MNC INVESTAMA (BHIT)

Based on annual report, the company was established in 2^nd November 1989. Then 6 years after that, the company had done initial public offering on 1995. Later, in 1997, one year before the monetary crisis of 1998, the company conducted initial public offering with ticker code BHIT. During period of 1998-2012 the company did many corporate actions to expand its business.

In 2013, the company entered new business segment, property. It acquired 26.23 % share of MNC Land in that year to add its business portfolio. Other subsidiaries are global Mediacom (media), MNC Capital (securities and financial service) and etc.

Afterwards, in 2014, the company acquired ICB Bumiputera’s 39.88 % of total share. The acquisition added the business portfolio of the company. It consist of Bank financial institution, advertising media, online based media, subscribers based media, media shopping and content and channel.

Based on its financial statement the biggest contribution in 2014 was given by segment of advertising based media. It was more than 50 % of total revenue. Furthermore, subscriber based media which was more than 26 % of total revenue. Meanwhile, the highest growth segment in 2014 was online based media that was advanced more than 115 %. The revenue of bank financial institution was only less than 1 % of total revenue.

The net profit of 2014 increased sharply more than 194 % compared to net profit in 2013. The net profit hike was occurred by the decrease in foreign exchange loss. In 2013 the loss of foreign exchange loss was 1,549,475 million rupiah and it was much higher compared to foreign exchange loss in 2014 that was only 340,567 million rupiah.

The key success factors of advertising based media segment are its TV stations and its shows in premium time. Global Mediacom supervised several FTA TV stations include Global TV, RCTI, MNCTV. The three of TV stations have 31 % of total audience share in Indonesia. Another FTA TV is iNews TV that was launched in 2015. The Global Mediacom as its subsidiary is also leading in pay-TV segment. It has oke-vision and TOP-TV.

Social media as trend setter

The feature content of RCTI were 7 manusia harimau, Tukang Bubur naik haji “the series”, jilbab in love,kita nikah yuk and catatan harian seorang istri. Furthermore, the future content of MNC and Global TV were Boboi boy, adit & Sopo Jarwo and talent search program. The story in its content is influenced by the trending topic in social media. That step is expected able to increase the audience share. Few of the artists had been recruited based on the social media. The people who is appeared or discussed in such forum at social media in many times or people who has a resemblance with those people usually were interesting to be taken.

Famous in social media may possibly be as an advantage in entertainment industry.

Case no.434/PDT.G/2011/PN.JKT/SEL

HS sued BCA (Karawang branch), BCA headquarters, president director of BCA, Citibank NA Indonesia, MNCSV and president director of MNCSV. HS filed a lawsuit against defendants because of his personal information had been illegally given, used and disseminated. 

Board of commissioners and Board of directors

SCBD

The company was founded in 1987 at Jakarta, it is operating in various businesses which consist of real estate, hotel, construction and etc. the company is owned by Jakarta international hotels and property as its highest share holder. It develops 45 ha of land on sudirman central business district. The key person who leads the company is Mr. Santoso Gunara who has been appointed as president director. Meanwhile the president of commissioner is Mr. Tommy Winata who is one of the tycoons in business of property at Indonesia.

The property investments of the company in SCBD are pacific place mall, one pacific place and graha sampoerna. In the future the company plan to build new five start hotel in SCBD, it is called as Alila suites. The company has a BOT agreement with Bukit Lentera Sejahtera. The hotel will be given to the company 25 years after the issuance date of construction building permit. BOT means build, operate and transfer, BLS will build, operate and after that transfer to the company. 

The strategic location of its property is one of its key success factors. It is located in the center of business of Jakarta, the capital city of Indonesia. The price of real estate, rental and office management and hotel rate are commonly high compared to other location.

The biggest contribution of revenue in 2014 was from real estate segment, it was more than 50 % of total revenue. In 2014 the sales decreased more than 65 % due to decline of real estate income.  Higher revenue in 2013 was derived because of the sale of land in SCBD to prima bangun investama amounted to 1,888,392,000 thousand rupiah. Other its business segments consist of telecommunication service and hotel were decreased 10 % and increased 12 % respectively. In 2014 there was new income segment, construction; its contribution to revenue was 0.04 % of total.

In 2014 the gross profit margin declined compared to gross profit margin in 2013. The decline may be occurred as the government had deregulated its regulation especially in LTV and tax. At recent, government plans to do several relaxations of regulations in property segment. Deregulation is made for advancing the growth of property segment. 

ABM INVESTAMA: ABMM

The company was founded in 1970 by the hamami’s family. In that year they established Trakindo Utama, sole authorized dealer of Caterpillar in Indonesia. Then in 2011 the holding company of the group, ABM investama was acquired by the Velle Verde pte Ltd, a company located Singapore that is owned by the Hamami’s Family. Through that acquisition, Velle Verde pte ltd acts as the biggest shareholder. In the same year, ABM investama did initial public offering in Indonesia Stock Exchange.

According to annual report the company and its subsidiaries operate in contractor and mining service, power engine rental, logistic and vessel rental, side service division and remanufacturing and manufacturing.

In 2014 the sales declined 6.9 % compared to sales in 2013, the downturn was occurred as the global coal price in 2014 fell compared to its price in 2013. On other hand import of coal in china has also decreased. In 2014, the net profit was negative due to impairment loss of mining property that was amounting to more than USD 67 million. The net profit margin in 2013 was 0.27 %.

Meanwhile the cash cycle in 2014 seemed better than 2013, the gross profit margin was also slightly improved from 31 % in 2013 to 34 % in 2014. In 2015 the company may experience better profit margin if there will be no a big impairment loss on mining property.

The biggest contribution of revenue in 2014 was from mining contractors and coal mining segment that was contributing more than 58 % of total sales. The second biggest segment was resulted from power engine rental.       

The key person of the company, Achmad Ananda Djajanegara, seemed concern to government priority in building 35,000 power plants. Through its subsidiary in power plant segment the company plan to participate in building new power plant to increase energy supply. Sewatama was able to increase its market share in Independent Power Plant as government support the private sector to invest in IPP sector to provide people with electricity. In 2014 the company succeeded in completion of diesel power plant project in Bali Island and Medan city.

Law that regulates mineral and coal mining activities is UU minerba, this law imposes the mining company a duty to supply the domestic markets. This regulation also imposes the company that owns mineral concession to build processing and refinery facilities. This law is also implementing such limitation of exploration area and production activities. As a result of this, there are particular risks in doing business in mineral and coal mining such as no available buyer at domestic, capability to build refinery or smelter and decrease of reserves.

The company seemed capable to face challenge in this business includes UU minerba.

SOBI

The company is owned by Cargill food Indonesia with more than 98 % of total shared. The company is controlled by the parent company which is located in US. The company produces starch and its derivatives such as sweeteners, syrup and starch powder. The head office is located in Pandaan city, east java.

Starch is made from cassava as the main raw material. The corporation has several factories in Java and Sumatra consists of two sweetener factory and 3 starch factories.

The company seems focus in one business segment in generating income. In 2014 there was a slightly increase of sales which rose more than 4.1 % compared to sales in 2013. In 2014 the company was able to maintain its margin at about 20%. Meanwhile, its profit margin slightly rose from 6.4 % in to 7.8%. For operating ratio, cash cycle apparently was stable.

More than 42 % of revenue in 2014 was contributed from sales at oversea. The company supplies its product to more to multinational company in 70 countries. Since it had been acquired by Cargill food Indonesia in 2011, the export is estimated to grow significantly in future.

ESSA

Preface

The public listed companies in Indonesia are only 507 companies; the average growth of number of listed company in the last ten years is only 5.4 % a year. That means many companies in Indonesia considered to do initial public offering due to several reasons. In Indonesia it needs approximately 4-6 weeks for issuance time, meanwhile in peers it only needs average 2 weeks. On other hand the company seems afraid to pay higher tax as the disclosure of its financial information which is required by government. For example, the Wilmar group, a domestic company, despite it is listed in Singapore; it is not listed in Indonesia. 

Bond market is also facing same situation, the government bond is dominated, and its contribution is almost 54 % of total bond in the bond market. Lengthy issuance time of bond increased the cost for issuing corporate bond.  It needs more than two months to do. It is much longer compared to peers such as Singapore, Thailand and Malaysia. Big corporation in Indonesia commonly has subsidiary in abroad which is used as entity to capture fund through bond issuance.

In 7^th October Indonesian government has announced the third economic stimulus to improve economic growth. Government decided to do relaxation of regulation in getting business permits and business license. Government is also giving discount of tariff in electricity and providing financial support for small medium enterprise. Few permits for investor such as use of land will be shortened in its process in getting permits.

The relaxation of regulation and discount of tariff were able to increase currency exchange rate to USD, the currency was under 14,000 / USD. The capital inflow from oversea was attracted to Indonesia again. But it is possible that the capital from foreign will be move out at the end of the year.

Surya Essa Perkasa

Surya esa perkasa has LPG offtake agreement with PERTAMINA since 2006, the company is only transmitting its LPG to Pertamina and its subsidiaries based on the agreement. Liquefied Petroleum Gas generally use as fuel for heating appliance in the kitchen, hotel, shopping center and etc. The company has LPG refinery which is used to change natural gas in to LPG. The company was the second largest LPG producer in Indonesia. The company is also producing condensate and propane.

In 2015 the company planned to build new LPG refinery valued more than IDR 1.9 trillion. In 2014, it also started to build ammonia factory valued USD 830 million to complete its expansion project. The factory is expected to be finished in 2017.

In 2014 the sales declined 5.5 % compared to sales in 2013. The weakened in economic growth may be as the key reason for the decline, energy consumption from corporate segment declined as the decrease in production capacity. Consequently, the net income in 2014 decreased more than 21 % compared to net income in 2013.

LPG segment was as the biggest contribution of total revenue in 2014. It was more than 88 % of total revenue in 2014.

ESSA is owned by Trinugraha Akraya Sejahtera as the largest share holder with 30 %, the second largest share holder is Ramaduta Teltaka.  

In non current asset there was a good will amounted to more than USD 20 million or more than 16 % of total asset in 2014. The company invested USD 31 million to acquire its subsidiary, the investment exceeded its fair value and as the result of that there was an increase in goodwill amounted to USD 23 million.

AKRA

Preface

According to JISDOR (Jakarta interchange spot dollar rate), rupiah’s exchange rate to US in 2 October 2015 was at 14,709 / USD. The weakened rupiah may be occurred due to the capital outflow which is bigger than the capital inflow.

It has been occurred persistently during the year. The Fed was printing money in large amount and they implement the rate at almost zero level. It was called quantitative easing. As a result of that, people at US have been able to get loan with low interest cost compared to others and this money is used to invest in many countries. The money commonly is used to invest asset in capital market.

 Their bank regulation allowed them to borrow money for investing in stock and bonds which tend to use for speculation or short term investment. On other hand price of commodity is still not improved, the export amount was difficult to be increased. China, the biggest market for commodity

As long as the inhabitant is able to buy the basic food with suitable price and people have job with sufficient salary, the politic situation will be save.

They abandoned Gold standard for war

The central bank of US and several European countries started to left gold standard since World War I, in the era of Woodrow Wilson, the US government decided to increase money supply significantly since 1917 until 1919. The federal outlay in 1917 was USD 1,954 million which is much lower than federal outlay in 1919; it was amounting to USD 18,493 million. The France government was borrowing money from US to finance the war.

In gold standard the nation which experiences persistent trade deficit, their gold reserve is pulled a way to cover their deficit. The Gold is used to back up the currencies. Central bankers from countries usually conduct a meeting to settle the imbalance with gold. In 1914 there were more than 44 countries which were in Gold Standard.

Company Analysis

The major part of income of the company in 2014 was contributed by its trading and distributor segment which was more 90 % of its total revenue. In 2014, the sales was higher than sales in 2013. It slightly increased 0.6 % than 2013. The company was chosen as the subsidized petroleum distributor by BPH Migas in 2014 with quota amounted to 650,000 Kl.

Since 2005 government has allowed the private sector to distribute to subsidized petroleum and the company was the first private company which was elected as distributor. The subsidized products are High speed diesel and gasoline Ron 88.

The revenue in petroleum distributor segment is expected to increase in the future as the petro station to population ratio is still low in 2014. They expected to get more quotas and distribute more petroleum product.

The company has also run in basic chemical trading, it is selling  basic chemical which is used as raw material in various industry such solvent, organic and inorganic chemical. The basic chemicals are Hydrocholic achid, Soda Ash Dense, Sodium sulphate and etc.

The company has also operated in non subsidized petroleum distribution; the allocation of subsidy for petroleum was also opening new opportunity for business in petroleum trading for the company.

Integrated industrial estate

In 2014 the company started to establish integrated industrial estate in east java. It combined industrial estate with its logistic at deep seaport and energy solution. The company joined cooperation with Pelindo III to build Java Integrated industrial and port estate in Gresik – east Java. The company has acquired land with total area more than 3000 hectare.

According to its financial statement the clients which have more than 10 % of its total income are PLN and Freeport Indonesia. (source : annual report)

SKLT

Digital currency revolution

Digital currency is being considered by people of whole the world for its new currency in transaction. Smartphone technology made digital currency as a choice in payment of their daily transaction. According to wall street journal the daily usage of digital currency of global in 2014 is USD 50 million a day. It is much smaller that the usage of Visa and master card which are amounting to USD 32 billion a day.

There are over than 2 billions of people at whole world which is called as unbanked people. And the developer of digital currency is set them as their target for digital currency product.

One of famous digital currency product is bit coin. Its system was established by satoshi nakamura three months after the financial crisis in US, in September 2008.  Mr satoshi took the momentum of crisis to launch bit coin.

Despite it could reduce cost of transaction, Bit coin still has flaws, it is vulnerable for money laundering and its price is also unstable.  Its currency iteration could change about more than 10 percent weekly. (source: wsj & internet)

Company analysis

The company exports its product to foreign countries such as US, Japan, Europe and etc. Its premium brand of product was called FINNA. But sales from domestic is still dominated its total income. The company has integrated business in food segment; its subsidiaries, Mitra Boga Sukses Abadi and Abadi Java food are operating in restaurant segment. For distribution, another subsidiary, Pangan Citra rasa Nusantara handle distributes the product across Indonesia. 

Surabaya is apparently a sea industry cluster, it is located near the sea and there are many industries either mass industries or home industries which are processing fish, shrimp, seaweed and etc both from fisheries segment and inland water.

Based on its financial statement revenue from local segment was more than 83 % of total revenue. The remained revenue was from oversea which was at 16 % of total revenue. Based on its products segment, the merchandise good segment was dominated which was 45.5% of total revenue of 2014. The second was cracker with 35.1 % of total revenue.

Based on euromonitor the food canned is expected having high growth in between 2013-2017. Its CAGR projection was more than 15 %. The company may start to increase its food canned or preserved food product to capture the demand in the market.

The sales growth of 2014 was more than 20 % compared to sales in 2013. The growth in 2014 was lower than sales growth in 2013 which was more than 40 %. It had occurred due to slowdown of economic growth in Indonesia. Among the people decreased their expenditure in 2014 due to higher cost of living and higher US dollar value to rupiah. Some company which depends on imported raw material has started to collapse and it has laid off employee.

According to the financial report of 2014, the largest share holder was Omnistar Inv H Ltd which has 26.78 % share. The second was PT Alamiah Sari with 26.16 % share.

Finally, the company is expected experiencing significant growth in next five years due its position as market leader of food of marine manufacturing industry in east java.