ID - [ IMJS IJ]: Greater Clarity On Rights Issue, Maintain BUY
Andrey Wijaya, Alvin Baramuli - RHB Sekuritas

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♦ Maintain BUY with SOP-derived TP of IDR970, 50% upside, implying 14.7-10x FY19F-20F P/E, and 1.6-1.3x FY19F-20F P/BV.

♦ IMJS is seeking IDR527bn funding via a rights issue, by issuing 752.5m new shares (~13.04% of total capital) at IDR700/share (9% higher than yesterday’s closing price), with 20:3 ratio.

♦ The company’s parent IMAS would act as the standby buyer. We see this should solve an overhang on IMJS’ share price in spite of the slightly-lower exercise price than the initial plan.

♦ *This additional capital should ease the execution of its aggressive expansion. *

♦ FY19F earnings are estimated to rise 60% YoY (from 21.6% YoY in FY18), driven by faster growth in its logistic business.

♦ The company is trading at 10.1x FY19F rolling forward P/E, or ~0.1SD below its 5-year mean.

♦ Key risks include the availability of drivers, termination of contracts from third- party customers, fuel price hikes, a weakened IDR, and higher-than-expected cost of funds.
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