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JAKARTA. Next year, PT PP Tbk (PTPP) will prepare some acquisitions through its subsidiaries, aside of other organic expansions agenda.
Therefore, the state owned enterprise (SOE) needs capital expenditure (capex) to Rp 174 trillion for the next four years. The funds will derive from the rights issue and initial public offering (IPO) of its four subsidiaries, as well as from external funding, such as bank loans or the bonds.
PT PP Peralatan Konstruksi is the subsidiary, which will make the most acquisitions. "At least, three companies will be acquired," said Director of PTPP Tumiyana, Tuesday (6/12). PT PP Peralatan Konstruksi will target private companies, which focus on foundation construction, offshore drilling, as well as the companies that are related to underground projects. However, PTPP is still reluctant to specify the acquisition plan in a detail manner, on the grounds that the issuer is bounded to non-disclosure agreement (NDA).
However, PT PP Peralatan Konstruksi will definitely acquire the three companies. “We will become the majority shareholder," said Tumiyana. Negotiations are already underway and will complete in early 2017. PP Peralatan is targeting to obtain Rp 3.5 trillion through the IPO to fund the expansions.
PT PP Energy will also launch acquisition. PP Energy has targeted at least one company to be acquired. Furthermore, PP Energi will involve in several tenders of the power plant projects of PT PLN (State Owned Electricity Company).
The company will also act as the initiator of the project. Therefore, PP Energy has already operated the power plant with the capacity of 2x7 megawatt (MW) in Lampung. "Based on the agreement, if the first project is successful, we will be allowed to add the capacity to 2x30 MW," said Director of PTPP Hidayat Lukman.
PP Energy also plans to conduct IPO in the second quarter of 2017. PP Energy is targeting to obtain Rp 6 trillion funds from the IPO, which will offer 35% new shares. PP Energy itself needs Rp 9.3 trillion capex in 2017. Meanwhile, PT PP Precast is targeting to obtain Rp 3.8 trillion from the IPO. In the future, PP Precast will focus on precast concrete projects for high-rise buildings.
PPRO stock split
One of PTPP subsidiaries, PT PP Properti Tbk (PPRO) will issue rights in the first quarter of 2017 with the target of Rp 1,6 trillion. "After that, PPRO will stock split," said Tumiyana. However, Tumiyana refused to specify the ratio of the stock split. “We will announce the ratio on January (2017),” he added.
The stock split is expected to make PPRO’s shares become more liquid. Because, the increase in the prices of its shares have been excessive therefore their movements have become slower.
When listing in May last year, PPRO has set the price at Rp 185 per share. As of Tuesday (6/12), the shares price has jumped more than seven-fold to Rp 1,385 per share.
Tumiyana added, PTPP aims at increasing its profit nets by 50% through the expansions. The issuer is also targeting to secure a 30% increase in income growth, or similar with the target of the new contracts. As of November 2016, PTPP has booked Rp 29.3 trillion of Rp 31 trillion total targets of new contracts in 2016.
Analyst at Samuel Sekuritas Akhmad Nurcahyadi assessed that the PTPP corporate actions will encourage and reinforce the competitiveness of this business group's equity level. Let alone, PTPP still has several joint ventures and will launch a number of expansions, while some of the company’s subsidiaries will conduct IPO. "This reflects the continuity of PTPP growth in the future," Akhmad wrote in his research.
Akhmad also recommends ‘buy’ for PTPP shares with a target of Rp 5,100 per share. This price reflects the 27 times PE .(Muhammad Farid/Translator)
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