Indonesia: GoTo, PT Nippon Indosari Corpindo Tbk. (ROTI) and more

In today’s briefing:

GoTo IPO – Past Performance Hasn’t All Been Great

GoTo aims to raise around US$1.25bn from a local listing, which will mainly be targeted at domestic investors.
GoTo, is an Indonesian holding company, was formed in May 2021 as a result of a merger between Gojek, leading player in ride hailing, and Tokopedia, leading e-commerce player.
In this note, we talk about the company’s past performance.

GoTo (1379371D IJ) is offering 52bn shares in its IPO (plus a greenshoe of 7.8bn shares). The issue is being targeted at domestic investors and should list on 4 April.
GoTo (1379371D IJ) will also look to list on an international exchange within the next two years by selling just over 8% of the company to those investors.
Inclusion in domestic indices could take place in July, while inclusion in the MSCI and FTSE indices is expected in 2023 at the earliest.

Indonesia’s leading mass-market bread producer PT Nippon Indosari Corpindo (ROTI IJ) booked a strong set of FY2021, with general trade driving growth, and greater efficiencies enhancing margins and FY2021 growth.
The company continues to improve its product mix and distribution to cater for more home consumption and also continues to push out into East and West Indonesia geographically.
Higher wheat prices are a risk but the company has bought forward and will increase prices if needs to be offset higher cost. Valuations are attractive versus history.

GoTo (1379371D IJ) is the leading digital ecosystem in Southeast Asia. It seeking to raise up to $1.3 billion. Bookbuilding runs from 15 to 21 March.
The fundamentals are mixed as the high growth is accompanied by ongoing losses and cash burn. A credible path to profitability is yet to be established.
In an environment where growth-at-all costs tech firms and peers have materially sold-off and are out of favour, GoTo is not for the faint-hearted.

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