DEPOK (eNBe Indonesia) - Shares of PT Indonesia Kendaraan Terminal (IPCC) Tbk, unit of state port operator Pelindo Multi Terminal, ended flat at Rp720 on Wednesday (Sep 13) to make a market capitalization of Rp1.3 trillion, only slightly bigger than equity (Rp1.24 trillion).
Launched an initial public offering (IPO) at Rp1,640 per share five years ago, IPCC is one of failed attempts of state entities in getting attention from global investors.
Losing more than 50% from IPO price clearly sets a really bad precedent for other state companies entering the market.
Shares of PT Jasa Armada Indonesia (IPCM), another subsidiary of state port management company Pelindo II, were last traded at Rp286, also way below IPO price (Rp380) in late 2017.
IPCM was worth Rp1.5 trillion, better than the valuation of IPCC. Both IPCC and IPCM are now traded with PE multiple below 10 on annualized earnings in the first half.
IPCC said it focuses on boosting its recurring income, also existing operational services. The Company is now building cooperation with an automaker firm from South Korea through providing land for 2 years period in the industrial bonded zone (the Kawasan Berikat Nusantara/KBN) in Cilincing, to becoming the pre delivery center.
IPCC will also serve cargo for vehicles from South Korea, to optimizing its distribution to throughout the country.
With the government’s policy of downstream management of mining materials, especially for the needs of electric cars, this will also be a positive sentiment for the IPCC terminal, where demand for electric cars will increase, so the IPCC terminal will be positively impacted.
Vehicle loading and unloading handling is no longer only dominated by Japanese vehicles but also from Korea and China.
To anticipate the potential increase in cargo handling, IPCC said it plans to build a parking area of around 5 floors at a cost of around IDR 147 billion, which will increase the capacity of around 127,000 vehicles per year.
IPCC then targets its revenue to grow by 15-20% this year. It has cash reserve of Rp780 billion until end this year.
IPCC booked revenue of Rp367 billion in the first half (H1) of 2023, grew 21.5% year on year (y/y), with net profit of Rp79 billion. Not bad. IPCC’s Tanjung Priok port contributed Rp341.53 billion revenue.
Other ports are Belawan (North Sumatra), Makasar (South Sulawesi), and Pontianak (West Kalimantan). IPCC’s assets reached Rp1.77 trillion, while liabilities was Rp531 billion.
IPCC earlier said it seeks to optimize business within the group to maintain positive performance this year, especially by looking at the potential in the eastern region of Indonesia.
IPCC’s President Director Sugeng Mulyadi explained that his party manages the delivery of 600,000 vehicle units or around 57% of national vehicle production.
Domestic distribution and exports continue to experience growth, in line with the national and regional economic recovery after Covid-19.
Meanwhile Jasa Armada Indonesia was also (IPCM) looking at the potential in the eastern region of Indonesia.
The Company booked revenues of Rp567 billion in H1 this year, grew 32% y/y, and net profit grew 29% to Rp84 billion. IPCM’s assets reached Rp1.6 trillion, while liability amounted to Rp461.5 billion. It has cash reserves of Rp505.5 billion.
IPCM President Director, Shanti Puruhita said the Company’s positive earning growth is also supported by its market share which continues to expand and the economy which is getting better this year.
In 2022, IPCM has successfully launched three new pilot boats and one new tugboat and signed several cooperation agreements.
One of them is a service collaboration agreement in Teluk Weda in collaboration with PT Langlang Laju Layang, which is the initial expansion of IPCM’s business in the Eastern Region of Indonesia.
IPCM carries out mandatory or mandatory services in ship traffic, such as pilotage and towage services, as well as fleet management. This makes the IPCM business relatively resistant in challenging economic conditions.
Still, IPCC and IPCM need to figure out ways to improve the valuation of their stocks if they want to raise more fresh money from the market to finance future expansion programs.