Research Report PT MNC Investama Tbk
Trade, Services, and Investment Sector
Strengthening with Digital Landscape
The Most Integrated Holding Investment Company in Indonesia
PT MNC Investama Tbk (BHIT) is the most integrated holding investment Company in Indonesia, with a stable and healthy balance sheet, supported by a total of IDR56.89 trillion in assets (as of 1Q19). BHIT runs four (4) main businesses, namely: 1) Media sector, through PT Global Mediacom Tbk (BMTR) operating the largest and most integrated media empire in Southeast Asia, with a portfolio consisting of national Free-to-Air (FTA) TV stations, content producer, subscription TV and online/ streaming businesses; 2) Financial Services sector, through PT MNC Kapital Indonesia Tbk (BCAP) providing one-stop-solution financial facilities including banking, consumer financing, leasing, securities, investment management, life and general insurance, 3) Lifestyle Property, Hospitality & Entertainment sector, through PT MNC Land Tbk (KPIG) which has grown to become one of the largest lifestyle property, hospitality & entertainment groups in Indonesia; and 4) Financial Investments.
Competitive Advantage and Business Prospect of BHIT
BHIT fully realized the future will be challenging, but at the same time, it will provide more opportunities for MNC Group to become one of the best investment companies in Indonesia. BHIT business through media sector contributed 79.95% to total 1Q19 revenue. Meanwhile, the financial service sector, along with other subsidiaries, contributed 17.72% and 2.33% to total revenue. We believe that going forward BHIT will be able to grow stronger with lower leverage and better performances of all its subsidiaries supported by: 1) Strong macroeconomic of Indonesia followed by a large and young population and growing emphasis to deepen media, internet and financial services penetration; 2) Solid synergy between MNC Group subsidiaries; 3) Right issues plans in 2H19E to further strengthen its capital structure, with targeted amount of IDR1.75 trillion; 4) BMTR through PT Media Nusantara Citra Tbk (MNCN) will launch FTA+, a mobile apps that consists of live streaming for the FTA televisions with various features in 3Q19E; 5) BCAP optimize MNC Group’s networks through access of SPIN, which features e-wallet, e-money, digital payment, fintech, and P2P lending; 6) Lifestyle Property, Hospitality & Entertainment, through KPIG is starting to unlock its value by developing major projects in Lido, Park Tower/ Park Hyatt Hotel Jakarta, Oakwood Hotel and One East Residence in Surabaya and Trump Bali Resort as a new tourism destination.
Valuation: Attractive, with only 0.17x of PBV
Based on Company data, 1Q19 BV of BHIT is IDR481.06 per share. The stock is trading at 0.17x of trailing PBV FY19. Along with an integrated business model applied in all businesses, focus on digital infrastructure & product and newly operated lifestyle property, hospitality & entertainment projects, the Company is confident it can deliver with solid catalysts ahead. MNCS is affiliated with the company. However, MNCS doesn’t give any recommendation related to company prospect. Recommendation: NOT RATED.
