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WSKT: Beneficiary of Indonesian Infrastructure Spending

CEO, A. Stotz Investment Research

Dr. Andrew Stotz, CFA

Equity Bottom-Up

Waskita Karya (Persero) / Equity Bottom-Up

<ul><li>Strong long-term earnings growth, solid short-term sales momentum, and solid short-term earnings momentum relative to its sector</li><li>This state-owned enterprise (SOE) is benefiting substantially from the rollout of toll roads nationwide; 18 toll road developments in the pipeline</li><li>Direct divestments and IPO of toll roads, planned for 1H18, should secure funding to carry out future toll-road projects</li><li>Trades at discount to ASEAN Capital Goods at 18CE* 8.3x PE, but earnings growth prospects are in line</li><li>Risks: Unexpected delays in toll road construction, failure to divest toll roads and therefore fail to fund future projects</li></ul><p><em>* Consensus Estimates</em></p>

Strong long-term earnings growth, solid short-term sales momentum, and solid short-term earnings momentum relative to its sectorThis state-owned enterprise (SOE) is benefiting substantially from the rollout of toll roads nationwide; 18 toll road developments in the pipelineDirect divestments and IPO of toll roads, planned for 1H18, should secure funding to carry out future toll-road projectsTrades at discount to ASEAN Capital Goods at 18CE* 8.3x PE, but earnings growth prospects are in lineRisks: Unexpected delays in toll road construction, failure to divest toll roads and therefore fail to fund future projects* Consensus Estimates

WSKT (WSKT IJ): Massive Indonesian Toll-Road Pipeline