Waskita Beton Precast (WBP)’s plans for an IPO should be considered as a threat to Wika Beton Tbk (WTON) which previously had conducted an IPO. With a large asset and capitalization, the market will give more appreciation to WBP. Moreover, its parent company Waskita Karya Tbk (WSKT) has the largest revenue and capitalization in Indonesia for the construction sectors.
WBP’s target of new funds reached 5.27 trillion IDR by selling 10.54 billion shares or 40% from its total shares with a price of 400-500 IDR. This means that WBP’s market capitalization will soar immediately to 13.1 trillion IDR. It has far exceeded WTON which has 8.6 trillion IDR for their market capitalization. Even in their sector which is the basic industry, WBP’s market capitalization will soon surpass that of Krakatau Steel Tbk (KRAS)’s.
WBP currently has the same income with WTON. However, WBP’s net profit and assets are much higher than WTON’s. This will affect WBP’s price to be cheaper than WTON’s if it is referred to the P/E ratio. The P/E ratio offered by WBP is 15-18.5 times, while WTON’s has already reached 43 times.
Other than that, the WBP profitability performance is better than WTON’s. Compared to WTON, WBP’s net profit margin is nearly twice as high while their ROE is currently almost four times as high. Though WBP’s ROE is estimated to fall by a half, it is still better than WTON’s.
These calculations have not yet included the potential revenue and profit that will be owned by WBP when the company has entered the capital market. WBP’s excellence will also be reflected on the share price of their parent company, which is WSKT that had risen by 66% since the beginning of the year.
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