Susie Setiawati, CNBC Indonesia
Market
Tuesday, 08/08/2023 21:10 WIB
Photo: Irvin Avriano Arief/www.ifsa.or.id
Jakarta, CNBC Indonesia – Foreign investors are now starting to look at Indonesia’s multi-finance industry. The large opportunity for foreign investors to acquire multi-finance companies has made several multi-finance shares a hot topic of conversation among investors.
Deputy Commissioner for Supervision of Financing Institutions and Other Financial Services Institutions of the Financial Services Authority (OJK) Bambang Budiawan said investors from China and Korea are currently targeting multi-finance companies to be acquired at the end of the year or early next year.
Dominant incoming investors came from South Korea including Woori Card which bought Batavia Finance (BPFI), Japan including Mizuho which annexed PT Verena Multi Finance Tbk. (VRNA), and Singapore is part of the Mouladin group which bought PT Pro Car International Finance and changed it to PT Moladin Finance Indonesia (Mofi).
Bambang assessed that the trend of foreign investors entering finance companies in Indonesia deserves a positive and proportional response. For foreign investors, Bambang appealed to them to carry out long-term investments and must understand the potential and characteristics of the targeted market.
The influx of foreign investment has had a positive impact in terms of foreign exchange and the capacity of risk analytics modified by the character of Indonesian customers and the rotation of knowledge in areas that cannot be handled by local workers or professionals.
Most recently, MUFG Bank Ltd. and PT Adira Dinamika Multifinance Tbk (ADMF) officially acquired PT Mandala Multifinance Tbk (MFIN) with a transaction value of IDR 7.04 trillion in June 2023. This transaction is expected to be completed in early 2024.
Then not long ago, another financing issuer, namely PT Buana Finance Tbk (BBLD), revealed that the company would have a new investor.
Previously, the Main Director of Buana Finance Yannuar Alin said that there were several potential investors who were starting to aim to put their money into the company.
However, until now this has not materialized and is only limited to informal discussions.
There are eight multi-finance companies that have relatively low valuations with fairly good stock price performance throughout 2023 until the second trading session today Tuesday (25/7/2023).
Of the eight multifinance issuers, PT Clipan Finance Indonesia Tbk (CFIN) and PT Trust Finance Indonesia Tbk (TRUS) have low prices, aka undervalued, with PBVs below one.
By sector, the average PER of the multi-finance sector can be said to be cheap if it is below PER 10. So that PT Clipan Finance Indonesia Tbk (CFIN), PT Adira Dinamika Multi Finance Tbk (ADMF) and PT Wahana Ottomitra Multiartha Tbk (WOMF) are cheap sectorally. Meanwhile, PT BFI Finance Indonesia Tbk (BFIN) is at its current fair price, and the rest are fairly expensive, aka overvalued.
Of the several issuers above, it is possible that they will be targeted by foreign investors as long as the Company is able to maintain good performance going forward.
Disclaimer: This article is a journalistic product in the form of views from CNBC Indonesia Research. This analysis does not aim to persuade readers to buy, hold, or sell related investment products or sectors. The decision is entirely up to the reader, so we are not responsible for any losses or profits that arise from that decision.
Watch the video below:
Turmoil in the Year of Politics, Affected Multifinance Business?
(saw/saw)
2023-08-08 14:10:50
#Multifinance #Issuers #Targeted #Foreigners
