DEPOK (eNBe Indonesia) - PT Trimegah Bangun Persada Tbk (NCKL), member of Harita Nickel, lists and trades its shares on Indonesia Stock Exchange (IDX) today (April 12), to make a market capitalization of Rp78.87 trillion.
Next, of course, will be the listing of another nickel giant Merdeka Battery Materials, which is a subsidiary of Merdeka Copper Gold (MDKA).
NCKL lists 63 billion shares, while 7.9 billion shares were offered through the initial public offering (IPO) scheme, representing 12.67% of total issued and paid-up capital.
NCKL set its IPO prices at Rp1,250 per unit, to raise total proceeds of Rp9.9 trillion.
That said, foreign investors from Europe, United States, and Asia also purchased NCKL IPO shares. The demand from institutional investors is high, surpassing the target of IPO fund.
Many expects NCKL to gain on its trading debut today, as the Company as well as other mining firms have positive prospect as they focus on the downstream segment, also focus on commodities with high demand potential such as nickel and its derivative products.
The expansion into processing activity or smelter would boost profit margin for mid and long term. Government also support with the transformation of economic base, from commodities into value-added products.
The demand for metal processing products will be boosted by a massive development of electric vehicle/EV, lifting demand on battery using nickel as raw material.
Back to IPO, NCKL will use 5.46% IPO proceeds for paying debts to PT Harita Jayaraya, 6.05% proceeds for paying debts to PT Dwimuria Investama Andalan, 15.13% for paying debts to Oversea-Chinese Banking Corporation Limited (OCBC) and Bank OCBC NISP, 2.12% for capital expenditure (capex).
And some 32.27% IPO proceeds will be used for the purposes of subsidiaries and entities association which will be channeled through capital deposits and loans, and the remaining 38.08% will be used by Company for working capital.
NCKL has assets of Rp33.6 trillion per November 2022 while liability amounted Rp19.6 trillion. Then the equity was Rp13.97 trillion.
It booked net profit of Rp4.3 trillion for January-November 2022 period, surged 207% year on year (y/y, as NCKL gained Rp2.7 trillion from profits of associates.
In January-November 2021 period, the Company only recorded Rp160 billion gain from profit of associates. While revenues and contracts grew 16.9% y/y to Rp9.04 trillion.
NCKL targets revenue to double this year, supported by increased production of ferronickel and laterite nickel ore for electric vehicle battery raw materials.
Trimegah Bangun Persada’s President Director Roy Armand Arfandy stated that NCKL’s ferronickel production capacity reached 25,000 tons in 2022, and targeted to increase to 100,000 tons this year, in line with the completion of the expansion construction using the proceeds from the IPO.
Meanwhile, Mixed Hydroxide Precipitate, which comes from the factory for making raw material for electric vehicle batteries, will increase from 40,000 tons in 2022 to 60,000 tons in 2023.
In summary, NCKL is an equity to watch because of the following assets/growth projects:
Nickel Assets/Projects
NCKL owns nickel concession with estimated reserves of 169 million WMT at 1.31% nickel to supply the following projects.
1/ PT Megah Surya Pertiwi (MSP): NCKL owns 60% interest. This company operates four lines of RKEF, producing NPI with 25,0000 TNi equivalent since 2015.
2/ PT Halmahera Jaya Feronikel (HJF): NCKL owns 63% interest. This company operates eight lines of RKEF, producing NPI with 95,000 TNi equivalent since 2022. Djarum Group and Lygend Resources are partner shareholders in this company.
3/ PT Halmahera Persada Lygend (HPL): NCKL owns 45% interest. This company operates 2 lines of HPAL smelters, producing MHP with 37,000 TNi equivalent (including 4,500 tons of cobalt). Phase II with 18,000 TNi equivalent (cobalt 2,250 tons) is in the construction stage. Lygend Resources is partner here.
4/ PT Obi Nickel Cobalt (ONC): NCKL owns 10%. This company is scheduled to start commercial operation of MHP with 65,000 TNi equivalent (7,500 tons of cobalt) in 2024. Lygend Resources is partner here.
5/ PT Karunia Permai Sentosa (KPS): NCKL owns 35% interest with Baosteel, one of the world’s largest stainless steel producers, as partner. This company is scheduled to operate 12 lines of RKEF smelters producing 185,000 TNi in the second quarter of 2025.
6/ PT Obi Stainless Steel (OSS): NCKL owns 35% interest with Baosteel as partner. This company plans to build stainless steel factory in Obi Island.
ESG
Unlike peers in Morowali and Konawe, Sulawesi Island or those in Halmahera, North Maluku, nickel projects in Obi Island of Harita Nickel and Lygend Resources have relatively been off the radar of national media when it comes to ESG practices.
Some say this might have reflected a relatively better handling of ESG issues in Obi Island, but others remain cautious because of growing global scrutiny on nickel production in Indonesia.
Global NGOs and financiers will surely pay more attention, especially now that both Harita Nickel and Lygend Resources are listed on stock exchanges.***
