Cigarette giant HM Sampoerna (HMSP) and consumer goods giant Unilever Indonesia (UNVR) are two of the most profitable multinational companies in the country. In the first half of 2019, they paid a combined Rp19.53 trillion of dividends to their shareholders (mostly to their overseas parents), jumped from Rp16.2 trillion in the corresponding period last year.

Almost all of the world’s top ten tire manufacturers have production facilities in the country. They are Michelin, Pirelli, Bridgestone, Goodyear, Hankook, and Gajah Tunggal. While Indonesia is expected to be a competitive manufacturing base because of the country’s position as one of the world’s largest natural rubber producers, these tire giants actually target domestic market.

Food processor PT Siantar Top Tbk (STTP) is among winners of the first half. This company booked net profit of Rp248.8 billion, jumped by 86% from the corresponding period of 2018, thanks to strong sales revenue growth of 25.8% to Rp1.66 trillion. Siantar Top is also one of those continue to expand, shown by the use of Rp278 billion of cash in the acquisition of fixed assets in the first half, against Rp19.6 billion only in the same period last year.

XL Axiata (EXCL), considered third largest telco operator, booked net profit of Rp282.4 billion in the first half of 2019, better than net loss of Rp81.7 billion in the corresponding period of 2018. Unfortunately, XL Axiata’s performance in the second quarter weakened compared to the first quarter.

We attended Indo Water Expo 2019 few weeks ago. We met some companies from China, South Korea, Germany, United States, and other countries offering their respective products. One of the companies attracting our attention is Yunnan Water Investment from China, which has already had a project in Surabaya, East Java province.

While waiting winner of the tender to acquire over 3,000 telecommunication towers from Indosat (ISAT), let’s talk about valuation of independent tower operators listed on Indonesia Stock Exchange (IDX) and their performance. Centratama Telekomunikasi (CENT) by far is the only one releasing first half financial results. This company, where private equity firm Northstar is one of shareholders, reported net profit of Rp12 billion only, crashed 82.3% from the corresponding period of 2018.

Unlike Fajar Surya Wisesa (FASW), paper producer PT Suparma Tbk (SPMA) reported a relatively stronger second quarter. Sales revenues grew 16% year-on-year, while gross profit margin improved to 16.5% in the quarter. Suparma, unfortunately, is valued substantially less than its equity.

SCG Packaging, member of Siam Cement Group, has recently completed acquisition of 55% shares in paper producer PT Fajar Surya Wisesa Tbk (FASW) for Rp9.6 trillion. At the last quoted price, Fajar Paper had market value of Rp20 trillion or 4.6 x equity as at June 30, 2019. Overvalued?

Puradelta Lestari (DMAS), developer of Deltamas City in West Java controlled by Sinarmas Group, recorded net profit of Rp625.7 billion in the first half of 2019, skyrocketed from Rp93.8 billion in the corresponding period of 2018. Why? Well, sales revenues also surged to Rp985.2 billion from Rp246.8 billion in the first half of 2018. What’s special?