Nippon Indosari Corpindo Tbk (ROTI) will issue new shares with rights issue (HMETD) with a maximum of 1.15 billion shares around IDR 1,200 to IDR 1,300 per share, so the company has the potential to receive IDR 1.38 trillion to IDR 1.49 trillion.
The management said the proceeds will be used to build four to five bakeries in Indonesia as well as in the Philippines. The company is also planning to build a special factory to produce frozen bread, pastries, and cakes. The rights issue is targeted to be implemented in October 2017.
Currently, ROTI has ten factories in Sumatra, Java, and Sulawesi. The company’s capacity utilization reaches 80 percent. In the first quarter of 2017, revenue dropped 1.3 percent to IDR 602 billion, as well as net profit by 67 percent to IDR 27 billion. The decrease in net profit was influenced by the decline in income and the
increase in cost of goods sold by 5.8 percent to IDR 303 billion.
Samuel Sekuritas Indonesia recommended BUY for ROTI with a target price of IDR 1,450. (*)