Photographer: Dimas Ardian/Bloomberg

This Stock Has Surged 3,100% in Just Four Months

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  • Indonesian company’s market cap has risen to about $1 billion
  • Shipping services provider seeks to grow through acquisitions

For Kardja Rahardjo, a 32-fold jump in his company’s shares in just four months, is all about more avenues of financing opening up for the Indonesian shipping services firm’s future acquisitions.

PT Pelayaran Tamarin Samudra is the top gainer among Indonesia’s 559 stocks this year, surging 3,091 percent since its initial share sale in May. The company, which counts China’s CNOOC Ltd. among its customers, is valued at about $1 billion, prompting at least four banks to line up to meet its financing needs, according to President Director Rahardjo.

Pelayaran wants to grow inorganically to benefit from a revival in capital expenditure by oil and gas explorers with crude prices stabilizing, Director and Corporate Secretary Leo Tangkilisan, said in an interview. It’s weighing options of an offshore loan and overseas bond issuance to acquire companies serving firms involved in oil and gas exploration or production, he said, without giving details about target companies or their location.

“The listing and the jump in stock prices are giving us more options for funding our growth,” Rahardjo said in an interview at his office in central Jakarta on Sept. 14. “I don’t know why we are among the top gainers. It’s the market which decides that. We are surprised at the readiness of investors to own the shares at even such a high price.”

Pelayaran, which sold 750 million shares in its IPO at 110 rupiah each, rose as much as 3.1 percent on Monday before ending unchanged at 3,510 rupiah, while the benchmark Jakarta Composite Index rose 0.2 percent.

Pelayaran is vying for contracts from Chevron Corp. Total SA and PT Pertamina Hulu Energi. to deploy two of its idle vessels, Rahardjo said. If it manages to close at least one deal before the end of the year that would boost the company’s earnings significantly as the barges have no loans, he said.

Pelayaran may post a “small net income” this year, compared with a loss of $6.8 million in 2016, Tangkilisan said. While the company has been recording operating profit for many years, higher depreciation has been causing losses, he said.

Government Policy

Pelayaran’s fortunes are directly linked to government policies related to the energy sector and President Joko Widodo’s efforts to boost output and cut reliance on imports will ensure it a steady flow of contracts, Rahardjo said.

Click here to read about Indonesia’s plan to boost energy output

“The potential for the oil and gas services industry remains good as the government is trying to develop the energy sector,” said Arief Budiman, an analyst at PT Ciptadana Sekuritas. “However, it all depends on how the government can push through their program and unless they can do that, the potential will not be materialized.”

Indonesia, a former member of the Organization of Petroleum Exporting Countries, is seeking to boost energy investment to reverse a declining trend in production by offering incentives such as tax-free imports of drilling equipment and simpler cost recovery. However, delays in project approvals and discovery of new fields have increased the nation’s reliance on imports.

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