FCX

The company is operating in mining of natural resources at entire part of the world. The company manages resources such as Gold, Copper, molybdenum, cobalt, oil and gas. It also has smelting plant in several areas in North America and Indonesia.

The key driver of the revenue based on its annual report of 2013 is refined copper with 35.7 % of total revenue. The second and third are copper in concentrate and Gold as the following data:

Segment	2012	2013
Refined Copper Product	53.9	35.7
Copper in concentrate	25.5	33.7
Gold	9.7	7.9
Molybdenum	6.6	5.3
Oil	0	11
Other	4.4	6.4

Revenue by Location	2011	2012	2013
US	34.4	34.9	45.0
Japan	12.0	12.1	10.2
Indonesia	10.9	11.4	7.9

The copper in concentrate seems increase in its contribution to revenue from 25.5 % in to 33.7 %. Mean while the refined copper product is decline from 53.9 % of total revenue in to 35.7 % of total revenue.  Based on Bloomberg copper commodities decrease 12 % in 2013 compared to 2012 year on year  and this decline causes the decrease in copper demand especially for refined copper product.

FCX has the world biggest gold and copper deposit in the Grasberg mineral district (according to annual report) in Papua, Indonesia. By location, Indonesia contributes 8 % of total revenue for FCX in 2013. It is the third largest revenue of the company. The biggest contribution by area is at united stated of America.

CAGR of revenue in period of 2009 – 2013 is at 8 %, inversely to CAGR of net income, which is at -0.7 %. Cost sales and operating expense seems as a big challenge for the company for getting profit. Depreciation and amortization is almost double in 2013 compared to 2012. In 2013, the company invests in oil and gas exploration segment to expand its portfolio and it might have been a diversification strategy for anticipating the unsteady circumstances of oil and gas price. 

	Copper	Gold	Molybdenum
Mineral reserve	(billion pounds)	(million ounces)	(billion pounds)
North America	36.2	0.4	2.6
South America	37.0	1.1	0.7
Indonesia	30.0	29.8	0.0
Africa	8.0	0.0	0.0

Forecast

Ratio & Item	2012	2013	2014	2015	2016
Net Profit margin	22.1	16.4	6.0	9.2	11.9
Asset Turn Over	50.8	33.0	34.2	34.8	35.2
ROA	11.2	5.4	2.0	3.2	4.2
Financial Leverage	202.0	303.2	296.9	285.4	270.7
ROE	22.7	16.4	6.0	9.2	11.3
Net sales	18,010.0	20,921.0	22,594.7	24,402.3	26,354.4
Capex	-	29,199.0	1,046.1	1,129.7	1,220.1
Free Cash Flow	-	-8,278	21,548.6	23,272.5	25,134.3

Compound annual growth rate of net sales in period of 2009 – 2013 is at 8.6 %, so I took 8 % growth in the next three years. For capital expenditure, I use assumption that the company allocates 5% of its revenue. Capital expenditure is financed with long term debt and equity. I made assumption the operating cycles in the next three years are fixed, same with the last year.

In 2013, the company allocated their fund in oil and Gas segment that is why the company spends a lot of money in its capital expenditure for completing the acquisition as the long term debt raised in 2013.  

The location of oil and gas assets consist of deep water Gulf of Mexico, eagle ford in Texas, California, Haynesville, central Wyoming and etc. the majority of oil and gas proved reserve is at California, second is at gulf of Mexico.  

ASII

Background

Based on World Bank in third quarter of 2013 Indonesia’s economic growth in 2014 was expected increase 5.6 % up. With dominant domestic consumption and stable politic atmosphere economic growth of Indonesia is still promising. Its challenge may have come from high inflation rate, foreign exchange rate, oil subsidies and high interest rate.

The result of president election in Indonesia at 2014 will affect the economic indicator in second semester of 2014. Investor seems to wait its result before take investment decision as each president has each program in economic development and policy.  

Government allocated much money to subsidies energy consumption especially for oil consumption. The import of diesel contributed to the trade deficit is much. Expert expected government to emphasize energy conversion policy to reduce it. The combination diesel and biodiesel could be a good option for energy conversion policy.  Based on Indonesian Palm oil association, 34 % of the nationwide palm oil biodiesel is absorbed domestically and the rest is exported. Indonesia has largest Palm tree plantations.

In other hand, government encourages people to use Low Cost Green Car to reduce subsidized oil consumption. Low Cost Green Car is vehicle with lower fuel consumption and friendly for environment. For household, gas is good alternative fuel.

Manufacture Industry

Manufacture industry in 2008 – 2012 has compound annual growth rate at 9.4 % (at current price). The investment in manufacture industry has been still growing as the increase in demand for products.

Transport Equipment and machinery sector

The industry has average growth rate at 9 % in 2008 – 2012 (at the current price). Government put development in infrastructure as one of important strategy to reach targeted economic growth. Loan to Value policy should also to be fixed with concerning in purchasing power of consumer.

Heavy equipment for mining and exploration is slowing down as the lower growth in quarrying sector. Its growth rate is slowing down since 2009 -2010. Due to decline in commodity price, commonly major company in mining and heavy equipment is experiencing decrease in its revenue in 2014.

But there are other commodities that increase in its price such as nickel.

Astra international

With low competitiveness in Indonesia, major player such as Astra International could lead the market share in several years for several products. The group has six major business, those are automotive, financial services, agribusiness, and Infrastructure and Information technology. The key drivers of its growth are automotive segment and heavy equipment and mining sector which is each contribution to revenue are 56.3 % for automotive and 26.3 % for heavy equipment and mining.

Net sales	%
109,154.0	56.3
13,867.0	7.2
51,012.0	26.3
12,675.0	6.5
7,843.0	4.0
2,261.0	1.2

In 2013 the group expands its business in automotive, infrastructure and property.

Company	Acquisition	Divestment
Astratel Nusantara and subs	Pelabuhan Pe-
	najam buana -
	Taka
Astra Otoparts	PT. Pakoakuina	15% share
	(51% owned)
Astra Int Group	2.4 hectare land
	for office tower
	& residential
	apartment
Suryaraya Prawira		100% share
Brahmayasa Bahtera		40% share

The group has subsidiary in financial services sector such as Bank Permata, Komatsu Astra Finance (KAF),Surya artha nusantara. Its contribution to group’s revenue is 7.2 % of total revenue.

Astra Int group does good synergy in operating its six business portfolio. The group deposits its biggest cash bank in bank permata amounting to 2.6 trillion and it also has biggest time deposit in bank permata amounting to 5.3 trillion in December 2013.

The group also does the same thing with its portfolio in infrastructure business. Astratel Nusantara did acquisition of penajam buana taka port in east Kalimantan in order to support its business in the area includes palm plantation sector, mining and heavy equipment sector. The purchase of the port is also having purpose to get revenue from other non-group businesses such as oil and gas.

The product of automotive subsidiary of the group are Toyota, Daihatsu, isuzu, UD Trucks,BMW and Peugeot and etc for wholesale car. Meanwhile the product of motorcycle is only Honda. Toyota is market leader in Indonesia for car and Honda lead market share of motorcycle in Indonesia.  Toyota owns more than 35 % of total market share and Honda has more than 60 % of total market share.

More vehicles mean more oil for its fuel. Government will allocated more subsidized gasoline and diesel as the increase of automotive product sold. In other hand that means the government has to provide more infrastructures for vehicle.

Year	Real  Growth	Sales Growth
2009	5.4	1.5
2010	6.9	31.0
2011	6.5	26.0
2012	6.1	15.7
2013	5.6	3.1
2014E	5.6	5.7

Based the data at above it can be taken an estimation of sales of 2014. It will grow at 5.7 % up. The correlation between real growth rate and sales growth is very significant which is at 0.9. Within adjusting the real growth at same level 5.6 %, the sales growth will be at 5.7 %.

Sales growth in 2013 is decline from 15.7 in to 3.1. The economic slowing down and tight monetary policy may have encouraged people to delay their spending.

Ratio analysis
ROE	2012	2013	2014	2015	2016
Net Profit margin	12.1	11.5	11.4	11.4	11.3
Asset Turn Over	103.2	90.6	87.0	78.3	71.5
ROA	12.5	10.4	9.9	8.9	8.1
Financial Leverage	256.0	254.9	219.5	208.6	200.9
ROE	31.9	26.6	21.8	18.6	16.2
Net sales	188,053.0	193,880.0	204,931.2	215,177.7	225,936.6
Gross profit	62,155.0	67,329.0	71,166.8	74,725.1	78,461.3
CFO		43,117.0	52,041.3	51,811.1	53,027.1
Net Addition		37,458.0	9,694.0	10,246.6	10,758.9
Free Cashflow		5,659.0	42,347.3	41,564.5	42,268.2

It is used adjustment in 2014, the company will allocate 5 % of revenue in its capital expenditure. The sales growth will be at 5.7 % as the result of investment in previous year. The sales growth in 2015-2016 is in 5 % with assumption capital expenditure will be at 5 % sales.