IPO of Coal Miner Mitrabara Adiperdana on the Indonesia Stock Exchange

Idemitsu is a Japan-based energy company that has been cooperating with Mitrabara Adiperdana for a long time. The former is the largest buyer of Mitrabara’s coal. In 2013, about 37 percent of Mitrabara’s coal production was exported to Japan. The company would like to increase its focus on Japan as global coal demand, particularly from China, has been weak, resulting in global oversupply and falling global coal prices. Rising energy demand from Japan, the world’s third-largest economy, in combination with close cooperation with Idemitsu could be a key to success for Mitrabara. Particulary as the use of nuclear power to meet Japan’s energy demand has been controversial after the 2011 tsunami that devastated the Fukushima nuclear plant leading to higher coal demand from Japan). Moreover, Mitrabara President Director Khoirudin said that Japan is a premium market, meaning that coal prices can be five percent higher compared to countries such as China and India.

If Idemitsu decides to purchase a stake in Mitrabara then it will buy the 27.68 percent stake from current shareholders Wahana Sentosa Cemerlang (9.88 percent) and Athanasius Tossin Suharya (17.80 percent).

Although the coal mining business has been experiencing a rough time in recent years, Mitrabara’s shares may be attractive as the company’s price to earnings ratio (PER) is currently at 7.4-8.7 times, while the PER for Indonesia’s mining industry is currently about 11 times according to Sucorinvest Central Gani.

Mitrabara will use about 58 percent of the funds obtained through the IPO to increase paid-up capital. About 35 percent will be used for working capital, while the remainder will be used for capital expenditure.

In 2013, Mitrabara, which owns coal mining concessions in North Kalimantan, produced 1.8 million tons of coal. Production is expected to reach 2.5 million tons this year and accelerate to 4 million tons by 2015-2016. The company’s net sales increased from USD $113.85 million in 2012 to USD $115.70 million in 2013. Meanwhile, net profit rose from USD $2.73 million to USD $3.54 million over the same period.

Underwriters for the IPO are Sucorinvest Central Gani and Danareksa Sekuritas. Listing on the Indonesia Stock Exchange (IDX) is scheduled for 10 July 2014.

This year so far (up to 24 June 2014), eleven companies have conducted an IPO on the IDX. Companies that are currently preparing an IPO are Chitose Internasional, Batavia Prosperindo International, Pharos, Sitara Propertindo, Garuda Maintenance Facilities, PLN Batam, Perkebunan Nusantara VII and Mitrabara Adiperdana.

Last Update: 29 Mar 2021

IPOs in 2014 up to 24 June

Company	P: 29 Mar 2021	P: 28 Mar 2021	Gain/Loss	P/E ttm	Yield %	Gain/Loss YTD
Bank Panin SyariahPNBS	83	82	1.22%	N/A	0.00%	-4.60%
Asuransi Mitra Maparya Tbk.ASMI	925	930	-0.54%	N/A	0.00%	-6.57%
Bank Ina Perdana Tbk.BINA	1,560	1,550	0.65%	N/A	0.00%	64.21%
Capitol Nusantara Indonesia Tbk.CANI	186	186	0.00%	N/A	0.00%	22.37%
Tunas Alfin Tbk.TALF	310	258	20.16%	N/A	0.00%	13.97%
Bali Towerindo Sentra Tbk.BALI	700	690	1.45%	N/A	0.00%	-6.04%
Wijaya Karya BetonWTON	334	344	-2.91%	N/A	0.00%	-20.85%
Graha Layar PrimaBLTZ	4,600	4,650	-1.08%	N/A	0.00%	53.85%
Intermedia Capital Tbk.MDIA	63	66	-4.55%	N/A	0.00%	3.28%
Eka Sari Lorena TransportLRNA	180	185	-2.70%	N/A	0.00%	1.69%
Link NetLINK	3,240	3,200	1.25%	N/A	0.00%	25.10%
Combined Total	12,181	12,141	0.33%			29.09%

Green colour indicates upward movement Red colour indicates downward movement P = price; E = earnings; D = dividend; Yield = D/P "N/A" indicates P/E < 0 (negative earnings) "-" indicates E,D,P or YTD is not available

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