The OG of Indonesia's soap operas

Raam Punjabi - a man who needs no introduction.

Founder of the production company PT Tripar Multivision Plus (RAAM), Mr Raam has humbly been deemed the most successful producer. Through his more than 30-years of leadership, Mr Raam has significantly improved the Indonesian entertainment industry as he reshapes the local media landscape through the many popular television programs he created. Amongst a few of the most notable releases of RAAM include: Tersanjung, Suami Suami Takut Istri, Doaku Harapanku, Soekarno, Kuntilanak, and many more.

Also as a man who has an eye for talent, Mr Raam has been behind the breakouts of many artists and actors in Indonesia including but not limited to Raffi Ahmad, Laudya Cynthia Bella, Luna Maya, Bunga Cinta Lestari, and Chelsea Olivia.

Today (May 8, 2023), RAAM will initiate its IPO on the Indonesia Stock Exchange (IDX) – offering approximately 929.2mn new shares, or 15% of the total issued and fully paid up capital. With an IPO price of IDR234 per share, RAAM has raised IDR217 bn in new capital, with the goal of expanding and strengthening its position in the film industry. According to its prospectus, 81.6% of IPO proceeds will be used for working capital, including the financing of film / web series / soap opera production and marketing activities. Whereas the remaining 18% of its IPO proceeds will be allocated to grow its Platinum Cineplex movie theater business (4 new cinemas targeted to open in 2023F, and 5 new cinemas targeted to open in 2024F). Annualizing its FY22F earnings, we calculated a 14x PE ratio multiple, far below its peers.

Source: PT Tripar Multivision Plus Tbk, Sucor Research

RAAM managed to be oversubscribed by 88 times from the total pooling allotment, showing investors’ significant interest in the company and faith in Indonesia’s entertainment industry.

With the many accomplishments of Mr Raam and PT Tripar Multivision Plus (RAAM) to date, Indonesia's film industry ecosystem still has tremendous opportunities for growth. Narrowing it down to the key elements influencing the entertainment industry are the following:

1. Number of viewers

Besides traveling, nothing excites us more than going back to the cinema to watch movies post-pandemic. According to a report published in 12M22 by filmindonesia, it is noted that 52.7mn Indonesian viewers watched films in FY22. This number is recorded to be higher than pre-pandemic levels, and is anticipated to continue on the trajectory as our country sees the rise of the middle-income population.

2. Film production

According to the same report published by filmindonesia, 84 films were screened in FY22, of which 26% drew audiences totaling more than 1mn viewers. This figure is the highest compared to pre-pandemic and, as our observation indicates, is anticipated to rise in line with the rising desire for local films. As seen in the Figure below, the amount of locally produced content has mainly been constant over time, but local movies' market share in Indonesia has been steadily increasing (with the exception of 2020 and 2021).

3. Number of cinemas

Most importantly, according to a research issued by Badan Ekonomi Kreatif (BEKRAF), the ratio of Indonesia’s population to screens is 100,000 : 0.4. When compared to other ASEAN countries like Malaysia, its population to screens ratio is 100,000 : 2.4. This translates to the analysis that Indonesia’s figures is currently strikingly lower than its neighboring countries, and merely 13% of Indonesians have access to cinemas in their neighborhood. Indeed, this presents opportunities for growth, where the market share in the cinema industry is expected to grow to IDR8.1 tn by 2026F. This is supported by the estimated value calculated from total sales in FY22, which are dominated by domestic films over foreign films, with a 61:39 ratio.

Throughout its more than 30 years in the industry, RAAM has garnered audiences from Indonesia, Malaysia, the Philippines, and generated more than 650 titles, 15,000 hours of film and television content, and 766 films that have been distributed locally, regionally and internationally.

Looking ahead, the company's long-term goal is to establish itself as Southeast Asia's top independent entertainment company. According to Allied Market Research, Indonesia's OTT market is projected to reach USD16,837 mn by 2031 (31.3% 10-year CAGR). With this, RAAM is one step ahead in its most recent endeavor to capitalize on the expanding OTT market through producing web series primarily for Vidio and Iflix.

In closing of the blog, here's a quote of RAAM's Mission Statement - yet another clear reflection of Mr Raam's excellent spirit:"..to innovate highest level of creativity providing the most entertaining, accessible and affordable experiences to every individual led by a passionate and entrepreneurial team."

That's it for today's report, and you can bet that I'll see you at the cinemas!

Cheers,

Boris the Broker🐾

SucorSekuritas