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Premier Insight : SCMA, targets to complete acquisition of 3 digital companies by end of May 2019
Friday, May 17, 2019       09:08 WIB

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Surya Citra Media ( IJ; Rp1,510; Not Rated) targets to complete acquisition of 3 digital companies by end of May 2019.
The company previously already announced (Mar-Apr 2019) intention to acquire online media companies and non-preemptive right issue (PMTHMETD) plan to fund the acquisition (max. Rp360bn; affiliated transaction) and remaining proceed for working capital and/or acquisition funding aligned with company's growth and strategy.
EGM on 16 May approved the acquisition plan. The number of shares to be issued as PMTHMETD is max. 10% of capital issued and fully paid (max. 1.46bn shares) with est. proceed of c.Rp3.6tn. Based on max. target proceed and max. number of shares issued mentioned in news above, we calculate the PMTHMETD plan implies average price of Rp2452/sh.
targets 2019F revenue growth of 8%YoY and net income of 10%YoY. Company expects healthy growth in 2Q19F from Ramadhan and e-commerce advertisement. estimates capex of Rp580bn in 2019 for infrastructure development and renovation for its facilities, using internal cash.
After acquisition of 3 digital companies, digital media division's potential contribution to revenue is 10% to 's top-line.
AGM yesterday approved final dividend of Rp31sh (implying yield of 2%; excluding interim dividend) - cum date 24 May. prev. distributed interim dividend of Rp20/sh in Dec 2018.
trades at 2019 PE of 14x. (Kontan, IndoPremier, Bisnis Indonesia, Bloomberg).


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