MM 5009 FINANCE STOCK ANALYSIS

PT Matahari Putra Prima Tbk (MPPA)

Executive 47 (MBA) Sufian (29112017)

MASTER OF BUSINESS ADMINISTRATION SCHOOL OF BUSINESS AND MANAGEMENT INSTITUT TEKNOLOGI BANDUNG 2013

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TABLE OF CONTENTS
General Overview ....................................................................................................................................................3 Macroeconomic overview ........................................................................................................................................3 Gross Domestic Product (GDP) ..............................................................................................................................4 Unemployment Rate ................................................................................................................................................6 Outlook of Modern Retail Industry .......................................................................................................................6 Consumer Spending ................................................................................................................................................8 Inflation Rate ...........................................................................................................................................................8 Company Overview .....................................................................................................................................................9 PT Matahari putra prima tbk (MPPA) Company Profile ...................................................................................9 History of the development of PT. Matahari Putra Prima Tbk. (MPPA) ........................................................ 10 ownership and major holders ............................................................................................................................... 12 business activities and strategies .......................................................................................................................... 13 The core retail business of Matahari Group ................................................................................................... 13 Supported by Nationwide Network .................................................................................................................. 13 Financial Performance Overview ............................................................................................................................. 14 Financial Ratios & Margins .................................................................................................................................. 14 Dividend and stock .................................................................................................................................................... 15 Dividend.................................................................................................................................................................. 15 Considerations in the Formulation of Dividend Policy ........................................................................................... 16 Cash Dividend Payment .......................................................................................................................................... 16 growth over prior year .......................................................................................................................................... 18 Stock theory ............................................................................................................................................................... 20 MPPA stock market snapshot .............................................................................................................................. 21 Investment Parameter ........................................................................................................................................... 21 Stock valuation........................................................................................................................................................... 22 Methodology............................................................................................................................................................ 22 Required Rate on Equity ...................................................................................................................................... 23 Growth ................................................................................................................................................................. 24 Value of Equity .................................................................................................................................................... 24 Value Estimation ......................................................................................................................................................... 25 Exhibit 1 INCOME STATEMENT .......................................................................................................................... 27 Exhibit 2 BALANCE SHEET .................................................................................................................................. 28 Exhibit 3 CASH FLOW............................................................................................................................................ 32

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INDONESIA MACRO-ECONOMIC OUTLOOK

GENERAL OVERVIEW1
Indonesia lies between latitudes 11S and 6N, and longitudes 95E and 141E. It consists of 17,508 islands, about 6,000 of which are inhabited. These are scattered over both sides of the equator. The largest are Java, Sumatra, Borneo (shared with Brunei and Malaysia), New Guinea (shared with Papua New Guinea), and Sulawesi. Indonesia shares land borders with Malaysia on Borneo, Papua New Guinea on the island of New Guinea, and East Timor on the island of Timor. Indonesia shares maritime borders across narrow straits with Singapore, Malaysia, the Philippines, and Palau to the north, and with Australia to the south. The capital, Jakarta, is on Java and is the nation's largest city, followed by Surabaya, Bandung, Medan, and Semarang.

MACROECONOMIC OVERVIEW2
Indonesia has the largest economy in Southeast Asia and is one of the emerging market economies of the world. The country is also a member of G-20 major economies and classified as a newly industrialized country. It has a market economy in which the government plays a significant role through ownership of state-owned enterprises (the central government owns more than 160 enterprises) and the administration of prices of a range of basic goods including fuel, rice, and electricity. In the aftermath of the financial and economic crisis that began in mid1997 the government took custody of a significant portion of private sector assets through acquisition of nonperforming bank loans and corporate assets through the debt restructuring process. Since 2004 the economy has recovered and growth has accelerated to over 6% in recent years. Indonesia regained its investment grade rating from Fitch Rating in late 2011, and from Moody's Rating in early 2012, after losing its investment grade rating in December 1997 at the onset of the Asian financial crisis which Indonesia spent more than Rp450 trillion ($50 billion) to bail out lenders from banks. Fitch raised Indonesia's long-term and local currency debt rating

1 2

http://en.wikipedia.org/wiki/Indonesia http://en.wikipedia.org/wiki/Economy_of_Indonesia 3

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to BBB- from BB+ with both ratings is stable. Fitch also predicted that economy will grow at least 6.0% on average per year through 2013, despite a less conducive global economic climate. Moodys raised Indonesia's foreign and local currency bond ratings to Baa3 from Ba1 with a stable outlook. Indonesia, a vast polyglot nation, grew an estimated 6.1% and 6.4% in 2010 and 2011, respectively. The government made economic advances under the first administration of President YUDHOYONO (2004-09), introducing significant reforms in the financial sector, including tax and customs reforms, the use of Treasury bills, and capital market development and supervision. During the global financial crisis, Indonesia outperformed its regional neighbors and joined China and India as the only G20 members posting growth in 2009. The government has promoted fiscally conservative policies, resulting in a debt-to-GDP ratio of less than 25%, a fiscal deficit below 3%, and historically low rates of inflation. Fitch and Moody's upgraded Indonesia's credit rating to investment grade in December 2011. Indonesia still struggles with poverty and unemployment, inadequate infrastructure, corruption, a complex regulatory environment, and unequal resource distribution among regions. The government in 2013 faces the ongoing challenge of improving Indonesia's insufficient infrastructure to remove impediments to economic growth, labor unrest over wages, and reducing its fuel subsidy program in the face of high oil prices.

GROSS DOMESTIC PRODUCT (GDP)

The GDP in Indonesia was worth US$ 846.832 billion in 2012. It represents 1.37% of world economic. In the last 10 years, Indonesia GDP has a constant growth each year.

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On the sector basis, the source of growth has started to be more balanced as the tradable sectors that accounted 46.9% of total GDP, rose by 4.5% YoY in the 2011, while non-tradable sectors grew by 8.3% YoY in the same period vs. 8.2% YoY last year. The strong pickup in tradable sector was driven by the manufacturing sector that grew by 6.2% YoY in 2011, the highest growth since 2004. The strong growth was driven by domestic-based manufacturing, such as iron, textile, food, and transportation industries. Expansion in manufacturing sector indicates improvement in the economic capacity, which will help sustain economic growth in the future.

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UNEMPLOYMENT RATE
With around 240 million people, Indonesia is the fourth most populous country in the world (after China, India and the United States). Moreover, the country has a young population as around half of the total population is below the age of 30 years. Combined, these two features imply that Indonesia currently contains a large labor force; one that will grow larger in the foreseeable future.

OUTLOOK OF MODERN RETAIL INDUSTRY

Strong underlying economic growth, large population (the worlds fourth largest and growing), rising per-capita incomes and the continued development of organized retail infrastructure are key factors behind the substantial growth forecast in Indonesian retail sales. In 2011 and 2012, modern retail industry is estimated to grow by approximately 20% YoY each.
Retail Industry Growth

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We are on the view that Indonesian modern retail industry still has large room to grow. Enhancing consumption, which contributes as much as 57.5% for Indonesian GDP growth of 6.4% in 1H12, large population of around 257 million, and increasing income per capita to over USD 4,000 in 2012, support the growth of modern retail industry. Else, demographic factors suggest scope for strong medium-to-long term growth in retail sales. The population is youthful around 28.8% of people are aged fewer than 15, and around 5% are above 65 years. The population itself also recorded an increasing middle-class society to over 40%, or amounted to 23 million families. Indonesian Retail Merchants Association (Aprindo) estimates that the sales from national modern retail will lift by 15% YoY in 2012, or accounted to Rp 138 trillion, with 1st and 2nd semester contribution of 40%: 60%.

With such supporting situation, many Indonesias major retailers, especially modern market retailers that focus on food business, are expanding rapidly and the competition remains fierce in the future. In the minimarts business segment, PT indomarco Prismatama, the owner of Indomaret mini markets, and PT Sumber Alfaria Trijaya, which operates Alfamart, has dominate the minimart business, with total of around 10,000 stores of minimarts. Meanwhile, in the hypermarkets segments, Carrefour and Hypermart dominate with outlets of 85 and 75, respectively, as of mid of November 2012.

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CONSUMER SPENDING
Consumer spending, also called consumer consumption or expenditure is the amount of money that households spend on goods and services in order to satisfy their needs. Similar to GDP, the amount of consumer spending in Indonesia has continuously increased since 2003 to 2012. In the last quarter of 2012, its stated that consumer spending in 4 th quarter has reached 368,212.80 billion. The figure below shows the trend of Indonesia consumer spending since 1st quarter of 2003 to 4th quarter of 2012. From the chart shown in the figure below, it can be indicated that Indonesia economic is performing well. The consumer expenditure is one of indicator to measure that the economy is in healthy condition. So household spend more of their money to goods and services to satisfy their needs

INFLATION RATE
Indonesian statistic biro (BPS) reported that the inflation rate in Indonesia was recorded at 5.57% in April 2013. The statistic shows that theres the variance of inflation rate since 2003 till present (the figure below show the inflation rate from 2013 t0 2012). The average of inflation

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rate is around 7.8 while the highest one was 18.38 around last quarter of 2005 and the lowest was 3.43 around April 2010.

COMPANY OVERVIEW
PT MATAHARI PUTRA PRIMA TBK (MPPA) COMPANY PROFILE
The Company is domiciled at Menara Matahari 20th floor, Boulevard Palem Raya # 7, Lippo Village - Tangerang, Banten. Homepage: www.matahari.co.id Vision: To be consumers most preferred retailer Mission: To consistently bring value fashionright products and services that enhances the consumers quality of lifestyle PT Matahari Putra Prima Tbk, together with its subsidiaries, operates a chain of retail stores. It sells clothes, accessories, bags, shoes, cosmetics, electrical equipment, toys, stationery, books, drugs, and daily need products through its chain of stores. The company also operates family entertainment centers under the name Time Zone. In addition, it involves in financing, general trading, sale, and marketing of mineral water; operating restaurants and drugstores; and consumer financing activities. As of November 2nd, 2012, MPPA has operated 75 Hypermart, 26 Foodmart and 75 Boston HBC stores with total operational space of more than 500,000 sqm. MPPA has received several awards such as Museum Indonesia (MURI) records for displaying
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219,860 page views in the internet. MPPA also received Corporate Social Responsibility (CSR) Award from Seputar Indonesia (Sindo) Newspaper, 2011 Retail Asia Top 500 Awards from Retail Asia, Euromonitor International and KPMG, and 1st Ranking of SWA 100 Indonesia Best Public Companies in 2011. In line with the growth of modern retail industry in Indonesia and buyed by its huge customer base, MPPA has a bright prospect ahead.

Listed Since: 21 December 1992 Industry: TRADE, SERVICES & INVESTMENT Sector: Retail Trade Market Cap: Rp. 12,965,471,310,000 Shares Outstanding: 5,576,546,800

Beta to Composite: 0.94 Weight to Composite: 0.00% Beta to industry: 0.76 Weight to industry: 0.00%
3

HISTORY OF THE DEVELOPMENT OF PT. MATAHARI PUTRA PRIMA TBK. (MPPA) 4

1958 : First store in Pasar Baru,Jakarta 1972 : Pioneer of Department Store concept in Indonesia 1980 : Open the first store outside Jakarta - Sinar Matahari Bogor 1988 : Core Business Expansion to Supermarket Operation. 1st Rights Issue - IDR 75B

1992 : IPO at Jakarta Stock Exchange and Surabaya Stock Exchange 1996 : Issuance of 5-year US$100 Million Bond & 2nd Rights Issue - Rp 226B 1997 : Multipolar became majority shareholder 3rd Rights Issue Rp 902B 2000 : Launching Of Matahari Club Card (MCC) 2001 : Settlement of 5-year US$ 100 Million Bond 2002 : o New Management Team o Core Business Restructuring: Matahari Department Store, o Matahari Supermarket & TimeZone

3 4

http://www.tradergods.com/stock/stockdetail.aspx?stock=MPPA http://www.mataharigroup.co.id

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Independent and transparent Business Units o Issuance of 5-year Obligasi I - Rp 450 Billion 2003 : o Consolidation Year o Closure of Non-profitable stores o Re-focus to internal infrastructure, resources & companys Foundation 2004 : o Launch of Hypermart o Top 500 As-Pac Retail Award: #1- Indonesia o Issuance of 5-year Obligasi II : Rp 300 B & Syariah I Rp 150 B 2005 : Successful aggressive expansion : 10 Department store,4 Kids2Kids,13 Hypermart,4 Cut Price,1 Matahari Supermarket, First Matahari Dept. Store in China, Top 500 As-Pac Retail Award:#1- Indonesia

PT Matahari Putra Prima Tbk (MPPA) was established on March 11, 1986. Currently, MPPA through its Food Business Division (Matahari Food Business- MFB) engaged in FMCG industry in the form of Hypermarket and Supermarket, as well as Department Store through Matahari Department Store (20% ownership in joint venture with CVC Capital Partners). In addition, MPPA also has several supporting business i.e. Timezone family entertainment centers, Times bookstore, Restaurant Services and FMCG logistic and distribution. MPPAs hypermarket known as Hypermart is the second largest hypermarket in Indonesia with market share of 34.3% in 2011.
MPPAs business network:

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OWNERSHIP AND MAJOR HOLDERS

The new structure of BOC & BOD for the period of 2013-2014 is as follow: Board of Commissioners: President Commissioner & Chairman Vice President Commissioner Independent Commissioner Independent Commissioner Independent Commissioner Commissioner Commissioner Board of Directors: President Director Vice President Director Director Director Director Director : Benjamin J. Mailool : Carmelito J. Regalado (non-affiliated) : Richard H. Setiadi : Lina H. Latif : IshakKurniawan : Johanes Jany : John Bellis : Theo L. Sambuaga : Travis Saucer : Steve A. Martin : Chua Siang Hwee, Jeffrey : Ali Chendra : Gouw ViVen

Shareholders (per February 2013): 1. DBS Bank Ltd S/A PT. Multipolar Tbk 2. Prime Star Pacific Investment Pte. Ltd. 3. PT Star Pacific Tbk 4. PT Ciptadana Securities 5. Public (< 5%) 2,701,386,000 407,307,600 338,419,625 319,110,000 1,810,323,575 48.44 % 7.30 % 6.07 % 5.72 % 32.46 %

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BUSINESS ACTIVITIES AND STRATEGIES

THE CORE RETAIL BUSINESS OF MATAHARI GROUP The Company's core key retail business activities include active retail operation within FMCG (Fast Moving Consumers Goods) industry through hypermarket and supermarket formats, supported by several other minor smaller businesses such as health and beauty centers, family entertainment centers, international bookstores, restaurant services and FMCG logistic and distribution. In addition, the Company also has a strategic alliance with its strategic international partner in owning and managing the Indonesia's leading department store chain, Matahari Department Store.

SUPPORTED BY NATIONWIDE NETWORK In the past six years, the number of Hypermart outlet has increased 23.0% a year on the average. In 2005, the number of Hypermart outlet was 17 units and increased to 59 units in 2011. This retail networks are spread over 32 cities in Indonesia. Besides, Hypermart is backed up with three distribution centers which have an important role in the distribution of goods to Hypermart and Foodmart. The warehouses of the three distribution centers are located in Surabaya, Balaraja and Cibitung. Up to September 2011, MPPA has opened 5 of 15 new stores which will increase about 102,500 sqm sales area. The new stores are located in North Lippo Karawaci, Ciputra World Surabaya, Serang, Kediri and Gresik, while the rest is planned to be opened in Kudus, Batu Malang, Cirebon, Ciputra Sraya (Sumatera), Gorontalo, Sidoarjo and Palembang. Furthermore, MPPA plans to open 15 new stores in 2012 and about 80 new stores in the next five years. We believe, thus extensive distribution network will boost MPPA sales in the subsequent periods

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MPPAs network

distribution

FINANCIAL PERFORMANCE OVERVIEW

FINANCIAL RATIOS & MARGINS
The PT Matahari Putra Prima Tbk financial analysis covers the income statement and ratio trend-charts with balance sheets and cash flows presented on an annual basis (please look at the Exhibit 1, 2 and 3). The report outlines the main financial ratios pertaining to profitability, margin analysis, asset turnover, credit ratios, and companys long-term solvency. This sort of company's information will assist and strengthen companys decision-making processes.

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DIVIDEND AND STOCK

DIVIDEND
Dividend policy refers to the explicit or implicit decision of the board of directors regarding the amount of residual earnings (past or present) that should be distributed to the shareholders of the corporation
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CONSIDERATIONS IN THE FORMULATION OF DIVIDEND POLICY

Profitability and Liquidity Legal Constraints Contractual constraints Growth prospects Owner considerations Market considerations Industry practice Shareholder expectation

CASH DIVIDEND PAYMENT

As a public company, it is common that company paid dividends to the investor who put their money to the company. PT. Matahari Putra Prima Tbk, as one reputable public company from year to year always pay the dividends to their investor. It was a part of corporate policy to meet some of investor expectation to the company. Some of them are really expecting gain from their
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investment from the dividends payment. Dividends payment policy in PT. Matahari Putra Prima Tbk was based on the decision of shareholders meeting agreement which normally held annually by the investor. The agreement will give guidance to the company to share corporate gain to the investor as dividends payment.

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PT Matahari Putra Prima Tbk (MPPA) paid cash dividends fiscal year 2012 amounting to Rp186 per share on May 29, 2013. According to the written statement of the company, on Thursday, cash dividends were distributed to shareholders whose names are registered in the list of shareholders (the record date) on May 20, 2013. The schedule for Cum and Ex Dividend in cash in the regular market and negotiations were conducted on May 15 May 16, 2013, while for Cum and Ex Dividend in cash in the cash market on 20-21 May 2013. As is known, MPPA shareholders in the AGM held on 24 April 2013 yesterday has approved a cash dividend amounting to Rp1 trillion, equivalent to Rp186 per share. In addition, the benefits achieved from the results of the company, about 2 billion set aside as a reserve fund, and about Rp1, 8 trillion allocated as accumulated retained earnings.

GROWTH OVER PRIOR YEAR

Year on year, growth in dividends per-share fell 98% while earnings per share excludig extraordinary items rose109.97%. Additionally when measured on a five year annualized basis, both dividend per share and earnings per share growth ranked in-line with the industry average relative to its peers.

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Last Dividend Paid refers to dividend per share (DPS) paid to the shareholder the last time dividends were issued by a company. It its conventional sense, dividends refer to the distribution of some of a company's net earnings or capital gains decided by the board of directors.

Matahari Last Dividend =

Last Profit Distribution Amount =0 Total Shares

Many stable companies today pay out dividends to their shareholders in the form of income distribution, but high-growth firms almost never offer dividends because all of their earnings are reinvested back to the business.

Based on recorded statements Matahari Putra Prima Tbk has Last Dividend Paid of 0.0. This indicator is about the same for average (which is currently at 0.0) sector, and about the same as Last Dividend Paid (which currently averages 0.0) industry, this indicator is about the same for all stocks average (which is currently at 0.0).

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STOCK THEORY
Stock is a share in the ownership of a company. Stocks represent a claim on the companys assets and earning. As acquire more stock, the ownership stake in the company becomes greater. Holder of company stock is called shareholder which represented by having a stock certificate. Stock certificate is a fancy piece of paper that is proof of shareholder ownership. Importance of being shareholder is that entitlement to a portion of the companys profits and has a claim on assets. Shareholders earn a lot if the company is successful, but they also stand to lose their entire investment if the company isnt successful. Another important feature of stock is its limited liability, as an owner of the stocks; shareholders are not personally liable if the company is not able to pay its debt. Basically every company needs to raise money. On doing that, company was able to choose either borrow or from somebody (issuing debt) or raise it by selling part of the company, which is known as issuing stock. A company can borrow by taking a loan from a bank or by issuing bonds. Its called debt financing. Issuing stock is called equity financing. Issuing stock is advantageous for the company because it do not require the company to pay back the money or make interest payment along the way. The first scale of stock which is issued by the private company is called Initial Public Offering (IPO). There are two main types of the stock, Common stock and preferred stock. Common stock represents ownership in a company and a portion of profits (dividends). Investor also have voting rights (one vote per share) to elect the board members who oversee the major decision made by management. In the long term, common stock by means of capital growth, yield higher rewards than other form of investment securities. Common stockholders expect to be compensated with adequate dividends and, ultimately, capital gains. This higher return comes at a cost, as common stock entails the most risk. If a company goes bankrupt and liquidities, the common stockholders will not receive money until the creditors, bondholders and preferred shareholders are paid. Preferred stocks give its holder certain privileges that make them senior to common stockholders. Preferred stockholder are promised a fix periodic dividend, which is stated as

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percentage or as a dollar amount. The dividend is specified on whether the preferred stock has par-value. Some people consider preferred stock considered as quasi debt, because much like interest on debt, it specifies a fix periodic payment (dividend).

MPPA STOCK MARKET SNAPSHOT

INVESTMENT PARAMETER
Target price adjustment is based on the following considerations: Growing modern retail industry, supported by growing economy which is predicted to reach 6.2% in 2012, increasing income per capita to over USD 4,000 and large population of 257 million. In Indonesia, potential increasing income per capita of middleclass society, which accounted for around 40% of Indonesian people, has become the main driver of modern retail industry growth, of which MPPA is one of them. Hypermart contributes as much of 94.6% of MPPAs revenue in 2011. Comparing to MPPAs gross revenue of 9.3 trillion in 2011 with its gross revenue excluding from Matahari Department Stores (MDS) in 2010 of IDR 8.05 trillion, MPPA still manage to grow by 15% YoY. MPPA recorded net revenue of IDR 8.9 trillion in 2011, as MPAs

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actual gross revenue grew by 15% YoY, but is operating profit was able to grew by 39.1% YoY. During January September 2012 period, MPPA booked 22.1% YoY growth of revenue, while its operating and net profit margin rose to 1.45% and 1.92% higher than 1.09% and 1.15% in September 2011 period. Risk free rate, equity premium, and beta assumption are 5.40%, 7.80%, and 0.94x respectively. In 2010, MPPA divested its Matahari Department Store business, to focus on food business. From such action, MPPAs net revenue dropped from IDR 10.3 trillion in 2009 to just IDR 8.6 trillion in 2010. However, afterwards MPPA booked a significant growth of revenue (without MDS), as proved by 15% YoY growth in 2011, and significant jump of 22.05% YoY growth in 9M12. In the bottom line, MPPAs net income experience robust growth in 9M12, as it rose by 104% YoY. MPPAs net margin also improved, as it state 1.92% of net profit margin in 9M12, better than 2011 period of 1.18% and 1.15% in 9M11 periods.

STOCK VALUATION
METHODOLOGY
Using assumption from market data in July 15, 2013: Risk free rate (%) Risk premium (%) Beta (x) Cost of equity (%) Marginal tax rate (%) Interest bearing debt to equity ratio (%) WACC (%) 5.40 7.80 0.94 12.73 25.00 41.10 15.25

Source:http://www.miniwebtool.com/wacc-calculator/?n1=12.73&n2=3845724&n3=25.09&n4=2715926&n5=25

The Gordon growth model, named after its inventor Myron Gordon, A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. Given a dividend per share that is payable in one year, and the assumption that the

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dividend grows at a constant rate in perpetuity, the model solves for the present value of the infinite series of future dividends.

Where: D = Expected dividend per share one year from now k = required rate of return for equity investor G = Growth rate in dividends (in perpetuity)

REQUIRED RATE ON EQUITY There are two basic inputs to the model - expected dividends and the cost on equity. To obtain the expected dividends, we make assumptions about expected future growth rates in earnings and payout ratios. The required rate of return on a stock is determined by its riskiness, measured differently in different models - the market beta in the CAPM, and the factor betas in the arbitrage and multi-factor models. The model is flexible enough to allow for time-varying discount rates, where the time variation is caused by expected changes in interest rates or risk across time. From the formula, we can calculate the Required Return of MPPA Stock such as:

Beta = 0,94 r = Risk-free Rate + Beta (Risk Premium) r = 5.4% + 0,94 (7.8%) = 12.73 %
Source: http://people.stern.nyu.edu/adamodar/New_Home_Page/datafile/totalbeta.html

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GROWTH Investors pay a price premium when they acquire companies with high growth potential. This premium takes the form of higher price-earnings or price-book value ratios. While no one will contest the proposition that growth is valuable, it is possible to pay too much for growth. In fact, empirical studies that show low price-earnings ratio stocks earning return premiums over high price-earnings ratio stocks in the long term supports the notion that investors overpay for growth. Actual prices paid for growth. For the MPPA stock we can calculate the growth by:

g = retention ratio x ROE g = (1 DPO) x ROE g = (1 0,1247) x 4.65% = 0.0407 or 4.07 %

VALUE OF EQUITY Value of equity is one of the tools to calculate the real value of Company stock. Value of equity consists of dividend per share, cost of equity and expected growth rate. The calculation of value of Equity of MPPA Stock is:

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Vo = 186 x (1 + 4.07%) = 186 x 1.0407 (12.73% - 4.07%) = 8.66 % = 193.57 0.0866 = Rp. 2,235
VALUE ESTIMATION
Stock market prices Real Stock prices 15 July 2013 Rp. 2,235 Rp. 2,300 2,375 Over valued Result

From the market on July 15, 2013, Matahari Putra Prima Tbk is now traded for IDR 2,300 (low) up to IDR 2,375 (high) on Jakarta Stock Exchange of Indonesia. So the stock that Telkom offer is overvalued. If the stock price is undervalued, investor should buy it, but if the company stock is overvalued means the investor should sell the stock and gain the profit.

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References:
http://www.tradergods.com/stock/stockdetail.aspx?stock=MPPA
http://en.wikipedia.org/wiki/Economy_of_Indonesia http://www.indexmundi.com/indonesia/economy_profile.html http://www.tradingeconomics.com/indonesia http://www.mataharigroup.co.id http://www.bi.go.id/sdds/default.asp#FinancialSector http://markets.ft.com/research/Markets/Tearsheets/Business-profile?s=MPPA:JKT http://investing.businessweek.com/research/stocks/financials/ratios.asp?ticker=MPPA:IJ http://www.ipotnews.com/index.php?level2=&level3=&level4=&id=2165160&popular= http://finance.yahoo.com/q?s=MPPA.JK http://www.reuters.com/finance/stocks/overview?symbol=MPPA.JK http://pages.stern.nyu.edu/~adamodar/ http://quotes.wsj.com/ID/MPPA http://investing.money.msn.com/investments/stock-price/?symbol=ID%3AMPPA http://www.bloomberg.com/quote/MPPA:IJ http://idsaham.com/saham-MPPA-informasi-saham-analisa-saham.html http://www.macroaxis.com/invest/ratio/MPPA.JK--Last_Dividend_Paid

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EXHIBIT 1 INCOME STATEMENT

PT MATAHARI PUTRA PRIMA TBK

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EXHIBIT 2 BALANCE SHEET

PT MATAHARI PUTRA PRIMA TBK

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EXHIBIT 3 CASH FLOW

PT MATAHARI PUTRA PRIMA TBK (MPPA)

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Financing Activities

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