Escolar Documentos
Profissional Documentos
Cultura Documentos
Multi-finance Companies
DBS Group Research . Equity
Alternative lenders
Multi-finance companies are high-yielding
businesses despite higher cost of funds than
banks as they cannot take deposits; higher risk as
they are less regulated than banks
Potential headwinds from impending fuel price
hike and imposition of minimum down payment
for 2W, but long-term growth prospects for 4W
remain robust
28 Mar 2012
JCI :
4,079.4
Analyst
LIM Sue Lin +603 2711 0971
suelin@hwangdbsvickers.com.my
Indonesian Research Team +6221 3983 2668
research@id.dbsvickers.com
ADMF
Market
cap
(US$m)
Price
(Rp/s)
PE (x)
FY11F FY12F
PBV (x)
FY11F FY12F
ROE (%)
FY11F FY12F
1,320
12,150
7.7x
NA
2.7x
NA
38.5%
BFIN
392
4,750
7.2x
5.5x
1.3x
1.0x
19.7% 19.3%
CFIN
209
510
6.9x
6.0x
0.9x
0.8x
15.3% 13.4%
MFIN
99
690
4.7x
4.0x
NA
NA
29.0% 27.0%
WOMF
58
265
88.3x
NA
1.2x
NA
1.2%
Weighted average
7.1x
5.4x
2.1x
0.8x
31.1% 18.6%
6.6x
5.2x
1.5x
0.9x
25.6% 21.2%
www.dbsvickers.com
Refer to important disclosures at the end of this report
ed: SGC / sa: MA
n/a
Simple average
NA
60.0
52.2
50.0
40.0
30.0
23.2
21.7
20.0
11.9
10.0
7.1
5.5
4.6
Mandiri
Tunas
F inance*
BFIN
CF IN
0.0
ADMF
BCA
Finance*
Astra
Seday a
Finance*
WOMF
*Non-listed companies
Total asset for Astra Sedaya Finance and CFIN are as of 3Q11
Banks
Multi-finance
companies
2W
25%
20%
30%
25%
20%
20%
Recipients of this report, received from DBS Vickers Research (Singapore) Pte Ltd
(DBSVR), are to contact DBSVR at +65 6398 7954 in respect of any matters arising
from or in connection with this report.
Industry Focus
Multi-finance Companies
Analysts
Table of Contents
Overview
Industry landscape
Growth drivers
Industry concerns
research@id.dbsvickers.com
Page 2
Regulatory environment
11
Industry trends
12
14
Valuation
15
Stock Profiles
16
17
BFI Finance
24
Clipan Finance
31
WOM Finance
38
Industry Focus
Multi-finance Companies
Overview
Finance companies, or typically known in Indonesia as multifinance companies, are licensed to offer a range of services,
including leasing, consumer financing, credit card financing
and factoring. But unlike banks, they are not allowed to
accept deposits, and are governed by Bapepam-LK, the
regulatory arm of the Minister of Finance (MoF). These
companies target the financing needs of the lower income
households.
130.0%
80.0%
Factoring, 70.5%
Leasing, 44.1%
30.0%
Total, 31.6%
Consumer
Financing, 26.7%
-20.0%
-70.0%
2003
2004
Total
2005
2006
Leasing
2007
2008
Factoring
2009
2010
2011
Credit Cards
Consumer Financing
20,000
2003
Leasing
31%
Consumer
F inancing
67%
Factoring, 2%
2005
Leasing
Factoring
2007
Credit Cards
2009
2011
Consumer Financing
Bonds
14.4%
Subordinated
Loans
0.1%
Borrowing
85.5%
Page 3
Industry Focus
Multi-finance Companies
83.5
80
67.2
70
60
49.9
50
40
30
20
12.9
10
7.8
6.5
2006
2007
9.0
9.1
2008
2009
Channeling
47.1
39.2
14.3
15.3
2010
2011
J oint Financing
WOMF
ADMF
BFIN
CFIN
BCA Finance*
Mandiri Tunas Finance*
Counterpart
BMRI
BBRI
BNII
BDMN
Bank Syariah Mandiri (BSM)
BBRI
BNGA
Bank DKI
Bank Mutiara
BMRI
BTPN
Bank UIB
PNBN
BBCA
BBNI
BBKP
BMRI
BNLI
Sahabat Finansial Bersama
BNGA
BNII
Bank Commonwealth
Page 4
Total Facility
Revolving
Recourse
JF Proportion
Rp500bn
Rp500bn
Rp8.0tr
n/a
Rp150bn
Rp150bn
Rp50bn
Rp100bn
Rp100bn
Rp245bn
Rp1.0tr
Rp8.5bn
Rp600bn
<Rp5bn per contract
Rp400bn
Rp75bn
Rp4.5tr
Rp4.45tr
Rp4.0tr
Rp2.0tr
Rp1.0tr
Rp500bn
n/a
n/a
n/a
n/a
N
N
Y
N
N
Y
Y
n/a
n/a
Y
n/a
Y
Y
n/a
n/a
n/a
n/a
n/a
Y
n/a
N
n/a
N
N
N
N
N
N
N
n/a
N
N
n/a
N
N
N
N
N
N
N
5:95
10:90
1:99
1:99
Channeling
Channeling
1:99
5:95
Channeling
5:95
10:90
n/a
Channeling
5:95
n/a
Channeling
5:95
5:95
5:95
5:95
5:95
5:95
Industry Focus
Multi-finance Companies
NPL classification Unlike BI, Bapepam and MoF have not set
any guidance for NPL classification. But since most large
finance companies have joint-ventures or channelling
agreements with banks, they have to adhere to BIs NPL
classification guide. Although there are conservative finance
companies, most consider financing overdue by 90 days as
bad debt. Moreover, the write-off policy varies from 180 to
270 days for automatic write-off.
Multi-finance companies: Blended NPL
3.0%
9.00
2.7%
Blended NPL
8.25
2.5%
8.00
2.0%
7.00
5.61
6.00
2.1%
1.9%
2.0%
5.85
4.86
5.00
1.4%
1.5%
1.2%
4.00
2.43
3.00
2.00
1.18
1.39
1.0%
1.51
1.00
0.5%
BFIN
CF IN
BCA
F inance
ADMF
MTF
WOMF
ASF
Industry
0.0%
2006
3.00%
2008
2009
2010
2011
2007
18.4
16.9
18.0
16.0
2.81%
14.0
12.0
2.50%
10.0
8.0
2.00%
4.1
4.0
1.50%
1.21%
3.9
3.7
1.5
2.0
-
1.00%
0.50%
5.3
6.0
1.59%
Astra
Seday a
Finance*
0.32%
ADMF
BFIN
CFIN
WOMF
BCA
F inance*
Mandiri
Tunas
F inance*
0.00%
0.00%
Leasing
F actoring
Credit Cards
Consumer
Financing
Blended
*Non-listed companies
Total asset for Astra Sedaya Finance and CFIN are as of 3Q11
Page 5
Industry Focus
Multi-finance Companies
40.0
30.0
23.2
21.7
20.0
11.9
7.1
10.0
5.5
4.6
BF IN
CF IN
0.0
ADMF
BCA
F inance*
Astra
Sedaya
F inance*
WOMF
Mandiri
Tunas
F inance*
*Non-listed companies
Gross Financing for Astra Sedaya Finance and CFIN are as of 3Q11
Page 6
60%
75%
40%
25%
4W
2W
Cash
Auto financing
ADMF, 23.19%
FIF*, 22.36%
20.0%
15.0%
10.0%
WOMF, 9.60%
5.0%
MTF*, 0.49%
0.0%
2006
2007
ADMF
2008
WOMF
2009
2010
FIF*
MTF*
2011
*Non-listed companies
Market share assumes only 75% new 2W purchased on credit
Industry Focus
Multi-finance Companies
35.0%
BCA Finance*,
28.1%
30.0%
ASF*, 26.9%
25.0%
275.0
40.0%
250.0
35.0%
30.0%
225.0
25.0%
200.0
20.0%
175.0
15.0%
10.0%
20.0%
150.0
15.0%
ADMF, 11.0%
5.0%
125.0
0.0%
1987
10.0%
BFIN, 1.2%
2006
BFIN
2007
ADMF
2008
ASF*
2009
MTF*
2010
BCA Finance*
1997
Indonesia
Population (LHS)
MTF*, 6.8%
5.0%
0.0%
1992
2002
2007
4W Penetration (RHS)
2012F
2W Penetration (RHS)
2011
*Non-listed companies
9,000
Malaysia, 32.17%
8,000
7,000
6,000
5,000
3,000
Indonesia, 4.68%
2,000
India, 2.68%
1,000
BF IN, 1.2%
Thailand, 15.22%
China, 4.52%
4,000
ADMF , 11.0%
0%
5%
10%
15%
20%
25%
30%
35%
BCA F inance*,
28.1%
ASF*, 26.9%
MTF *, 6.8%
6.5%
Industry landscape
6.0%
5.7%
5.5%
6.5%
6.1%
5.5%
5.0%
5.0%
4.5%
6.1%
6.0%
4.6%
4.1%
4.0%
3.5%
3.0%
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012F
Page 7
Industry Focus
Multi-finance Companies
30%
20%
10%
%
28
0%
Poor
1999
2005
Lower Middle
2009
Middle
2010
Upper Middle
2015F
Affluent
12,000,000
2W Sales
10,000,000
12.6% CAGR
6,000,000
4,000,000
2,000,000
0
2006
2007
YR 93-94
YR 92-93
YR 04-05
16
YR 73-74
12
YR 06-07
8
4
China
Korea
Brazil
Malay sia
Russia
J apan
Thailand
Growth Drivers
Indonesia: 2W Sales
2005
YR 87-88
24
20
8,000,000
YR 08-09
2008
2009
2010
Indonesia: 4W Sales
1,600,000
4W Sales
1,400,000
12.0% CAGR
1,200,000
1,200,000
80%
1,000,000
60%
40%
800,000
20%
1,000,000
600,000
0%
800,000
400,000
600,000
200,000
-40%
-60%
2006
0
2005
2006
2007
2008
Page 8
-20%
200,000
400,000
2009
2010
2007
2008
4W Sales
2009
2010
Industry Focus
Multi-finance Companies
40%
30%
8,000,000
20%
6,000,000
10%
4,000,000
0%
2,000,000
-10%
-20%
2006
2007
2008
2W Sales
2009
2010
16
BI rate (%)
14
12
10
40% local content on the first year, 60% on the third year
and 80% on the fifth year
Jul-11
Jan-11
Jul-10
Jan-10
Jul-09
Jan-09
Jul-08
Jan-08
Jul-07
Jan-07
Jul-06
Jan-06
Jul-05
Industry Concerns
BI and MoF want to raise down payment to 20%-30%. MoF
and BI jointly proposed to increase minimum down payment
for auto financing to 20%-30%, applicable to banks and
financing companies. The objective of the regulation is to
improve auto loans asset quality and control disbursements to
an industry that has been growing rapidly in the past few
years. This regulation was passed earlier in the month, and is
effective 15 June 2012.
New minimum down payment regulation
Vehicles
Banks
Financing Companies
2W
25%
20%
30%
25%
4W Non-productive
20%
20%
(Commercial Use)
Page 9
Industry Focus
Multi-finance Companies
70
600
60
500
50
400
40
300
30
33% increase
from Rp4,500 to
Rp6,000
200
20
Motorcycles
100
60
500
50
400
40
30
300
200
33% increase
from Rp1,810 to
Rp2,400
100
20
88% hike from
Rp2,400 to
Rp4,500
Motorcycles
0
Jan-05
May-05
Sep-05
Jan-06
Page 10
10
Cars
May-06
Sep-06
Cars
10
0
0
Jan-08
May-08
Sep-08
Jan-09
Industry Focus
Multi-finance Companies
CAR
NPL
Funding
Reporting
Activities
Explanation
No.84/PMK.012/2006
No.166/PMK.010/2008
No 30/PMK.010/2010
Banks
Multi-finance Companies
Not regulated
Subject to monthly
reporting to MoF
Limited to leasing,
consumer financing,
factoring and credit cards
Page 11
Industry Focus
Multi-finance Companies
Page 12
WOMF
BFIN
ADMF
14.0
23.0
(9.0)
3.5
Industry Focus
Multi-finance Companies
Page 13
Industry Focus
Multi-finance Companies
BFI Finance
BFIN
Summary
Total Asset
Total Financing (ne
Net Profit
NIM (%)
ROE (%)
ROA (%)
Gearing Ratio (x)
Cost to Income Rat
Business Risk
Operating
Environment
WOM Finance
WOMF
5,305
4,751
425
11.1
18.0
8.0
1.18
55.3
16,889
13,241
1,583
12.8
35.8
9.4
2.43
51.6
Leasing HETO,
13%
Financing Used
Motorcycle Direct, 8%
Consumer
Financing Used
Car - Direct,
22%
Clipan Finance
CFIN
Note: data as of 3Q11, the FY11 result is not out yet
Motorcycle
(used)
14%
Leasing LCV,
7%
3,907
3,261
5
3.5
1.2
0.1
5.61
88.8
Consumer
Financing Used
Car - Dealer,
31%
Ownership
Structure
Motorcycle
(new)
90%
Leasing
51%
Franklin Templeton
Investment Funds
9.96%
44.95%
Public
6.20%
Mayban Offshore
Corporate Services
(Labuan) Sdn Bhd
42.96%
26.43%
67.37%
Consumer
Financing
36%
Motorcycle
(used)
10%
Motorcycle
(new)
53%
59.68%
Car (new)
22%
Car (used)
11%
Consumer
Financing New
Car - Dealer,
19%
40.32%
99.0%
95.0%
54.33%
8.07%
6.56%
4,056
3,935
204
7.4
12.4
5.0
1.39
42.3
90.0%
2.71%
45.09%
62.00%
5.00%
31.02%
54.35%
Public
17.24%
1.0%
Public
Public
Willy Suwandi Dharma
Governance
Structure
Approval Policy
Management,
system and
strategy
Financial Risk
Asset Quality
Down Payment
Policy
15.76%
10.0%
Av dp for:
- New 2W 15%
- Used W 22%
- New 4W 21%
- Used 4W 26%
66
1.1
92.2
653
1.3
14
0.4
69.9
5.0
Liquidity
Borrowing
27%
Borrowing
35%
Borrowings
83%
Bonds
57%
Borrowing
100%
Bonds
73%
Bonds
17%
MTN
8%
2,000
7,000
3,500
6,000
3,000
5,000
Asset Maturity
Liability Maturity
2,500
1,600
1,400
1,400
1,200
1,200
1,000
2,000
600
1,000
1,000
400
2013
2014
Borrowing
% of Total
Liability
Bonds
% of Total
Liability
>2015
600
400
200
200
No
maturity
< 1 mth
1-3 mths
3-12 mths
1-3 yrs
> 3 yrs
Liability Maturity
800
800
2012
Liability Maturity
1,000
3,000
1,500
Asset Maturity
1,600
1,800
Liability Maturity
2,000
Asset Maturity
Asset Maturity
4,000
500
1,800
< 3 mths
3-12 mths
1-5 yrs
<1 mth
> 5 yrs
1-3 mths
3-12 mths
1-5 yrs
> 5 yrs
2,316
2,957
851
2,285.59
78.8
482
23.7
7,805
24.5
1,596
94.84
-
16.4
62.6
46.0
19.8
15.0
14.0
8.0
10.8
9.0
11.1
1.18
8.0
7.0
12.8
2.43
23.0
(9.0)
3.5
5.61
1.2
7.4
24.9
1.39
1.24
2.82
7.95
1.46
Profitability
Page 14
Industry Focus
Multi-finance Companies
factors justify the valuation discount. On average, multifinance companies are currently trading at 2.1x FY11 P/BV
and 7.1x FY11 PE.
Valuation
Trade at a discount to banks. Multi-finance companies
except for ADMF trade at a significant discount to the
banks. We believe this is partly due to the size of the
companies and also the limited liquidity of the stock. Also,
as stated in the report above, multi-finance companies are
less tightly regulated than the banks, have different NPL
classification and write-off policies and carry higher cost of
funds as they are not allowed to take deposits. All these
ADMF
BFIN
CFIN
MFIN
WOMF
Market cap
(US$m)
Price
(Rp/s)
FY11F
1,320
392
209
99
58
12,150
4,750
510
690
265
Weighted average
Simple average
PE (x)
FY12F
FY11F
7.7x
7.2x
6.9x
4.7x
88.3x
NA
5.5x
6.0x
4.0x
NA
7.1x
6.6x
5.4x
5.2x
PBV (x)
FY12F
38.5%
19.7%
15.3%
29.0%
1.2%
NA
19.3%
13.4%
27.0%
n/a
0.0%
0.0%
2.2%
0.0%
0.0%
NA
0.0%
2.2%
NA
NA
31.1%
25.6%
18.6%
21.2%
n.m
n.m
n.m.
n.m.
FY12F
FY11F
2.7x
1.3x
0.9x
NA
1.2x
NA
1.0x
0.8x
NA
NA
2.1x
1.5x
0.8x
0.9x
ROE (%)
Price
Target
Price
(US$m)
(Rp/s)
(Rp/s)
21,500
8,000
8,500
Buy
23.3x
19.5x
17.5x
13.2
Bank Danamon
4,649
4,450
4,800
Hold
13.2x
12.7x
10.6x
20.8
Bank Mandiri
Bank Negara
Indonesia
Bank Rakyat
Indonesia
Bank Tabungan
Negara
Bank Tabungan
Pensiunan
Nasional
17,168
6,750
7,200
Buy
15.2x
11.4x
10.1x
12.9
8,029
3,950
4,500
Buy
14.7x
12.6x
11.2x
18,151
6,750
8,200
Buy
13.8x
10.5x
1,146
1,190
1,500
Buy
11.3x
2,161
3,500
4,700
Buy
23.7x
Banking Group
Rating
PE (x)
FY10F
FY11F
CAGR
FY12F
^ (%)
P/BV (x)
FY10F
ROE
(%)
Net div
(%)
FY11F
FY12F
FY12F
FY12F
5.8x
4.8x
4.0x
24.9%
1.5%
2.1x
1.7x
1.5x
14.8%
3.3%
3.4x
2.3x
2.0x
20.9%
3.1%
13.6
1.8x
2.0x
1.7x
16.3%
2.4%
9.8x
12.2
4.3x
3.2x
2.6x
29.0%
3.1%
9.3x
8.5x
15.1
1.6x
1.4x
1.3x
15.7%
3.2%
14.2x
12.3x
22.5
4.7x
3.5x
2.7x
25.1%
0.0%
Weighted average
17.3x
13.9x
12.4x
4.1x
3.2x
2.7x
23.3%
2.5%
Simple average
16.5x
12.9x
11.4x
3.4x
2.7x
2.2x
21.0%
2.4%
14.7x
11.5x
10.3x
3.4x
2.5x
2.1x
22.6%
2.9%
15.3x
11.8x
9.6x
3.0x
2.3x
1.8x
20.4%
2.8%
Page 15
Industry Focus
Multi-finance Companies
Stock Profiles
Page 16
Industry Focus
Potential Catalyst: -
Analyst
LIM Sue Lin +603 2711 0971
suelin@hwangdbsvickers.com.my
Price Relative
4,500
16,000
4,000
14,000
3,500
12,000
3,000
10,000
2,500
8,000
2,000
6,000
1,500
4,000
1,000
2,000
500
2008
2009
Relative JCI Index (LHS)
2010
2011
2012
Pre-prov. Profit
Net Profit
Net Pft (Pre Ex.)
EPS (Rp)
EPS Pre Ex. (Rp)
EPS Gth (%)
EPS Gth Pre Ex (%)
Diluted EPS (Rp)
PE Pre Ex. (X)
Net DPS (Rp)
Div Yield (%)
ROAE Pre Ex. (%)
ROAE (%)
ROA (%)
BV Per Share (Rp)
P/Book Value (x)
2008A
2009A
2010A
2011A
1,445
1,020
1,020
1,020
1,020
82.3
82.3
1,020
12.0
280
2.3
25.0
25.0
13.0
1,950
6.3
1,691
1,212
1,212
1,212
1,212
18.8
18.8
1,212
10.1
510
4.2
25.0
25.0
14.2
2,652
4.6
2,125
1,468
1,468
1,468
1,468
21.1
21.1
1,468
8.3
242
2.0
25.0
25.0
7.7
3,795
3.2
2,568
1,583
1,583
1,583
1,583
7.9
7.9
1,583
7.7
954
7.8
25.0
25.0
8.0
4,421
2.8
N/A
B: N/A
N/A
S: N/A
N/A
H: N/A
Page 17
Recipients of this report, received from DBS Vickers Research (Singapore) Pte Ltd
(DBSVR), are to contact DBSVR at +65 6533 9688 in respect of any matters arising
from or in connection with this report.
www.dbsvickers.com
Refer to important disclosures at the end of this report
ed: SGC / sa: MA
At A Glance
Issued Capital (m shrs)
Mkt. Cap (Rpbn/US$m)
Major Shareholders
Bank Danamon (%)
Free Float (%)
Avg. Daily Vol.(000)
1,000
12,250/1,334
95.0
5.0
17,805
Industry Focus
Adira Dinamika Multi Finance
Company Background
Strong synergy with BDMN. Adira Dinamika Multi Finance
(ADMF) was established as a multi-finance company in the
1990 by Raphael Adi Rachmat, Linda Rachmat and Yus
Winata. It was a part of the Triputra Group, a conglomerate
with many businesses, including a motorcycle dealership,
auto parts manufacturing, and auto parts retail. After ADMF
went public, Bank Danamon (BDMN) has since become major
shareholder with 95% stake after exercising its call options
over the years.
Cross-selling opportunities within the group. ADMF
specialises in financing new and used motorcycles and cars. It
also extended loans for electronic appliances, but that
business unit has been taken over by an affiliate company, PT
Adira Quantum Multifinance. ADMF also bundles its finance
products with insurance products by Adira Insurance, in
which BDMN has 90% stake.
Growth Strategies
Access to funding remains a competitive strength. Despite
the large number of multi-finance companies in Indonesia,
ADMF remains one of the strongest. One of the reasons is the
support of major shareholder, BDMN. The bank channels
lending through ADMF and cross-sells other products to
ADMFs customers. But growth has been driven mainly by the
strong auto sales, which growth resilient at 9% for 2W and
17% for 4W respectively in 2011. ADMF has 16% and 7%
market shares of new motorcycles and cars, respectively. The
company is diversified in terms of auto segment and brands,
and geographically.
Business model focuses on financing new and used 2W.
Although the company offers financing for both used and
new motorcycle and cars, it is skewed towards motorcycles.
The largest share of new financing last year was to new
motorcycles, valued at Rp15.5tr for 1.26m units.
Consumer Financing Portfolio
Avg. Ticket
Size (Rp m)
Avg.
Avg.
Tenor
Deposit
(mth)
(%)
Avg. Rate
(%)
4W (new)
141-143
41
21
13-16
4W (used)
91-93
35
26
15-20
2W (new)
11-12
29
15
27-31
2W (used)
7-9
25
22
31-36
Source: Company
2011
Branch
121
139
306
365
Kiosk
103
126
Dealer Outlets
20
23
TOTAL
550
653
24,392
28,272
Employees
Page 18
Industry Focus
Adira Dinamika Multi Finance
Prospect
Key Risks
Operating expenses. The largest expense item is staff cost.
The company employed an additional 3,880 people in 2011
to man its growing network. Consequently, cost-to-income
ratio shot up to 60.2% in 2011.
Strong competition. With 192 competitors by end 2010,
strong competition in the industry had resulted in thinning
margins and dwindling asset quality.
Maximum down payment regulation. MoF recently imposed
a maximum down payment for auto financing effective Jun
2012, to rein in auto sales growth. The 2W market is more
sensitive because buyers have lower purchasing power.
Shareholding Structure
Franklin Templeton
Investment Funds
Public
5.0%
6.20%
26.43%
67.37%
99.0%
95.0%
90.0%
1.0%
Page 19
10.0%
Industry Focus
Adira Dinamika Multi Finance
20.0%
Motorcycle
(used)
14%
Car (new)
22%
15.73%
14.66%
16.0%
12.18%
13.58%
13.22%
2.98%
3.43%
2008
2009
15.81%
12.0%
8.0%
Car (used)
11%
8.65%
4.0%
2.66%
2007
0.0%
Motorcycle
(new)
53%
2006
Market Share 4W
2010
4.5%
3.74%
700
4.0%
3.5%
600
3.0%
500
West Java
11%
2.5%
400
300
0.87%
200
0.95%
1.24%
1.25%
Central Java
11%
0.0%
2006
2007
2008
25.0%
20.7%
3,000
66.5%
20.6%
20.0%
17.4%
2,000
2010
2011
NPL (%)
Cost to Income
3,500
14.1%
2009
NPL(Rp bn)
2,500
13.9%
12.8%
15.0%
80.0%
67.8%
2,500
58.0%
60.2%
58.0%
2,000
1,500
10.0%
1,000
5.0%
500
-
0.0%
2007
2008
2009
2010
50.0%
40.0%
10.0%
0.0%
2006
2007
2008
2009
2010
2011
CIR (%)
10,000
2.50
2.00
1.57
1,800
1,600
2.43
60.0%
52.3%
51.2%
45.7%
45.7%
1,400
50.0%
38.7%
1,200
1,000
1.50
1.10
4,000
1.00
0.68
0.43
2,000
0.34
0.50
2006
20.0%
500
2011
12,000
6,000
30.0%
1,000
NIM (%)
Gearing Ratio
8,000
70.0%
60.0%
50.4%
1,500
2006
1.5%
0.5%
East Java
12%
3,000
2.0%
1.0%
100
Sumatera
23%
2011
Market Share 2W
4.17%
800
Greater
Jakarta
15%
Kalimantan
12%
6.60%
5.22%
2007
2008
2009
2010
Gearing Ratio
2011
35.8%
40.0%
30.0%
800
600
20.0%
400
10.0%
200
-
0.0%
2006
2007
2008
2009
2010
ROE (%)
Page 20
Industry Focus
Adira Dinamika Multi Finance
Key Assumptions
FY Dec
Sensitivity Analysis
2007A
2008A
2009A
2010A
2011A
17.4
64.0
28.4
14.1
26.6
66.9
33.4
13.0
12.3
65.0
33.9
14.2
55.1
60.6
17.3
7.7
32.3
52.8
15.0
8.0
2011
Portion financed by
BDMN is trending down
Consumer Financing
I
Other Income
Total Income
Operating Expense
Provision
Pre-Tax Profit
Tax
Extraordinary Income
Minorty Interest
Net Profit
Net Profit bef Except
2007A
2008A
2009A
2010A
2011A
1,727
758
2,485
(1,636)
(47)
801
(241)
560
560
2,331
1,049
3,379
(1,934)
(26)
1,419
(399)
1,020
1,020
2,778
1,167
3,945
(2,254)
(33)
1,658
(446)
1,212
1,212
2,119
1,778
3,897
(1,772)
(193)
1,932
(464)
1,468
1,468
3,008
2,295
5,304
(2,736)
(456)
2,112
(528)
1,583
1,583
Growth (%)
Net Interest Income Gth
22.4
Net Profit Gth
20.6
Margins, Costs & Efficiency (%)
Spread
14.2
Net Interest Margin
13.9
Cost-to-Income Ratio
65.9
Business Mix (%)
Net Int. Inc / Opg Inc.
69.5
Non-Int. Inc / Opg inc.
30.5
Fee Inc / Opg Income
Oth Non-Int Inc/Opg Inc
Profitability (%)
ROAE Pre Ex.
52.5
ROAE
52.5
ROA Pre Ex.
17.0
ROA
17.0
Page 21
Operating expenses to
increase along with
network expansion and
new staff hire.
Margins Trend
3,500
25%
3,000
20%
2,500
2,000
15%
1,500
10%
1,000
35.0
82.3
19.2
18.8
(23.7)
21.1
42.0
7.9
20.4
20.7
57.2
19.7
20.6
57.1
9.6
17.4
45.5
7.0
12.8
51.6
69.0
31.0
-
70.4
29.6
-
54.4
45.6
-
56.7
43.3
-
64.3
64.3
28.4
28.4
52.7
52.7
28.0
28.0
45.5
45.5
19.3
19.3
38.5
38.5
9.4
9.4
5%
500
-
0%
2007
2008
2009
2010
2011
NIM
Industry Focus
Adira Dinamika Multi Finance
Quarterly / Interim Income Statement (Rp bn)
FY Dec
Financing Income
Other Income
Total Income
Operating Expense
Provision
Pre-Tax Profit
Tax
Extraordinary Income
Minorty Interest
Net Profit
Net Profit bef Except
Growth (%)
Net Interest Income Gth
Net Profit Gth
4Q10A
1Q11A
3Q11A
4Q11A
579
515
1,094
(483)
(99)
512
(127)
384
384
667
475
1,141
(573)
(51)
517
(129)
388
388
728
527
1,255
(646)
(137)
472
(118)
354
354
830
650
1,480
(733)
(89)
657
(165)
(3)
490
490
784
643
1,427
(783)
(179)
465
(116)
3
352
352
8.5
3.1
15.1
0.8
9.2
(8.8)
14.1
38.5
(5.6)
(28.1)
50.0
40.0
30.0
20.0
10.0
0.0
-10.0
-20.0
-30.0
-40.0
600
500
400
300
200
100
3Q10 4Q10 1Q11 2Q11 3Q11 4Q11
Qty Net Profit
Page 22
Industry Focus
Adira Dinamika Multi Finance
Gross Consumer Financing & Gth
2007A
2008A
2009A
2010A
2011A
376
1,905
69
22
151
25
752
3,302
474
1,821
82
19
155
46
995
3,592
487
2,562
1
75
21
145
44
996
4,330
619
6,544
1
136
31
191
35
43
7,600
2,793
13,241
1
234
123
263
29
205
16,889
Fund Borrowing
Bonds
Taxes Payable
Accrued expenses
Other Liabilities
Shareholders' Funds
Total Liab& S/Hs Funds
146
1,200
37
260
435
1,225
3,302
96
749
225
299
273
1,950
3,592
225
677
51
354
370
2,652
4,330
50
2,535
53
618
548
3,795
7,600
2,957
7,805
62
745
899
4,421
16,889
2007A
2008A
2009A
2010A
2011A
60,000
60%
50,000
50%
40,000
40%
30,000
30%
20,000
20%
10,000
10%
2007
Liabilities Measure
Gearing Ratio
Laibility/Equity
2008
2009
Gross Financing
2010
2011
3.0
10,000
2.5
8,000
2.0
6,000
1.5
4,000
1.0
2,000
0.5
0.0
0%
57.7
40.8
7.0
57.8
50.7
23.5
5.8
45.6
59.2
20.8
13.4
40.4
86.1
34.0
1.3
66.6
78.4
63.7
23.7
62.6
3.74
20.3
7.1
7.7
0.87
5.5
13.2
5.2
0.95
5.6
13.6
6.0
1.24
6.4
39.6
21.4
1.25
3.9
69.9
38.2
1.10
1.70
0.43
0.84
0.34
0.63
0.68
1.00
2.43
2.82
2007
2008
2009
2010
Total Debt
2011
Gearing Ratio
2008
2009
2010
NPL (%)
Page 23
2011
Industry Focus
BFI Finance
Bloomberg: ADMF IJ | Reuters: ADMF.JK
Opportunities in direct
financing
Price Relative
4,500
8,000
4,000
7,000
3,500
6,000
3,000
5,000
2,500
4,000
2,000
3,000
1,500
2,000
1,000
1,000
500
2008
2009
2010
2011
2012
2010A
2011A
2012F
2013F
Pre-prov. Profit
Net Profit
Net Pft (Pre Ex.)
EPS (Rp)
EPS Pre Ex. (Rp)
EPS Gth (%)
EPS Gth Pre Ex (%)
Diluted EPS (Rp)
PE Pre Ex. (X)
Net DPS (Rp)
Div Yield (%)
ROAE Pre Ex. (%)
ROAE (%)
ROA (%)
BV Per Share (Rp)
P/Book Value (x)
463
362
362
476
476
20.1
20.1
476
10
78
1.7
20.8
20.8
9.4
2,553
1.85
558
425
425
559
559
17.5
17.5
559
8
19.8
19.8
8.0
3,112
1.52
698
512
512
674
674
20.4
20.4
674
7
56
1.2
19.6
19.6
7.1
3,751
1.26
784
577
577
758
758
12.6
12.6
758
6
67
1.4
18.5
18.5
6.6
4,450
1.06
B: 1
666
S: N/A
866
H: N/A
Page 24
Recipients of this report, received from DBS Vickers Research (Singapore) Pte Ltd
(DBSVR), are to contact DBSVR at +65 6533 9688 in respect of any matters arising
from or in connection with this report.
www.dbsvickers.com
Refer to important disclosures at the end of this report
ed: SGC / sa: MA
At A Glance
Issued Capital (m shrs)
Mkt. Cap (Rpbn/US$m)
Major Shareholders
Trinugraha Capital (%)
Northen Trust S/A AVFC (%)
Free Float (%)
Avg. Daily Vol.(000)
760
3,592/391
45.0
10.0
45.0
250,250
Industry Focus
BFI Finance
Company Background
Over 20 years track record. The company started out as a
joint venture with Manufacturer Hanover Leasing Company in
1982. Hanover Leasing subsequently sold its stake to PT Bank
Umum Nasional and Essompark Ltd of Hong Kong in 1986. In
1990, the company was licensed as a multi-finance company
and renamed PT Bunas Finance Indonesia. BFIN then went
public and was listed on the Jakarta and Surabaya Stock
Exchanges in the same year.
17-18%
18-20%
16-17%
23-25%
41-42%
21-24%
Source: Company
Page 25
Industry Focus
BFI Finance
Valuation
Currently trading at below book value. BFIN trades at 1.0x
FY12 P/BV and 5.5x FY12 PE based on consensus estimates.
There is only 1 broker covering the stock with a Buy
recommendation. BFINs shares are tightly held, with free
float at 45%. Trinugraha Capital & Co recently bought 45%
Shareholding Structure
59.68%
40.32%
Page 26
9.96%
45.09%
Public
Industry Focus
BFI Finance
25.0%
Leasing HETO,
13%
20.0%
Leasing LCV,
7%
15.0%
10.0%
5.0%
Consumer
Financing Used
Car - Dealer,
31%
Consumer
Financing New
Car - Dealer,
19%
0.0%
2006
2007
2008
2009
2010
2011
2012F
Av cost of funds
2013F
NIM
80
Unallocated
14%
(Rp bn)
2.5%
70
Java
33%
2.0%
60
50
Sulawesi
18%
1.5%
40
1.0%
30
20
0.5%
10
Sumatera
21%
Kalimantan
14%
2,000.00
13.4% 13.0%
16.0%
13.4%
11.1% 10.8%
14.0%
10.3% 12.0%
10.0%
1,000.00
2009
2010
2011
2012F
2013F
NPL(%)
1,200.00
1,000.00
50.0%
42.1%
600.00
400.00
40.0%
200.00
35.0%
45.0%
0.0%
30.0%
2006 2007 2008 2009 2010 2011 2012F 2013F
60.0%
55.0%
48.7% 49.8%
47.7%
800.00
58.0%
6.0%
2.0%
-
55.3% 55.5%
53.2%
8.0%
4.0%
500.00
NIM
Operating Expense
Gearing Ratio
Cost to Income
6,000.0
1.47
1.47
5,000.0
1.53
1.18
0.99
0.90
3,000.0
2,000.0
2008
Cost to Income
14.8%
1,500.00
4,000.0
2007
0.0%
2006
0.43
0.28
1,000.0
2006 2007 2008 2009 2010 2011 2012F 2013F
Debt
Gearing Ratio
1.80
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
-
700.00
25.0%
600.00
500.00
19.6%
18.7%18.0%18.0%
17.0% 20.0%
16.6%17.1%
15.5%
400.00
15.0%
300.00
10.0%
200.00
5.0%
100.00
-
0.0%
2006 2007 2008 2009 2010
Net Profit
ROE (%)
Page 27
Industry Focus
BFI Finance
Key Assumptions
FY Dec
2009A
2010A
2011A
2012F
2013F
(19.5)
(41.5)
21.2
9.5
40.3
152.7
21.2
10.4
29.9
120.8
19.8
10.8
20.0
12.0
20.4
10.0
20.0
10.0
20.5
10.0
2009A
2010A
2011A
2012F
2013F
Consumer Financing
I
619
49
242
910
(443)
(75)
392
(91)
301
301
661
70
192
922
(459)
(0)
463
(101)
362
362
850
150
249
1,248
(690)
(29)
529
(104)
425
425
1,097
225
247
1,570
(872)
(15)
683
(171)
512
512
1,317
248
303
1,867
(1,083)
(15)
769
(192)
577
577
Leasing Income
Other Income
Total Income
Operating Expense
Provision
Pre-Tax Profit
Tax
Extraordinary Income
Minorty Interest
Net Profit
Net Profit bef Except
Growth (%)
Net Interest Income Gth
(3.7)
Net Profit Gth
30.0
Margins, Costs & Efficiency (%)
Spread
11.7
Net Interest Margin
14.8
Cost-to-Income Ratio
48.7
Business Mix (%)
Net Int. Inc / Opg Inc.
73.4
Non-Int. Inc / Opg inc.
26.6
Fee Inc / Opg Income
Oth Non-Int Inc/Opg Inc
Profitability (%)
ROAE Pre Ex.
20.8
ROAE
20.8
ROA Pre Ex.
12.6
ROA
12.6
Page 28
Operating Expense
increasing in line with
network expansion and
new staff hire.
Margins Trend
700
16%
600
14%
500
12%
10%
400
8%
300
6%
200
4%
100
2%
9.3
20.1
36.8
17.5
32.3
20.4
18.3
12.6
10.7
13.4
49.8
9.0
11.1
55.3
10.4
10.8
55.5
10.5
10.3
58.0
79.2
20.8
-
80.0
20.0
-
84.2
15.8
-
83.8
16.2
-
20.8
20.8
9.4
9.4
19.8
19.8
8.0
8.0
19.6
19.6
7.1
7.1
18.5
18.5
6.6
6.6
0%
2009
2010
2011
2012F
2013F
NIM
Industry Focus
BFI Finance
Quarterly / Interim Income Statement (Rp bn)
FY Dec
4Q10
1Q11
3Q11
4Q11
30%
25%
20%
15%
10%
5%
0%
-5%
-10%
140
120
Leasing Income
Other Income
Total Income
Operating Expense
Provision
Pre-Tax Profit
Tax
Extraordinary Income
Minorty Interest
Net Profit
Net Profit bef Except
182
22
51
255
(127)
(0)
128
(25)
103
103
193
25
56
274
(148)
126
(25)
101
101
205
33
59
297
(166)
(6)
125
(25)
101
101
220
41
61
321
(188)
(9)
125
(24)
100
100
231
51
74
356
(188)
(14)
153
(30)
123
123
Growth (%)
Net Interest Income Gth
Net Profit Gth
(4.6)
25.5
7.4
(1.5)
8.7
(0.8)
9.6
(0.1)
8.3
22.7
100
80
60
40
20
2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11
Qty Net Profit
Page 29
Industry Focus
BFI Finance
Gross Consumer Financing & Gth
2009A
2010A
2011A
2012F
2013F
50%
40%
30%
20%
10%
0%
-10%
-20%
-30%
7,000
166
167
1,916
55
12
27
50
2,393
334
511
2,807
145
6
6
61
3,870
231
1,085
3,666
204
40
4
75
5,305
1,320
1,195
4,345
220
44
5
68
7,197
1,843
1,313
5,208
231
48
5
71
8,720
Fund Borrowing
Bonds
Taxes Payable
Accrued expenses
Other Liabilities
Shareholders' Funds
Total Liab& S/Hs Funds
657
25
75
102
1,534
2,393
1,593
159
21
73
84
1,941
3,870
2,316
482
21
64
56
2,366
5,305
3,127
1,060
22
67
70
2,852
7,197
3,908
1,272
23
71
63
3,384
8,720
2009A
2010A
2011A
2012F
2013F
80.1
7.0
76.5
76.5
6,000
5,000
4,000
3,000
2,000
1,000
2009
2010
2011
2012F
Gross Financing
2013F
1,800
1,600
1,400
1,200
1,000
800
600
400
200
-
150%
100%
50%
0%
-50%
-100%
2009
2010
2011
72.5
13.2
90.8
82.5
69.1
20.4
95.2
78.8
60.4
16.6
96.3
72.0
59.7
15.1
97.1
73.2
0.7
0.6
313.5
424.7
1.4
1.2
92.2
103.5
1.1
0.9
115.3
690.5
1.1
0.8
132.7
425.4
0.90
0.99
1.18
1.24
1.47
1.52
1.53
1.58
2012F
Gross Leasing
2013F
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
2009
2010
2011
2012F
NPL (%)
Page 30
2013F
Industry Focus
Clipan Finance
Bloomberg: BBCA IJ | Reuters: BBCA.JK
Business as usual
Potential Catalyst:
Analyst
LIM Sue Lin +603 2711 0971
suelin@hwangdbsvickers.com.my
Price Relative
4,500
900
4,000
800
3,500
700
3,000
600
2,500
500
2,000
400
1,500
300
1,000
200
500
100
2008
2009
2010
2011
2012
Pre-prov. Profit
Net Profit
Net Pft (Pre Ex.)
EPS (Rp)
EPS Pre Ex. (Rp)
EPS Gth (%)
EPS Gth Pre Ex (%)
Diluted EPS (Rp)
PE Pre Ex. (X)
Net DPS (Rp)
Div Yield (%)
ROAE Pre Ex. (%)
ROAE (%)
ROA (%)
BV Per Share (Rp)
P/Book Value (x)
2008A
2009A
2010A
2011F*
122
75
75
28
28
(28.5)
(28.5)
28
18.0
9.9
9.9
4.5
402
1.3
193
113
113
43
43
51.1
51.1
43
11.9
10.1
10.1
7.0
445
1.1
224
150
150
57
57
33.1
33.1
57
9.0
5
0.0
12.1
12.1
8.5
497
1.0
269
201
201
76
76
33.6
33.6
76
6.7
15
0.0
14.4
14.4
7.5
561
0.9
Page 31
Recipients of this report, received from DBS Vickers Research (Singapore) Pte Ltd
(DBSVR), are to contact DBSVR at +65 6533 9688 in respect of any matters arising
from or in connection with this report.
www.dbsvickers.com
Refer to important disclosures at the end of this report
ed: SGC / sa: MA
At A Glance
Issued Capital (m shrs)
Mkt. Cap (Rpbn/US$m)
Major Shareholders
PT Panin Financial (%)
Voltraint No 1103 Pty Ltd(%)
Free Float (%)
Avg. Daily Vol.(000)
2,642
1,925/210
44.68
38.82
45.65
8,681
Industry Focus
Clipan Finance
Company Profile
Network Expansion
Bank Pan Indonesia is major shareholder. PT Clipan Finance
Indonesia Tbk (CFIN) started out in 1982 as a joint-venture
company between Credit Lyonnais of France and PT Bank Pan
Indonesia (PNBN). In 1990, CFIN became a listed company
and in 1997, Credit Lyonnais stake in CFIN was acquired by
PNBN, which has since been its major shareholder.
2010
3Q11
Branch
18
18
Marketing Office
10
14
TOTAL
28
32
Employees
654
843
Source: Company
Growth Strategies
Diverse multi-finance business. In line with its principal
business, CFIN offers the following: consumer financing for
new and used cars, lease financing, and factoring of short
term bills or receivables of companies for domestic trade
transactions. Its focus is consumer financing, mainly to loans
for used cars through dealers, at fixed rates and loan tenures
of 1-4 years.
Consumer financing: focus on Greater Jakarta. In order to
manage credit risk, CFIN tries to diversify its loan portfolio.
Geographically, it focuses on Greater Jakarta, which makes
up 53.4% of its total portfolio. It finances mainly non-sedan
Japanese vehicles (c.85% of total portfolio). Japanese vehicles
have better resale values and see stronger used car demand.
In leasing, its portfolio comprises mainly the following brands:
Hitachi, Komatsu, Caterpillar and Kobelco, which have
excellent resale value in the secondary market.
CFIN has also ventured into the higher-yielding business by
providing direct financing for used cars. Yields are 2 to 3%
higher than for consumer financing, and the average tenure
is 18 months to 2 years. This segment typically sees 20%
repeat business.
Factoring business started in 2007. Most of its factoring
business is derived from referrals from PNBN. CFIN provides
short term financing for corporate clients, charging them
16% annually. The term of financing is more than 91 days
and less than a year. Typically a land or building is used as
collateral.
In expansion mode. New bookings grew in 2011 after it
expanded it added five branches and 144 employees in 2010,
and another four branches and 189 employees in 2011.
Looking ahead, CFIN wants to expand outside Java with plans
to open 5-10 branches this year. Its plan is to open a few
main branches in large cities, and then try to penetrate the
region with smaller branches in smaller cities.
Key Risks
NIM pressure due to competition. Like its peers in the
industry, CFIN is starting to feel slight NIM pressure due to
competition. Moreover, since consumer financing is a dealer
generated business, dealer incentives or acquisition costs are
also eating into margins. But with cost of funds trending
down, CFIN believes it can maintain margins going ahead.
Prospects
Funded by borrowings. Most of its borrowing is from PNBN,
its major shareholder. At end 3Q11, Rp2.3tr of its funds were
from PNBN and Bank Danamon (BDMN), with effective
annual interest rate of 10.74%. In 2011, it raised Rp1.5tr
from bonds and a right issue. Going forward, we expect
equal weighting between bank borrowings and bond
issuance to finance growth. The company plans to issue more
bonds in 2012. Gearing ratio is below 1x, allowing plenty of
room for CFIN to take on more debt.
PNBN channels loans through CFIN. The company has a
channeling agreement with PNBN. CFIN prefers this option
rather than joint-financing to grow its asset base. Currently,
the company has a revolving facility of Rp600bn with PNBN
that charges 9.25% for 12 months, 9.75% for 13-24 months
and 10.25% for 25-36 months. As of 3Q11, CFIN has used
Rp107.9bn of the facility.
Valuation
CFIN currently trades at 0.8x FY12 P/BV and 6.0x FY12 PE
based on consensus estimates. There is only 1 broker that
cover the stock with a Buy recommendation. Trading volume
for CFIN is rather limited with only 8m average daily traded
volume (3-month average)
Page 32
Industry Focus
Clipan Finance
Shareholder Structure
54.35%
Page 33
6.56%
31.02%
Public
Industry Focus
Clipan Finance
Factoring,
15%
16.0%
14.0%
12.0%
10.0%
8.0%
Consumer
Financing,
52%
6.0%
4.0%
2.0%
Leasing, 33%
0.0%
2006
2007
2008
2009
Av cost of funds
2010
NIM
Factoring
13%
1.20%
18.00
1.00%
16.00
14.00
0.80%
12.00
10.00
0.60%
8.00
0.40%
6.00
Leasing
51%
4.00
0.20%
2.00
Consumer
Financing
36%
0.00%
2006
2007
2008
NPL (Rp bn)
350.00
9.1%
11.5%
12.0%
10.4%
9.5%
10.0%
250.00
8.0%
200.00
6.0%
150.00
4.0%
100.00
2.0%
50.00
0.0%
2006
2010
NPL (%)
Cost to Incomel
400.00
300.00
2009
2007
2008
Interest Income
2009
2010
160.00
140.00
120.00
100.00
80.00
60.00
40.00
20.00
-
50.0%
44.2%
45.0%
40.5%
40.0%
32.1%
33.1%
2009
2010
2007
2008
Operating Expense
Cost to Income
Gearing Ratio
(Rp bn)
(x)
1,200
0.80
0.70
1,000
250.00
200.00
13.6%
11.5%
11.2%
0.60
800
0.50
600
150.00
0.30
400
0.20
200
8.0%
100.00
6.0%
4.0%
50.00
2007
Total Debt (RHS)
2008
2009
2010
14.0%
10.0%
7.0%
2.0%
0.10
16.0%
12.0%
9.6%
0.40
2006
35.0%
30.0%
2006
NIM (%)
55.0%
50.6%
0.0%
2006
2007
2008
Net Profit
2009
2010
ROE (%)
*At the time of this report is published, CFIN has yet to release its FY11 results.
Source: Company data; DBS Vickers
Page 34
Industry Focus
Clipan Finance
Key Assumptions
FY Dec
2006A
2007A
2008A
2009A
2010A
36.4
(7.7)
15.1
1.0
37.3
116.0
11.5
4.9
(23.0)
2.4
12.9
10.1
72.6
(1.7)
11.0
9.4
123.0
(2.6)
11.3
7.3
Growth of consumer
financing segment has
been resilient.
Leasing Income
Factroring Income
Other Income
Total Income
Operating Expense
Provision
Pre-Tax Profit
Tax
Extraordinary Income
Minorty Interest
Net Profit
Net Profit bef Except
2006A
2007A
2008A
2009A
2010A
49
77
28
154
(78)
(7)
69
(19)
50
50
65
83
2
69
218
(96)
(28)
94
(20)
75
75
76
151
28
68
323
(131)
(34)
158
(45)
113
113
69
145
52
64
329
(106)
(21)
202
(52)
150
150
137
158
44
64
403
(133)
(4)
265
(64)
201
201
Margins Trend
250
1400%
1200%
200
1000%
150
800%
100
600%
400%
50
200%
0%
2007
Growth (%)
Net Interest Income Gth
(5.7)
Net Profit Gth
(5.9)
Margins, Costs & Efficiency (%)
Spread
14.1
Net Interest Margin
9.1
Cost-to-Income Ratio
50.6
Business Mix (%)
Net Int. Inc / Opg Inc.
81.9
Non-Int. Inc / Opg inc.
18.1
Fee Inc / Opg Income
Oth Non-Int Inc/Opg Inc
Profitability (%)
ROAE Pre Ex.
11.7
ROAE
11.7
ROA Pre Ex.
6.4
ROA
6.4
Page 35
2009
2010
18.6
48.8
70.6
51.1
3.9
33.1
27.6
33.6
6.6
9.5
44.2
2.9
11.0
40.5
1.6
11.5
32.1
4.1
10.4
33.1
68.5
31.5
-
78.9
21.1
-
80.5
19.5
-
84.0
16.0
-
9.9
9.9
4.5
4.5
10.1
10.1
7.0
7.0
12.1
12.1
8.5
8.5
14.4
14.4
7.5
7.5
2008
2011
NIM
Industry Focus
Clipan Finance
Quarterly / Interim Income Statement (Rp bn)
FY Dec
3Q2010
4Q2010
2Q2011
3Q2011
100
100%
50
Consumer Financing
I
Leasing Income
Factoring Income
Other Income
Total Income
Operating Expense
Provision
Pre-Tax Profit
Tax
Extraordinary Income
Minorty Interest
Net Profit
Net Profit bef Except
37
42
8
13
99
(36)
3
66
(16)
50
50
52
38
14
9
113
(41)
(7)
66
(16)
50
50
67
41
24
20
152
77
(6)
222
(22)
200
200
78
38
28
20
164
(72)
(3)
89
(22)
67
67
91
42
28
19
180
(81)
(7)
93
(23)
69
69
Growth (%)
Net Interest Income Gth
Net Profit Gth
25.7
9.0
21.1
0.4
26.5
297.7
9.0
(66.4)
11.8
3.2
0%
(50)
-100%
2Q10 3Q10 4Q10 1Q11 2Q11 3Q11
-200%
(100)
-300%
(150)
-400%
(200)
-500%
(250)
-600%
Page 36
Industry Focus
Clipan Finance
Gross Consumer Financing& Gth
2006A
2007A
2008A
2009A
2010A
Factoring (net)
Leased Asset
Fixed Asset
Short Term Investment
Deferred Tax Asset
Other Assets
Total Assets
33
427
281
12
11
10
4
779
26
856
377
102
11
11
262
15
16
1,674
117
880
294
259
10
15
18
6
10
1,607
31
866
494
270
9
13
74
2
11
1,771
26
927
1,108
567
11
18
15
2
20
2,694
Fund Borrowing
Bonds
Taxes Payable
Accrued expenses
Other Liabilities
Shareholders' Funds
Total Liab& S/Hs Funds
84
223
7
6
9
449
779
381
149
4
8
71
1,062
1,674
395
6
14
18
1,175
1,607
378
24
15
43
1,312
1,771
1,090
30
12
82
1,481
2,694
Leasing (net)
Consumer Financing (net)
2006A
2007A
2008A
2009A
2010A
1,600
1,400
1,200
1,000
800
600
400
200
-
150%
100%
50%
0%
-50%
-100%
-150%
2007
2008
Gearing Ratio
Laibility/Equity
36.1
54.8
93.3
25.5
22.5
51.1
6.1
86.5
62.1
18.3
54.7
16.1
91.3
91.3
27.9
48.9
15.3
82.3
82.3
41.1
34.4
21.1
89.8
89.8
0.2
0.2
619.1
7.0
0.3
0.3
801.4
13.9
0.3
0.3
778.9
15.1
0.6
0.7
301.5
10.9
0.4
0.3
209.0
5.0
0.7
73.3
0.5
57.7
0.3
36.8
0.3
35.0
0.7
81.9
2010
Gross Financing
2011
1,150
1,140
1,130
1,120
1,110
1,100
1,090
1,080
1,070
100%
50%
0%
-50%
-100%
-150%
2007
2009
2008
2009
2010
Gross Leasing
2011
Gross Leasing Gth
2008
2009
NPL (%)
Page 37
2010
2011
Industry Focus
WOM Finance
Bloomberg: BBCA IJ | Reuters: BBCA.JK
No way but up
Potential Catalyst:
Analyst
LIM Sue Lin +603 2711 0971
suelin@hwangdbsvickers.com.my
Price Relative
4,500
800
4,000
700
3,500
600
3,000
500
2,500
400
2,000
300
1,500
1,000
200
500
100
0
2008
2009
2010
2011
2012
Pre-prov. Profit
Net Profit
Net Pft (Pre Ex.)
EPS (Rp)
EPS Pre Ex. (Rp)
EPS Gth (%)
EPS Gth Pre Ex (%)
Diluted EPS (Rp)
PE Pre Ex. (X)
Net DPS (Rp)
Div Yield (%)
ROAE Pre Ex. (%)
ROAE (%)
ROA (%)
BV Per Share (Rp)
P/Book Value (x)
2008A
2009A
2010A
2011A
314
21
21
10
10
(107.3)
(107.3)
10
25.6
140
52.8
65.8
65.8
17.7
525
0.5
280
61
61
30
30
192.9
192.9
30
8.7
255
96.2
25.0
25.0
17.6
301
0.9
285
138
138
69
69
127.2
127.2
69
3.8
121
45.8
25.0
25.0
18.4
207
1.3
186
5
5
3
3
(96.1)
(96.1)
3
98.3
477
180.0
25.0
25.0
23.0
(269)
(1.0)
n.a
B: 0
n.a
S: 0
n.a
H: 0
Page 38
Recipients of this report, received from DBS Vickers Research (Singapore) Pte Ltd
(DBSVR), are to contact DBSVR at +65 6533 9688 in respect of any matters arising
from or in connection with this report.
www.dbsvickers.com
Refer to important disclosures at the end of this report
ed: SGC / sa: MA
At A Glance
Issued Capital (m shrs)
Mkt. Cap (Rpbn/US$m)
Major Shareholders
Bank Internasional Indonesia (%)
PT Wahana Makmur Sejati (%)
DBS Nominees (%)
Free Float (%)
Avg. Daily Vol.(000)
2,000
530,000 /57
62.00
17.24
5.00
21.00
503,851
Industry Focus
WOM Finance
Company Profile
Started out as a financing new Honda motorcycles. PT
Wahana Ottomitra Multiartha Tbn (WOMF) was established
in 1982 as PT Jakarta Tokyo Leasing, and specialised in
providing financing for new Honda motorcycles. In 2001, it
broadened its market by offering financing for new and
used motorcycles, mainly Honda, Yamaha and Suzuki. After
listing in 2004, it was acquired by a consortium comprising
Bank Internasional Indonesia (BNII), International Finance
Corporation (IFC) and DBS Nominees Pte Ltd. The
consortium currently holds 67% stake in the company.
Growth Strategies
Focus on financing new and used motorcycles. In line with its
principal business, WOMF provides financing for new and
used motorcycles through dealers. It does not plan to expand
into car financing to avoid competing directly with its major
shareholder, BNII.
Gearing up after cleaning up books. In 2011, WOMF focused
on cleaning up its loan portfolio, which was reflected in
slower loan growth that year. And loans for 2W financing
slowed down significantly, from an average of 15k units a
month to 4k units. Going forward, WOMF expects new 2W
loans to improve to industry growth rate. It expects negative
impact from the implementation of minimum downpayment
regulation, although the magnitude is still being assessed by
management.
Key Risks
Gearing has always been high. Although gearing is still well
below the 10x maximum set by Bapepam-LK and industry
average of 8.14x, it is trending up. Its funding is mainly from
bond issuance and borrowings. Interest rate on borrowings
has dropped by c.200bps over the last two years to 10.2512.00%.
Nominal
value
Coupon
Rate (%)
Tenure
(years)
Maturity
(Rp Bn)
Bonds IA
4-Nov-03
150
13.50
11-Nov-06
Bonds IB
4-Nov-03
150
13.75
11-Nov-07
Bonds IIA
30-May-05
190
12.75
7-Jun-07
Bonds IIB
30-May-05
140
13.25
7-Jun-08
Bonds IIC
30-May-05
170
13.90
7-Jun-09
Bonds IIIA
24-May-06
200
14.85
7-Jun-08
Bonds IIIB
24-May-06
465
15.15
7-Jun-09
Bonds IIIC
24-May-06
160
15.35
7-Jun-10
Bonds IVA
29-May-07
225
11.25
29-May-10
Bonds IVB
29-May-07
185
11.625
29-May-11
Bonds IVC
29-May-07
590
12.00
4.5
29-Nov-11
MTN I
10-Aug-10
200
9.50
1.5
16-Feb-12
MTN II
30-Aug-10
150
9.25
20-Sep-11
Bonds VA
4-Mar-11
294
8.75
9-Mar-12
Bonds VB
4-Mar-11
Bonds VC
4-Mar-11
120
366
9.60
10.30
2
3
Bonds VD
4-Mar-11
620
11.00
9-Mar-14
9-Mar-13
9-Mar-15
Page 39
Industry Focus
WOM Finance
Prospects
Concerns on new policies. MoF recently issued a regulation
on minimum down payment for 2W and 4W, to be effective
three months form now. 2W market demand will be more
sensitive to this new policy, because buyers have
substantially lower purchasing power, and sales will slow
down. And since WOMF focuses solely on 2W, it will feel
the impact of slower bookings during the year. Its
management is still assessing the impact.
WOMF is less concerned about the increase in fuel price.
Typical 2W fuel consumption is only 25 litres a month, so
the forecast 33% increase in fuel price will not increase
expenditure severely. But it expects some 4W users to shift
to 2W after the fuel price hike.
Shareholding Structure
Mayban Offshore
Corporate Services
(Labuan) Sdn Bhd
42.96%
54.33%
2.71%
62.00%
Public
Page 40
5.00%
15.76%
Industry Focus
WOM Finance
Motorcycle
(new)
90%
Motorcycle
(used)
10%
36.0%
32.0%
28.0%
24.0%
20.0%
16.0%
12.0%
8.0%
4.0%
0.0%
32.0%
23.0%
21.8%
18.0%
14.8%
2006
17.6%
15.2%
14.6%
14.0%
12.3%
6.4%
6.3%
3.5%
5.6%
5.0%
1.6%
2007
2008
Asset Yield
2009
2010
Cost of Funds
NIM
10.0%
700
9.0%
600
Sumatera
17%
8.0%
500
7.0%
400
6.0%
300
4.0%
5.0%
3.0%
200
East Java,
Bali,
Kalimantan
and Sulawesi
21%
7.0%
1,600
6.0%
1,400
1,200
5.0%
700
600
3.5%
NPL (%)
1.6%
200
100
2008
2009
2010
132.4%
140.0%
97.2%
88.0%
93.3%
99.0%
80.0%
60.0%
600
2.0%
400
1.0%
200
0.0%
40.0%
20.0%
0.0%
2006
2011
2007
2008
2009
2010
NIM (%)
Gearing Ratio
120.0%
100.0%
87.0%
800
3.0%
400
2011
CIR (%)
12.36
3,000
12.00
8.77
2,500
10.00
2,000
4.72
3.80
5.61
3.86
8.00
6.00
150
(200)
(250)
2009
2010
2011
Gearing Ratio
2006
2007
2008
2009
2010
-20.0%
-40.0%
-60.0%
(150)
(300)
20.0%
0.0%
(100)
2.00
2008
1.2%
500
2007
7.5%
50
(50)
40.0%
18.0%
14.6%
100
4.00
30.0%
200
1,000
2006
2010
1,000
4.0%
500
1,500
2009
Cost to Income
6.3%
5.0%
2007
2008
NPL (Rp bn)
5.6%
3,500
2007
Jabotabek
32%
6.4%
2006
0.0%
2006
1,000
300
1.0%
800
2.0%
100
900
2011
West Java
10%
Central Java
20%
18.4%
17.7%
-80.0%
-110.5%
-100.0%
(350)
-120.0%
Net Profit (Rp bn)
ROE (%)
*)NPL Data is only available up to 2010; Source: Company data; DBS Vickers
Page 41
Industry Focus
WOM Finance
Key Assumptions
FY Dec
2007A
2008A
2009A
2010A
2011A
15.7
28.9
14.8
21.8
6.5
47.2
15.2
17.7
(10.7)
55.5
14.6
17.6
31.9
52.4
12.3
18.4
6.8
55.0
14.0
23.0
Majority of financing is
done by joint financing.
Consumer Financing
I
Other Income
Total Income
Operating Expense
Provision
Pre-Tax Profit
Tax
Extraordinary Income
Minorty Interest
Net Profit
Net Profit bef Except
2007A
2008A
2009A
2010A
2011A
917
273
1,191
(1,091)
(486)
(386)
104
(282)
(282)
854
483
1,338
(1,023)
(276)
38
(17)
21
21
636
751
1,388
(1,108)
(187)
93
(32)
61
61
554
938
1,492
(1,207)
(91)
194
(56)
138
138
745
908
1,653
(1,467)
(170)
16
(10)
5
5
Growth (%)
Net Interest Income Gth
3.5
Net Profit Gth
(410.1)
Margins, Costs & Efficiency (%)
Spread
(7.0)
Net Interest Margin
1.6
Cost-to-Income Ratio
91.6
Business Mix (%)
Net Int. Inc / Opg Inc.
77.0
Non-Int. Inc / Opg inc.
23.0
Fee Inc / Opg Income
Oth Non-Int Inc/Opg Inc
Profitability (%)
ROAE Pre Ex.
(64.2)
ROAE
(64.2)
ROA Pre Ex.
(6.0)
ROA
(6.0)
Page 42
Margins Trend
7%
1,000
6%
800
5%
600
4%
400
3%
2%
200
(6.9)
(107.3)
(25.5)
192.9
(12.9)
127.2
34.4
(96.1)
(2.6)
5.6
76.5
(3.0)
6.4
79.8
(6.1)
6.3
80.9
(9.0)
3.5
88.8
63.9
36.1
-
45.9
54.1
-
37.2
62.8
-
45.1
54.9
-
7.8
7.8
0.6
0.6
19.8
19.8
2.4
2.4
34.7
34.7
3.8
3.8
1.2
1.2
0.1
0.1
1%
0%
2007
2008
2009
2010
2011
NIM
Industry Focus
WOM Finance
Quarterly / Interim Income Statement (Rp bn)
FY Dec
Consumer Financing
I
Other Income
Total Income
Operating Expense
Provision
Pre-Tax Profit
Tax
Extraordinary Income
Minorty Interest
Net Profit
Growth (%)
Net Interest Income Gth
Net Profit Gth
4Q2010
155
221
376
(331)
(29)
16
(6)
10
(0.0)
(77.3)
1Q2011
177
203
381
(338)
(36)
7
(3)
4
14.1
(56.0)
181
221
402
(365)
(39)
(3)
(1)
(4)
1.9
(183.9)
3Q2011
177
239
416
(362)
(50)
5
(3)
1
(2.0)
(138.1)
4Q2011
210
245
455
(403)
(45)
7
(3)
3
18.6
142.2
50
200
150
40
100
30
50
0
20
-50
-100
10
-150
(10)
-200
-250
Page 43
Industry Focus
WOM Finance
Gross Loan& Growth
Prepaid Expenses
Other Receivables
Fixed Assets (net)
Deferred Tax Asset
Derivative Receivable
Other Assets
Total Assets
Fund Borrowing
Medium Term Notes
Bonds
Taxes Payable
Accrued expenses
Deferred tax liabilities - net
Other Liabilities
Shareholders' Funds
Total Liab& S/Hs Funds
2007A
2008A
2009A
2010A
2011A
101
4,258
152
59
33
47
1
66
4,716
202
2,925
96
44
47
29
43
47
3,433
243
2,090
80
34
68
3
54
2,573
134
3,163
133
35
95
39
3,599
309
3,261
186
43
93
15
3,907
1,029
2,122
4
60
1,246
255
4,716
629
1,788
1
49
689
276
3,433
431
1,157
1
53
3
592
336
2,573
649
349
774
1
49
59
1,260
459
3,599
851
200
1,397
1
33
69
918
437
3,907
14,000
40%
12,000
30%
10,000
20%
8,000
10%
6,000
0%
4,000
-10%
2,000
-20%
2007
2009
2010
Gross Financing
2011
Consumer financing is
balance sheet driver.
14.0
3,000
12.0
2,500
10.0
2,000
8.0
1,500
6.0
1,000
4.0
2.0
500
2009A
2010A
2011F
2012F
0.0
2013F
2007
2008
2009
2010
Total Debt
90.3
66.8
23.1
47.6
85.2
70.4
19.9
56.6
81.2
61.7
19.3
51.7
87.9
49.2
20.7
24.7
83.5
62.7
24.5
40.2
9.44
13.96
23.2
14.8
6.01
13.07
18.8
10.2
3.31
8.77
22.4
10.1
4.29
10.48
16.9
7.9
n.a
n.a
n.a
n.a
Liabilities Measure
Gearing Ratio
Laibility/Equity
12.36
17.49
8.77
11.45
4.72
6.65
3.86
6.84
5.61
7.95
2008
2011
Gearing Ratio
Gearing ratio in
average is always high.
2008
2009
NPL (%)
Page 44
2010
Industry Focus
Multi-finance Companies
DBSV recommendations are based an Absolute Total Return* Rating system, defined as follows:
STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame)
BUY (>15% total return over the next 12 months for small caps, >10% for large caps)
HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps)
FULLY VALUED (negative total return i.e. > -10% over the next 12 months)
SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame)
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The research set out in this report is based on information obtained from sources believed to be reliable, but we (which collectively refers to
DBSVR, DBSVS, and/or DBSVH) do not make any representation or warranty as to its accuracy, completeness or correctness. Opinions expressed
are subject to change without notice. This document is prepared for general circulation. Any recommendation contained in this document does
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The information in this document is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed and it
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(a)
(b)
such valuations, opinions, estimates, forecasts, ratings or risk assessments or their underlying assumptions will be achieved, and
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ANALYST CERTIFICATION
The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies
and their securities expressed in this report accurately reflect his/her personal views. The analyst also certifies that no part of his/her compensation
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his / her spouse and/or relatives who are financially dependent on the analyst, do not hold interests in the securities recommended in this report
(interest includes direct or indirect ownership of securities, directorships and trustee positions).
Page 45
Industry Focus
Multi-finance Companies
2.
3.
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months, and within the next 3 months receive or intends to seek compensation for investment banking services from the
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ii.
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Page 46