Indocement, Poised for growth, CLSA

Indocement has excess capacity and less cost pressure to deliver the
highest profit growth for FY12 vs peers. We raised our ave. selling price
growth assumption to 4%; ytd prices rose by 2%. We expect GP margin
to rebound to 48% in FY12 (FY11:46%), maintaining its superior margin
vs peers. INTP has no debt, and generates enough cashflow to fund more
expansion in the future. Valuation is still attractive vs peers. BUY.

Holcim Indo, Strong momentum, CLSA

Holcim has excess capacity this year to grab market share; we expect
11% YoY sales growth in FY12/14; 2M12 sales grew a strong 26.8% YoY
vs 19.4% of market, at 16% of our FY expectation. We raised our ASP
growth assumption to 4% which will enable stable margin this year. The
company’s balance sheet is getting stronger, and should be moving into a
net cash position in 2014; even with US$325m capex expansion for 2013-
16. Holcim trades at a very attractive valuation vs peers. BUY.

Semen Gresik, Limited upside this year, CLSA

With new capacity coming only in Apr and July, SMGR is likely to just be
able to maintain market share from last year. The company will also be
worst hit on margin given rising energy costs and depreciation despite
the 4% ASP growth assumption. SMGR also needs to gear up for
expansion and starts expensing higher interest in 2013 (previously
capitalized). Valuation is also more expensive vs peers. Maintain U-PF.

Cement story, CLSA

Cement prices have started to gradually rise from 2Q11 until the
year end with a 5% weighted average increase. However, cement
price movement has been mixed in the first two months of 2012
with Kalimantan and Bali showing a strengthening trend (>15%)
but other islands showing weakening trend. The overall price
adjustment in eight cities under our watch is around +3.3%.
Strong demand from infrastructure projects in Kalimantan coupled
with bad weather and heavy congestion at ports has enabled
retailers to increase prices.

Indonesia Hard Hat, Solid 2M12 numbers, JP Morgan

Indonesia cement sales volume in 2M12 grew by 19% y/y. Indonesia
cement sales volume in 2M12 grew by 19% y/y to 8.2mn MT. February
demand looks firm, with cement sales volume of 4.1mn MT, flat m/m
and up by 24% y/y. All regions posted strong growth. Kalimantan area
showed the strongest growth, as its cement sales volume grew by 36%
y/y. Assuming no fuel subsidy removal, we view that Indonesia cement
consumption growth for FY12 would likely to be inline with our
forecast of 10% y/y growth.

Semen Gresik, New plant nearly completed, Danareksa

Counting down
The new Tuban IV production facility is expected to commence trial operation in March 2012.
The project has been slightly delayed from December 2011, but with capex slightly below budget.
In the first two months, the new plant is expected to run at a 50-60% utilization rate and then
to gradually increase to 80-85% in May 2012 and the following months. This will increase Semen
Gresik’s production by 1.3-1.4 mn tonnes. In the first year, the new plant can be expected to run
at an average 70% utilization rate. The Tonasa plant, meanwhile, is being delayed to July 2012
with the power plant to be completed in October 2012. The capex for Tonasa will increase slightly
due to this delay from IDC, translating to Rp20-40bn. All in all, we expect additional capacity of
about 2.1mn tonnes in FY12 from these two new plants.

CLSA on the Road, Building the new Batavia

A lower cost of capital, rising FDI inflows and an investment
renaissance, the Land Bill, and the return of confidence are
major drivers of the construction boom in Indonesia. We think
this trend will continue. Our observations highlighted that
Jakarta’s CBD has been bustling. Rising demand, higher rental
rates (up to 20%) and record high occupancy rates have been
evident. We expect at least nine new office towers to come
operational adding 377k sqm in 2012 and 189k sqm next year.