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Debutant Mitra Keluarga makes a splash at the local bourse
In the black: Indonesia Stock Exchange president director Ito Warsito (right) with PT Mitra Keluarga Karyasehat president director Rustiyan Oen (center) and PT Kresna Graha Sekurindo president director Michael Steven monitor the movement of Mitra Keluarga stocks during the companyâs debut on the bourse in Jakarta on Tuesday
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span class="inline inline-center">In the black: Indonesia Stock Exchange president director Ito Warsito (right) with PT Mitra Keluarga Karyasehat president director Rustiyan Oen (center) and PT Kresna Graha Sekurindo president director Michael Steven monitor the movement of Mitra Keluarga stocks during the company's debut on the bourse in Jakarta on Tuesday. More than 260 billion shares were sold during the initial public offering (IPO) at a price of Rp 17,000 per share. Antara
Mitra Keluarga Karyasehat made a stunning debut in the Indonesian Stock Exchange (IDX) on Tuesday, seeing its shares jump by nearly 40 percent from its initial public offering prices (IPO) ' the biggest jump in four years ' as investors remain optimistic about the country's hospital business.
Shares of Mitra Keluarga, traded under the code MIKA, opened ' and later closed ' at Rp 21,200 (US$1.64), surging by 24.71 percent from the IPO price of Rp 17,000. The shares briefly plunged to a daily low of around Rp 19,000, before climbing to a daily high of Rp 23,675 around an hour before trade closing. Mitra Keluarga ended as the day's top gainer, with it shares traded around 13,670 times by the end of the day.
Michael Steven of Kresna Graha Sekurindo, the lead underwriter of the IPO, said that the shares had been oversubscribed by a factor of 10.3 during last week's public offering, claiming that demands for the shares reached Rp 45 trillion. Around 53 percent of the buyers are foreign investors.
'This shows how enthusiastic investors are about Mitra Keluarga,' he said.
The hospital operator reaped Rp 4.45 trillion from releasing 261.91 million shares, ' equal to 18 percent of its enlarged capital ' about 189.16 million of which are owned by Lion Investments Partners BV, which saw its ownership in the company diluted from 66 percent to 49.7 percent after the IPO.
The remainder of shares to be floated ' equal to Rp 1.24 trillion ' are new shares, the proceeds of which will be used to finance the company's expansion.
Mitra Keluarga's public offering is the biggest since Garuda Indonesia, which went public in 2011, pooled Rp 4.7 trillion in an unabsorbed IPO in which its underwriters had to spend Rp 1.4 trillion to buy the unsold shares after investors balked at paying Rp 750 a share.
While analysts had raised doubts over the attractiveness of Mitra's costly shares, Desmon Silitonga of Millennium Danatama said that the success of the IPO was down to investors being enticed by the company's low price-to-earnings (PE) ratio.
The PE ratio, one of the most important indicators to value an investment, looks at the relationship between stock price and a company's earnings, and indicates if share prices are high or low.
'Mitra Keluarga's PE stands at 59.9 times its earnings, while for its peers Siloam International Hospital and Sarana Meditama Metropolitan it stands at around 213 and 66.6 times earnings, respectively. This means Mitra Keluarga shares are not that expensive,' he explained.
He further added that investors warmly welcomed Mitra Keluarga to the bourse given the company's positive financial performance and the prospects of the health sector in populous Indonesia.
The company has yet to announce its full-year financial performance. Mitra Keluarga's first nine-month financial result in 2014 showed the company's revenue had increased 11.1 percent year-on-year (yoy) to
Rp 1.47 trillion.
Mitra Keluarga president director Rustiyan Oen said that the company had booked a more than 20 percent yoy increase in its bottom line last year and would maintain the growth at around the same level for the next three to five years.
The company currently operates 11 hospitals ' seven in Greater Jakarta, three in Surabaya and one in Tegal, Central Java ' with a total bed capacity of 2,000 catering to 2 million patients a year.
Rustiyan said that his company planned to operate 18 hospitals by 2019 and was looking to build one new hospital in Kalideres, West Jakarta, this year.
