THE INITIAL PUBLIC OFFERING OF PT YELOOO INTEGRA DATANET Tbk (A CASE STUDY)

• Main Author: Novaldi, Arief
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/42571
• Institution: Institut Teknologi Bandung

PT Yelooo Integra Datanet Tbk (“the Company”/ “YELO”) is one of start-up firm from 76 firms under IDX incubator program who have had success in conducting initial public offering (IPO) in October 2018. The Company’s IPO is to finance their business development to support the expected growth in the future. As reported by CNBC Indonesia, the Company record an oversubscribed 10.27 times during the book-building process. The market price of YELO as of 30 June 2019 of IDR 212 per shares. Based on the FCFF method, YELO is undervalued; the intrinsic value of YELO shares is IDR 443 per shares, while based on PER method, YELO is also undervalued with intrinsic value of IDR 390. The PBV of YELO as of 30 June 2019 is 0.98 with BVPS of IDR 215. The market price might be experiencing further depreciation up to 18% from market price as of 30 June 2019 as result decrease of operating margin by 6% and net profit margin by 4% compared to 31 December 2018 although the revenue already reaches 79% within 6 months of revenue 2018. Therefore, the management need to improve their performance to increase the performance of shares price. For existing investors, the author recommends holding their investment until such time YELO shares will reach or better yet, exceed its intrinsic value. While, for potential investor the author recommends buying the shares at PBV below 1, as condition. In doing valuation, FCFF give higher value rather than PER approach due to PER did not considering reinvestment activities to support the growth but only rely on the earnings or result from operating asset only. In practice, the author recommends using FCFF approach in valuing a start-up firm or a young company although this method is more time consuming compared to the PER approach.