IPO HOKI | 21 Juni 2017

FR TRIMEGAH : We published a report on HOKI, which will be listed tomorrow at IPO price of IDR310. We have a Buy rating with TP IDR460 (+48% upside) on reasons as follow:

1) Promising outlook on rice business with total demand reached JCI ~2mn tons per month,

2) HOKI is the market leader in rice sales at modern market at 35% market share, gives plenty of room for Company to grow in
its general trade,

3) Gradual profitability improvement on the back of paddy to rice processing,

4) Attractive valuation at 7.5x 2017F PE (vs AISA IJ at 11.0x).

HOKI will be listed by tomorrow, 22 June ‘17. China A-shares is added to MSCI emerging markets index, although starts at low weighting of 0.7% (Indonesia is 2.5%)