Monday, September 30, 2013

Indonesia Market Summaries 30 September 2013

  • PT Budi Starch and Sweetener Tbk (MIND,Rp 100) has realized repurchase ( buyback ) as many as 12.1 million shares or a 0.3 % share of the total shares outstanding. Manufacturers of tapioca starch and cassava-based artificial sweetener that has set aside 25 billion to buyback shares amid plunging stock price index (IHSG).

    The company formerly known as PT Budi Acid Jaya Tbk has done buyback in the period of time, September 5 to 6, September 9 to 13, September 16 to 20, and then September 23 to 27. Funds of stock buyback amounting to Rp 25 billion is derived from the company's reserve fund, which the company retained earnings unappropriated, valued at Rp 209,6 billion as of June 30, 2013. (Bisnis.com)
  • PT Rajawali Nusantara Indonesia ( RNI ) Persero plans to acquire Australian cattle farms with 200,000-500,000 cows. According to the Director of RNI, Mr Ismed Hasan Putra, the company has prepared about 350 billion fund. This budget was derived from internal cash about 30 % and 70 % bank loan.

    Currently, the company is verifying five companies. He expects corporate takeover can be completed in January 2014. SoE Minister Dahlan Iskan has appointed PT Pupuk Indonesia Holding Company (Persero) to buy cattle company in Australia with a land area of ​​1 million hectares, while RNI can manage cattle in smaller amounts. (IMQ)
for Indonesia Market Summaries 30 September 2013

LPJKN proposed six actions to deal foreign currency fluctuations

The National Construction Services Development Institute (Lembaga Pengembangan Jasa Konstruksi Nasional / LPJKN)  proposed six actions to the government to deal with foreign currency fluctuations. 
  1. The government must establish the conditions of force majeure and revise the contract value by time duration, which is a multiyear, single year, and lump-sum contract.
  2. The contract price adjustment can only be done in times of crisis.
  3. Project delays can only be allowed if the agreement price adjustment has not happened.
  4. The contractor is allowed to cancel the contract without penalty if the contract value is not agreed upon negotiation.
  5. Review of final taxation for the period of crisis.
  6. Incentives import tax on building materials strategic to national development.
As a plant, the proposal will be submitted to the government next week .

The Association also stated that minimum wage (UMR and UMP) rising, increase in fuel price and IDR-USD volatility has a negative pressure on the construction industry. According to LPJKN, the supplier of goods is not willing to lock the sale price more than a week since the price fluctuating.

Analyst believe that the proposal would be a boost to the owner of the project contractor. If the government approve the proposal, the margin of contractors will be affected by the light conditions of crisis.

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Friday, September 27, 2013

Indonesia Market summaries 27 September 2013

Central Bureau of Statistics of Indonesia (Badan Pusat Statistik / BPS) will announce the September inflation and August trade balance at 1 October. Analyst predicts deflation will occur between the months of 0.05 % (MoM) and push inflation to 8.7 % between the year (YoY) which fell compare to inflation of 8.8% YoY last month. Since the beginning of the year (YTD), inflation will reach 7.9%.

Analyst observed that staple food commodities such as rice, peppers, onions, garlic, and beef are the main drivers. Transportation expenses will also be normal again after a period of Eid.

Nevertheless, core inflation can be increased slightly to 4.64% YoY from 4.48% YoY in August 2013. The main factor is the depreciation of 5.5% MoM and 0.6% MoM rise in gold last month.

Supply of cash funds increased 14.7% YoY in July from 11.8% YoY in June can cause pass through effect of core inflation in September 2013.

For the trade balance, there are trade deficit that will decline to U.S. $ 0.8 billion in August from U.S. $ 2.3 billion in July due to the lower imports. Import growth is predicted to fall to 2.4% YoY in August (compared to 6.5 % YoY in July 2013), while exports will be improve.

Predicted exports contracted 5.2% YoY from 6.1% previously. Decline in trade deficit also caused the value of imports, especially of fuel cut previously had increased because of Ied holiday. This cycle has occurred in recent years.

From 2005-2012 data, the trend of imports will rise by U.S. $ 1 billion in Eid then will drop. In addition , export performance also will not move significantly while the price of coal, palm oil, and rubber are still stable.

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Thursday, September 26, 2013

Indonesia Market summaries 26 September 2013

  • Ministry of Communication and Informatics Republic of Indonesia (Kominfo) insists will only approve the consolidation of PT XL Axiata Tbk (EXCL, Rp 4.425) with PT Axis Telekom Indonesia in the event of a merger. Kominfo will only support the merger because the number of telecom operators will be reduced.

    Kominfo said, the fewer number of operators will make a quality mobile broadband network to meet its criteria. They also said that the CDMA operators in the 850MHz spectrum should also get ready to unite its network even though the company will not unite. (Bisnis.com)
  • PT Modernland Realty Tbk (MDLN, 700) acquired 100% property project of Jakarta Garden City in Cakung, East Jakarta. The acquisition of this project occurred because MDLN has acquired the shares of PT Mitra Sindo Sukses and Mitra Sindo Makmur.

    On the other hand, MDLN projected revenue this year could reach Rp 2 trillion. By mastering Jakarta Garden City project, MDLN revenue targets next year increased to Rp 2,6 trillion. (Kontan)
  • Management of Bank Nagari still keen to do the initial public offering (IPO). IPO step is done to support the company's expansion. They would discuss the IPO plan with directors and shareholders. (Inilah.com)
  • Fitch Ratings assessed that tightening LTV for second and third homes will tame the property and house price growth in Indonesia. Significant growth occurred during the last 3 years. Fitch Ratings still believes that the property market is still attractive despite the growth of price will slow, and the developers are still able to compete in the more challenging conditions. (Fitch Ratings)
  • PT Sat Nusapersada Tbk (PTSN, Rp 92) allocates Rp 40,74 billion to buy back shares of about 20 % of the paid-up capital. The Company has appointed PT Samuel Sekuritas Indonesia, which will help the company in the buyback. (Inilah.com)
  • Energy services company PT Elnusa Tbk (ELSA, Rp 285) to realize the sale of 40% stake in its subsidiary, PT Patra Telekomunikasi Indonesia (Patrakom) PT Telekomunikasi Indonesia Tbk (TLKM, Rp 2.175). Sales made ​​on 25 September 2013 and the effective date of this sale is upon receipt of payment in full. (imq21.com)
  • PT Dharma Satya Nusantara Tbk (DSNG, Rp1.880) got a loan of Rp 201,58 billion of BBCA (Rp10.300, NEUTRAL, TP Rp10.300). 7-10 year loan tenure obtained by DSNG through eight subsidiaries for investment in oil palm plantation. (IDX)
for Indonesia Market summaries 26 September 2013

Wednesday, September 25, 2013

Indonesia Market Summaries 25 September 2013

  • Astra Group through PT Marga Mandala Sakti (MMS) targeting Balaraja Serpong toll road. Subsidiary of PT Astra International Tbk (ASII, Rp6.400, NEUTRAL, TP Rp7.300) targeting 40 km toll road by forming a consortium with Grup Sinarmas and Grup Kompas Gramedia.

    The joint venture will have a 70:30 ratio of debt compared to the proportion of cash that will be used. MMS focus on the Trans Jawa toll road Mojokerto-Kertosono along 40.5 Km which will be completed in September 2014. The company is targeting revenue Rp 600 billion this year (+20% YoY), while net profit rose just 10% targeted amid rising labor costs. (Investor Daily)
  • SUN's Auction managed to get requests Rp 25,78 trillion yesterday. In the auction, the government absorb the demand and issue Rp 12 trillion from Rp 8 trillion indicative target. Throughout the quarter III/2013 government has sold securities valued at Rp 77,76 trillion of the auction, above the target of Rp 72,9 trillion. Since the beginning of the year, the government has issued securities valued (Surat Utang Negara / SUN) at Rp 179, 18 trillion. (Kontan)
  • Issuer of Grup Sinar Mas, PT Pabrik Kertas Tjiwi Kimia Tbk (TKIM, Rp1.750) mortgaged 35.29% shares of its subsidiary - PT Oki Pulp & Paper Mills - to get a loan from China Development Bank Corp. The new shares are owned by TKIM since July 11 are pledged for a loan of U.S. $ 3 billion that will be used to build tissue and Oki Pulp paper mill. (Kontan)
  • PT Dayamitra Telekomunikasi (Mitratel) were given a backdoor listing option on the stock exchange by its parent company, PT Telekomunikasi Indonesia Tbk (TLKM, Rp 2.150, under review). Backdoor listing is A strategy of going public used by a company that fails to meet the criteria for listing on a stock exchange. To get onto the exchange, the company desiring to go public acquires an already listed company.

    The option was given with the portion of release shares held by TLKM up to 49% and open procedure for redemption through the exchange of shares and cash. (Investor Daily
  • Contract of Work (Kontrak Karya / KK) of PT Koba Tin was decided not to be extended. Management of tin mine land that abandoned by Koba Tin handed over to PT Timah Tbk (TINS, Rp1.470). This decision established on 18 September, after having been extended twice with a total duration of 5 months. A total of 75% stake in Koba Tin owned by Malaysia Smelting Corp and the rest owned by TINS. (Bisnis Indonesia)
for Indonesia Market Summaries 25 September 2013

Monday, September 23, 2013

Indonesia Market Summaries 23 September 2013

  • PT Kimia Farma Tbk (KAEF, Rp590) delay the issuance of bonds worth Rp 1 trillion, which is planned to be released this September. According to the plan, Funds from the issuance are for the construction of pharmaceutical manufacturing. The company plans to seek bank loans to those needs. (Kontan)
  • PT Timah Tbk (TINS, Rp1.530) targeting 51% stake in the new company which will replace PT Koba Tin. The plan is inline with the condition if the government did not renew the work contract of Koba Tin. (Investor Daily)
  • The IPO schedule of PT Link Net, a subsidiary of PT First Media Tbk (KBLV, Rp600) withdrew from the beginning schedule in the quarter III/2013. Delays occur until the end of this year due to the acquisition have not been pre-effective statement from the Financial Services Authority. (Bisnis Indonesia)
  • PT Cipaganti Citra Graha Tbk (CPGT, Rp265) acquired two taxi company, PT Pandu Persada Saranamukti and PT Andika Semesta. Acquisition through its subsidiary in the field of taxi services, PT Grand Transportasi Sejahtera. (Bisnis Indonesia)
  • Indonesian Government Bond Yields fell the most in among other Asian countries along with the Fed's decision delay tapering Quantitative Easing. The fall of government securities (Surat Utang Negara / SUN) yields  make its price in the secondary market climbed. However, the big fall of SUN also shows that the Indonesian bond market is very fluctuative. It also shows the pressure in the bond market decreased. (Kontan)

for Indonesia Market Summaries 23 September 2013

Thursday, September 19, 2013

21st Indonesia International Motor Show (IIMS 2013) organized by Dyandra

The subsidiary company of PT Dyandra Media International Tbk (DYAN), PT Dyandra Promosindo again organizing the annual car show event, The 21st Indonesia International Motor Show (IIMS) 2013 in Jakarta International Expo (JIExpo) Kemayoran - Jakarta. Officially opened by Indonesia Vice President, Mr Budiono today September 19, 2013.

IIMS known as the biggest automotive exhibition in Indonesia, IIMS hosted by Gaikindo is one of the biggest event which organized by Dyandra.

Theme for IIMS 2013 is 'Smart Vehicle Mobility', where smart mobility solution is the most appropriate choice for today’s urban society. IIMS 2013 will support and highlight steps taken by Indonesian automotive industry to develop innovative technology through the LCGC (Low Cost Green Car) programs.

There will be a 36 sole agent (Agen Pemegang Merek / APM) from 35 APM last year. While the support industry company reached 276 from 260 in 2012.

Gaikindo did not put specific targets sales to Indonesia International Motor Show (IIMS) 2013, but for the same event last year, IIMS 2012 recorded 368.790 visitors and Rp 4.2 trillion for the amount of transaction.

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Indomobil shows Datsun Go at IIMS 2013

PT Indomobil Sukses International Tbk (IMAS) through Nissan Motor Indonesia (NMI) displaying Datsun Go in Indonesia International Motor Show 2013 (IIMS 2013).

Datsun Go at Indonesia International Motor Show 2013


After being introduced to the media, Tuesday, 17/9/2013, Datsun Go finally can be seen by the general public in the annual car show event, IIMS 2013. There are 2 types of LCGC car that will be in the market in 2014, Datsun Go and Datsun Go+.

NMI explains the presence of Datsun Go in IIMS 2013 is still a show car, there is no order units and it will be sold in 2014.

As is known, some manufacturers are planning to introduce LCGC cars, such as Honda Prospect Motor launched Brio Satya, Agya by Toyota, Ayla by Daihatsu.  And Datsun Go will complete the market of LCGC car segment in Indonesia.

for Indonesia Market Summaries

Friday, September 13, 2013

Indonesia Market Summaries 13 September 2013

  • Approximately 90 % stake in PT Siloam International Hospitals Ltd (SILO, Rp 9.650) absorbed by foreign investors . The entry of foreign investors mostly in the form of institutions, while the rest is absorbed by local investors. The company who engaged in the business of the hospital has just recorded their IPO and raised Rp 1,4 billion fund.

    After IPO, SILO directly boosted their expansion to have 40 hospitals by 2017. Next year, the management set aside U.S. $ 100 million fund, or equivalent to Rp 1,11 trillion, to fulfill the development needs of the hospital with a target of six to eight new units. (Kontan)
  • PT Pemeringkat Efek Indonesia (Pefindo) downgraded PT Aneka Tambang (Persero) Tbk (ANTM, Rp 1.450 under review) of idAA to idAA-. The downgrade is primarily driven by the decline in nickel prices which could disrupt the company's cash flow. (Pefindo)
  • PT Cipaganti Global Corporindo sell PT Citra Graha (CPGT, Rp 275) of 117.647.058 shares at a price of Rp 255 per share on August 29, 2013. Andianto Setiabudi, Corporindo Cipaganti director, said the sale of shares with a total value of approximately Rp 29,9 billion is intended to supplement Cipaganti Citra Graha's working capital. (Bisnis.com)
  • PT Bank Permata Tbk (BNLI, Rp 1.280) will raise interest rates on deposits by 125 bps, following a rise in BI Rate to 7.25% since the beginning of the year. On the other hand, the company recorded priority customers have reached a total of 50,000 customers from as many as 1.5 million customers . Thus, the total funds under management of priority customers reach Rp 40 trillion to Rp 45 trillion. (Inilah.com)
  • Indonesia Stock Exchange (IDX) reported a number of local investors who invest in corporate bonds surged by 43.85% to 6,315 accounts per August 30, 2013, from the previous 4,390 accounts in the same period last year . IDX data also show the number of domestic investors who have securities accounts increased 12.45% from 230.360 to 259.037.

    Meanwhile, the number of accounts for Indonesian Government Retail Bond (ORI) has not changed. Current account number of ORI are 73.042. As of 4 September 2013, the percentage of shareholding foreign investors accounted is 56.17% or decreased when compared to the end of 2011 which was in the range of 60%. (Bisnis.com)
for Indonesia Market Summaries 13 September 2013

Thursday, September 12, 2013

Indonesia Market Summaries 12 September 2013

  • PT Modernland Realty Tbk (MDLN, 700, BUY, TP Rp 1.250) seek approval of its shareholders at the EGM 27 September to seek bank loans. The fund is intended to be a source of funding for the acquisition of Jakarta Garden City of Keppel Land that has been previously announced.

    As a result of the world financial market conditions that are not conducive, MDLN failed to issue bonds denominated in U.S. dollars that were previously planned and are looking for alternative financing from banks. In the EGM, MDLN also requested approval of a stock split 1:2 . (Company Released)
  • PT Cemindo Gemilang , the owner of Semen Merah Putih, began to build a new cement plant worth U.S. $ 600 million. The factory of Ganda Group company in Banten will have a capacity of 4 million metric tons per year and will start operating in 2015. The plant capacity can be increased to 12 million metric tons per year with a total investment of Rp 1,8 trillion. (Investor Daily)
  • PT Astra Otoparts Tbk (AUTO, Rp3.550) of Group Astra will pay an interim dividend of Rp 22 per share (0.6 % yield). Cum date and ex date of dividend is 2 and 3 October, while the distribution will be made on October 23.

    Another ASII subsidiary, PT Astra Agro Lestari Tbk (AALI, Rp 21.400, BUY, TP Rp 21.900) and PT Astra Graphia Tbk ( ASGR , Rp1.230 ) will also pay dividends Rp 160 and Rp 18 per share. (IDX)
  • Property company PT Surya Semesta Internusa Tbk intends to hold a buyback worth IDR200 billion. The funds will be used to purchase a maximum of 20 % of its shares in the stock market. (Investor Daily)
  • Group Emtek PT Elang Mahkota Teknologi Tbk (EMTK, Rp 5.450) develope their business into the health care sector by acquiring ​​1.5 hectares area of RS Usada Insani in Tangerang. Acquisition is done by forming a joint subsidiary namely PT Surya Cipta Medika. The business group of Sariaatmadja was known as SCTV and has other business lines such as solutions and connectivity. (Bisnis Indonesia)
  • PT Nippon Indosari Corpindo Tbk (ROTI, Rp 5.950) will hold the sale price this year despite there are any invasion of foreign companies and increased costs when fuel prices rise. The selling price was hold especially useful for maintaining their market share. (Bisnis Indonesia)
for Indonesia Market Summaries 12 September 2013

Honda Prospect Motor Launch Brio Satya environmentally friendly car

Honda launched the Honda Brio Satya, a cheap environmentally friendly car yesterday. The launch was also accompanied by the launching of All New Brio.


So there are three line-up types of New Brio:
  • Brio Satya - range price from Rp 106 million to Rp 117 million
  • Brio 1.2L - range price from Rp 131 million to Rp 136 million
  • Brio Sports 1.3L - range price from Rp 169 million to Rp 179 million
The CBU version of the Honda Brio (1.3L engine) was launched in August last year, with cumulative sales of 15,000 through August 2013.

Compared with LCGC model, the Satya (Rp 106 million to Rp 117 million) , there are still buyers who will be having Brio 1.2L (Rp131 million to Rp136 million) because it has an automatic transmission and the difference in monthly payments is not as significant (Rp 900.000 for 3 years tenor).

To the 1.3L Sports model (Rp 169 million to Rp 179 million ), buyers will not so enthusiast but it can boost the image of "premium " on the Brio brand.

Regardless of the type of Sports 1.3L model, Brio pricing at levels Rp 106 million to Rp 136 million is still more expensive 6 to 15 million rupiah compared to Toyota Agya (Rp 100 million to Rp 121 million) and 30 to 60 million rupiah on top of Daihatsu Ayla (Rp 77 million - Rp 107 million). It is believe that buyers will also compare the Brio with Agya not Ayla.

On a monthly basis, the difference between Brio and Agya installments based on 3 years tenor are  Rp 173.000 to Rp 486.000 for manual transmission and Rp 591.000 to Rp 733.000 for automatic transmission.

What are the main differences for this New Brio?

With higher prices, Brio is equipped with a 88 HP 1.2L engine, compared with Agya with 65 HP 1.0L engine. Other features are relatively similar.

Honda has a strong branding in the segment of passenger cars in Indonesia with 8.1% market share during the first 7 months of 2013. With the design and specifications, Brio can take Agya market, but it will not much because the dealerships capacity is only about 120, compared with Toyota (240) and Daihatsu (200).

Honda targeting to sell 4,000 units of Brio per month, with about 1,200 of Satya. The first deliveries expected in November 2013. For comparison, Agya / Ayla predicted will be posted sales of 8,300 units in 2014.

To support assembly, Honda intends to increase its plant capacity to 180,000 per year from 60,000 per year to increase the capacity of 120,000 per year, equivalent to the capacity of LCGC of PT Astra International Tbk (ASII, Rp 5.950, NEUTRAL, TP Rp 7.300).

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Wednesday, September 11, 2013

Indonesia Government reviewing to raise royalties and export duties of coal commodity companies

The Indonesia Government reviewing to raise royalties and export duties of coal commodity companies. The goal is to increase state revenues in the volatile situation.

Special Staff of ESDM Minister, Mr Thabrani Alwi said the government reviewing to raise coal royalties and export duties for Coal to 10% to 13.5%.

"Currently, the government plans to increase coal royalties are devoted to IUP (Mining Permit) from 5% until 7,5% to 10% until 13.5%," said Thabrani at the Ministry of Energy and Mineral Resources, Wednesday (11/9/ 2013).

As for the coal mining company, the Coal Mining Employers Work Agreement (Perjanjian Karya Pengusaha Pertambangan Batubara / PKP2B), the royalty it is not altered or it is a fixed royalty of 13.5%. "For PKP2B, the royalty is fixed," he said.

Based on Government Regulation No. 9 of 2012 concerning Types and Tariffs on Non-Tax State Revenues, royalties for open pit coal pegged between 3% -7% of the sales price depending on the type of calories.

As for coal from underground mines the amount of the royalty is 2% for calories less than 5,100 calories per Kg.

for Indonesia Market Summaries

Indonesia Market Summaries 11 September 2013

  • PT Moderland Realty Tbk (MDLN, Rp690) will undertake the acquisition of 51% shares owned by PT Mitra Sindo Sukses (MSS) from Le Vision and 51% shares owned by PT Mitra Sindo Makmur (MSM) from Castlehigh. Currently MDLN already has a 49% stake owned by those two companies. The acquisition plan as an effort to gain additional operational support in terms of land area supply.
  • PT Jasa Marga Tbk (JSMR, Rp5.600) targeting total revenue amounted to Rp 6 trillion in 2013. This was done after Jasa Marga will operate 3 new toll roads and encouraging other construction projects. In the second semester of 2013, Jasamarga will target an income of Rp 2,78 trillion, which is obtained through the highway at 68% and the rest through the construction business and other services. (Vibiznews)
  • PT Dyandra Media International Tbk (Dyan, Rp240, BUY, TP Rp425) has budgeted approximately Rp 85 billion to buyback shares amid stock market turmoil. The fund is approximately 20% of the value of the paid-up capital and it is from company's retained earnings. (Bisnis.com)
for Indonesia Market Summaries 3 September 2013

Tuesday, September 3, 2013

Indonesia Market Summaries 3 September 2013

  • PT Astra Agro Lestari Tbk (AALI, Rp20.550 BUY TP: Rp21.200 ) and Kuala Lumpur Kepong form a joint venture to market AALI downstream products abroad. Both have set up a company engaged in crude palm oil refined products (downstream products), and market their products abroad. (Company Release)
  • Management of PT Media Nusantara Citra Tbk (MNCN, Rp2.825 ) said they have terminated the discussions with VIVA group regarding the proposed acquisition of ANTV. MNC said that the company's valuation and market situation into uncertainty become the reasons for cancellation of the acquisition.
    Furthermore, they said that there is a better way to increase shareholder value is doing a buyback. The Company also will wait for a more opportune moment to make acquisitions. Previously rumored, that MNC group interested in buying shares of VIVA group. (Inilah.com)
  • Based on data from the Central Statistics Agency (Badan Pusat Statistik / BPS), the soybean imports in this year (January to July) stood at 1.1 million tons, worth U.S. $ 670 million equivalen to Rp 6,7 trillion.
    Details, soybean imports in July amounted to 227 thousand tons or U.S. $ 140 million. That number is higher than June which amounted to 175 thousand tons or U.S. $ 105 million. So also with Mei that recorded 184 thousand tons or U.S. $ 113 million. (DetikFinance)
  • Bank Indonesia (BI) will accelerate the launch of the implementation of the rules of banking services without offices alias branchless banking, because of banking supervision will move into the hands of the Financial Services Authority (Otoritas Jasa Keuangan / OJK) began early in 2014.
    Initially, branchless banking rules will glide after branchless banking test pilot project ends in November 2013. However, the central bank will promote the launch of a regulation in September or no later than October 2013. (Kontan.co.id)
  • Significant Expense of PT Unilever Indonesia Tbk (UNVR, Rp30.550 Rp30.650 NEUTRAL TP) imposed by the related parties by June 2013 rose 48.14% compared with the same period last year to Rp 689,946 billion.
    The increase is due to the cost of services fueled by UBGS which skyrocketed while the royalty burden down. Meanwhile, the burden of royalties owned by Dutch giant retail is down 29.18% from Rp 360,412 to Rp 255,234 billion. (Bisnis.com)
Indonesia Market Summaries 3 September 2013

Monday, September 2, 2013

Minz SP has denied the allegations from Glaukus Research

China Minzhong (Minz SP) - a subsidiary company of PT Indofood Sukses Makmur Tbk (INDF, 6,500, BUY, TP Rp 7,500) - has denied the allegations from Glaucus Research and assess that those view was reckless opinion and misleading.

The vegetable processing companies of the People's Republic of China (PRC) was previously accused by Glaucus Research Group. Glaucus accused Minz has inflated the amount of assets and income which are presented to the Singapore Stock Exchange (SGX).

Minz also accused and reported their total capital expenditures of 2011-2012 were different from that recorded in State Administration for Industry & Commerce (SAIC).

Minz said that Glaucus did not understand the business and operational environment in China, and stated that any firm statements have been adjusted to the financial reporting standards (FRS) and have been audited by Crowe Horwarth First Trust LLP.

In detail, the following rebuttal by Minz against Glaucus report:
  1. No sales were inflated. Legal adviser of the Hong Kong Trading Co. Yifenli willing to provide evidence of the sales contract and to confirm their trade relations.
  2. Proof of purchase from the company to Chengdu Shufeng for question period are also available.
  3. Minz said that there was no major consumer transactions are covered, including the Putian that has a normal commercial contract. Related to Glaucus allegations that there is a covered affiliate transactions in Putian, the company said that Lin Guo Rong (Chairman of Minz SP) and legal counsel of one of its subsidiary, Ping Guo Lin, was never involved in the daily activities of management and operations. Both of them also do not have the Putian stock either directly or indirectly.
  4. Capital expenditure stated by Minz can be provable. Glaucus also accused only show Minz 2010-2012 financial statements partially and did not consider differences in the calculation of generally accepted accounting principles (GAAP) in China and the FRS.
  5. Financial performance can also be proved as Glaucus is considered to have improper of EBITDA count and did not understand the tax calculation. Income derived from the sale of fresh vegetables are tax-free while the income of vegetable processed and branded products are taxable.
Minz also stated that the company has received letters of interest from INDF which will be announced today. Although we have not been sure what kind of bid that will be submitted by Indofood, but there is a possibility that INDF intends to increase its ownership in Minz as the majority and took over the operations and management thus increasing control by Indofood.

Earlier, INDF acquired a 29.3 % stake of Minz with average purchase price of SGD 1.02 per share or totaling SGD 195 million.

Although, Minz official explanation were relief but we assess the condition of Minz is overhang and has a negative sentiment from this scandal. Sentiment was mainly exist when it's linked to a similar scandal and delisting from some Chinese companies were listed on the Singapore (S-chips).

The majority acquisition of Minz stake will make the overhang condition fade away. However, INDF is still consider to be  potential for investors.

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