Achiko announces successful capital increase
Achiko today announced the successful completion of a capital increase. The company’s share capital was increased by kUSD 20.0 from kUSD 91.4 to kUSD 111.4 by issuing 2.0 million bearer shares with a par-value of USD 0.01. All new shares have been placed at a price of USD 1.00 per share, substantially above yesterday`s closing price of USD 0.22. Gross proceeds from the capital increase in the amount of USD 2.0 million will be used to strengthen the equity base and to support the company’s organic growth and the further rollout of its platform strategy. The new shares were subscribed by major shareholder MNC Group (PT Media Nusantara Citra), one of Indonesia’s largest integrated media groups and also a significant shareholder in Achiko.
In addition, a USD 2.0 million convertible bond has been announced, to be completed within 20 days.
Only recently, the company reiterated its guidance and continues to expect an increase in revenues to USD 50 million and USD 110 million and an increase in the number of unique users to 5 million and 12 million in 2020e and 2021e, respectively, which is significantly above our own predictions. The organic growth expected is mainly based upon two sources: Firstly, on Achiko’s leading e-payment solution in Indonesia which enables the settlement of credit card payments, online transfers, and e-commerce transactions without customers being required to have an own bank account or financial services provider. Secondly, on the planned introduction of its e-payment services, video games, and messenger services in neighbouring territories with similar population structures and a similarly low percentage of bank account holders along with a high Internet penetration rate.
With this growth story fully intact, in our view, we reiterate our Buy rating for the shares of Achiko Ltd., but reduce our discounted cash flow entity model (primary valuation method) driven price target to USD 1.10 from USD 1.20, following the increased number of shares outstanding.
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