Indonesia Stock Market Update: IPO Soechi Lines & Forecast IPOs in 2015

Underwriters of Soechi Lines‘s IPO are Mandiri Sekuritas and RHB OSK Securities Indonesia. The book building process (which helps to determine the value of the company’s shares) will be undertaken between 24 and 26 November 2014, while listing on the IDX is scheduled for 2 December 2014.

Darmadi expects that investors will be eager to invest in the company as Indonesian President Joko Widodo has emphasized repeatedly that he wants to focus on development of the maritime sector. Furthermore, with a price to earnings ratio of between 7.9 and 10.5 times, the company's shares are attractive (the average P/E ratio in the country's shipping sector is 9 times.

In the first half of 2014, Soechi Lines recorded a 18.3 percentage point growth (y/y) in revenue to USD $54.7 million, while net profit increased 52.9 percent (y/y) to USD $15.6 million over the same period.

Soechi Lines, established in 1977, is engaged in marine transportation as well as hotel management in Medan (North Sumatra), and has a shipyard in Karimun Island (close to Singapore and Batam). The company currently owns a fleet of 33 ships (including oil tankers, chemical tankers, and gas carriers). Darmadi said that the company seeks to purchase seven new ships after the IPO.

Initial Public Offerings (IPOs) on the Indonesia Stock Exchange (IDX) in 2014 and 2015

The Indonesia Stock Exchange (IDX) targets 35 IPOs on the stock exchange in 2015, a 40 percentage point increase from this year’s expected IPO result of 25 companies. Originally the IDX targeted 30 new listings in 2014, but there has been a large decline in IPOs as companies were reluctant to conduct an IPO amid Indonesia's ‘political year’. This year, legislative and presidential elections were held. However, both these elections showed a fragmented outcome fuelling political uncertainties. It required a Constitutional Court case to announce Joko Widodo as the winner of the presidential election, while the opposition in Indonesian parliament outnumbers the coalition that supports the Widodo-led cabinet. Furthermore, global sentiments are also not conducive in 2014 as the global economic recovery can be labelled sluggish and the US Federal Reserve’s monetary tightening leads to capital outflows from emerging markets, particularly those markets that show certain financial weaknesses such as a wide current account deficit. Five Indonesian companies that were planning to conduct an IPO on the IDX in 2014 postponed this corporate action to 2015.

Ito Warsito, General Director of the IDX, said that Indonesian companies will be more enthousiastic to list on the IDX in 2015 as domestic political turmoil will have eased.

Currently there are 502 companies listed on the Indonesia Stock Exchange. In the January-October 2014 period a total of 18 companies have conducted an IPO on the IDX. Six more IPOs are expected in the last two months of 2014. These companies are Blue Bird, Soechi Lines, Intan Baruprana Finance, Impack Pratama Industri, Archi Indonesia, and Golden Plantation.

Last Update: 29 Mar 2021

IPOs on the IDX in period January-October 2014

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%
Chitose InternasionalCINT	238	244	-2.46%	N/A	0.00%	-6.30%
Magna Finance Tbk.MGNA	50	50	0.00%	N/A	0.00%	0.00%
Batavia Prosperindo Internasional Tbk.BPII	7,300	7,300	0.00%	N/A	0.00%	-15.12%
Mitrabara AdiperdanaMBAP	2,810	2,800	0.36%	N/A	0.00%	1.08%
Sitara Propertindo Tbk.TARA	50	50	0.00%	N/A	0.00%	0.00%
Bank Dinar Indonesia Tbk.DNAR	196	210	-6.67%	N/A	0.00%	6.52%
Combined Total	22,825	22,795	0.13%			6.89%

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

Key Findings:

• Shipping company Soechi Lines targets to raise IDR 2 trillion through an IPO on the Indonesia Stock Exchange (IDX) in November 2014

• The number of companies currently listed on the Indonesia Stock Exchange is low at 502

• The IPO target in 2014 has not been achieved as companies were reluctant to conduct an IPO in Indonesia's ‘political year’ and amid global uncertainty

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