INVESTMENT BANKING

Top Indonesia Small Cap Companies

20 Jewels 2024 Edition

IDR

YEARS

SINCE 2004

$ ¥
 TOP INDONESIA
SMALL CAP COMPANIES

20 JEWELS

2024 EDITION
 INDONESIA

Andrey Wijaya [Link]@[Link] (6221) 5093 9980

Indonesia Research [Link]@[Link] (6221) 5093 9888

Vanessa Karmajaya vanessa@[Link] (6221) 5093 9985

<This page has been left blank intentionally>
CONTENTS
List Of Companies By Alphabetical Order
Autopedia Sukses Lestari 1

Bali Towerindo Sentra 3

Bank Neo Commerce 5

Blue Bird 7

Delta Dunia Makmur 9

Elnusa 11

Energi Mega Persada 13

FKS Food Sejahtera 15

Integra Indocabinet 17

Jayamas Medica 19

Kencana Energi Lestari 21

Maharaksa Biru Energi 23

Mandiri Herindo Adiperkasa 25

Mark Dynamics Indonesia 27

Sinar Eka Selaras 29

Steel Pipe Industry Of Indonesia 31

Total Bangun Persada 33

Tripar Multivision Plus 35

Victoria Care Indonesia 37

Wismilak Inti Makmur 39
List Of Companies By Industry Classification
Auto related
Autopedia Sukses Lestari 1

Construction
Total Bangun Persada 33

Consumer
FKS Food Sejahtera 15

Entertainment
Tripar Multivision Plus 35

Financials
Bank Neo Commerce 5

Forest Products
Integra Indocabinet 17

Health / Personal Care

Jayamas Medica 19
Victoria Care Indonesia 37

Industrial
Steel Pipe Industry Of Indonesia 31

Manufacturing
Mark Dynamics Indonesia 27
Oil and Mining Related
Delta Dunia Makmur 9
Elnusa 11
Energi Mega Persada 13
Mandiri Herindo Adiperkasa 25
Renewable Energy
Kencana Energi Lestari 21
Maharaksa Biru Energi 23

Retail
Sinar Eka Selaras 29

Telecommunication Tower
Bali Towerindo Sentra 3

Tobacco
Wismilak Inti Makmur 39

Transportation
Blue Bird 7
Foreword
Dear valued investors,
We are delighted to present the 14th edition of the RHB Indonesia Small Cap Jewels Book. This year is a milestone – it
marks the 20th anniversary of the maiden launch of our series of annual small-cap books in Malaysia. Since then, our
esteemed publication has become a hallmark of RHB Research's commitment to identifying promising opportunities in the
small-cap space. In this 2024 edition, we showcase 20 companies with market capitalisations under USD500m,
representing a diverse array of sectors – from snack products to digital banking and from renewable energy to taxi services,
these companies offer a broad spectrum of investment potential. Around 50% of our stock picks in this edition are
companies that have not been featured in previous editions. Our picks stem from both a top-down and a bottom-up
methodology.
Our largest industry classification comes from oil- and mining-related counters, which comprise 20% of our stock picks. This
is supported by our recent lifting of 2024 and 2025 average Brent oil price estimates, given the higher geopolitical risks.
The coal sector may also benefit from further weather abnormalities – early signs of a heatwave have been reported in
many Asian countries, which may trigger a hike in demand for electricity to cool down homes, offices, and other types of
properties affected by such heat. We continue to like the renewable energy (RE) sector, comprising 10% of our stock picks,
which may become beneficiaries of Prabowo Subianto and Gibran Rakabuming Raka winning the recent general election.
The new president, who begins his duties in Oct 2024, has promised to ensure environmental conservation and is
committed to pursuing net-zero emissions goals by reducing the country’s carbon footprint. We see this possibly helping
the RE sector to navigate its prospects, as RE would serve as an alternative energy source to reduce emissions. We
anticipate the small-cap companies we have identified evolving into mid-cap stalwarts in future. Our selection of small-cap
stocks is poised for growth that exceed industry norms, driven by diverse catalysts. This Indonesia edition forms a segment
of the broader regional small-cap compendium that also features other standout ideas from the other ASEAN markets that
we cover.
We extend our gratitude to the dedicated management teams of the companies featured in this book for giving us their
time to share insights and helping us to understand their business models and growth potential. Additionally, we commend
our research analysts for their tireless dedication in meticulously evaluating and selecting top-notch stock ideas. These
selections not only provide solid growth prospects, but also present re-rating opportunities.
Testing our thesis, our selection of Top 20 Indonesia Small Cap Jewels for 2023 delivered a return of +11.4% based on
weighted average returns. This performance outpaced the Jakarta Composite Index (JCI) by 5.7%, as the JCI yielded a
return of +5.6% during the same period. Furthermore, our selections demonstrated remarkable strength against the IDX
Small Mid Cap Liquid (IDXSMCL) Index, outperforming it by 17.5%, as the latter registered a return of -6.1%. This
achievement underscores the effectiveness of our rigorous selection process and potential for significant returns within the
small-cap segment.
Lastly, as the research division of RHB, our dedication lies in continually enhancing and fortifying our small cap franchises.
Through these endeavours, we aim to deliver insightful research products that offer substantial value to our esteemed
clients. With the release of this milestone 14th edition (for Indonesia), we are confident that our commitment to small-cap
research here will be underscored, solidifying our position in the market. This tradition of identifying and highlighting
shining jewels within these segments remain at the core of our mission, and we are eager to uphold this legacy as we move
forward. We hope the 2024 Top 20 Indonesia small-cap picks may project better performances ahead, and we hope you
keep healthy and safe!

Andrey Wijaya
Head of Indonesia Research
RHB Sekuritas Indonesia

Jakarta, 14 May 2024

 20 Jewels – at a glance

Current Potential
Fair Value Mkt Cap P/E (x) P/BV (x) Div Yield (%) ROE (%)
Price Upside
Company name Rating
(IDR) (IDR) (%) (USDm) FY23 FY24F FY23 FY24F FY23 FY24F FY23 FY24F

Not
Autopedia Sukses Lestari 185 96 93 76 53.3 20.7 1.8 1.7 0.0 N/A 3.4 8.2
Rated
Not
Bali Towerindo Sentra 1,435 1,100 30 270 28.8 N/A 1.7 N/A 2.1 N/A 6.1 N/A
Rated
Trading
Bank Neo Commerce 360 246 46 185 N/A N/A 0.9 1.0 0.0 N/A N/A N/A
Buy
Not
Blue Bird 2,400 1,520 58 237 8.4 N/A 0.7 N/A 4.6 N/A 8.4 N/A
Rated

Not
Delta Dunia Makmur 650 540 20 290 8.5 9.4 0.9 0.9 2.7 2.4 13.6 12.9
Rated

Not
Elnusa 630 422 49 192 6.1 N/A 0.7 N/A 6.1 8.1 11.8 N/A
Rated

Not
Energi Mega Persada 270 198 36 306 4.7 N/A 0.5 N/A 0.0 N/A 11.0 N/A
Rated

Not
FKS Food Sejahtera 138 120 15 70 59.5 N/A 1.2 N/A 0.0 N/A 2.1 N/A
Rated

Not
Integra Indocabinet 340 242 40 97 16.1 N/A 0.4 N/A 0.0 N/A 2.4 N/A
Rated

Not
Jayamas Medica 225 198 14 334 20.7 N/A 2.4 N/A 1.6 N/A 12.2 N/A
Rated

Kencana Energi Lestari Buy 990 725 37 166 9.7 8.5 1.0 1.0 0.9 0.9 9.4 10.3
Not
Maharaksa Biru Energi 160 135 19 53 N/A N/A 1.3 1.2 0.0 N/A N/A N/A
Rated
Mandiri Herindo Not
290 220 32 229 13.7 12.5 N/A N/A 0.0 N/A 18.3 15.6
Adiperkasa Rated

Mark Dynamics Not

1,130 975 16 231 23.7 N/A 4.4 N/A 4.1 N/A 18.6 N/A
Indonesia Rated

Not
Sinar Eka Selaras 270 228 18 74 5.6 N/A 0.8 N/A 4.2 N/A 17.7 N/A
Rated

Steel Pipe Industry Of Not

385 284 36 127 4.1 N/A 0.4 N/A 2.0 N/A 11.4 N/A
Indonesia Rated

Not
Total Bangun Persada 578 490 18 104 9.7 N/A 1.6 N/A 21.1 N/A 14.9 N/A
Rated

Not
Tripar Multivision Plus 589 520 13 201 31.3 N/A 2.6 N/A 0.0 N/A 9.6 N/A
Rated

Not
Victoria Care Indonesia 750 650 15 272 24.4 N/A 4.7 N/A 1.4 N/A 20.8 N/A
Rated

Not
Wismilak Inti Makmur 1,890 1,120 69 147 4.8 5.2 1.3 1.2 6.5 11.5 29.6 23.3
Rated
Note: All prices as at 10 May 2024
Note 2: Non-rated stocks FY24F PE are using Bloomberg Estimate EPS and other
Note 3: na = not available; company booked negative earnings or insufficient data
Source: Bloomberg, RHB
A comparison of Top 20 Indonesia Small Cap Jewels 2024

Market capitalisation (USDm) FY23 ROE (%)

Source: Bloomberg, RHB Source: Bloomberg, RHB

FY24F P/Es (x) FY23 P/BVs (x)

Source: Bloomberg, RHB Source: Bloomberg, RHB

Performance of the Top 20 Indonesia Small Cap Jewels in 2023

RHB 2023 Top 20 small-cap stocks’ performance vs JCI

JCI performance breakdown 2023 (%) by sector
and IDX SMC Liquid Index (%)

Note: RHB 2023 SCB return is the weighted average return Source: Bloomberg, RHB
Note 2: JCI = Jakarta Composite Index, IDX SMCL: Indonesia Stock Exchange
Small Mid Cap Liquid Index
Source: Bloomberg, RHB

Breakdown of RHB 2023 Top 20 small-cap stocks’ Breakdown of RHB 2023 Top 20 small-cap stocks’
absolute performance (%) relative performance – net of JCI (%)

Source: Bloomberg, RHB Source: Bloomberg, RHB

 Fair Value: IDR185
Autopedia Sukses Lestari Price: IDR96

Time To Vroom
Autopedia Sukses Lestari (ASLC IJ
Price Close
Investment Merits
 Robust 1Q24 earnings growth (up 668% YoY)
140.00

120.00

100.00
 The market for used cars is huge and continues to grow
80.00
 Leading automotive auction marketplace in Indonesia
60.00  Retail business expansion to support earnings growth
40.00

Company Profile
Jul-23

Sep-23

Nov-23
May-23

Jan-24

Mar-24

Autopedia Sukses Lestari (ASLC), founded in 2013, is a part of the Adi

Source: Bloomberg Sarana Armada Group (ASSA IJ). This used vehicle trading company was
listed on the IDX in early 2022. ASLC buys and sells used vehicles in
Stock Profile business-to-business (B2B), consumer-to-consumer (C2C) and business-
Bloomberg Ticker ASLC IJ to-consumer (B2C) platforms, and aims to be the most trusted omni-
Avg Turnover (IDR/USD) 2,206m/0.14m
channel automotive marketplace. It now owns Indonesia's largest
marketplace ecosystem for buying and selling used vehicles. It has two
Net Gearing (%) Net cash
main businesses, of which one is an automotive auctioneer called JBA
Market Cap (IDRbn) 1,236
BidWin (KBA), which runs both offline and online (hybrid) auctions. KBA
Beta (x) 1.1 is Indonesia's largest automotive auction house, with 37 branch offices
BVPS (IDR) 566 across the country. ASLC also operates an online-to-offline (O2O) car
52-wk Price low/high (IDR) 78 – 125 dealer business under the [Link] (Caroline for short) brand, which
Free float (%) 21 currently has 10 showrooms. Caroline also uses JBA and ASSA networks
as purchasing points. The number of Caroline showrooms should expand,
in view of the great growth potential of Indonesia's used vehicle trade.
Major Shareholders (%)
Adi Sarana Armada 77.6 Highlights
Massive, consistently growing market for used cars. ASLC expects to
chart double-digit YoY revenue and earnings growth in 2024. Caroline
and KBA are also aiming for double-digit growth over the same period.
Despite the decelerating economic activity and external factors that have
Share Performance (%) affected the auto industry, Indonesia's used car market has continued to
1m 3m 6m 12m grow. According to Ken Research, the used car industry in Indonesia is
Absolute (6.7) 4.3 21.3 (11.8) expected to expand at 202-2025 CAGRs of: i) 15.7%, in terms of gross
Relative (9.9) (0.2) 10.5 (24.3) transaction value; and ii) 14.2%, in terms of sales volume. Furthermore,
according to Redseer Strategy Consultants, the ratio of used car sales to
new car sales in Indonesia was the highest in ASEAN – at 3.3x, compared
to 1.9x in Thailand and 1.8x in Malaysia (as of 2019).
Indonesia Research +6221 5093 9888
[Link]@[Link] Leading automotive auction marketplace in Indonesia. KBA moved 44k
units of approximately 120k cars auctioned nationwide, implying a 40%
Andrey Wijaya +6221 5093 9846 market share in the national auction market in 2020. KBA's assets are
[Link]@[Link] primarily cars and motorcycles seized by financial institutions (leasing
companies), accounting for roughly 70% of units sold. This is followed by
dealer inventory vehicles (20%) and ASSA's fleet (10%), with the majority
of customers being small dealers. ASLC can strive for long-term cost
savings by collaborating with key suppliers.

1 Top 20 Indonesia Small Cap Jewels 2024

As such, KBA is more B2B-oriented. It also offers dynamic, personalised
Profit & Loss Dec-22 Dec-23 Mar-24
financing from multiple finance and insurance providers to vehicle
Total turnover (IDRbn) 480 682 183
buyers.
Reported net profit (IDRbn) 3 27 17

Retail business expansion to support earnings growth in the future. In Recurring net profit (IDRbn) 3 27 17

early 2022, ASLC launched Caroline, a digital dealer platform for used Recurring net profit growth (%) (86.4) 713.9 65.5

cars that employs the C2C and B2C models. Caroline’s platform or system Recurring EPS (IDR) 0.3 2.1 1.3

was previously operated by its sister company, Caroline Karya Teknologi, DPS (IDR) 0.00 0.00 0.00

and this purchased by ASLC in Nov 2021. The platform will include Dividend Yield (%) 0.0 0.0 0.0
Recurring P/E (x) 384.1 47.2
physical showrooms as well as an online channel (O2O). Caroline will buy
Return on average equity (%) 0.5 3.8 9.4
cars, then resell them to end-users (selected/premium used cars) and to
P/B (x) 1.8 1.8 1.8
KBA for auction (normal used cars). We see this as the development of
P/CF (x) (14.1) (11.2) (393.2)
new solutions, broadening the scope of the used car ecosystem. Caroline Source: Company data, RHB
anticipates generating additional revenue through partnerships with
multi-finance companies that provide loans to its customers. It also takes
Balance S heet (IDRbn) Dec-22 Dec-23 Mar-24
in revenue from other services such as insurance.
Total current assets 490 526 564
Total assets 790 847 894

Company Report Card Total current liabilities 70 125 156

Total non-current liabilities 14 17 15
Results highlights. ASLC’s 1Q24 earnings skyrocketed by 668.2% YoY to Total liabilities 85 142 173
IDR16.9bn, driven by a wider profit margin and higher revenue. 1Q24 S hareholder's equity 705 705 721
GPM increased to 34.5% (from 28.8% in 1Q23), while 1Q24 NPM Minority interest 33 12 14
widened to 16.9% (from 1.7% in 1Q23). Note that KBA’s 2W and 4W Other equity 0 0 0
sales volume surged by 48% YoY to 29,000 units in 1Q24, from 19,000 Total liabilities & equity 790 847 894
units in 1Q23. Meanwhile, Caroline’s sales volume increased 19% YoY to Total debt 5 11 4
725 units in 1Q24, from 610 units in 1Q23. For comparison, KBA and Net debt Net cash Net cash Net cash
Caroline sold 100,506 units and 3,135 units in 2023. Source: Company data, RHB

Balance sheet/cash flow. ASLC’s current ratio remains strong at 3.6x as

at end-Mar 2024 (Mar 2023: 5.5x). We believe the YoY decline is Cas h Flow (IDRbn) Dec-22 Dec-23 Mar-24

justified, since ASLC spent cash for working capital to support its Cash flow from operations (42) 43 (2)

increased business activities in 1Q24. Its total liabilities-to-total assets Cash flow from investing activities (47) (156) (1)

ratio remains low, at 0.2x as at end-Mar 2024 (Mar 2023: 0.1x). Cash flow from financing activities 397 (36) 0
Cash at beginning of period 88 396 247
Dividends. According to its prospectus, ASLC's dividend payout policy is a
Net change in cash 308 (149) (3)
maximum of 40% of earnings from the previous year. However, due to the
E nding balance cash 396 247 244
current aggressive expansion mode, we anticipate that dividends will be
Source: Company data, RHB
minimal in the coming years.
Management. Jany Candra, the company's President Director, has over
16 years of working experience in the automotive industry. Meanwhile,
ASLC's Director, Deborah Debyanti Sugiarto, has over 20 years of
extensive experience in finance, and has held managerial positions in
several leading companies.

Investment Case
Valuation. Based on its annualised 1Q24 earnings, ASLC should book
IDR68bn in net profit in 2024 (+209% YoY), implying 0.08x 2024 PEG – ie
more attractive than its peer, Astra International (ASII IJ), which is
expected to record negative earnings growth this year. Our FV for ASLC
is pegged to a conservative 0.15x PEG.
Key risks: i) An increase in interest rates, which may increase financing
costs and decelerate vehicle sales growth; and ii) increased industry
competition, as many companies, including Carsome, Carmudi, OLX
Autos, and Mobile88, have entered the vehicle platform business.

Top 20 Indonesia Small Cap Jewels 2024 2

 Fair Value: IDR1,435
Bali Towerindo Sentra Price: IDR1,100

Poised For Growth Amidst Data Traffic Surge

Bali Towerindo Sentra (BALI IJ)
Price Close
Investment Merits
1,800.00
1,600.00  Growing data consumption, resulting in site densification, which should
1,400.00
1,200.00
benefit the company
1,000.00
800.00
 Future-proof towers equipped with fibre optics and wireless
600.00 transmission
400.00
200.00
0.00
 Huge potential for tenancy growth, with the tenancy ratio currently at
0.77x
Jul-23

Sep-23

Nov-23
May-23

Jan-24

Mar-24

Company Profile
Source: Bloomberg
Bali Towerindo Sentra (BALI), established in 2006, is a
Stock Profile
telecommunications infrastructure provider known for its tower facilities
that are equipped with integrated transmission via fibre optics and
Bloomberg Ticker BALI IJ
wireless networks. It also offers internet and TV subscription services via
Avg Turnover (IDR/USD) 0,599m/0.45m
BaliFibre for household and corporate customers, alongside data centre
Net Gearing (%) 97.1 rental services catering to corporate clients.
Market Cap (IDRbn) 4,524
Beta (x) 0.47 Highlights
BVPS (IDR) 639.2
600-1550 Pursuing network densification opportunities. Unlike its peers, BALI
52-wk Price low/high (IDR)
40.3
does not pursue built-to-suit business strategies, and is focusing on
Free float (%)
telecommunication infrastructure in densely populated major cities in
Java and Bali. The rapidly increasing usage of mobile phones (Indonesia’s
average screen time was c.6.1 hours in 2023 vs 5.7 hours in 2022) and the
Major Shareholders (%) shifting trend towards video-based content on social media will
Kharisma Cipta Towerindo 59.7 significantly increase data traffic, especially in tier-1 cities, thereby
raising the demand for network densification in these cities.
Future-proof towers to accommodate 5G. All BALI’s towers have been
equipped with integrated transmission facilities through fibre optics and
wireless transmission networks which support larger volumes of data
Share Performance (%) traffic with faster speeds. As of 2023, BALI’s tenancy ratio was at 0.77x,
1m 3m 6m 12m which is relatively low compared to its peers. However, it has huge
Absolute (4.3) 2.8 37.5 34.1 potential to capture more tenants going forward, with the industry’s
Relative (7.6) (1.7) 26.7 21.6 average tenancy ratio currently at 1.7x.

Indonesia Research +6221 5093 9888

[Link]@[Link]

3 Top 20 Indonesia Small Cap Jewels 2024

Company Report Card Profit & Loss Dec-21 Dec-22 Dec-23
Total turnover (IDRbn) 947 978 955
Results highlights. FY23 revenue contracted by 2.4% YoY, mainly due to
EBITDA (IDRbn) 667 676 639
the 5.9% decline in the non-cellular segment (data communications,
Recurring net profit (IDRbn) 189 212 150
internet, and cable television). This was after COVID-19 restrictions were
Recurring net profit growth (%) 123.9 12.2 (29.2)
lifted in mid-2023, leading to more outdoor activities, and negatively
Recurring EPS (IDR) 48.00 54.00 38.00
impacting the growth of home entertainment services such as the
DPS (IDR) 30.00 31.00 32.00
internet and cable television. On the other hand, BALI’s tower and
Dividend Yield (%) 2.5 2.6 2.7
network segment earnings stayed relatively flat (+0.3% YoY) as the
business model is less volatile, given its long-term contracts. Recurring P/E (x) 25.2 22.5 31.7
Return on average equity (%) 8.3 8.8 6.0
Dividends. BALI has consistently distributed dividends over the past two P/B (x) 2.0 1.9 1.9
years, with an average payout ratio of c.62.4%. We expect the company to P/CF (x) 7.5 7.4 7.6
maintain this payout ratio, which translates to a DPS of IDR23.70 (2.1%
Source: Company data, RHB
yield).
Balance sheet. BALI’s net gearing stood at 97.1% in 2023, from 99.8% in Balance Sheet (IDRbn) Dec-21 Dec-22 Dec-23
2022. The company has consistently maintained its debt at this level, Total current assets 459 515 439
reflecting management’s strong debt management. Total assets 5001 5197 5519

Management. CEO Jap Owen Ronadhi has been managing the company Total current liabilities 646 782 1331

since 2017, and has over 15 years of experience in the industry. He is also Total non-current liabilities 2004 1971 1673

the CEO of Kharisma Cipta Towerindo, the controlling shareholder of Total liabilities 2650 2753 3004

BALI with a 59.7% stake. Shareholder's equity 2352 2444 2515

Minority interest 0 0 0
Other equity 0 0 0
Total liabilities & equity 5001 5197 5519
Investment Case Total debt 2309 2438 2441

An anticipated surge in data traffic is expected to favour BALI’s Net debt 2172 2193 2298

operations via network densification. We expect c.15% YoY revenue Source: Company data, RHB
growth in 2024, driven by a higher tenancy ratio of 0.84x from 0.77x (vs
the 1.7x industry average). The stock is trading at 11x FY23 EBITDA, ie Cash Flow (IDRbn) Dec-21 Dec-22 Dec-23
comparable to its peers. We derived a FV of IDR1,435 per share, based on Cash flow from operations 634 643 629
10.8x EV/EBITDA, with IDR735bn in 2024F EBITDA. Cash flow from investing activities (512) (331) (521)
Cash flow from financing activities (89) (204) (210)
Key risks. Risks include losing contracts in the Jakarta Smart City project,
Cash at beginning of period 105 137 245
and a decline in tower leasing rates.
Net change in cash 32 108 (102)
Ending balance cash 137 245 143

Source: Company data, RHB

Top 20 Indonesia Small Cap Jewels 2024 4

 Fair Value: IDR360
Bank Neo Commerce Price: IDR246

Expect a Turnaround In 2024

Bank Neo Commerce (BBYB IJ)
Price Close
Investment Merits
700.00

600.00  Expect a better performance in 2024

 Akulaku Finance Indonesia (AFI) is returning to operations
500.00

400.00

300.00  Significant improvement in 4Q23

200.00

100.00  Undemanding valuations

0.00

Company Profile
Jul-23

Sep-23

Nov-23
May-23

Jan-24

Mar-24

Bank Neo Commerce (BBYB) was established in 1989 as Bank Yudha

Source: Bloomberg Bhakti by the Ministry of Defence. Akulaku Silvrr Indonesia (ASI) then
bought its shares through a capital increase without pre-emptive rights. It
Stock Profile began its transition to a digital bank in 2019. In 2020, the bank's status
Bloomberg Ticker BBYB IJ was elevated to Commercial Bank for Business Activities (BUKU) 2.
16,098m/1.02m Neo+, a mobile banking app, was launched in 2021 and later renamed
Avg Turnover (IDR/USD)
N/A
Neobank. Neobank began direct lending and completed a rights issue of
Net Gearing (%)
IDR2.5trn (USD167m). In Nov 2022, it completed its sixth rights issue of
Market Cap (IDRbn) 2,997
IDR1.7trn (USD113m). By end-2023, Neobank had 25.6m users.
Beta (x) 1.83
266
BVPS (IDR)
Highlights
52-wk Price low/high (IDR) 210 – 600
Free float (%) 58.1 Expect an improved performance in 2024. BBYB aims to lower CIR while
increasing profitability. It is worth noting that earnings were positive in
January at IDR5.3bn, followed by IDR11.1bn in February. Key expansion
initiatives include the launch of the Lazada cash loan feature as part of
Major Shareholders (%)
BBYB's ongoing ecosystem, as well as a focus on loan products ie Neo
Akulaku Silvrr Indonesia 27.3
Loan, MSME Loan, and Commercial Innovative Loans. This strategic
Gozco Capital 8.5 approach aligns with the company's goal of diversifying revenue streams
Rockcore Financial Technology 6.1 and meeting evolving customer expectations.
Akulaku Finance Indonesia (AFI) resuming operations. At the end of
February, the Financial Services Authority (OJK) lifted the business
Share Performance (%) activity restriction penalties imposed on AFI, which operates the Buy
1m 3m 6m 12m Now Pay Later (BNPL) programme. This should assist BBYB because, as
Absolute (9.7) (21.9) (1.6) (59.7) of Dec 2023, 46% of total loans were from either AFI or ASI. These loans
Relative (12.9) (26.5) (12.4) (72.2) have greater yields than BBYB's normal loans.
Significant improvement in 4Q23. Pre-provision operating profit (PPOP)
increased to IDR805bn (+54.2% QoQ, +246.5% YoY). Provision expense
Andrey Wijaya +6221 5093 9846 increased moderately to IDR813bn (+6.6% QoQ, +96.3% YoY). Net loss
[Link]@[Link] for 4Q23 was IDR7bn, down from IDR239bn in 3Q23. BBYB still had a
net loss of IDR573bn in FY23, although it was substantially better than in
2022, when it lost IDR789bn. This is well above our and consensus
expectations. The improved FY23 performance was driven by a 86% YoY
increase in operating income and 16% YoY decrease in opex.

5 Top 20 Indonesia Small Cap Jewels 2024

Company Report Card Profit & Loss Dec-23 Dec-24 Dec-25

Results highlights. BBYB showcased an improved 4Q23 performance: Net Interest Income (IDRbn) 2,902 3,132 4,198

PPOP rose to IDR805bn (+54.2% QoQ, +246.5% YoY), with provisions at Non Interest Income (IDRbn) 637 577 547

IDR813bn (+6.6% QoQ, +96.3% YoY). Despite a net loss of IDR7bn in PPOP(IDRbn) 2,187 2,418 3,459

4Q23, FY23's net loss of IDR573bn exceeded 2022's IDR789bn loss, Net earnings (IDRbn) (573.2) (69.8) 207.1

surpassing expectations and credited to 86% YoY operating income surge Recurring EPS (IDR) (56.99) (6.21) 17.13

and 16% YoY opex reduction. DPS (IDR) 0.00 0.00 0.00
Dividend Yield (%) nm nm nm
Solid equity position. By end-2023, BBYB's equity had grown to Recurring P/E (x) (4.7) (43.1) 15.6
IDR3.3trn. This exceeds OJK's minimal requirement of IDR3trn for Return on average equity (%) (16.3) (2.2) 6.3
continued classification as a commercial bank. However, BBYB intends to
P/B (x) 0.9 1.0 0.9
undergo multiple rights issue exercises to strengthen its equity position
P/CF (x) na na na
and increase flexibility in implementing its long-term strategy.
Source: Company data, RHB
Dividends. BBYB’s medium-term dividend payout remains unclear. It is
still in expansion mode, which necessitates significant marketing Balance Sheet (IDRbn) Dec-23 Dec-24 Dec-25
expenses. As a result, the bank may still post a negative loss in 2024. We Total gross loan 10783 13791 18059
anticipate positive net earnings beginning in 2025, but dividend payments Other interest earning assets 6545 4508 1445
are likely to remain distant. Total gross IEAs 17328 18300 19505

Management. Aditya Wahyu Windarwo currently serves as the bank's Total assets 18170 19179 20430

acting President Director and Business Director. In Mar 2021, he was Total liabilities 14847 15924 16966

appointed as a director of Bank Neo Commerce. The other directors are Shareholder's equity 3267 3198 3407

Ricko Irwanto (Director of Compliance) and Chen Jun (Director of Minority interest 0 0 0

Information Systems Technology). Other equity 56 56 57

Total liabilities & equity 18170 19179 20430

Investment Case Total debt 10783 13791 18059

Net debt na na na
Undemanding valuation. BBYB is trading at 1.0x and 0.9x FY24-25F Source: Company data, RHB
P/BV, which is lower than its peers Bank Jago’s (ARTO IJ) 4.4x FY24F
P/BV and Bank Aladin’s (BANK IJ) 5.6x FY24F P/BV. Our GGM-based FV Asset quality and capital Dec-23 Dec-24 Dec-25
of IDR360 implies 1.3x and 1.3x FY24F and FY25F P/BV. Reported NPLs/gross cust loans (%) 3.7 3.7 3.7

Key risks include a rise in nonperforming loans (NPLs), particularly in the Total provisions/reported NPLs .(%) 364.8 442.2 462.2

super micro segment, as well as slower economic growth and consumer CET-1 ratio (%) 10.5 8.3 6.3

expenditure. Tier-1 ratio (%) 49.3 33.6 27.0

Total capital ratio (%) 49.3 33.6 27.0

Source: Company data, RHB

Top 20 Indonesia Small Cap Jewels 2024 6

 Fair Value: IDR2,400
Blue Bird Price: IDR1,520

Good Times To Continue

Blue Bird (BIRD IJ)
Price Close
Investment Merits
2,600.00

2,400.00
 Higher revenue from the regular taxi segment
2,200.00
 Higher contributions from the non-taxi segment
 Attractive valuation
2,000.00

1,800.00

Company Profile
1,600.00

1,400.00
Jul-23

Sep-23

Nov-23
May-23

Jan-24

Mar-24

Blue Bird (BIRD) is a leading transportation company in Indonesia, with a

major focus on the taxi business. It caters to nationwide needs – with
Source: Bloomberg
more than 20,000 vehicles available in Jakarta, Surabaya, Bandung, Bali,
Lombok, Semarang, Medan, Pekanbaru, Palembang, Bangka Belitung,
Stock Profile
Batam, Banten, Manado, Makassar, and Yogyakarta. Aside from the taxi
business, the company also provides vehicle rental services (Goldenbird),
Bloomberg Ticker BIRD IJ
bus services (Bigbird), and intracity transportation (Cititrans), among
Avg Turnover (IDR/USD) 3,566.12m/0.22m
others.
Net Gearing (%) 0.6
3,803
Market Cap (IDRbn) Highlights
Beta (x) 1.08
BVPS (IDR) 2,251 Higher revenue from regular taxi segment. BIRD has been enjoying
1,510 – 2,430
higher monthly average revenue from its regular taxi segment, which
52-wk Price low/high (IDR)
recorded a turnover of IDR8bn in 2023 (9% higher than 2022’s IDR6.7bn
Free float (%) 29
per month). This was supported by BIRD’s 21% flagfall (the minimum cost
of hiring a taxi) tariff increase applied in May 2023, and another 6%
flagfall rise earlier this year. This came on top of the company’s reported
Major Shareholders (%) bigger operational fleet, which averaged 11-12k vehicles per month
Pustaka Citra Djokosoetono 28.4 (2022 average: 9.7k vehicles per month). We note that BIRD maintained
Purnomo Prawiro 11.5 an average monthly revenue of IDR7.9bn in 3M24, with a stable 12k-
Kresna Priawan Djokosoetono 6.2 vehicle operational fleet. Based on this, we believe the solid revenue
Indra Priawan Djokosoetono 5.8 contributions from the regular taxi segment should continue in FY24-25.
5.
Adrianto Djokosoetono 5.3 Higher contributions from the non-taxi unit, with the company’s
initiatives to expand Cititrans. Efforts include adding touchpoints to its
existing routes and opening more destinations for its bus fleet (for
Jakarta-Yogyakarta-Malang) which was launched on 24 Apr. BIRD claims
Share Performance (%)
this new initiative has gained high traction, and that it is able to capture
the demand for luxury bus travel (which is cheaper than luxury train or
1m 3m 6m 12m
airline tickets). It recorded a higher revenue contribution from the non-
Absolute (12.8) (13.8) (19.2) (16.1)
taxi segment in FY23, at 25.7% (FY22: 22.4%) and expects this figure to
Relative (16.0) (18.3) (30.0) (28.6) grow to at least 27% in FY24, led by the new initiatives.
Attractive valuation. BIRD is trading at 7.1x FY24F P/E, at -1SD from the
10-year mean. It deserves to trade at a premium, based on the easing
Indonesia Research +6221 5093 9888
competition from online taxi services. This should enable it to increase
[Link]@[Link] tariffs without losing significant market share, book higher
contributionsfrom the non-taxi division, and enjoy high earnings growth
in FY24-25F. BIRD’s FV of IDR2,400 is pegged to 12x FY24F P/E, which is
on par with its 10-year P/E mean.

7 Top 20 Indonesia Small Cap Jewels 2024

Company Report Card Profit & Loss Dec-21 Dec-22 Dec-23

Results highlights. 4Q23 revenue from the taxi segment was at Total turnover (IDRbn) 2,221 3,590 4,422

IDR864bn (+2.1% QoQ, +4% YoY) while the non-taxi segment Reported net profit (IDRbn) 9 364 463

contributed IDR344bn (+12% QoQ, +37% YoY) – bringing 4Q23 total Recurring net profit (IDRbn) 9 364 463

revenue to IDR1.19trn (+5% QoQ, +10% YoY). FY23 revenue amounted Recurring net profit growth (%) nm 4,073.0 27.2

to IDR4.4trn (+23% YoY). Meanwhile, net profit in 4Q23 was at Recurring EPS (IDR) 3.00 145.00 185.00

IDR85.5bn (-21% QoQ, -12.5% YoY), which took FY23 net profit to DPS (IDR) 36.00 60.00 72.00

IDR453bn (+26% YoY). Note that BIRD recorded higher operational costs Dividend Yield (%) 2.3 3.8 4.6

from royalty fees from Aug 2023 onwards. Marketing expenses in FY23 Recurring P/E (x) 450.5 10.8 8.5

came up to IDR40bn (+197% YoY). Return on average equity (%) 0.2 6.9 8.4
P/B (x) 0.8 0.7 0.7
Balance sheet. As of FY23, the company’s balance sheet was still
P/CF (x) 12.9 4.3 3.8
relatively healthy, with a net gearing level of close to zero. FY23 net debt
Source: Company data, RHB
was only IDR32bn, compared to IDR5.6trn in total equity. Compared to
FY22, BIRD had net cash of IDR213bn in FY23.
Balance Sheet (IDRbn) Dec-21 Dec-22 Dec-23
Dividends. The company has not disclosed its dividend policy. However, Total current assets 1367 1380 1497
looking at the historical pre-pandemic payout ratio of c.30%, we are Total assets 6598 6893 7580
expecting it to distribute DPS of around IDR54, which would imply c.3-4% Total current liabilities 565 908 876
dividend yields. Total non-current liabilities 886 634 1073

Management. Kresna Priawan Djokosoetono, who currently serves as Total liabilities 5148 1542 1949

BIRD’s President Director, is a member of the company’s founding family. Shareholder's equity 5148 5351 5631

Other members of the family who are also on the Board of Directors are Minority interest 98 102 111

Sri Adriyani Lestari and Adrianto Djokosoetono. Other equity 0 0 0

Total liabilities & equity 6598 6893 7580
Total debt 840 678 1016

Investment Case Net debt (106) (213) 33

Source: Company data, RHB

Implying a higher FV of IDR2,400. We think BIRD deserves to trade at a
premium, based on the easing competition from online taxi services. This Cash Flow (IDRbn) Dec-21 Dec-22 Dec-23
would enable it to increase tariffs without losing significant market share. Cash flow from operations 305 909 1035
This is supported by its 21% flagfall tariff increase applied in May 2023,
Cash flow from investing activities 345 (649) (1093)
and another 6% flagfall rise earlier this year. This comes on top of the
Cash flow from financing activities (503) (315) 150
company’s bigger monthly operational fleet that already has an average
Cash at beginning of period 799 946 891
of 11-12k vehicles, vs the 9.7k vehicles per month average in 2022. Note
Net change in cash 147 (55) 92
that BIRD was able to maintain an average monthly revenue of IDR7.9bn
Ending balance cash 946 891 983
in 3M24, with a stable 12k-vehicle monthly operational fleet. Higher
Source: Company data, RHB
contributions from the non-taxi segment are also expected, especially
from Cititrans. A high earnings growth trajectory can be expected in
FY24-25F.
Key risks include lower-than-expected traffic volume, mobility
restrictions that can limit economic and transportation activities, higher-
than-expected input costs, and the negative effect of changes in other
government regulations.

Top 20 Indonesia Small Cap Jewels 2024 8

 Fair Value: IDR650
Delta Dunia Makmur Price: IDR540

Short-Term Play With Assurance On Higher Output

Investment Merits
Delta Dunia Makmur (DOID IJ)
Price Close
600

 Prominent coal-mining contractor with established client relationships

550

500

450  Direct beneficiary of the global economic recovery

400
 Fair rating profile ensures it will be able to secure new funding
350

300  Initiatives to venture outside coal business; potential value ahead

250
Jul-23

Sep-23

Nov-23

Dec-23
Oct-23

Jan-24

Apr-24
May-23

Jun-23

Aug-23

Feb-24

Mar-24

May-24

Company Profile
Source: Bloomberg
Through its subsidiary, Bukit Makmur Mandiri Utama (BUMA, in which it
has a 99.9% stake), Delta Dunia Makmur (DOID) operates as a provider of
Stock Profile
coal-mining services and carries out a comprehensive scope of works –
from overburden removal (OB), coal-mining, and coal-hauling to
Bloomberg Ticker DOID IJ
reclamation and land rehabilitation. BUMA is the second largest
Avg Turnover (IDR/USD) 9940.8m/0.62m
independent contractor in Indonesia (c.15% market share), working with
Net Gearing (%) 254 eight different customers on 11 mining sites located entirely in
Market Cap (IDRbn) 290 Kalimantan. BUMA has 11,000 employees and about 2,800 high-quality
Beta (x) 1.41 equipment from renowned brands such as Komatsu, Caterpillar, and
BVPS (IDR) 500 Scania. DOID’s other two subsidiaries, Banyubiru Sakti (BBS, 99.9%
52-wk Price low/high (IDR) 296 - 570 stake) and Pulau Mutiara Persada (PMP, 99.9% stake) are non-active
Free float (%) 44.3 entities which previously held coal exploration permits.

Highlights
Major Shareholders (%)
Although coal prices are declining, an increase in national coal
Northstar Tambang Persada 37.9
production remains feasible to provide a positive outlook. Throughout
Thio Andrianto 4.2
FY23, DOID’s operations increased (OB: 621m bcm, +14% YoY) – higher
coal production is expected to trigger an increase in demand for mining
contracting services. The Indonesian Government has approved a
working plan (namely RKAB, to be reviewed once every three years) for
Share Performance (%) coal companies nationwide – from which a coal output of c.912m tonnes
1m 3m 6m 12m
is expected yearly. This projection has led to DOID lifting its OB target to
631m bcm for FY24. Meanwhile, benchmark coal prices have been
Absolute 31.3 60.1 51.6 81.5
sustainably higher than what the market expected (Newcastle:
Relative 28.1 55.6 40.8 69.0
USD145.15/tonne; +27% since the low in end-February). China, the main
market for seaborne coal, is starting to settle into an economic recovery
(China’s GDP for 1Q24 grew 5.3% YoY), which may drive coal
Indonesia Research +6221 5093 9888 consumption further and keep coal prices elevated.
[Link]@[Link]
Business expansion to buoy outlook. DOID has acquired c.90% of Mining
East via BUMA Australia for about USD99m. Mining East, which was
previously owned by Australian contract miner EDI Mining, has won a
contract (valid until Jun 2026) from Blackwater Operations to provide
pre-strip mining services for a metallurgical coal mine, and this would
generate an additional OB of 36m bcm per year. This diversification into
metallurgical coal would also enable DOID to reduce its dependence on
thermal coal revenue, which in turn may account for under 50% of total

9 Top 20 Indonesia Small Cap Jewels 2024

turnover by 2028F. This is in line with company’s initiatives in
Profit & Loss (USDm) Dec-21 Dec-22 Dec-23
decarbonisation. In the meantime, DOID’s acquisition of 34.5% of a
Total turnover 911 1,554 1,833
copper mine, ie Beruang Kanan Mine in Central Kalimantan, also brings
Reported net profit 0 29 36
growth prospects via investment.
Recurring net profit 0 29 36
Recurring net profit growth (%) N/A N/A 25.7
Company Report Card Recurring EPS (IDR) 0.1 52.5 66.0

Results highlights. DOID’s FY23 topline expanded to USD1.9bn (+18% DPS (IDR) - 14.2 14.6

YoY), mainly supported by higher contributions from its biggest clients. Dividend Yield (%) - 2.6 2.7

Revenue from Berau Coal Energy (25% of total revenue) amounted to Recurring P/E (x) N/A 10.3 8.2

USD459m. While DOID’s increased mining activity and expansion Return on average equity (%) 0.0 11.2 13.2

throughout the year translated to higher costs incurred in FY23, its GPM P/B (x) 1.1 1.1 1.1

remained robust at 13.44% (FY22 GPM: 13.11%). This led to stronger P/CF (x) 3.6 (6.4) 0.8

operational profit as FY23 EBITDA rose to USD410m (+13% YoY). Source: Company data, RHB
However, higher taxes imposed and heftier interest rates offset a large
portion of the improvements, so this led to earnings being at USD36m Balance Sheet (USDm) Dec-21 Dec-22 Dec-23
(+26% YoY). Total current assets 674 652 1,025

Balance sheet/cash flow. In FY23, DOID’s net gearing ratio stood at 2.5x Total assets 1,636 1,571 1,875

(FY22: 3.1x), while total debt increased to USD1.1bn (+26% YoY) – this Total current liabilities 474 419 582
hike was in line with the company’s need to finance its long-term Total non-current liabilities 896 895 1,074
diversification and expansion plan (EBIT to interest coverage remains Total liabilities 1,370 1,315 1,656
feasible, at c.2x). DOID’s working capital remained at a manageable level Shareholder's equity 266 256 273
– surplus from financing activities mitigated a minor correction in Minority interest 0 0 0
operating cash flow and higher investments during the year, leading to Other equity 0 0 0
cash reserves of USD498m (+236% YoY). Total liabilities & equity 1,636 1,571 1,875
Total debt 930 947 1,190
Management. BUMA’s senior management consists of three directors,
Net debt 736 799 692
with an average of over 25 years of industry experience (about ten years
Source: Company data, RHB
with BUMA). DOID, the parent company, is currently helmed by Ronald
Sutardja (over 11 years of experience with BUMA), who has been its
Cash Flow (USDm) Dec-21 Dec-22 Dec-23
President Director since 2021. He has held various senior roles in
Cash flow from operations 144 253 340
Northstar Group, Infineum Singapore, Michelin Malaysia and Asia Pacific,
and Booz Allen Hamilton. Cash flow from investing activities (331) (185) (160)
Cash flow from financing activities 269 (106) 169
Cash at beginning of period 112 194 148
Investment Case Net change in cash 82 (46) 350
Ending balance cash 194 148 498
Valuation. Management mentioned that its FY24 numbers could be
impacted by the normalisation of benchmark coal prices – this would Source: Company data, RHB

directly affect the contracting fees paid by its clients. As such, DOID
expects FY24 topline to be at USD1.7bn (-7% YoY). Nonetheless, the risks
associated with fluctuating coal prices should be partly mitigated by the
company’s stable operations. Note that DOID regularly beats its annual
targets (for coal production and OB removal), which are usually
announced early each year. Using a conservative assumption on net profit
margins (estimated at c.2%), DOID’s FY24F EPS may decline to IDR65
(-10% YoY, with a USD/IDR rate of 15,800). We use 10x P/E (currently
trading at c.7.8x P/E) to value this stock – which is still at discount to the
average of its closest domestic peers, which is above c.15x P/E. Our FV
for DOID is IDR650, and we believe that it makes for an attractive short-
term play.
Key risks. Further weakening of benchmark coal prices, increase in
geopolitical tensions, coal demand decelerating as a result of slower
economic growth.

Top 20 Indonesia Small Cap Jewels 2024 10

 Fair Value: IDR630
Elnusa Price: IDR422

Beneficiary Of Surging Upstream Investments

Elnusa (ELSA IJ)
Price Close
Investment Merits
 Beneficiary of the surge in upstream investments
600.00

 Relatively stable margin amidst oil price fluctuations

500.00

400.00
 Harnessing synergies with Pertamina
300.00

200.00
Company Profile
Jul-23

Sep-23

Nov-23
May-23

Jan-24

Mar-24

Elnusa (ELSA) is an energy services provider with core competencies in

O&G upstream services, support services, and energy distribution &
Source: Bloomberg logistics services through its subsidiary, Elnusa Petrofin. ELSA is a
subsidiary of Pertamina. It also sources its revenue largely from
Stock Profile Pertamina projects – jobs entail services related to seismic activities,
Bloomberg Ticker ELSA IJ O&G well maintenance, and other operations and maintenance aspects.
Avg Turnover (IDR/USD) 14.1bn/0.98m
Net Gearing (%) Net cash Highlights
Market Cap (IDRbn) 3,124 Beneficiary of the surge in Indonesia upstream investments, pursuing
Beta (x) 0.8 1mbpd target by 2030. Indonesia’s O&G upstream regulator SKK Migas
BVPS (IDR) 630 has set Indonesia’s upstream investment target at USD17.7bn (+29%
52-wk Price low/high (IDR) 312 – 460 YoY), and the exploration investment target at USD1.8bn (+100% YoY).
40
SKK Migas expects to achieve 1mbpd in production by 2030. Meanwhile,
Free float (%)
Pertamina Hulu Energi (PHE) has set its upstream capex at USD57bn, in
response to SKK Migas’ target. As an O&G service provider, ELSA should
benefit from a ramp-up in E&P activities. In the last three years, on
Major Shareholders (%) average, ELSA’s upstream revenue took up 73% of PHE’s exploration
Pertamina 51.1 capex.
Pertamina Pension Fund 10.0
Management expects 12% YoY earnings growth in 2024. The rising oil
prices has not significantly impacted ELSA’s operations, as most upstream
contracts are already bound by rates and terms. However, higher oil
prices provide momentum for oil companies to engage in more E&P work
Share Performance (%) – which, in turn, should boost the company's orderbook.
1m 3m 6m 12m
Drilling fees may almost double this year to USD20k a day from USD11k
Absolute 6.0 6.0 3.4 31.7 a day, as ELSA has more development drilling than workover drilling.
Relative 2.8 1.5 (7.4) 19.2 This, combined with the pick-up in utilisation rates, should make for
promising revenue growth in 2024. Its reliance on management fees for
logistics operations suggests that margins may be minimally affected by
oil price fluctuations – which would provide a cushion for the company’s
Indonesia Research +6221 5093 9888
[Link]@[Link] business, if and when oil prices drop suddenly.
YTD, ELSA has secured several new contracts, including a notable
seismic works contract from Petronas in Madura. This project, which
faced delays due to socialisation and licensing issues, is now underway.
Additional seismic works (in which it is involved) have commenced in
South Sumatra – this should contribute to 2Q24 revenue, alongside new
contracts in Bone and Seram that should bolster revenues in 2Q and 3Q.

11 Top 20 Indonesia Small Cap Jewels 2024

Company Report Card Profit & Loss Dec-21 Dec-22 Dec-23

Results highlights. In 1Q24, ELSA’s earnings surged by 59.4% YoY, driven Total turnover (IDRbn) 8,137 12,306 12,564

by the ramp-up in upstream activities. Although revenue slipped 1.1% Reported net profit (IDRbn) 109 378 503
YoY to IDR3.1trn, net profit grew by 59.4% YoY to IDR183.2bn (gross Recurring net profit (IDRbn) 109 378 503
profit rose by 14.9% YoY to IDR324.3bn). Profit before taxes improved Recurring net profit growth (%) (56.3) 247.7 33.1
by 61.4% YoY to IDR235.9bn. Recurring EPS (IDR) 14.90 51.80 68.94
DPS (IDR) 7.45 25.90 33.00
Upstream services’ earnings surged 202% YoY to IDR75bn, accounting
Dividend Yield (%) 1.8 6.1 7.8
for 41% of total 1Q24 net income (1Q23: 22%), while its distribution &
Recurring P/E (x) 28.3 8.1 6.1
logistics energy services segment chalked net profit growth of 32% YoY
Return on average equity (%) 5.8 9.6 11.8
to IDR93bn (equivalent to 51% of total 1Q24 earnings). The wider margin
from the upstream segment enabled ELSA to book a NPM of 5.9% in P/B (x) 0.8 0.7 0.7

1Q24, vs 3.7% in 1Q23. P/CF (x) 3.1 2.1 2.2

Source: Company data, RHB
Contract value jumped 37% YoY to IDR10.1trn, with upstream contract
value up 42% YoY to IDR3.4trn, while that of distribution & logistics Balance Sheet (IDRbn) Dec-21 Dec-22 Dec-23
contracts grew 35% YoY to IDR5.4trn. The value of its support business Total current assets 4,447 5,287 6,106
jobs grew by 31% YoY to IDR1.2trn. Total assets 7,235 8,836 9,601
ELSA’s 2024 capex amounts to IDR526bn (2023: IDR499bn). Capex will Total current liabilities 2,561 3,561 4,234
be distributed to the following units: Upstream services (53%), energy Total non-current liabilities 895 1,158 951
distribution and logistics (31%), and support services (9%). This is to Total liabilities 3,457 4,719 5,185
enhance E&P activities, as well as help in market optimisation in its Shareholder's equity 3,777 4,116 4,414
chemicals business, including blending innovations related to B35 Minority interest 2 2 2
biodiesel. Additionally, ELSA intends to invest in: i) Fuel tank vehicles, Other equity - - -
ii) sea transport for LNG and LPG, iii) initiatives to explore battery asset Total liabilities & equity 7,235 8,836 9,601
management, and iv) develop IoT solutions. Total debt 1,192 1,405 1,243

Net cash position. As of 1Q24, ELSA has net cash of IDR2.5trn. Notable Net debt 47 net cash net cash

cash outflows totalling IDR112bn in 1Q24 were done to purchase fixed Source: Company data, RHB
assets and repay loans of IDR103bn. Operating cash flow was positive, at
IDR529bn. Cash Flow (IDRbn) Dec-21 Dec-22 Dec-23
Cash flow from operations 1,004 1,461 1,390
Dividends. In the past two years, it has distributed almost 50% of
earnings as dividends. For 2024F, with 12% EPS growth, its dividend yield Cash flow from investing activities -361 -388 -488

could reach 10%. Cash flow from financing activities -733 -587 -478
Cash at beginning of period 1,232 1,145 1,657
Management. At its EGM on 17 Jan, Bachtiar Soeria Atmadja was Net change in cash -87 512 421
appointed as President Director (he was previously ELSA’s Finance
Ending balance cash 1,145 1,657 2,078
Director). Endro Hartanto is now the Operations Director, while Stanley
Source: Company data, RHB
Iriawan is the Finance Director and Arief Prasetyo Handoyo, the Business
Development Director.

Investment Case
We believe ELSA will benefit from the increase in upstream O&G
activities this year, and synergy with Pertamina should grant it a
competitive edge. A higher portion of short- and mid-term contracts is
expected to result in better renegotiated service rates.
FV of IDR630. Despite its robust earnings growth prospects, ELSA is
trading at just 0.6x FY24F P/BV. We believe it deserves a premium and
set its FV at IDR630, implying 1x FY24F P/BV.
Key risks: Weakening oil prices, inefficient usage of assets, and the
inability to renegotiate service rates

Top 20 Indonesia Small Cap Jewels 2024 12

 Fair Value: IDR270
Energi Mega Persada Price: IDR198

Promising Prospects On Recent M&A And Gas Discovery

Energi Mega Persada (ENRG IJ)
Price Close
Investment Merits
300.00

 Beneficiary of the oil price hike

250.00
 More oil revenue contributions with two new oil assets
 Additional output in 2025 from newly discovered reserves
200.00

 Stable EBITDA, as 77% of hydrocarbon outputs are gas

150.00

100.00

Company Profile
Jul-23

Sep-23

Nov-23
May-23

Jan-24

Mar-24

Energi Mega Persada (ENRG), established in 2001 and listed on the IDX in
Source: Bloomberg 2004, is a leading upstream O&G company. Part of the Bakrie Group,
ENRG operates across Indonesia and Mozambique, managing 11 oil and
Stock Profile natural gas properties that span 35,000sq km. Through its subsidiaries, it
Bloomberg Ticker ENRG IJ has working interest in eight oil and natural gas properties in: Bentu,
10.4b/0.67m Korinci Baru, the Malacca Straits, Tonga and Gebang in Sumatra, Kangean
Avg Turnover (IDR/USD)
31
in East Java, Sanggatta II in East Kalimantan, and Buzi in Mozambique.
Net Gearing (%)
The company specialises in exploration, development, and production, as
Market Cap (IDRbn) 5,113
well as leveraging its advanced reservoir management and drilling
Beta (x) 1.34
technologies. ENRG is a critical supplier of natural gas for power
BVPS (IDR) 431 generation and industrial feedstock in East Java and Sumatra, reinforcing
52-wk Price low/high (IDR) 193 – 302 its pivotal role in the regional energy framework.
Free float (%) 55

Highlights
A 10-15% increase in production for 2024, with newly acquired blocks
Major Shareholders (%)
in Siak and Kampar adding ~2,500bpd of oil. It is targeting the Siak block
Shima Global Kapital 23.8
to maintain production at 1,422bpd, while the Kampar block should
Bakrie Kalila 15.9 produce 890bpd in 2024F – both blocks are scheduled to contribute to
Trimegah Sekuritas Indonesia 7.5 ENRG’s numbers from 2Q24 onwards. With RHB’s 2024 oil price
estimate of USD85 per bbl, these two blocks should add USD44m in oil
revenue for the company this year (total revenue is estimated to grow
Share Performance (%) 33% YoY). On its natural gas business, development in the Sengkang
1m 3m 6m 12m block may boost its gas output to 20.1mmscfpd (9M23: 13.2mmscfpd).
On the “B” production-sharing contract, ENRG targets to achieve
Absolute (8.3) (3.8) (5.7) (9.9)
21mmscfpd in gas output for 2024. All in all, we expect total output to
Relative (11.5) (8.4) (16.4) (22.4)
increase by 12% YoY in 2024 to 37kboepd, and generate USD464m
(+10% YoY) in revenue.
New gas reserve discovery in Bentu, CEN-1 (126bcf) adds 45mmscfpd in
Indonesia Research +6221 5093 9888 revenue stream starting mid-2025. The company expects its new gas
[Link]@[Link]
stream to be at 45mmscfpd in mid-2025. Current total reserves stand at
+603 9280 8866
149m boe for 2P reserves and 135m boe for 2C reserves. The new gas
discovery at the Bentu block, at CEN-1, is expected to bring additional
revenue in 2025F. Assuming a gas price of USD6 per mmbtu, the new gas
stream would add USD49m starting mid-2025F.

13 Top 20 Indonesia Small Cap Jewels 2024

 Profit & Loss (USDm) Dec-21 Dec-22 Dec-23
2024 capex at USD150m (flat YoY). The capex will not only be
Total turnover 406 452 421
distributed to develop the new gas reserve discovery in the Bentu block,
Reported net profit 40 66 68
but boost cost efficiency (current oil cash costs are ranging at USD25-30
per bbl, and gas costs at USD1.8 per mmbtu). About 55% of the capex will Recurring net profit 40 66 68

go to the development of wells, 25% for 2D and 3D seismic activities and Recurring net profit growth (%) (25.0) 63.9 2.6

20% for working capital and the new facility installment in Bentu block. Recurring EPS (USD) 0.0 0.0 0.0
DPS (USD) - - -
11.5% YoY earnings growth for 2024F. Having an additional revenue
Dividend Yield (%) - - -
stream from the oil business, amid higher oil prices, should help to widen
Recurring P/E (x) 7.5 4.6 4.5
its net margin to 16.5%, and increase net profit by 11.5% YoY to USD76m.
Return on average equity (%) 15.4 11.9 10.9
P/B (x) 0.6 0.5 0.5
Company Report Card P/CF (x) 1.8 1.9 1.9

Results highlights. In 1Q24, ENRG reported a net profit of USD17m (+1% Source: Company data, RHB
YoY). However, revenue declined by 6% YoY to USD97.3m. This period
marked the acquisition of the Siak and Kampar assets in Riau, Sumatra, Balance Sheet (USDm) Dec-21 Dec-22 Dec-23
which began contributing approximately 2,300bpd to ENRG's total Total current assets 163 180 242
production. Additional outputs from acquisitions are expected to be fully Total assets 1,064 1,194 1,369
integrated in 2Q24. Total current liabilities 294 338 364

Oil production ticked up by 2% YoY to 6,267bpd, while gas production Total non-current liabilities 321 342 420

decreased by 3% YoY to 149mmscfpd. ENRG’s O&G production points to Total liabilities 615 679 784

a consistent performance YoY. Net oil output grew by 2% YoY from Shareholder's equity 522 588 656
6,135bpd to 6,267bpd. Net gas production dropped by just 3%, from Minority interest -73 -73 -71
154mmscfd to 149mmscfd. Its oil ASP rose 3% YoY to USD81.60 per bbl Other equity - - -
and gas ASP was flat (+1% YoY), at USD6.40 per mmbtu. Total liabilities & equity 1,064 1,194 1,369
Total debt 191 174 272
Formidable balance sheet in a capital-intensive industry. In a highly
Net debt 158 128 189
capital-intensive O&G industry, ENRG has managed to keep its net
gearing low at 39% (as at 1Q24). Interest-bearing debt amounted to Source: Company data, RHB

USD306m, with cash on hand at USD70m and equity at USD603m. Most

of the cash outflow in 1Q24 was from acquiring O&G assets (USD47m), Cash Flow (USDm) Dec-21 Dec-22 Dec-23
while both operating cash flow and financing cash flow pointed to inflows. Cash flow from operations 167 158 160
Cash flow from investing activities (184) (67) (129)
Management. At its 8 Dec 2023 EGM, ENRG implemented some changes
Cash flow from financing activities 25 (78) 5
in its key management personnel. Syailendra Bakrie – the grandson of the
Cash at beginning of period 24 33 46
Bakrie Group founder, Ahmad Bakrie – remains as the President Director,
Net change in cash 8 13 36
while Edoardus Ardianto (former CFO) is now the Vice President
Ending balance cash 33 46 82
Director. Utaryo Suwanto was appointed as President of the Board of
Source: Company data, RHB
Commissioners.

Investment Case
FV of IDR270. Several catalysts should boost oil prices to average at
USD85-88 per bbl in 2024. Therefore, we believe ENRG should benefit
from this environment this year. Meanwhile, its additional oil revenue
stream from two newly-acquired blocks could boost earnings by 11.5%
YoY in 2024F – this translates to an EPS of IDR48, and FY24F P/E of 4.6x,
vs Medco Energi Internasional’s (MEDC IJ) P/E of 6.2x. Our FV of IDR270
reflects 5.5x P/E, which is at a ~10% discount from MEDC’s valuation.
Key risks: i) Lower-than-expected oil prices, ii) lower-than-expected
hydrocarbon output, iii) longer-than-expected monetisation of newly-
acquired oil assets, and iv) negative effect of changes in government gas
regulations and policies.

Top 20 Indonesia Small Cap Jewels 2024 14

 Fair Value: IDR138
FKS Food Sejahtera Price: IDR120

Various Turnaround Initiatives In Place

FKS Food Sejahtera (AISA IJ)
Price Close
Investment Merits
180

170
 Multiple turnaround initiatives under new company leadership
160

150  Banking on the positive growth of its snack business

140
 Its food staples business should also grow, as more consumers practice
healthier lifestyles.
130

120

110  Various initiatives are in place to enhance its business

100
Jul-23

Sep-23

Nov-23

Jan-24
May-23

Mar-24

Company Profile
Source: Bloomberg
FKS Food Sejahtera (AISA; previously called Tiga Pilar Sejahtera Food) is
Stock Profile
a major fast-moving consumer goods (FMCG) player in Indonesia. The
company has a strong track record of over six decades of operations. Its
Bloomberg Ticker AISA IJ
wide range of products – it offers snacks as well as other consumer
Avg Turnover (IDR/USD) 669.7m/0.04m
product brands including Taro, Bihunku, Mie Kremez, and Mie Ayam Dua
Net Gearing (%) 12.1 Telor – benefit from strong brand awareness. The company has a
Market Cap (IDRbn) 1,117bn nationwide distribution network, especially to general trade outlets.
Beta (x) 0.92
BVPS (IDR) 104 Highlights
52-wk Price low/high (IDR) 105 – 184
Turnaround initiatives in place under new company leadership. AISA, a
Free float (%) 26
major FMCG player in Indonesia, has a strong track record of producing
quality food items. With its new CEO Gerry Mustika at the helm, AISA has
embarked on some initiatives to fast-track growth. These include
Major Shareholders (%) modifying packaging to increase its products’ shelf life to enable them to
Pangan Sejahtera Investama 58.1 reach further geographical locations. Note that Gerry Mustika has over
Asta Askara Sentosa 15.5 30 years of work experience across various industries, including
international FMCG companies. This should help bring fresh insights to
the company to strengthen its business.
Banking on the positive growth of its snack business. Through its Taro
Share Performance (%) and Mie Kremez products, AISA is the fourth most popular extruded
1m 3m 6m 12m snack company in Indonesia. As such, it is in a sweet spot to benefit from
Absolute (2.4) (7.7) (22.6) (14.9)
the growth in consumption of out-of-home products. Snack producers
Relative 0.3 (5.7) (26.2) (19.5)
saw out-of-home product sales (including snacks) grow strongly in
10M23, according to Kantar Indonesia. In 2019, Kantar also found that
out-of-home and beauty were two major product categories that saw
growth during elections.
Vanessa Karmajaya +6221 5093 9985
vanessa@[Link]
Its food staples business should also grow, as more consumers practice
healthier lifestyles. AISA has a 76% share of the instant vermicelli
market. We think AISA has great potential for growth, given the still-low
penetration of its products, while consumers are becoming increasingly
conscious about the importance of healthy lifestyles. Bihunku sales
revenue grew by c.12% YoY in 2023, and monthly sales of the brand have
tripled over the last 3-4 years. The company also launched Bihunku
Seduh, an instant vermicelli product in a smaller package that is more
practical and may attract younger consumers.

15 Top 20 Indonesia Small Cap Jewels 2024

Various initiatives to enhance its business. AISA aims to boost its Profit & Loss Dec-21 Dec-22 Dec-23
product penetration, particularly in ex-Java areas and via modern trade Total turnover (IDRbn) 1,521 1,835 1,704
(MT) channels. It also intends to upgrade its MT channel services, which Reported net profit (IDRbn) 6 -62 19
should help to improve the availability of its products to consumers. AISA Recurring net profit (IDRbn) -44 -66 29
has revamped its packaging and production processes, and this has Recurring net profit growth (%) 97.1 (49.6) nm
reduced its packaging costs. The company has also put in place initiatives Recurring EPS (IDR) (5.00) (7.00) 3.00
to increase the shelf life of its products, which should help boost its DPS (IDR) 0.00 0.00 0.00
operational efficiency. Dividend Yield (%) 0.0 0.0 0.0
Recurring P/E (x) nm nm 38.4

Company Report Card Return on average equity (%) 0.7 nm 2.1

P/B (x) 1.3 1.4 1.2
Results highlights. FY23 revenue declined by c.7.2% to IDR1.7trn due to
P/CF (x) (13.2) (20.9) 14.2
the absence of one-off government-related projects that it secured in Source: Company data, RHB
2022. Excluding this, FY23 topline grew by a low-to-mid-single digit in
2023. Following a net loss in 2022, AISA returned the black and booked a Balance Sheet (IDRbn) Dec-21 Dec-22 Dec-23
positive net income of IDR19bn in 2023, mainly driven by margin Total current assets 433 559 497
improvements. Total assets 1762 1826 1850
Improved balance sheet profile. Although it is still at <1.0x, we see that Total current liabilities 720 828 660
AISA’s current ratio has gradually improved over the last two years from Total non-current liabilities 208 221 222
0.6x in 2021 to 0.8x in 2023. It booked positive cash flow from operations Total liabilities 928 1048 882
(CFO) in 2023 (negative CFO in 2021 and 2022). Net gearing was at Shareholder's equity 835 779 970
12.1% in 2023 (vs 18.4% in 2022). Minority interest (1) (1) (1)
Other equity 0 0 0
Dividends. The company has not paid dividends in the last few years, as
Total liabilities & equity 1762 1826 1850
AISA is focusing on bolstering its operations to improve profitability and
Total debt 115 232 179
strengthen its cash flow.
Net debt 57 143 117
Management. Gerry Mustika, who took on the leadership of the company Source: Company data, RHB
this year, has embarked on several initiatives to fuel AISA’s growth. Note
that he has >30 years of work experience across a variety of industries, Cash Flow (IDRbn) Dec-21 Dec-22 Dec-23
including international FMCG companies. This should help strengthen Cash flow from operations (85) (54) 78
AISA’s business going forward. Cash flow from investing activities (56) (17) (22)
Cash flow from financing activities (28) 101 (83)
Investment Case Cash at beginning of period 227 58 89
Net change in cash (169) 31 (26)
Declining commodity prices (such as that of wheat) should bode well for
Ending balance cash 58 89 63
AISA’s business. The company expects earnings growth from an increase
in sales volumes in 2024, and anticipates revenue growth of c.10% YoY Source: Company data, RHB

this year without increasing its ASPs. AISA aims to remain earnings-
positive as well, and expects to record a c.2ppt NPM expansion in 2024.
The stock is trading at c.18-19x 2024F P/E, but we believe it should be at
21x, given its turnaround initiatives. From this thesis, we derived a FV of
IDR138. Downside risks: Increase in commodity prices and execution
risks.

Top 20 Indonesia Small Cap Jewels 2024 16

 Fair Value: IDR340
Integra Indocabinet Price: IDR242

Solid Growth Strategy

Integra Indocabinet (WOOD IJ)
Price Close
Investment Merits
 Turnaround opportunities from the recovering US housing market
500.00

 Largest vertically-integrated timber products manufacturer

400.00

300.00
 Cheaper and abundant availability of certified logs to support its
200.00 margin expansion
100.00
Jul-23

Sep-23

Nov-23
May-23

Jan-24

Mar-24

Company Profile
Integra Indocabinet (WOOD) is involved in forest concessions,
Source: Bloomberg manufacturing wood furniture and building components. It is the biggest
vertically integrated manufacturer of furniture and building component
Stock Profile products in Indonesia. The company’s key competitive advantage lies in
Bloomberg Ticker WOOD IJ its extensive experience (of over 30 years) in the industry and strategic
Avg Turnover (IDR/USD) 1,120m/0.07m location, where it has access to an abundant supply of raw materials. Its
Net Gearing (%) 67.5 product line-up includes fully assembled furniture, knockdown furniture,
Market Cap (IDRbn) 1,558 and building components.
Beta (x) 1.25
BVPS (IDR) 663.2 Highlights
52-wk Price low/high (IDR) 240 - 500 US economic recovery presents turnaround opportunities. The US’
Free float (%) 24.7 toned-down inflation rate of 3.5% as at Mar 2024 (vs 5% in Mar 2023)
has opened up opportunities for interest rates to decline. This, in turn,
should lead to a recovery in building component and furniture demand
Major Shareholders (%) after a huge slump in 2023. As of 1Q24, US building permits also rose
Integra Indo Lestari 71.1 4.7% YoY, further confirming the demand recovery. With its revenue
primarily coming from the export market – particularly the US – the
recovery of the demand in this market and the strengthening USD would
further support its margin expansion.
Direct-to-retailers strategy will likely support margin expansion and
Share Performance (%)
increase market penetration. Strengthening its US market penetration
through direct marketing arms should stabilise WOOD’s revenue growth
1m 3m 6m 12m
going forward, as the US remains the world’s largest furniture and
Absolute (20.5) (20.0) (18.4) (40.9)
building component importer. Also, eliminating the middleman in the
Relative (23.7) (24.5) (29.1) (53.4) distribution channel should expand and strengthen its profit margin. As
such, WOOD's decision to collaborate directly with US retailers is poised
to mutually enhance pricing structures and margins.
Indonesia Research +6221 5093 9888 Aggressive forestry segment expansion to boost earnings. WOOD
[Link]@[Link] currently has a tropical forest concession spanning 163,425ha, and a
mangrove jungle concession covering 18,130ha. This puts the company in
a prime position to capitalise on the increasing demand for carbon credits
in the voluntary carbon market. Businesses and governments that aim to
achieve carbon neutrality can purchase carbon credits, presenting
WOOD with an opportunity to generate turnover through this avenue.

17 Top 20 Indonesia Small Cap Jewels 2024

Company Report Card Profit & Loss Dec-21 Dec-22 Dec-23

Results highlights. FY23 revenue plunged by 51.7% YoY, as export sales Total turnover (IDRbn) 5,416 4,527 2,186

of the building component segment and the fully assembled furniture Reported net profit (IDRbn) 537 178 97

segment contracted by 53.9% and 71.4% YoY. Mortgage rates stayed at Recurring net profit (IDRbn) 537 178 97

their highest levels in the past 10 years, at c.6.1-7.8% through 2023 (vs Recurring net profit growth (%) 70.9 (66.9) (45.4)

c.3.2-7.1% in 2022), thereby slowing down the demand for home-building Recurring EPS (IDR) 83.00 28.00 15.00

& furniture products. DPS (IDR) 2.00 6.00 0.00

Dividend Yield (%) 1.0 2.6 0.0
Balance sheet. As of 2023, WOOD’s net gearing ratio is at 67.5% (current Recurring P/E (x) 2.9 8.8 16.1
ratio: 1.86x), indicating a relatively healthy balance sheet and prudently Return on average equity (%) 16.3 4.8 2.4
managed debt levels.
P/B (x) 0.4 0.4 0.4
Management. CEO Halim Rusli and Chief Marketing Officer Widjaja Karli P/CF (x) (30.1) 17.7 (4.9)
are the founders of WOOD. Both have overseen the entire operations Source: Company data, RHB
since its establishment, and have over 30 years of experience in the
industry. Balance Sheet (IDRbn) Dec-21 Dec-22 Dec-23
Total current assets 4311 4442 4755
Total assets 6801 6956 7663
Investment Case Total current liabilities 2084 1826 2554
Total non-current liabilities 1074 1370 797
Anticipating c.15% YoY increase in revenue for 2024. The primary
Total liabilities 3158 3196 3351
growth driver will be the building component segment and pick-up of
Shareholder's equity 3632 3750 4227
furniture sales to the US market, due to the anticipated US housing
Minority interest 11 10 85
market recovery – seeing as the number of US building permits rose 4.7%
Other equity 0 0 0
YoY in 1Q24. Monetising its forest concession and leveraging the
Total liabilities & equity 6801 6956 7663
voluntary carbon market could open up additional revenue streams for
Total debt 2612 2936 3054
WOOD, and further strengthen the company’s earnings. This counter is
Net debt 2495 2669 2853
trading at around 19x FY23 P/E – WOOD’s FV of IDR340 reflects 20x
Source: Company data, RHB
P/E on 2024F IDR16.9 EPS, ie at a 6% discount to the global peer average.
Key risks. Weakening US housing market and Vietnam expanding its Cash Flow (IDRbn) Dec-21 Dec-22 Dec-23
wood furniture exports more aggressively. Cash flow from operations (52) 88 (317)
Cash flow from investing activities (11) (40) (148)
Cash flow from financing activities 154 96 367
Cash at beginning of period (1) 90 226
Net change in cash 92 144 (98)
Ending balance cash 90 226 130

Source: Company data, RHB

Top 20 Indonesia Small Cap Jewels 2024 18

 Fair Value: IDR225
Jayamas Medica Industri Price: IDR198

Seeing a Brighter Future

Investment Merits
Jayamas Medica Industri (OMED IJ)
Price Close
 To benefit from anticipated continued government support
260.00

 Production facility expansion to support future growth

220.00

 Business enhancements in the offing

180.00

140.00

100.00
Company Profile
Jul-23

Sep-23

Nov-23
May-23

Jan-24

Mar-24

Jayamas Medica Industri (OMED) manufactures medical products, and

has a strong track record of over 30 years of operations. It has integrated
Source: Bloomberg
business operations and a variety of products spanning from medical
Stock Profile
disposable items to hospital furniture. The company serves customers
nationwide and overseas through one national distribution centre, as well
Bloomberg Ticker OMED IJ
as 23 branch offices and warehouses in Indonesia. It serves a variety of
Avg Turnover (IDR/USD) 168.94m/0.01m
consumers ranging from the Government to private institutions.
Net Gearing (%) 6.3
Market Cap (IDRbn) 5,357bn
Beta (x) N/A Highlights
BVPS (IDR) 82 Continued government support anticipated. OMED has benefitted from
52-wk Price low/high (IDR) 149 – 242 the under-penetrated healthcare industry as well as government support
Free float (%) 15 for products with high local content. We think this favourable policy will
continue following the recent presidential election, and should benefit
the company. Despite the challenges from imported products and some
Major Shareholders (%) companies – such as Kalbe Farma (KLBF IJ) – tapping into the medical
equipment and consumable products markets, we think OMED’s wide
Intisumber Hasilsempurna 83.3
range of product offerings, long-standing client relationships, and solid
Yacobus Jemmy Hartanto 0.9 track record will help it remain as a top choice for consumers. The
Siane Soetanto 0.9 company also sees increasing contributions from its own brands, which
should support margins. Its operations are supported by a strong
nationwide distribution network.
Share Performance (%)
Production facility expansion to support growth. The commencement of
1m 3m 6m 12m
OMED’s new production facility should support its future growth. Its
Absolute 0.5 (1.0) (5.7) 0.0 Krian factory expansion has been completed, and it is in the process of
Relative 3.2 1.0 (9.4) (4.6) expanding its Mojoagung factory, which is scheduled to commence
operations this year. Its new factory in Batang (to be completed by 4Q24)
should enhance margins, given the lower minimum wage in the area.
Vanessa Karmajaya +6221 5093 9985 These new facilities are expected to raise its production capacity by
vanessa@[Link] c.30% from current levels. The company is also improving its operations
via automation, which should result in stronger margins.
Business enhancements. In addition to its sole national distribution
centre (NDC) in Gresik, East Java, OMED plans to open a new centre in
Greater Jakarta to strengthen its distribution network. It is in the process
of selecting a suitable location. The company also plans to open 25 new
offline stores over the next five years to be closer to end-customers and
enhance brand awareness. It plans to forge partnerships with some

19 Top 20 Indonesia Small Cap Jewels 2024

international parties (such as its JV with Wellong International) to boost
Profit & Loss Dec-21 Dec-22 Dec-23
export revenue, which stood at c.0.2% in FY23. More collaborations with
Total turnover (IDRbn) 2,227 1,739 1,737
international companies are on the cards to strengthen its competitive
Reported net profit (IDRbn) 563 286 259
edge.
Recurring net profit (IDRbn) 564 275 259
Recurring net profit growth (%) (17.2) (51.3) (5.8)
Recurring EPS (IDR) 21.00 10.00 10.00
Company Report Card DPS (IDR) 9.00 9.00 3.00

Results highlights. The company saw flattish YoY revenue growth in Dividend Yield (%) 4.8 4.7 1.6

2023 following the pandemic. This, coupled with higher YoY operating Recurring P/E (x) 9.5 19.5 20.7

expenses, brought net income down by 9.2% YoY in 2023. The company Return on average equity (%) 52.0 17.5 12.2

sees a healthier future ahead, driven by post-pandemic normalisation, P/B (x) 4.4 2.6 2.4

support from the Government, its business expertise, and expansion P/CF (x) 10.6 57.8 39.9

plans ahead. Source: Company data, RHB

Balance sheet/cash flow. OMED has a healthy balance sheet profile, and
Balance Sheet (IDRbn) Dec-21 Dec-22 Dec-23
has maintained its net cash position over the last three years. Its current
Total current assets 1490 2113 2047
ratio was at c.15x in 2023 (c.9x in 2022), indicating a strong liquidity
Total assets 1726 2507 2581
profile. Cash flow from operations also remained positive over the last
Total current liabilities 273 231 136
few years.
Total non-current liabilities 208 207 200
Dividend. The company paid c.IDR86bn in cash dividends in 2023, Total liabilities 481 438 336
representing c.30% of 2022 income and translating to a c.IDR3 DPS (1.6% Shareholder's equity 1224 2044 2218
dividend yield). This is lower than 2022’s payout ratio of c.40%, as OMED Minority interest 21 25 27
is in an expansion mode. Other equity 0 0 0
Total liabilities & equity 1726 2507 2581
Management. Dr Herlien Sri Ariani has been OMED’s President Director
Total debt 159 160 160
since 2018. She has been with the company since 2001, and has a deep
Net debt net cash net cash net cash
understanding of the operations. She also has a solid track record, with Source: Company data, RHB
over 30 years of experience in the medical industry.
Cash Flow (IDRbn) Dec-21 Dec-22 Dec-23
Investment Case Cash flow from operations 505 93 134
Cash flow from investing activities (187) (495) 265
The company believes that the worst was over in 2023, and is anticipating
Cash flow from financing activities (282) 500 (109)
a brighter 2024. Its YTD performance has been positive. OMED guided
Cash at beginning of period 697 733 831
for c.15% YoY revenue growth (and a 15-16% net margin) in 2024. The
Net change in cash 36 98 290
stock is trading at c.16x 2024 P/E – we think it should be trading at c.18x,
Ending balance cash 733 831 1121
at a c.15% discount vs KLBF, with stronger growth and margins. This
Source: Company data, RHB
translates to an FV of IDR225. Downside risks for the company include a
short IPO track record (it was listed in 2022), intensifying competition,
and unfavourable government regulations.

Top 20 Indonesia Small Cap Jewels 2024 20

 Target Price: IDR990
Kencana Energi Lestari Price: IDR725

Ample Earnings Growth Ahead

Kencana Energi Lestari (KEEN IJ)
Price Close
Investment Merits
 Renewable energy (RE) specialist in hydropower utilisation
1,200.00

1,000.00

800.00  Potential projects from the Government’s RE push

600.00
 Strong profile with prominent strategic partner (Tokyo Electric Power
(TEPCO, with a USD5bn market cap)) ensures the continuity of more
400.00

RE projects
200.00

0.00
Jul-23

Sep-23

Nov-23
May-23

Jan-24

Mar-24

Company Profile
Source: Bloomberg Kencana Energi Lestari (KEEN) was established in 2008 with a focus on
building and operating RE facilities in Indonesia. The company began
Stock Profile construction of its first hydropower plant in 2010 after obtaining a power
Bloomberg Ticker KEEN IJ purchase agreement (PPA) from Perusahaan Listrik Negara (PLN) in
Avg Turnover (IDR/USD) 8,951m/0.58m 2009. On 2 Sep 2019, KEEN succeeded in raising USD20.5m via an IPO.
Net Gearing (%) 50
The company currently owns and operates hydropower plants with a
running capacity of 64MW – a further 10MW is currently still in
Market Cap (IDRbn) 2,566
development, but it has already started booking revenue from the
Beta (x) 0.60
recognition of its construction progress. The company focuses on the run-
BVPS (IDR) 724 of-the-river (RoR) hydroelectric system for all its plants; this system is
52-wk Price low/high (IDR) 545 – 1,095 deemed the safest method for the surrounding environment. Each power
Free float (%) 11.4 plant is constructed under a build-own-operate-transfer contract and
sells the electricity produced solely to the state-owned electricity
company, PLN.
Major Shareholders (%)
Paramata Indah Lestari 30.3 Highlights
Tepco Renewable Power 25.0
Business outlook is positive. The initiative from TEPCO to acquire a
c.25% stake in KEEN should support this optimism, in our view. This is
because the move is in line with management’s strategy to seek out
strategic partnerships to realise its capacity expansion of c.250MW by
Share Performance (%)
2025. We believe the company’s long-term outlook is quite bright, given
1m 3m 6m 12m its RE commitments – without taking into account KEEN’s current
Absolute (4.6) (8.8) (2.7) (3.3) progress on a 10MW micro-hydropower plant in Salu Noling and a
Relative (7.8) (13.3) (13.4) (15.8) 10MW micro-hydropower plant in Ordi Hulu – that are in line with the
Government’s efforts to reduce emissions (17% RE in the energy mix by
2025; FY21: 11.5%).
Indonesia Research +6221 5093 9888 Abundant potential for hydropower projects in Indonesia. KEEN’s
[Link]@[Link] current and future projects are already located across the archipelago,
providing abundant potential for the RoR type of hydropower plants –
Sumatra and Sulawesi account for 43% (3.8GW) of the national
hydroelectricity potential. The company also plans to expand to other RE
projects (biomass, biogas, solar photovoltaic (PV), wind, and geothermal),
thereby bringing further growth. On its project pipelines, KEEN has
conducted feasibility studies for over 500MW in capacity across
Indonesia. Upcoming projects include the 90MW hydropower plant in
Sulawesi and 35MW hydropower in Sumatra.

21 Top 20 Indonesia Small Cap Jewels 2024

Company Report Card Profit & Loss (USDm) Dec-23 Dec-24F Dec-25F
Total turnover 48 53 57
Results highlights. KEEN booked a 1Q24 topline of USD9.8m (-27% QoQ, Reported net profit 13 20 23
-26% YoY), with all operating assets decreasing in value YoY. Gross profit Recurring net profit 13 20 23
fell 20% YoY to USD6.9m. EBIT was at IDR6.0m (-24% YoY), with Air
Recurring net profit growth (%) 2.8 56.2 12.5
Putih accounting for 40% of total EBIT. Its latest operating asset, Ordi
Recurring EPS (USD) 56.3 88.0 99.0
Hulu, booked an operating loss of USD117k while Salu Noling, KEEN’s
DPS (USD) 0.00 13.20 14.85
latest construction project, generated USD2.5m in EBIT. Net income
Dividend Yield (%) 0.0 1.8 2.0
amounted to USD3.3m (-34% YoY), but the flat interest expense of
Recurring P/E (x) 12.9 8.2 7.3
USD1.4m exacerbated its below-par topline.
Return on average equity (%) 7.9 11.1 11.2
On the flip side, KEEN was able to record higher profitability in 1Q24. P/B (x) 1.0 0.9 0.8
GPM expanded to 70% (1Q23: 65%), and the EBIT margin widened to P/CF (x) 17.0 20.9 10.4
61% (1Q23: 59%). We maintain our earnings growth forecast of 56% YoY. Source: Company data, RHB
Both the new operating assets – the 10MW Ordi Hulu micro-hydropower
plant and new project in Salu Noling – should propel earnings in 2024F. Balance Sheet (USDm) Dec-23 Dec-24F Dec-25F
Another positive catalyst, the biomass power plant in Tembilang, has no
Total current assets 43 32 47
maintenance schedule in 2024F, so repair and maintenance costs (which
Total assets 353 353 375
spiked in 4Q23) would not be incurred.
Total current liabilities 31 26 25
The 10MW Salu Noling micro-hydropower plant in South Sulawesi is the Total non-current liabilities 134 121 125
subject of its latest PPA signed in early 2024. The plant is scheduled to be Total liabilities 165 147 150
completed in mid-2026, with PLN being the offtaker for the next 25 Shareholder's equity 164 182 202
years. This may generate a revenue of IDR1.2trn (USD77.4m) throughout Minority interest 23 23 23
the contract period. Meanwhile, its latest operating asset, Ordi Hulu, Other equity 0 0 1
commenced operations in 1Q24 and this may increase KEEN’s electricity Total liabilities & equity 353 353 375
production by 7% YoY to 346GWh. Ordi Hulu should contribute 18% of Total debt 110 96 98
2024F total electricity produced. With the El Nino effect dissipating, we Net debt 100 88 82
believe KEEN’s utilisation rate will likely improve to 59% this year, from Source: Company data, RHB
55% in 2023. Its total electricity revenue is estimated to grow by 23%
YoY to USD29m, with the 21MW Air Putih hydropower plant accounting
Cash Flow (USDm) Dec-23 Dec-24F Dec-25F
for 38% of the total. KEEN actively seeks new hydropower projects and
Cash flow from operations (12) 16 9
has conducted feasibility studies on over 500MW potential hydropower
Cash flow from investing activities (1) (1) (1)
plant sites. At the moment, it is pursuing a 90MW hydropower project in
Cash flow from financing activities 19 (16) (1)
Sulawesi and a 35MW hydropower project in Sumatra.
Cash at beginning of period 4 10 8
Credit profile and cash position. As at 1Q24, KEEN’s net gearing is stable, Net change in cash 6 (2) 8
at 51%, (FY23: 50%). Its 1Q24 cash on hand fell to USD4.5m from Ending balance cash 10 8 16
USD9.8m in FY23, due to operating cash outflows amounting to IDR2.1m Source: Company data, RHB
and the repayment of a long-term loan of IDR2.2m, as well as interest
expenses of IDR1.4m.
Management. President Commissioner Albert Maknawi is the son of the
founder of KEEN, Henry Maknawi. His second son, Wilson Maknawi, has
served as KEEN’s President Director since 2023.

Investment Case
12-month TP of IDR990 is derived from 11.2x FY24F P/E – its 5-year P/E
mean, with a 4% ESG premium to reflect KEEN’s ESG score of 3.2 (above
the country median of 3.0).
Key risks. KEEN is exposed to major seasonal weather changes (eg El Nino
or La Nina) as well as vulnerable to macroeconomic challenges eg an
economic downturn. It is also subjected to risks when there are drastic
changes in laws that affect its business.

Top 20 Indonesia Small Cap Jewels 2024 22

 Fair Value: IDR160
Maharaksa Biru Energi Price: IDR135

Cleaner Path Towards Expansion

Investment Merits
 A solid choice for an ESG play in Indonesia
 Massive earnings growth potential from renewable energy (RE)
projects
 A beneficiary of carbon credit implementation

Company Profile
Established in Apr 2006, Maharaksa Biru Energi (OASA) specialises in
clean energy, processing and providing supportive technology that
Source: Bloomberg
focuses on RE and waste management. Prior to this, it was in
infrastructure, telecommunications, trading, and construction. In 2016,
Stock Profile
the company successfully raised IDR30.4bn through its IPO.
Bloomberg Ticker OASA IJ
Avg Turnover (IDR/USD) 9,622.96m/0.6m Highlights
Net Gearing (%) Net cash Still undergoing expansion, but outlook looks promising. To date,
Market Cap (IDRbn) 53 company’s topline mainly comes from consulting services (on shipping
Beta (x) 0.30 engineering and waste management). OASA also aims to engage more
BVPS (IDR) 1,635 with: i) Environmental technologies such as waste-to-energy (WTE)
52-wk Price low/high (IDR) 92 - 286 under the build-operate-transfer (BOT) scheme; ii) biomass production to
33.7 supplant coal usage; iii) producing bio-propylene glycol (bio-PG), which
Free float (%)
can be used as an ingredient in brake liquids, pharmaceutical products
and resins, among others. OASA has won a commitment through a MoU
(involving an investment of c.USD50m) with Sojitz, a Japan-based
Major Shareholders (%)
chemical company, to process c.30k tonnes of bio-PG in Java.
Umar Bobby Gafur Sulistyo 55.6
Zurich Assets International 5.6 To contribute to a cleaner environment by using waste. OASA’s WTE
power plants (or PLTSa, COD in 2027) are designed to convert waste into
electricity (40MW output) in West Jakarta. This pilot project aims to
process c.2,000 tonnes of daily waste, at a fee of IDR500,000 per tonne
according to its contract with the local government. Under a BOT
Share Performance (%) arrangement, OASA will build and operate the facility for 30 years, and
1m 3m 6m 12m sell the generated electricity to Perusahaan Listrik Negara (PLN) before
Absolute 12.7 (9.5) (1.5) (11.3) transferring the ownership of the asset to the Jakarta Municipal
Relative 9.5 (14.1) (12.2) (23.8) Government. Total capex is estimated at c.IDR5.5trn (c.USD340m), and
OASA has secured the funds needed to commence the project.
Alternative cleaner energy sources. OASA also supports steam-powered
Indonesia Research +6221 5093 9888 plants (PLTU) in Indonesia, by providing co-firing fuels from woodchips,
[Link]@[Link] sawdust, and wood pellets as alternatives to coal (c.15% blend targets).
OASA is building a biomass facility in Bangka Belitung with a 72,000-
tonne capacity (c.IDR200bn investment, COD in 2024 or early 2025)
with a long-term target capacity of c.120k tonnes pa. Moreover, other
facilities are also being built in Central Java (initial annual production
target of c.60k tonnes, to be upgraded to c.180k tonnes, COD in end-
2024) and West Nusa Tenggara (c.24,000 tonnes p.a capacity). OASA also
aims to export wood pellets to Europe and Japan.

23 Top 20 Indonesia Small Cap Jewels 2024

Company Report Card Profit & Loss Dec-21 Dec-22 Sep-23
Total turnover (IDRbn) 3 41 30
Results highlights. Its 9M23 topline of IDR30.3bn (9M22: IDR800m),
Reported net profit (IDRbn) 1 4 0
mostly came from the sales recognition of consulting services (c.66%
Recurring net profit (IDRbn) 1 4 0
contribution) provided by a subsidiary, Telesys Indonesia, which will
Recurring net profit growth (%) - 238.4 (103.1)
oversee OASA projects in biomass, WTE, and others. COGS during the
period was at IDR3.1bn (+448% YoY), and took GPM to a robust c.90% Recurring EPS (IDR) 0.2 0.7 0.03

(9M22: c.30%). However, due to higher expenses (in tandem with the DPS (IDR) 0 0 0

revenue growth), the operational margin was at c.5% (9M23 EBIT: Dividend Yield (%) 0 0 0

c.IDR2bn, vs 9M22’s operating loss of IDR6bn). 9M23 bottomline turned Recurring P/E (x) n.m. n.m. n.m.

positive, at c.IDR200m (vs 9M22’s net loss of c.IDR5bn). Return on average equity (%) 5.9 5.9 4.6
P/B (x) 17.9 9.9 1.3
Balance sheet still decent enough for future expansion. In 9M23,
P/CF (x) (32.4) (54.6) 20.9
OASA’s total assets were valued at IDR740bn (equity amount:
Source: Company data, RHB
IDR656bn). It had net cash of IDR40bn. Cash flow was mainly used to
facilitate corporate exercises like rights issues – which bumped up its
Balance Sheet (IDRbn) Dec-21 Dec-22 Sep-23
capital to IDR599bn.
Total current assets 208 115 589
Management. The senior management team comprises five directors,
Total assets 224 294 740
with Bobby Gafur Umar (c.35 years of experience) as the company’s
Total current liabilities 27 137 34
president director.
Total non-current liabilities 175 71 50
Total liabilities 202 207 84

Investment Case Shareholder's equity 48 87 657

Minority interest 0 (0) (312)
Valuation. The company is still in an expansion phase. Its promising Other equity (26) 0 0
growth outlook is due to its business trajectory which is solely on the RE Total liabilities & equity 224 294 740
path. Also, it would deserve an ESG premium (due to a high score in the Total debt 11 9 7
Environmental pillar). OASA is trading at 1.2x P/BV, but we believe it Net debt (8) 6 (37)
deserves to trade at the domestic RE peer average of 1.5x P/BV – which Source: Company data, RHB
justifies our FV of IDR160. More value could be unlocked once its ongoing
projects (plus additional earnings from waste removal, electricity sales Cash Flow (IDRbn) Dec-21 Dec-22 Sep-23
from the WTE business, biomass sales) are profitable. Cash flow from operations 1 15 32

Key risks. Unprecedented weakening of the economy, delayed progress Cash flow from investing activities (34) (73) (413)

in ongoing projects, and high capital needed for future expansion. Cash flow from financing activities 0 42 486
Cash at beginning of period 45 19 3
Net change in cash (26) (16) 41
Ending balance cash 19 3 44

Source: Company data, RHB

Top 20 Indonesia Small Cap Jewels 2024 24

 Fair Value: IDR290
Mandiri Herindo Adiperkasa Price: IDR220

Churning Stronger Profits Amidst Uncertainty

Investment Merits
 Fair experience in coal-hauling business with a good track record
 Insulated from sensitivity to coal prices, with recurring increases in fee
adjustments
 Healthy balance sheet with robust net cash support

Company Profile
Mandiri Herindo Adiperkasa (MAHA), established in 1994, focuses on
Source: Bloomberg coal-hauling services by providing a range of equipment such as dump
trucks, single trailers and double trailers – these total about 970 units.
Stock Profile As of FY23, the company has been able to expand its business which
Bloomberg Ticker MAHA IJ mainly operates in three provinces in Kalimantan. On 25 Jul 2023, the
Avg Turnover (IDR/USD) 7,351.6m/0.46m stock was listed on the IDX.
Net Gearing (%) Net cash
Market Cap (IDRbn) 228
Highlights
Beta (x) 0.20
Additional business agreements, from new long-term contracts (seven
years) with various coal-related firms such as Darma Henwa (DEWA IJ)
BVPS (IDR) 1,783
and Kaltim Prima Coal (c.51% owned by Bumi Resources (BUMI IJ),
52-wk Price low/high (IDR) 159 - 306
equal to the coal-hauling commitment of c.22m tonnes from both
Free float (%) 24.0 contracts (for the next 7-8 years). MAHA has also extended its contract
agreement with Kideco Jaya Agung (owned by Indika Energy (INDY IJ)
valued at IDR1.2trn, pertaining to transportation services for c.35m
Major Shareholders (%) tonnes of coal over a 5-year term. The collaboration may consistently
Edika Mandiri 34.5 deliver robust growth to the company’s performance – MAHA targets to
Koean Yenny Hamidah 7.9 record c.60m tonnes of delivered coal this year.
A catalyst from potential massive increase in national coal production.
MAHA is a leading coal transportation provider in Indonesia. The
company raised IDR491bn from its IPO in Jul 2023. About 60% was
Share Performance (%) earmarked to purchase various vehicles – 100 trucks, 50 dump trucks,
1m 3m 6m 12m 50 prime movers, 50 dollies, 100 vessels – in order to increase its
Absolute 7.6 17.1 (4.5) N/A
capacity to c.60-70m tonnes of coal transportation for the years ahead.
Relative 4.4 12.6 (15.3) This is in line with the expected demand in mining activity, post-
N/A
government approval for national coal production that allows the output
to reach c.900m pa for the next three years (FY23 national coal
production: 775m tonnes, or +13% YoY). MAHA’s profitability is less
Indonesia Research Team +6221 5093 9888 affected by the fluctuations in coal prices, as its negotiated fees (based
[Link]@[Link] on a cost-plus structure) are premised on fuel prices and the delivery
distance – the increase in volume is a key catalyst for the continuation of
its business, apart from the increment in fees (+4-6% YoY annually). In
addition, MAHA has diversified its services by offering road
maintenance services and expanding its coal-loading operations to grow
customer segments. We see that these initiatives have benefited the
company and spurred the growth of its operations.

25 Top 20 Indonesia Small Cap Jewels 2024

Company Report Card Profit & Loss Dec-22 Dec-23 Mar-24
Total turnover (IDRbn) 1,642 1,978 623
Results highlights. MAHA’s 1Q24 topline was recorded at IDR622bn Reported net profit (IDRbn) 502 268 73
(+36% YoY), continuing the positive growth throughout FY23 (full-year Recurring net profit (IDRbn) 502 268 73
revenue: IDR2trn, +20% YoY). This was helped by improved coal- Recurring net profit growth (%) - -47 78
hauling volumes, and offset the downtrend in coal prices (Newcastle Recurring EPS (IDR) 30 16 4
average for 1Q24: USD127/tonne; -50% YoY). Most of the sales during DPS (IDR) 0 0 0
the quarter were contributed by recurring contracts with Indonesia Dividend Yield (%) 0 0 0
Pratama (mining operator owned by Bayan Resources (BYAN IJ) at Recurring P/E (x) 7 14 13
c.60%, followed by INDY’s Kideco (c.14%), DEWA (c.13%), and others. Return on average equity (%) 44 15 16
On the operational front, profit is stable (1Q24 EBIT: IDR83bn, -4% P/B (x) 68 108 113
YoY), albeit with the majority of costs and expenses reflecting a higher P/CF (x) 37 12 (55)
output (1Q24 EBIT margin notched at c.14%). Overall, the non-
Source: Company data, RHB
operational factor from higher unrealised gains from investment (c.2%
ownership in Prima Andalan Mandiri (MCOL IJ) enhanced overall
Balance Sheet (IDRbn) Dec-22 Dec-23 Mar-24
earnings during the quarter (1Q24 net profit surged78% YoY).
Total current assets 501 949 944
Balance sheet/cash flow. MAHA remains in a net cash position (1Q24: Total assets 1,607 2,554 2,588
c.IDR124bn) while its EBIT-to-interest coverage ratio is still above the Total current liabilities 365 491 491
covenant level, at 9x. MAHA’s working capital remains stable, with Total non-current liabilities 105 256 217
positive cash from operating activities (1Q24: IDR70bn) giving the Total liabilities 470 746 708
company the ability to partly pay off its debt. Its ROE hovered at c.15%. Shareholder's equity 1,137 1,808 1,880
Minority interest 0 0 0
Management. Yenny Hamidah Koean has been MAHA’s President
Other equity 0 0 0
Director since 2010, and has 34 years of professional experience. Her
Total liabilities & equity 1,607 2,554 2,588
co-company director has been with the company since 1994, and has 40
Total debt 168 430 384
years of experience in the industry.
Net debt (68) (108) (153)

Source: Company data, RHB

Investment Case
Valuation. The stock is trading at c.10x FY24F P/E, based on its Cash Flow (IDRbn) Dec-22 Dec-23 Mar-24

recurring profit from the coal-hauling business (ex-gains from Cash flow from operations 471 395 71

investment) – above the valuation range of its upstream coal peers (4-6x Cash flow from investing activities (195) (246) (83)

P/Es). That said, MAHA has a cheap market valuation when compared to Cash flow from financing activities (176) 152 (54)
its regional peers that are involved in transporting coal (average of c.15x Cash at beginning of period 136 236 538
P/E). As management aims to increase the company’s coal-hauling Net change in cash 100 302 (67)
volume this year, we believe it may record FY24 earnings growth of 15- Ending balance cash 236 538 471
20% YoY – which translates to a FV of IDR290. Source: Company data, RHB

Key risks. These include further pressure related to environmental

issues, ie weakening demand for coal in the future, and slower economic
growth dampening coal demand and production.

Top 20 Indonesia Small Cap Jewels 2024 26

 Fair Value: IDR1,130
Mark Dynamics Indonesia Price: IDR975

Charting Healthier Growth

Investment Merits
 Riding on the recovery of the glovemaking industry
 Significant growth potential
 Seeking new opportunities
 Better scale and efficiencies to drive margin growth

Company Profile
Mark Dynamics Indonesia (MARK) mainly produces nitrile and latex
Source: Bloomberg glove formers, with three manufacturing plants located in north Sumatra.
The product has a life cycle of c.6-8 months. The company’s key
Stock Profile competitive advantages are its products’ good quality (high durability)
Bloomberg Ticker MARK IJ and its specialty in nitrile component gloves. MARK has a strong track
Avg Turnover (IDR/USD) 20947.62m/1.31m record, and has forged longstanding relationships with customers.
0.3
Net Gearing (%)
3,705
Highlights
Market Cap (IDRbn)
Beta (x) 1.36 Riding on the recovery of the glovemaker industry. Management noted
BVPS (IDR) 221 that global glove demand is picking up, and expects a meaningful recovery
52-wk Price low/high (IDR) 436 – 980 in 2H24 – in line with our regional analyst’s view that glovemakers will
33
start expanding their production capacity by 2025-2026. The company
Free float (%)
has seen positive volume growth YTD, along with stabilising prices. Note
that MARK has secured orders until around mid-FY24. This is positive for
the company, as its products are among the key materials in glove
Major Shareholders (%)
production. It has a 40% global market share in hand former products,
Tecable (HK) Co 43.8 supported by strong relationships (of over 20 years) with major clients.
Dyna Capital Indo 21.2
Significant growth potential. MARK noted that developed markets,
based on 2020 data, used an average of more than100 gloves/capita pa vs
four, eight, and 11 in Indonesia, China, and the Philippines. We think the
rising GDP/capita in emerging markets and better healthcare quality will
Share Performance (%) continue to drive the growth in demand for gloves. Management
1m 3m 6m 12m anticipates a c.8-9% YoY growth in the global glove industry over 2024-
Absolute 20.4 31.8 109.2 48.9 2030. This should drive higher utilisation rates for MARK, leading to
Relative 23.1 33.8 105.6 44.3 potentially higher sales of its hand formers. It is targeting a utilisation rate
of 55-65% (2023: c.40%) and c.31% volume growth this year.

Seeking new opportunities. Although most of MARK’s sales are derived

Vanessa Karmajaya +6221 5093 9985 from Malaysian companies, it has strengthened its footprint in other
vanessa@[Link] markets, ie China, Vietnam, and the US. The company also expects other
regions to record strong growth for their glove industries. The growth has
helped MARK mitigate its overreliance on just a few customers, thereby
reducing concentration risks. It noted that c.25% of its total customers
YTD are new customers. The company also expects glove usage in other
industries to ramp up.

27 Top 20 Indonesia Small Cap Jewels 2024

Better scale and efficiencies to drive margin improvement. We expect
Profit & Loss Dec-21 Dec-22 Dec-23
margins to improve in 2024 due to efficiencies from a better raw material
Total turnover (IDRbn) 1,194 824 559
mix (the use of a higher portion of local materials), continued product
Reported net profit (IDRbn) 392 243 156
innovations (the launch of thin lightweight hand formers), and greater
Recurring net profit (IDRbn) 395 247 146
sales volumes. Raw material prices have remained stable with no supply
Recurring net profit growth (%) 184.6 (37.5) (40.6)
disruptions, but geopolitical tensions could cause logistics issues. While
Recurring EPS (IDR) 104.00 65.00 39.00
there is a slight increase in gas prices, MARK’s long-term relationships
DPS (IDR) 15.00 50.00 40.00
with customers should aid in price negotiations, especially in the event of
Dividend Yield (%) 1.5 5.1 4.1
higher raw material prices.
Recurring P/E (x) 9.4 15.0 25.3
Return on average equity (%) 68.3 30.7 18.6

Company Report Card P/B (x)

P/CF (x)
5.1
11.2
4.4
18.0
4.4
15.8
Results highlights. MARK’s net income plunged by c.35.8% YoY to Source: Company data, RHB
IDR156bn in 2023, mainly because of a 32.1% YoY decline in revenue
owing to normalising demand during the post-pandemic phase. Its net Balance Sheet (IDRbn) Dec-21 Dec-22 Dec-23
margin dipped to c.28% in FY23 from 29.5% in 2022, but this was still Total current assets 586 436 423
higher than the pre-pandemic levels (2018-2019) of c.24-25%. Total assets 1078 1005 952

Solid liquidity profile. It had a liquidity ratio of 5.3x in 2023 (vs 2022’s Total current liabilities 273 112 79

3.9x). The company also has a low debt level with a net gearing of 0.3% in Total non-current liabilities 61 50 32

2023 (2022: 8.1%). MARK recorded positive cash flow from operations Total liabilities 335 162 111

over the last few years. Shareholder's equity 741 841 837
Minority interest 3 3 3
Dividends. The company has continuously distributed dividends over the Other equity 0 0 0
past three years. Around 62.5% of its earnings were disbursed as Total liabilities & equity 1078 1005 952
dividends in 2023 – much higher than the 48.4% dividend payout ratio in Total debt 135 122 57
2022. It expects to see a dividend payout ratio average of 45% moving Net debt 31 70 2
forward.
Source: Company data, RHB
Management. Ridwan Goh is currently MARK’s President Director. He
was first appointed to the Board in 2018. He oversees the entire Cash Flow (IDRbn) Dec-21 Dec-22 Dec-23
company, and has more than a decade of experience in its business and Cash flow from operations 332 205 234
operations. He joined MARK as a marketing manager in 2008. Cash flow from investing activities (176) (44) (11)
Cash flow from financing activities (92) (215) (219)
Cash at beginning of period 40 104 51
Investment Case Net change in cash 65 (53) 4
Ending balance cash 104 51 55
MARK guided for c.31% YoY revenue growth in 2024, with net profit
Source: Company data, RHB
margins to hover around 32%. Following the major expansion exercise
done in 2021, the company should see better cash flow in 2024. It is also
mulling over acquisition strategies, as well as exploring opportunities
outside the glove former business (currently it manufactures
sanitaryware products, as well as agriculture-supporting chemicals and
equipment) to enhance its business. MARK currently trades at c.15-16x
2024F P/E. We derived our FV of IDR1,130 from its guidance of 2024F
EPS with 18x P/E, representing a c.20% discount to other healthcare
players. Key risks include soaring logistics and raw material costs, and
intensifying competition.

Top 20 Indonesia Small Cap Jewels 2024 28

 Fair Value: IDR270
Sinar Eka Selaras Price: IDR228

Embarking on a Fast Track For Growth

450
Sinar Eka Selaras (ERAL IJ)
Price Close
Investment Merits
400
 Leveraging on growing lifestyle trends to expand
350
 Still at the forefront of capitalising on an increase in health awareness

300
 Smart appliance products segment offers much headroom for growth
 Multiple strategies to fuel growth
250

200

Company Profile
Dec-23

Apr-24
Aug-23

Oct-23

Feb-24

Source: Bloomberg Sinar Eka Selaras (ERAL) has become a rising retailer in Indonesia by
providing innovative solutions, solid services and a compelling customer
Stock Profile journey through a high-quality portfolio of active lifestyle products that
ERAL IJ include accessories (ecosystem), IoT items, sportswear, apparel and
Bloomberg Ticker
3328.66m/0.21m
outdoor products. ERAL has notable international brands in its portfolio,
Avg Turnover (IDR/USD)
eg Garmin, DJI, Asics, JD Sports and MST Golf. As of 2023, it operates
Net Gearing (%) nc
116 outlets that help to market such brands across Indonesia.
Market Cap (IDRbn) 1,182bn
N/A
Beta (x)
Highlights
BVPS (IDR) 282
52-wk Price low/high (IDR) 242 – 480 Leveraging on growing lifestyle trends in order to expand. The company
20 is in a sweet spot to capitalise on the rising demand for lifestyle-related
Free float (%)
products, eg IoT products and sportswear. Its key growth strategy is to
open more stores and add more brands to its stable. However, ERAL
remains prudent in selecting brands to collaborate with, while targeting
Major Shareholders (%)
its market segments and presenting unique selling points. The company
Erajaya Swasembada 80.0 also sees potential in enlarging its private brands, while monetising strong
market knowledge and bolstering margins.
Still at the forefront of capitalising on higher health awareness post-
COVID-19. The ramp-up in health awareness is seen in examples like the
rising interest in sporting activities and athleisure trends. As of FY23, it
Share Performance (%) operates 11 JD Sports stores, 10 Asics stores and one newly-opened MST
1m 3m 6m 12m Golf outlet. Although its rival MAP Aktif Adiperkasa (MAPA IJ) has
Absolute (21.9) (25.0) (27.9) N/A already secured a dominant market share in the segment, ERAL still sees
Relative (19.2) (23.0) (31.5) N/A potential to strengthen its market position through prudent expansion
strategies. There is, however, an overhang factor related to the potential
consolidation of JD Sports – although this exercise is still ongoing and has
been delayed since end-2023. Should the consolidation be successful, this
Vanessa Karmajaya +6221 5093 9985
would help ERAL strengthen its revenue and bring about better growth
vanessa@[Link] opportunities.
Ample room for growth from smart appliance products. The company is
putting more focus on strengthening its IoT segment, since this is still a
nascent market. Statista expects Indonesia’s IoT market to expand at a
CAGR of 13.9% over 2024-2028, driven by increasing government
support to boost digital connectivity. ERAL also has forged business-to-
business (B2B) partnerships with property companies to increase the
brand awareness of its products. Although contributions from this are

29 Top 20 Indonesia Small Cap Jewels 2024

still minor, we remain upbeat on this tactic. ERAL is also putting more
Profit & Loss Dec-21 Dec-22 Dec-23
focus on its private brands, given the more lucrative margins from this
Total turnover (IDRbn) 2,194 3,037 3,730
segment. Currently, its private labels account for c.5-7% of revenue, and
Reported net profit (IDRbn) 181 184 211
this percentage is expected to double over the next five years.
Recurring net profit (IDRbn) 155 160 165
Multiple strategies to fuel growth. The company will grow its store Recurring net profit growth (%) 172.8 3.0 3.2
network to boost its presence nationwide. Last year, it opened 56 new Recurring EPS (IDR) 30.00 31.00 32.00
stores. Meanwhile, synergy across its brands remains intact – which helps DPS (IDR) 0.00 0.00 10.00
to lower costs and enhance sales (ie joint promotions of several brands in Dividend Yield (%) 0.0 0.0 4.2
a single event). The company plans to add c.3-4 new brands annually but Recurring P/E (x) 7.6 7.4 7.2
remains prudent about choosing these. The impact of new regulations Return on average equity (%) 28.5 22.4 17.7
from the Ministry of Trade, meanwhile, should be minimal – ERAL has P/B (x) 1.6 1.3 0.8
taken steps to comply with the latest laws and policies. P/CF (x) 12.7 11.7 7.9

Source: Company data, RHB

Company Report Card
Results highlights. FY23 topline rose by c.22.8% YoY, supporting its Balance Sheet (IDRbn) Dec-21 Dec-22 Dec-23

c.14.4% YoY net income growth in 2023. GPM widened by c.10bps YoY to Total current assets 708 1084 1525

13.7%. ERAL’s continuous expansion initiatives from new brand Total assets 894 1382 2000

collaborations and additional store openings should propel revenue Total current liabilities 130 394 448

growth ahead. Total non-current liabilities 33 73 86

Total liabilities 163 467 534
Formidable liquidity profile. It has maintained its net cash position over
Shareholder's equity 730 915 1465
the last two years, with an ample 3.4x ratio in 2023 (vs 2.8x in 2022). It
Minority interest 0 1 1
also delivered a solid ROAE of c.17.7% in 2023 (vs 22.4% in 2022, given
Other equity 0 0 0
the higher equity stemming from IPO proceeds in 2023).
Total liabilities & equity 894 1382 2000
Dividends. ERAL started to distribute dividends totalling IDR50bn in Total debt 5 9 0
2023 (c.27% payout ratio) following two years of not doing so, since the Net debt 5 net cash net cash
company is still in a growth phase. As per its prospectus, ERAL intends to Source: Company data, RHB
distribute cash dividends of up to 30% of the respective net profits of the
fiscal year, starting from fiscal year 2023. Cash Flow (IDRbn) Dec-21 Dec-22 Dec-23

Management. Djohan Santoso joined ERAL’s holding company Erajaya Cash flow from operations 93 101 149

Swasembada (ERAA IJ) in 2014, and became the ERAL’s CEO in 2021. Cash flow from investing activities (371) (75) (121)

Before joining ERAA, he garnered extensive working experience in other Cash flow from financing activities (92) 163 279
businesses, which should help him in helming the firm. Cash at beginning of period 371 (3) 187
Net change in cash (370) 190 307

Investment Case Ending balance cash 0 187 493

Source: Company data, RHB

We expect ERAL’s revenue to grow by c.10% YoY in 2024, with a stable
net margin. This should translate to c.5x 2024F P/E. We believe it should
be trading at c.6x 2024F P/E, ie at a c.50% discount from local peer
MAPA – resulting in a IDR270 FV. Downside risks include a slower-than-
expected store network expansion, intensifying competition and
regulatory issues dampening its growth.

Top 20 Indonesia Small Cap Jewels 2024 30

 Fair Value: IDR385
Steel Pipe Industry of Indonesia Price: IDR284

Looking Forward To Further Growth

Steel Pipe Industry of Indonesia (ISSP IJ)
Price Close
Investment Merits
330.00

310.00
 Leading steel pipe manufacturer in Indonesia
290.00
 Benefits from a recovery in property, infrastructure, oil and gas sectors
270.00  Attractive valuation
250.00

230.00
Company Profile
Jul-23

Sep-23

Nov-23
May-23

Jan-24

Mar-24

Steel Pipe Industry of Indonesia (ISSP) started as a steel pipe

manufacturer in Surabaya in 1971. Today, it has six facilities nationwide
Source: Bloomberg
in Surabaya, Sidoarjo, Pasuruan, and Karawang, with 600,000 tonnes of
annual production capacity as of FY23. The company designs and
Stock Profile
manufactures various steel pipe products, both ready-made and custom-
made, based on customers’ specifications. The raw materials used in the
Bloomberg Ticker ISSP IJ
production process include hot rolled steel, cold rolled steel, and stainless
Avg Turnover (IDR/USD) 1,533.22m/0.1m
steel. The final products are used in various pipes ie structural, water,
Net Gearing (%) 52.9 O&G, stainless steel, galvanised, mechanical, and poles.
Market Cap (IDRbn) 2,041
Beta (x) 1.07
Highlights
BVPS (IDR) 642
248 – 332
One of Indonesia’s leading steel pipe producers. In FY23, ISSP continued
52-wk Price low/high (IDR)
its positive growth momentum by recording 364.5k tonnes in sales
Free float (%) 32
volume (+6% YoY) following another stellar year in FY22 of 343.5k
tonnes (+12% YoY). Property, auto, infrastructure, and O&G led the
growth following the sectors’ significant recovery. The company targets
Major Shareholders (%) another stellar year in FY24 – still guiding for positive sales volume
Cakra Bhakti Para Putra 55.9 growth. Higher demand in infrastructure-related works (malls, hospitals,
DBS Group Holdings 6.9 houses, and industrial) is expected to be a main driver.
Kosasih Kamtono 4.9 Margins to continue improving in FY24F. We believe the slower
adjustment of ASP against the normalising of raw material costs was a
key reason for the higher profitability enjoyed by ISSP in 2Q23-4Q23. It
Share Performance (%) recorded 17-18% GPMs during the period, vs 8-12% in the preceding
1m 3m 6m 12m three quarters. We noticed the hot-rolled coil (HRC) global price, one of
Absolute (6.0) (0.7) (2.7) 10.9
the benchmark costs for steel’s raw materials, has been normalising to
Relative (9.2) (5.2) (13.5) (1.6)
USD750-950 per tonne on average in 2H23. The price is almost half from
its peak of USD1,600 per tonne in 3Q21, while its ASP is relatively stable
at IDR17,800 per kg in 4Q23 (-3% QoQ, -6% YoY). We believe the risk of
further volatility in ASP is limited, based on the strong demand – which
Indonesia Research +6221 5093 9888 should allow ISSP to maintain its GPM at 17% going forward. Further
[Link]@[Link] efficiency in operating and overhead costs (as volume grows) will also be
catalysts for further margin expansion.
Attractive valuation. ISSP is trading at 4x FY24F P/E, ie cheaper than the
building materials peer average of 16x and auto parts peer average of 8x.
With higher volume and relatively stable margins expected, a higher ROE
of 10% in FY24 is also expected.

31 Top 20 Indonesia Small Cap Jewels 2024

Benchmarking more to building materials stock valuations, we also
Profit & Loss Dec-21 Dec-22 Dec-23
applied a 50% discount (on the liquidity factor) to derive a FV of IDR385,
Total turnover (IDRbn) 5,379 6,256 6,455
which implies 5.3x FY24F P/E (also its 3-year mean), thereby adding
Reported net profit (IDRbn) 486 306 498
another c.5% dividend yield in FY24F.
Recurring net profit (IDRbn) 486 306 498
Recurring net profit growth (%) 176.2 (37.1) 62.8
Company Report Card Recurring EPS (IDR) 68.00 43.00 69.00

Results highlights. 4Q23 net profit was at IDR134bn (-16% QoQ, +935% DPS (IDR) 6.00 9.00 6.00

YoY), bringing FY23 net profit to IDR498bn (+63% YoY), in line with our Dividend Yield (%) 2.0 2.9 2.0

estimate. 4Q23 revenue was at IDR1.6trn (flat QoQ, +12% YoY), Recurring P/E (x) 4.4 7.1 4.3

supported by 94k tonnes of production volume (+3% QoQ, +19% YoY) to Return on average equity (%) 13.6 7.7 11.4

bring FY23 revenue to IDR6.4trn (+3% YoY), which is also in line with our P/B (x) 0.6 0.5 0.5

forecast. Profitability remained solid, with 4Q23 GPM improving to 18% P/CF (x) (19.6) (68.4) 10.7

vs 17% and 8% in 3Q23 and 4Q22. Source: Company data, RHB

Balance sheet. FY23 net gearing improved to 0.5x from 0.6x in FY22
Balance Sheet (IDRbn) Dec-21 Dec-22 Dec-23
while its cash level increased to IDR176bn in FY23 (+252% YoY). The
Total current assets 4423 4401 5075
company targets to lower its net gearing from FY24 onwards through
Total assets 7097 7406 7972
debt refinancing, which started in 2023. Lower debt and interest
Total current liabilities 2762 2607 2497
expenses are expected to follow thereafter.
Total non-current liabilities 549 654 856
Dividends. ISSP has been consistently distributing dividends to its Total liabilities 3310 3261 3353
shareholders. Using the most recent dividend payout ratio assumption of Shareholder's equity 3787 4145 4618
13% (in 2023), we expect a DPS of at least IDR9 from its FY23 net profit. Minority interest 0 0 0

Management. Ibnu Susanto has been President Director of the company Other equity 1086 1201 1219

since 1980, and has strong experience and a firm footprint in the industry. Total liabilities & equity 7097 7406 7972

The majority of the current boardmembers has served as directors in the Total debt 2381 2559 2618

company for over 20 years. Net debt 2331 2509 2442

Source: Company data, RHB

Investment Case
Cash Flow (IDRbn) Dec-21 Dec-22 Dec-23
FV of IDR385, at 5.3x FY24F P/E (the stock currently trades at 4x FY24F Cash flow from operations (110) (32) 202
P/E) implies a ~35% potential upside on top of a c.5% dividend yield in Cash flow from investing activities 41 (107) (62)
FY24F. ISSP is set to benefit from the increasing demand for property and Cash flow from financing activities 59 138 (13)
infrastructure-related works. The company targets to record another Cash at beginning of period 60 50 50
stellar year in FY24 – still guiding for positive sales volume growth. Net change in cash (9) 0 127
Higher demand for infrastructure-related works (eg malls, hospitals, Ending balance cash 50 50 177
houses, and industrial) is expected to be one of its main growth drivers.
Source: Company data, RHB
We lean towards its building materials peers as a benchmark for its value,
and derive an FV of IDR385 FV, which also implies 5.3x FY24F P/E (at the
3-year mean). This makes ISSP one of the cheapest building materials
counters. It also remains attractive to investors.
Key risks include lower-than expected sales volume and selling prices,
higher-than-expected material prices, and the negative effect of any
change in government regulations and policies.

Top 20 Indonesia Small Cap Jewels 2024 32

 Fair Value: IDR578
Total Bangun Persada Price: IDR490

Private Sector Jobs Spurring Growth

Investment Merits
 Healthier book vs that of state-owned enterprise (SOE) contractors
 Benefiting from higher demand from the private sector
 Attractive valuation

Company Profile
Total Bangun Persada (TOTL), a leading private contractor with more
than 50 years of experience, specialises in premium building construction
Source: Bloomberg
works, with over 800 buildings under its completed portfolio. These
include high-rise residential towers, offices, shopping centres like Pondok
Stock Profile
Indah Mall and Central Park Mall, apartment complexes like The
Pakubuwono Residence, as well as projects like Trans Studio Bandung
Bloomberg Ticker TOTL IJ
and IKEA stores.
Avg Turnover (IDR/USD) 2,019.21m/0.13m
Net Cash
Net Gearing (%)
1,671
Highlights
Market Cap (IDRbn)
Beta (x) 0.85 Impressive performance to continue into FY24F. TOTL benefits from the
BVPS (IDR) 313 rising demand for construction works from the private sector. Its jobs
300 – 515
involve buildings that cater to industrial and leisure activities. It won new
52-wk Price low/high (IDR)
contracts worth IDR4.1trn (+64% YoY) last year, 40% of which were for
Free float (%) 32
shopping malls, apartments and offices. The remainder came from the
industrial sector. As of 1Q24, the company is tendering for projects
valued at about IDR11.6trn (all private sector contracts) – this implies
Major Shareholders (%) that its new contract target of IDR3.5trn for FY24 is rather conservative.
Total Inti Persada 56.5 This is followed by significant revenue recognition of IDR3trn (+33%
Djadjang Tanuwidjaja 9.9 YoY) in FY23. TOTAL has about IDR3.5trn worth of orders in hand, on top
of its additional new contract target to be achieved throughout 2024. As
such, we expect it to record more stellar numbers in FY24-25.
Contractor with one of the healthiest books. TOTL’s strong balance
Share Performance (%) sheet (IDR720bn in net cash as of FY23) puts it in a stable position, and
1m 3m 6m 12m this may help it win bigger and more projects. TOTL targets to book a
Absolute (0.8) 17.8 36.1 18.4
modest IDR3.1trn (+2.4% YoY) in revenue, and IDR175bn (+1.7% YoY) in
Relative (4.0) 13.3 25.3 5.9
net profit for FY24.
Attractive valuation. The stock is trading at 8.7x FY24F P/E – an
attractive level vs peers, with its healthier balance sheet and higher
Indonesia Research +6221 5093 9888 FY24F ROE of 16.5%. We note the headwinds facing the construction
[Link]@[Link]
sector after the COVID-19 pandemic, with many projects halted or even
cancelled. Many construction players that may have leverage and cash
flow issues continue to struggle – even some SOEs. However, we believe
the demand for construction is still recovering and more of this is coming
from the private sector. That said, a smaller playing field (with a lesser
supply of contractors) may bring about opportunities, especially for firms
with healthier numbers. As such, TOTL is poised to be a winner in this
currently challenging industry

33 Top 20 Indonesia Small Cap Jewels 2024

 Profit & Loss Dec-21 Dec-22 Dec-23
Company Report Card Total turnover (IDRbn) 1,745 2,277 3,027

Results highlights. TOTL booked FY23 revenue of IDR3trn (+33% YoY), Reported net profit (IDRbn) 102 92 173

while earnings surged by 88% to IDR172.7bn. This was underpinned by Recurring net profit (IDRbn) 102 92 173

its new contracts won, which amounted to IDR4.1trn (+64% YoY). Recurring net profit growth (%) (6.8) (9.8) 88.4
Recurring EPS (IDR) 30.00 27.00 51.00
Balance sheet. As of FY23, the company has a hefty net cash pile of
DPS (IDR) 10.00 25.00 100.00
IDR720bn (FY22: Net cash of IDR930bn). We note that the decrease was
Dividend Yield (%) 2.1 5.3 21.1
due to its bigger working capital requirements, as economic growth and
Recurring P/E (x) 15.9 17.6 9.4
the demand for construction works picked up in FY23.
Return on average equity (%) 8.6 7.4 15.0
Dividends. TOTL has continued to pay dividends, even during the P/B (x) 1.3 1.3 1.5
pandemic. As such, its historical dividend payout ratio (ie for the past 10 P/CF (x) 11.8 5.8 17.9
years) averaged at over 50%. Assuming a minimum 50% of payout ratio, it Source: Company data, RHB
could pay DPS of IDR25 for FY23, implying a ~5% dividend yield.
Management. Janti Komadjaja has served as President Director since Balance Sheet (IDRbn) Dec-21 Dec-22 Dec-23

2009. She joined TOTL in 1992 as an estimator. She was appointed as Total current assets 2051 2323 2505

Associate Director in 2001, then promoted to Director in 2004. Total assets 2727 2990 3133
Total current liabilities 1295 1564 1884

Investment Case Total non-current liabilities 200 186 181

Total liabilities 1495 1750 2066
TOTL benefits from rising demand from the private sector, for projects Shareholder's equity 1232 1240 1067
that cater to industrial and leisure activities. While we believe the Minority interest (3) (3) (3)
demand for construction is still recovering, TOTL is poised to be a winner. Other equity (4) (3) (7)
As of 1Q24, it is tendering for projects worth about IDR11.6trn – all from Total liabilities & equity 2727 2990 3133
the private sector – which makes its full-year new contract target of Total debt 0 0 0
IDR3.5trn quite conservative. Net debt (760) (931) (729)

Source: Company data, RHB

In FY23, it chalked a revenue of IDR3trn (+33% YoY). The company
currently has ~IDR3.5trn worth of orders on top of its additional new
contract target to be achieved throughout 2024. As such, we expect it to Cash Flow (IDRbn) Dec-21 Dec-22 Dec-23

record more stellar numbers in FY24-25. Cash flow from operations 137 280 91
Cash flow from investing activities 50 (30) 49
The stock is trading at 8.7x FY24F P/E. We believe it deserves to trade at Cash flow from financing activities (36) (85) (341)
a premium over peers, in view of its strong balance sheet and profitability. Cash at beginning of period 608 760 931

Key downside risks include lower-than-expected contract wins, higher- Net change in cash 151 165 (201)

than-estimated raw material costs, mobility restrictions or new Ending balance cash 760 931 729

regulations that may hamper construction activities. Source: Company data, RHB

Top 20 Indonesia Small Cap Jewels 2024 34

 Fair Value: IDR589
Tripar Multivision Plus Price: IDR520

Monetising The Entertainment Industry

Tripar Multivision Plus (RAAM IJ)
Price Close
Investment Merits
1,000

900
 Driving revenue through its sinetron (soap opera) collection
800

700  Growing popularity of local films and the presence of over-the-top

600

500
(OTT) platforms are poised to benefit RAAM
400
 Monetising growth opportunities in the cinema industry
300

200

100 Company Profile

0

Tripar Multivision Plus (RAAM) is a production house in Indonesia that

Jul-23

Sep-23
May-23

Dec-23

Jan-24

Apr-24
Jun-23

Aug-23

Oct-23

Nov-23

Feb-24

Mar-24

has been operating for over three decades. Its businesses include
Source: Bloomberg
producing shows (soap opera series, movies, web series), and managing
cinemas, among others. It has an extensive library of content comprising
Stock Profile
over 15,000 hours of TV series and more than 650 films. It also has a
Bloomberg Ticker RAAM IJ network of 13 cineplexes in Indonesia under the Platinum Cineplex
Avg Turnover (IDR/USD) 1,954.58m/0.12m brand.
Net Gearing (%) Net Cash
Market Cap (IDRbn) 201
Highlights
Beta (x) N/A
198.75
Driving revenue through its collection of sinetron. This has become its
BVPS (IDR)
leading source of revenue, accounting for 43% of FY23 sales. This was
52-wk Price low/high (IDR) 364 - 940
largely due to its large bank of sinetron, which enables content for
Free float (%) 16
television to be recycled. One of RAAM’s famous soap operas is
Tersanjung, which became a fan favourite and ran for a remarkable >350
episodes. Tersanjung was recognised by the Indonesia World Records
Major Shareholders (%) Museum (MURI) in 2006 as Indonesia’s longest-running sinetron.
Ram Jethmal Punjabi 84.2
Growing popularity of local films and presence of OTT platforms poised
to benefit RAAM. According to [Link], in 2015, only three
Indonesian films had >1m ticket admissions. By 2022, this number had
risen to 14 films, reflecting the burgeoning appeal of Indonesian films.
RAAM's movie Di Ambang Kematian had over 3m tickets sold, becoming
Share Performance (%) the second highest-grossing Indonesian film based on admission numbers
1m 3m 6m 12m in 2023. This highlights RAAM's prowess in creating compelling content.
Moving forward, the company plans to launch its line-up of films
Absolute 17.7 (6.3) (8.0) 14.5
scheduled for release in 2024 – predominantly horror movies. These
Relative 20.4 (4.3) (11.6) 10.0
releases are anticipated to boost RAAM’s revenue stream, as the horror
genre is popular among Indonesian viewers. RAAM should also benefit
from OTT media platforms, which provide an additional avenue to
Indonesia Research +6221 5093 9888 generate income via produced content.
[Link]@[Link]
Monetising growth opportunities in the cinema industry. Operating in
the cinema industry should allow RAAM the opportunity to grow in this
market. Data points to the underpenetrated cinema landscape in
Indonesia, with Euromonitor reporting that the country’s screen per 1m
citizens was at 7.6 in 2022, vs Malaysia’s 42.9 and Thailand’s 12.9. As of
end-Mar 2024, there are 13 Platinum Cineplexes, and two more are
slated to be opened later this year. RAAM concentrates on tier-2 and tier-
3 cities, where we think has less competitive pressure.

35 Top 20 Indonesia Small Cap Jewels 2024

This is particularly due to major cinema players like Nusantara Sejahtera
Profit & Loss Dec-21 Dec-22 Dec-23
Raya (CNMA IJ) having about 38% of its centres located in Greater
Total turnover (IDRbn) 209 322 399
Jakarta as of 2023. Such strategic market positioning should enable
Reported net profit (IDRbn) 26 87 103
RAAM to seize growth opportunities effectively.
Recurring net profit (IDRbn) (1) 62 106
Recurring net profit growth (%) (94) na 70

Company Report Card Recurring EPS (IDR) (0.1) 10.0 17.0

DPS (IDR) 0.0 0.0 0.0
Results highlight. RAAM posted a net profit of IDR103bn (+18% YoY) in Dividend Yield (%) 0.0 0.0 0.0
FY23. Gross margin for FY23 stood at 59.7% (+8.7ppts YoY). FY23 Recurring P/E (x) na 51.9 30.5
revenue increased 24.1% to IDR399.3bn, mainly driven by increases in Return on average equity (%) na 7.2 9.9
the film and soap opera segments, where turnover grew 133% and 13% P/B (x) 3.9 3.5 2.6
YoY. P/CF (x) na 394.8 na

Source: Company data, RHB

Balance sheet. RAAM was in a net cash position in 2023 compared to
11.9% of net gearing in 2022. Its current ratio was at 3.1x in 2023.
Balance Sheet (IDRbn) Dec-21 Dec-22 Dec-23
Dividend. The company has not paid dividends in the last few years. Total current assets 261 278 551

Management. Whora Anita Raghunath has been the President Director Total assets 1,160 1,105 1,429

of RAAM since 2022. She has been a director of the company since 2009. Total current liabilities 232 132 176

With her >20 years of experience in RAAM, we believe she has the solid Total non-current liabilities 109 60 27

knowledge to navigate the company’s growth ahead. Total liabilities 341 192 202
Shareholder's equity 817 913 1,226
Minority interest 3 0 0

Investment Case Other equity - - -

Total liabilities & equity 1,160 1,105 1,429
FV. RAAM has guided for c.13% YoY revenue growth and c.17% YoY net Total debt 204 127 110
profit growth for this year. The stock is trading at 26.8x FY24F P/E. We Net debt 195 108 nc
believe it should be trading at 30.4x P/E, ie at a c.4% premium from the Source: Company data, RHB
peer average. Our FV for the stock is IDR589.
Key risks. Lower-than-expected movie admission which may chip down Cash Flow (IDRbn) Dec-21 Dec-22 Dec-23
revenue generation, and lower-than-expected cinema attendance Cash flow from operations (3) 8 (46)
numbers. Cash flow from investing activities (4) 115 (33)
Cash flow from financing activities 1 (114) 175
Cash at beginning of period 15 9 18
Net change in cash (6) 10 96
Ending balance cash 9 18 114

Source: Company data, RHB

Top 20 Indonesia Small Cap Jewels 2024 36

 Fair Value: IDR750
Victoria Care Indonesia Price: IDR650

Maintaining The Victorious Path

700
Victoria Care Indonesia (VICI IJ)
Price Close
Investment Merits
650
 In a position to capitalise on rising beauty industry trends
600
 Key beneficiary of the return of TikTok Shop in Indonesia
 Ramping up efforts to boost its performance
550

 Continuous efforts to explore various growth avenues

500

450

Company Profile
Jul-23

Sep-23

Nov-23

Jan-24
May-23

Mar-24

Source: Bloomberg Victoria Care Indonesia (VICI) has become one of the country’s leading
personal care companies, supported by its strong track record and
Stock Profile presence in the local beauty industry for over a decade. It has benefited
VICI IJ from the public’s increasing awareness of beauty products. VICI has
Bloomberg Ticker
151.78m/0.01m
implemented various initiatives to monetise these opportunities,
Avg Turnover (IDR/USD)
targeting the younger generation in particular. It is also a beneficiary of
Net Gearing (%) 6.9
the return of TikTok Shop in Indonesia, which accounts for a sizeable
Market Cap (IDRbn) 4,360bn
portion of revenue earned from social media platforms.
Beta (x) 0.58
BVPS (IDR) 137
52-wk Price low/high (IDR) 486 – 800 Highlights
Free float (%) 15
In the sweet position to capitalise on the rising beauty industry. The
allure of beauty brands has been sustained in Indonesia throughout the
last five years. Based on Kantar’s report in Mar 2023, the industry
Major Shareholders (%) experienced a remarkable 20% growth during this period. This upward
Sukses Sejati Sejahtera 59.95 trend persists, with recent periods showing double-digit growth – fuelled
Beauty Brands International 25.00 by increased consumer expenditure and, notably, higher unit purchases
of beauty products. Moreover, from Jakpat’s survey in Nov 2023, in the
previous six months, 74% of consumers expressed continued interest in
local brands, with the majority of purchases conducted through online
Share Performance (%)
channels. VICI, which remains as a leading local beauty product
manufacturer and with a sizeable 24% online sales portion in 2023,
1m 3m 6m 12m
should become a key beneficiary of this trend.
Absolute 0.0 0.0 (1.5) 25.0
Relative 2.7 2.0 (5.2) 20.5 As a key beneficiary of the return of TikTok Shop in Indonesia, VICI saw
sales recover in Dec 2023 – its third highest monthly sales in 2023.
TikTok Shop stopped operating in Indonesia in early Oct 2023, resulting
Vanessa Karmajaya +6221 5093 9985 in VICI’s sales falling in October and November last year. Although it tried
vanessa@[Link] increasing its efforts on the Shopee platform, the impact to induce
impulsive purchases was substantially less than on TikTok. Also, the
average basket size for TikTok is higher than Shopee, with the former
prioritising brands produced locally. Note that TikTok made up c.45% of
VICI’s online revenue as of 2023.

37 Top 20 Indonesia Small Cap Jewels 2024

Ramping up efforts to boost performance. In 2024, VICI plans to have
Profit & Loss Dec-21 Dec-22 Dec-23
c.80 new product launches (mainly focusing on NuFace, Miranda, CBD
Total turnover (IDRbn) 1,153 1,046 1,362
and Herborist) – largely similar to 2023. It will still allocate a bulk of its
Reported net profit (IDRbn) 177 98 178
advertising and promotion budget in digital marketing, especially for new
Recurring net profit (IDRbn) 177 98 178
product launches. The company aims to fortify its offline presence
Recurring net profit growth (%) 15.3 (43.6) 81.6
through selective expansion to modern trade, and open its own dedicated
Recurring EPS (IDR) 26.00 14.00 26.00
stores, ie Oemah Herborist and Beauty CAFÉ. It also targets to double its
DPS (IDR) 9.00 7.00 9.00
factory capacity, particularly for products with semi-solid ingredients,
Dividend Yield (%) 1.3 1.1 1.4
owing to increasing demand.
Recurring P/E (x) 25.3 44.9 24.7
Multiple efforts to explore various growth avenues. Challenging Return on average equity (%) 25.7 12.6 20.8
economic conditions – which may trigger downtrading activities and P/B (x) 5.8 5.4 4.7
events like the recent boycott of foreign brands – should benefit VICI. P/CF (x) 39.6 36.7 18.3
Aside from that, its initiative to use online media for new product Source: Company data, RHB
launches should help create greater awareness (by going viral) for the
targeted consumer segment before selling it in offline markets. This
Balance Sheet (IDRbn) Dec-21 Dec-22 Dec-23
should help to keep costs in check. VICI also plans to strengthen its offline
Total current assets 561 631 600
distribution through multi warehouse projects to accelerate its products
Total assets 998 1151 1148
supply to consumers.
Total current liabilities 162 246 159
Total non-current liabilities 86 104 71
Company Report Card Total liabilities 248 350 229

Results highlights. In 2023, revenue surged 30.3% YoY, mainly driven by Shareholder's equity 750 801 919

new products launched over the last two years. This strong topline Minority interest 0 0 0

growth and better product mix beefed up GPM to 55.7% in 2023 Other equity 0 0 0

(+c.3.2ppts YoY). Net income jumped c.82.8% YoY, yielding c.13.1% net Total liabilities & equity 998 1151 1148
margin in 2023 – around 3.8ppts YoY margin expansion. Total debt 144 141 71
Net debt 140 135 63
Balance sheet/cash flow. VICI recorded net debt of IDR63bn in 2023. We
Source: Company data, RHB
noted its balance sheet remains healthy, as net gearing improved from
16.8% in 2022 to 6.9% in 2023, and its current ratio was at 3.8x in 2023
(vs 2022: 2.6x). Cash Flow (IDRbn) Dec-21 Dec-22 Dec-23
Cash flow from operations 110 119 238
Dividends. The company booked a high dividend payout ratio of c.62% in Cash flow from investing activities (16) (23) (50)
2023, which was much higher than 2022’s c.26%. This was given its ample Cash flow from financing activities (159) (95) (186)
liquidity and improved profitability. This translates to a c.IDR9 cash DPS Cash at beginning of period 69 4 6
and a 1.4% dividend yield. Net change in cash (64) 1 2

Management. Billy Hartono Salim has been its President Director since Ending balance cash 4 6 7

2010. He has a strong track record with more than a decade of Source: Company data, RHB
experience.

Investment Case
VICI has guided for 12-15% YoY revenue growth this year, mainly from
volume growth. It last increased prices in Dec 2023 and plans to maintain
them as such for the time being. Its performance remains solid YTD – and
it remains on track to achieving targets set.
Margins should improve, given the better product mix and more targeted
marketing strategies. VICI aims to maintain its net margin level in 2024
(2023: 13.1%). The stock is trading at c.21x P/E. We think VICI should be
trading at c.25x 2024F P/E – at a 30% premium vs Unilever Indonesia
(UNVR IJ), given VICI’s stronger growth profile, translating to an FV of
IDR750.

Top 20 Indonesia Small Cap Jewels 2024 38

 Fair Value: IDR1,890
Wismilak Inti Makmur Price: IDR1,120

Growth Opportunities In The SKT And Filter Segments

Wismilak Inti Makmur (WIIM IJ)
Price Close
Investment Merits
4,000.00

3,500.00  Attractive stock price, given its robust earnings growth

 Stepping up to become a tier-2 hand-rolled kretek cigarette (SKT)
3,000.00

2,500.00

2,000.00 producer opens up volume growth opportunities

1,500.00

1,000.00  Downtrading trend should increase filter stick demand from tier-2
500.00

0.00
companies, benefitting it as a filter manufacturer
Jul-23

Sep-23

Nov-23
May-23

Jan-24

Mar-24

Source: Bloomberg
Company Profile
Wismilak Inti Makmur (WIIM) was established in 1987 under the name
Stock Profile Gelora Djaja. Since then, it has grown to become one of Indonesia's
Bloomberg Ticker WIIM IJ leading producers of cigarettes. The production, distribution, processing,
Avg Turnover (IDR/USD) 6,586m/0.45m and flavouring of the cigarettes are all integrated into one seamless
Net cash manufacturing process. Its products are classified into several categories:
Net Gearing (%)
2,530
i) SKT, ii) machine-rolled kretek cigarettes (SKM), iii) premium cigars, and
Market Cap (IDRbn)
iv) filter rods for cigarettes.
Beta (x) 0.9
BVPS (IDR) 878.7
835-3850
Highlights
52-wk Price low/high (IDR)
Free float (%) 35.7 Growth opportunities in SKT. The tier-1 SKM price has increased by 4.9-
9.6% YoY as per Mar 2023, while the minimum wage hike average is
below 5%. As such, customers are likely to downgrade to tier-2 players ie
Major Shareholders (%) WIIM. Its SKM segment has reached tier-2’s capped production volume
Indahtati Widjajadi 25.48
of 3bn sticks (2022: 2.98bn sticks sold), with a price of IDR1.594 a stick as
per Apr 2024. WIIM’s Diplomat Evo has narrowed the price gap to tier-1
Ronald Walla 15.18
players, from being c.30% cheaper in Apr 2023 to 18-25% in Apr 2024.
Stephen Walla 15.18
We expect the company to focus more on SKT price increments to
Sugito Winarko 7.30 expand its margin. Nearing the tier-3 production limit with 473m SKT
sticks sold in 2022, WIIM still has room to increase its prices, as
downgrading happens not only for cheaper SKM, but also SKT.
Share Performance (%)
Aggressive expansion of the filter segment. Three filter-producing
1m 3m 6m 12m machines were added in 2023 to meet the 6bn filter sticks production
Absolute (7.5) (33.0) (66.2) (4.7) target (+30.9% YoY) – equal to 26bn cigarette sticks. The filter segment
Relative (10.7) (37.6) (77.0) (17.2) expansion is targeted to help boost exports to neighbouring countries, eg
Malaysia, Singapore, and the Philippines. FY23 export sales reached
IDR76.9bn (+100.9% YoY), with 65.2% of the total exports coming from
the filter segment. With the downtrend to tier-2 SKM and SKT products,
Indonesia Research +6221 5093 9888
WIIM will also reap the benefit from the demand boost by supplying
[Link]@[Link]
filters to non-integrated tier-2 players.
Undervalued. The stock is trading at 4.95x FY23 P/E, which is at a 65%
discount to peers. Our fair value is based on 8x FY23 P/E, given the
company’s lower price product portfolio and consumer downtrading
activities – which we believe may help it book solid earnings growth in
FY24F.

39 Top 20 Indonesia Small Cap Jewels 2024

Company Report Card
Profit & Loss Dec-21 Dec-22 Dec-23
Total turnover (IDRbn) 2,734 3,704 4,875

Results highlights. WIIM recorded strong revenue growth of 31.6% YoY Reported net profit (IDRbn) 177 249 494

in FY23, aided by the filter (+122.1% YoY) and SKT (+80% YoY) segments. Recurring net profit (IDRbn) 177 249 494
Both segments’ contributions to total revenue increased by 15.5% (vs Recurring net profit growth (%) 2.9 40.7 98.4
2022: 9.2%) for filter and 15.2% (vs 2022: 11.1%) for SKT. EBIT margin Recurring EPS (IDR) 84.00 119.00 235.00
expanded to 12.6% from 8.3% in 2022 due to the price hike on tier-2 SKM DPS (IDR) 20.50 21.60 72.90
and SKT products. Dividend Yield (%) 1.9 2.0 6.6
Recurring P/E (x) 13.1 9.3 4.7
Dividends. IDR151bn was distributed in dividends last year – translating
Return on average equity (%) 14.2 17.7 29.5
to IDR72.90/share (61.3% payout ratio). If the company manages to
P/B (x) 1.8 1.5 1.3
maintain its payout ratio, this will translate into a c.12% yield (IDR144 per
P/CF (x) 12.8 7.7 (11.5)
share) at the current share price.
Source: Company data, RHB
Net cash position. WIIM is in a positive net cash position, similar to other
tobacco players.
Balance Sheet (IDRbn) Dec-21 Dec-22 Dec-23
ROE. FY23 ROE reached an impressive 29.5%, vs 17.7% in FY22. Total current assets 1591 1876 2215
Total assets 1891 2169 2576
Management. The management team and founding family own 63.16% of
Total current liabilities 543 662 718
the company. President Director Ronald Walla has been managing the
Total non-current liabilities 30 6 10
company since 2012. Before being appointed to the position, he was the
Total liabilities 573 668 728
company’s commissioner (2008-2012) and the President Director of the
Shareholder's equity 1317 1499 1845
company’s subsidiary, Galan Gelora Djaja (2002-2007).
Minority interest 2 2 2
Other equity 0 0 0

Investment Case Total liabilities & equity

Total debt
1891
0
2169
0
2576
33

With a positive net cash position and above-industry sales growth, WIIM Net debt net cash net cash net cash

is currently undervalued. Its potential for high growth in the SKT and Source: Company data, RHB
filter segments should enable the company to book 16% topline growth in
2024F. We believe WIIM is worth IDR1,890/share or 6.9x 2024F P/E. Cash Flow (IDRbn) Dec-21 Dec-22 Dec-23

Key risks: i) Tight competition, ii) cut in fuel subsidies, and iii) weak Cash flow from operations 181 300 (200)

consumer purchasing power. Cash flow from investing activities (27) (45) (122)
Cash flow from financing activities (62) (66) (110)
Cash at beginning of period 430 522 712
Net change in cash 93 190 (433)
Ending balance cash 522 712 279

Source: Company data, RHB

Top 20 Indonesia Small Cap Jewels 2024 40

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