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WIKA: SOE to Benefit from High-Speed Rail Project

CEO, A. Stotz Investment Research

Dr. Andrew Stotz, CFA

Equity Bottom-Up

PT Wijaya Karya (Persero) Tbk / Equity Bottom-Up

<ul><li>Low correlation with Western stock markets, strong price momentum, and relatively strong analyst recommendation relative to its sector</li><li>As one of  Indonesia’s top-three building contractors ranked by revenue, and a state-owned enterprise (SOE), WIKA is particularly well placed to get orders for major infrastructure projects to be rolled out through 2019</li><li>The recently announced tax amnesty should boost funding, which had been delayed for this year’s biggest ever infrastructure budget, and support the high-speed rail project, a key order for WIKA</li><li>Trades above ASEAN Capital Goods at 16CE* 26.2x PE, but offers good growth in a sector that is expected to contract</li><li>Risk: Further delay in government tenders for construction projects</li></ul><p><em>* Consensus Estimates</em></p>

Low correlation with Western stock markets, strong price momentum, and relatively strong analyst recommendation relative to its sectorAs one of  Indonesia’s top-three building contractors ranked by revenue, and a state-owned enterprise (SOE), WIKA is particularly well placed to get orders for major infrastructure projects to be rolled out through 2019The recently announced tax amnesty should boost funding, which had been delayed for this year’s biggest ever infrastructure budget, and support the high-speed rail project, a key order for WIKATrades above ASEAN Capital Goods at 16CE* 26.2x PE, but offers good growth in a sector that is expected to contractRisk: Further delay in government tenders for construction projects* Consensus Estimates

WIKA: SOE Contractor to Benefit from Tax Amnesty