June 2015 to 22.33% as per
September 2015.
Figure 7: SMBRs Revenue, 9M15 vs 9M14
(in IDR billion)
Sources: PT Semen Baturaja (Persero) Tbk, PEFINDO Research and Consulting,

Figure 8: SMBRs Gross, Operating and Net Profit

Margins, 2011 1H2015

More certainty on the receivables collection

To provide more certainty its trade receivables collection, SMBR entered into agreement
with PT Bank Mandiri (Persero) Tbk related to the implementation of sales system using
trust receipt method, in which distributors have been given the loan facility to paid the
sales invoice, so then SMBR would have gained the more assurance of receivable payment
on the due date period. Around 68% of total SMBRs trade receivables have used such
facility as of June 30, 2015. However, such facility also comes with interest expense for
SMBR, but relatively insignificant for SMBRs current financial condition.

December 21, 2015
Page 7 of 13

No interest bearing debt but ample cash for expansion
As of Sept 30, 2015, SMBR had only insignificant debt on their book. With no loan
from banks or bonds issued, SMBR had no debt in their financial statements. With
relatively no debt in their book, SMBR relies on its internal cash to support its
expansion activity. Its cash position as of end September 2015, was IDR1.7 trillion,
which we believe sufficient to finance SMBRs expansion activity.
Figure 9: SMBRs Cash Position


December 21, 2015
Page 8 of 13

SWOT ANALYSIS
Table 2: SWOT Analysis
Strength
The plants are located stategically close to the
market in Sumatera (as the 2nd most populated area
as well as the 2nd highest demand of cement in
Indonesia after Java). Further, demand in South
Sumatera is the 2nd largest in Sumatera.
Good reputation and backed up by strong
management team for more than 40 years in
cement industry.
Conservative capital structure (low use of leverage)
which enables the Company to raise external
funding to further expanding the capacity.
Weakness
Limited distribution area, the biggest

only in South Sumatera and Lampung.
Opportunity
Threat
Low cement penetration in the country

(238kg/capita) compared to neigborhood countries
in Asia Pacific region, i.e. Malaysia, Thailand,
Vietnam (734, 505 and 540 kg/capita respectively).
Government plans to boost infrastruture
development and property especially in Java and
Sumatera province, including Trans Sumatera toll
road. Also, Asian Games event in 2018.
Growing Indonesian middle class economy
potentially increases the middle class property
demand.
Cement supply potentially exceeds

demand with incoming capacities from
new foreign entrants.
Intense price war amongst the new
foreign entrants for them to gain more
market share, creating lower margins.
Government intervention to instruct
SOEs to lower (4%-5%) their bagged
cement price, offsetting the benefit
from lower fuel price.
Prolong property and construction
sector would reduce cement demand.
Table 3: SMBR and Peers Performance Summary as of September 2015

Sales [IDR bn]
Gross Profit [IDR bn]
Operating Profit [IDR bn]
Net Profit [IDR bn]
Total Asset [IDR bn]
Total Liabilities [IDR bn]
Total Equity [IDR bn]
SMBR
SMCB
SMGR
INTP
1,032
6,558
19,115
12,886
350
1,477
7,513
5,752
231
(411)
4,102
3,692
265
(372)
3,208
3,218
3,119
17,996
36,355
25,930
252
10,065
10,016
3,148
2,866
7,931
26,338
22,781
26.4
(2.6)
(1.2)
(9.0)
45.3
(24.2)
(11.1)
(9.6)
19.7
(228.4)
(21.4)
(13.8)
33.9
22.5
39.3
44.6
22.3
(6.3)
21.5
28.7
25.6
(5.7)
16.7
25.0
8.5
(11.9)
8.8
12.4
9.2
(13.0)
12.2
14.1
0.1
1.3
0.4
0.1
Growth YoY
Sales [%]
Gross Profit [%]
Net Profit [%]
Profitability
Gross Margin [%]
Operating Margin [%]
Net Margin [%]
ROA [%]
ROE [%]
Leverage
DER [x]
Sources: PT Semen Baturaja (Persero) Tbk, PT Holcim Indonesia Tbk, PT Semen Indonesia (Persero) Tbk, PT Indocement Tunggal
Prakarsa Tbk., PEFINDO Research and Consulting, Equity & Index Valuation Division

December 21, 2015
Page 9 of 13

TARGET PRICE
VALUATION
Methodology
We applied the Discounted Cash Flow (DCF) method as the main valuation
approach considering that income growth is the value driver in SMBR instead of
asset growth.
Furthermore, we also apply Guideline Company Method (GCM) as comparison
method.
This valuation is based on 100% share price as of December 18, 2015, using
SMBRs financial report as of September 30, 2015, for our fundamental analysis.
Value Estimation
We use Cost of Capital of 12.3% and Cost of Equity of 12.4% based on the
following assumption:
Table 4: Assumption
Risk free rate [%]*
Risk premium [%]*
Beta [x]**
Cost of Equity [%]
Marginal tax rate [%]
Interest Bearing Debt to Equity
Ratio [x]
WACC [%]
9.1
4.1
0.8
12.4
25.0
0.03
12.3
Sources: Bloomberg, PEFINDO Research and Consulting, Equity & Index Valuation Division Estimates
Notes: * As of December 18, 2015

** Based on PEFINDO Beta Saham report dated December 17, 2015
Target price for 12 months based on valuation as per December 18, 2015 is as
follows:
Using DCF method with discount rate assumption 12.3% is IDR374

IDR396 per share.
Using GCM method (PBV 1.9X and P/E 12.1X) is IDR325 IDR554 per
share.
In order to obtain a value which represents both value indications, we have weighted
both DCF and GCM methods by 70%:30%.
Based on the above calculation, target price of SMBR for 12 month is IDR359
IDR444 per share.
Table 5: Summary of DCF Method Valuation
PV of Free Cash Flows [IDR bn]

PV Terminal Value [IDR bn]
Non-Operating Assets [IDR bn]
Interest Bearing Debt [IDR bn]
Total Equity Value [IDR bn]
Number of Share [mn shares]
Fair Value per Share [IDR]
Conservative
Moderate
Aggressive
169
1,914
1,657
(60)
3,680
9,838
374
176
2,014
1,657
(60)
3,789
9,838
385
186
2,115
1,657
(60)
3,899
9,838
396
Source: PEFINDO Research and Consulting, Equity & Index Valuation Division

December 21, 2015
Page 10 of 13

Table 6: GCM Comparison
SMBR
SMCB
SMGR
INTP
Average
P/E, [x]
7.7
n.a
13.2
15.4
12.1
P/BV, [x]
1.1
1.0
2.4
3.2
1.9
Valuation,
Sources: Bloomberg, PEFINDO Research and Consulting, Equity & Index Valuation Division
Table 7: Summary of GCM Method Valuation

Multiples
(x)
P/E
P/BV
Est. EPS
(IDR)
12.1
1.9
Est. BV/Share
(IDR)
27
-
Value
(IDR)
291
325
554
Sources: Bloomberg, PEFINDO Research and Consulting, Equity & Index Valuation Division
Table 8: Fair Value Reconciliation

Fair Value per Share [IDR]
DCF
GCM
Average
Upper limit
396
554
444
Bottom limit
374
325
359
Weight
70%
30%
Sources: PEFINDO Research and Consulting, Equity & Index Valuation Division Estimates

December 21, 2015
Page 11 of 13

Table 9: Consolidated Statements of Comprehensive
Income (IDR bn)
Sales
Cost of Goods Sold
Gross Profit
2012
2013
2014
1,098
(608)
1,16
9
(706
)
462
1,215
(842)
372
(129)
243
313
366
490
2015P
2016P
1,462
(977)
484
1,640
(1,08
2)
558
(171)
(192)
Operating Expense
(123)
Operating Profit
367
(133
)
329
28
71
152
130
123
Pre-tax Profit
395
400
395
443
489
Tax
(97)
(88)
(66)
(77)
(86)
Net Profit
299
312
328
365
403
Other Income (expense)
Figure 10: Historical P/E and P/BV Ratio
Sources: PT Semen Baturaja (Persero) Tbk., PEFINDO Research and Consulting, Equity &
Index Valuation Division Estimates
Table 10: Consolidated Statements of Financial

Position (IDR bn)
Sources: PT Semen Baturaja (Persero) Tbk., PEFINDO Research and Consulting - Equity & Index
Valuation Division
2012
2013
2014
2015P
2016P
543
1,903
2,054
1,637
1,616
Figure 11: ROA, ROE and Assets Turnover
Assets
Current Assets
Cash and cash
equivalents
Receivables
36
81
103
113
117
132
187
348
444
36
14
588
706
Total Current Assets
668
2,107
2,336
2,676
2,880
Fixed Assets
518
590
558
568
788
Other Assets
13
15
33
49
22
1,199
2,711
2,926
3,293
3,690
64
68
91
87
97
107
126
88
168
186
73
51
29
62
68
Total Liabilities
244
244
209
317
351
Total Equity
954
2,467
2,717
2,976
3,339
Inventory
Other Assets
Total Assets
Liabilities
Trade payables
Short term liabilities
Other short term
liabilities
Long term liablities
Sources: PT Semen Baturaja (Persero) Tbk., PEFINDO Research and Consulting - Equity & Index
Valuation Division
Table 11: Key Ratio

2012
Sources: PT Semen Baturaja (Persero) Tbk., PEFINDO Research and Consulting, Equity &
Index Valuation Division Estimates
2013
2014
2015P
2016P
Growth [%]
4.5
6.5
4.0
20.3
12.2
Operating Profit
19.5
(10.3)
(26.1)
28.7
16.9
EBITDA
70.4
(5.2)
(19.6)
12.8
8.9
Net Profit
18.6
4.6
5.2
11.2
10.5
Gross Margin
44.6
39.6
30.7
33.1
34.0
Operating Margin
33.4
28.2
20.0
21.4
22.3
EBITDA Margin
38.0
33.9
26.2
24.6
23.9
Net Margin
27.2
26.7
27.0
25.0
24.6
ROA
24.9
11.5
11.2
11.1
10.9
ROE
31.3
12.7
12.1
12.3
12.1
Debt to Equity
0.3
0.1
0.1
0.1
0.1
Debt to Asset
0.2
0.1
0.1
0.1
0.1
Current Ratio
3.9
10.9
13.0
10.5
10.2
Quick Ratio
3.1
9.9
6.4
6.4
5.7
Sales
Profitability [%]
Solvability [X]
Liquidity [X]

December 21, 2015
Source: PT Semen Baturaja (Persero) Tbk., PEFINDO Research and Consulting,

Equity & Index Valuation Division Estimates
Page 12 of 13

DISCLAIMER
This report was prepared based on trusted and reliable sources. Nevertheless, we do not guarantee the
completeness, accuracy and adequacy of the information furnished to us by the sources and therefore will
not be held responsible for any investment decisions made based on this report. All assumptions, opinions
and predictions were solely of our internal judgments as of the reporting date, and those judgments are
subject to changes without further notice.
We are not responsible for any mistakes or negligence that arises from using this report. Recent
performance cannot always be used as a reference for future outcome. This report does not offer a
recommendation to purchase or hold particular shares and might not be suitable for some investors. All
opinions in this report have been presented fairly as of the issuing date with good intentions; however,
they could change at any time without further notice. The price, value or income of each share of the
Company stated in this report might be lower than investor expectations, and investors may obtain
returns lower than the invested amount. Investment is defined as the probable income that will be
received in the future; nonetheless, such returns may fluctuate. As for companies whos e shares are
denominated in a currency other than Rupiah, foreign exchange fluctuation may reduce their share value,
price or the returns for investors. This report does not contain any information for tax considerations in
investment decision-making.
The share price target in this report is a fundamental value, not a fair market value or a transaction price
reference required by regulations.
The share price target report issued by the PT PEFINDO Riset Konsultasi (PRK) or PEFINDO Research &
Consulting is not a recommendation to buy, sell or hold particular shares. It should not be considered as
investment advice from the PRK and its scope of service to some parties, including listed companies,
financial advisors, brokers, investment banks, financia l institutions and intermediaries, does not correlate
with receiving rewards or any other benefits from such parties.
This report is not intended for any particular investor and cannot be used as part of an objective
investment analysis of particular shar es, an investment recommendation, or an investment strategy. We
strongly recommend investors to consider the suitability of the situation and conditions before making a
decision in relation with the figures in this report. If necessary, consult with your f inancial advisor.
PEFINDO keeps the activities of the Equity Valuation separate from its ratings activities to preserve the
independence and objectivity of its analytical processes and products. PEFINDO has established policies
and procedures to maintain the confidentiality of non-public information received in connection with each
analytical process. The entire process, methodology and the database used in the preparation of the
Reference Share Price Target Report as a whole are different from the proce sses, methodologies and
databases used by PEFINDO in issuing ratings.
This report was prepared and composed by PRK with the objective of enhancing the transparency of share
prices of listed companies in the Indonesia Stock Exchange (IDX). This report is a lso free of influence from
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This report was prepared and composed by the PEFINDO Research & Consulting - Equity & Index Valuation
Division. In Indonesia, this report is published in our w ebsite and in the IDX website.

December 21, 2015
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Equity Valuation

Semen Baturaja (Persero), Tbk

December 21, 2015

Cementing the growth

Market price as of December 18, 2015

Market price 24 week high

Market price 24 week low

Market cap 24 week high (bn)

Market cap 24 week low (bn)

Last 4 Weeks of Price and Volume

Government of the Republic of Indonesia

Public (below 5% ownership)

PT Semen Baturaja (Persero) Tbk (SMBR) is a state owned Indonesian

Semen Baturaja (Persero), Tbk

Table 1: Performance Summary

Pre-tax Profit [IDR bn]

Net Profit [IDR bn]

Revenue [IDR bn]

EPS Growth [%]

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Government consistency in pushing structural reforms through a wide range of

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Cement outlook: still wide room to grow

Figure 3: Low Consumption per capita of cement

More intense competition in the near-terms

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Figure 4: SMBRs Ownership Structure and Key Milestones

Plan for additional capacity in 1Q17

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Favorable capital structure

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Sources: PT Semen Baturaja (Persero) Tbk, PEFINDO Research and Consulting,

Figure 8: SMBRs Gross, Operating and Net Profit

Sources: PT Semen Baturaja (Persero) Tbk, PEFINDO Research and Consulting,

More certainty on the receivables collection

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Sources: PT Semen Baturaja (Persero) Tbk, PEFINDO Research and Consulting,

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Limited distribution area, the biggest

Low cement penetration in the country

Cement supply potentially exceeds

Table 3: SMBR and Peers Performance Summary as of September 2015

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Notes: * As of December 18, 2015

Using DCF method with discount rate assumption 12.3% is IDR374

PV of Free Cash Flows [IDR bn]

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