Company Background
PT Sri Rejeki Isman Tbk (publicly well-known as Sritex) founded by H.M. Lukminto as traditional trading company in Pasar Klewer, Solo, in 1966. Expanding the business, the company opened its firs printing factory that produce bleached and dried fabrics in Solo in 1968. The year after, it established its first weaving mills (1982) and expanded factories of
its four product lines, marking it as integrated textile company. Recently, the company has an integrated vertical textile – garment plants which consist of 9 spinning plants, 3 weaving plants, 3 drying/printing plants, and 7 garment plants at an area of 50 Ha in Sukoharjo, Solo, Central Java, with total employees of approximately 16,000 people.
Wide Variety Product with Diversified Market
The company products divided into four categories; yarn, greige, fabrics, and apparel that are sold to textile producers as well as retailers. Beside marketed locally, the company has been able to penetrate into 94 markets in 55 countries. The company also provides uniform products for corporate as well as military. Currently, it covers military uniforms and supporting products for over 30 countries. It is also designated to be official partner outside Europe to produce military uniform for NATO.
Strong Financial Performance
The company demonstrates growing revenue as registering a CAGR of 12.8% during 2008-2012. Strong contribution from export market (covers 54% of total FY12 revenue vs 50% in FY11) was addressed on the solid revenue performance. It also helps the company eliminating forex risk on the raw materials, which basically commodity-based. As a result, gross profit and net income rose significantly with a CAGR of 27% during 2010-2012 with rising margin (from 17% and 6.4% in 2010 to 22% and 8.0% in 2012 respectively).
Offering 30% Stake at Rp230-385/Share
The company is planning to offers up to 5.6 bn new shares to public, which represents 30.12% of enlarged capital. With a nominal value of Rp100/share, offering price of the company’s share ranging from Rp230-385/share. Total proceeds of approximately Rp1.292.16 tn will be used to increase production capacity, particularly in spinning and garment plants from 287k bale of yarn/year and 8 mn pieces of apparel/year currently to 700k bale of yarn/year and 16 mn pieces of apparel/year. Acting as underwriter is PT Bahana Securities. Using historical 27% CAGR in net income in the past three years, FY13 net income may reach around Rp291 bn (EPS: Rp15.6/share). Therefore, the offering price reflects PER’13 of 14.7-24.6x.
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