Experienced Investor Lo Kheng Hong Not Interested In Buying Bukalapak Shares: Not My Criteria, They Still Lose IDR 1.35 Trillion

Lo Kheng Hong. (Photo: Doc. ardiarmandanu.com)

JAKARTA - A lot of discussion about the IPO of PT Bukalapak.com Tbk (BUKA), also 'pricked' the ears of veteran investor Lo Kheng Hong. According to the man who is referred to as Indonesia's Warren Buffet, he does not want to buy BUKA shares because it is not included in the criteria.

"If I am a conservative investor, so there are criteria in buying shares, one of which is buying a company that has high profits and low valuations," said Lo Kheng Hong in a virtual seminar, quoted Friday, July 30.

According to the man who is familiarly called Pak Lo, there are two criteria that do not meet my criteria, namely the company is still at a loss and the valuation is high. He said there are three things a smart investor would do.

First, a smart investor will choose a company that is managed by honest management and integrity. Second, investors will buy companies in the right and good industries. Third, buy companies that make big profits.

"Of course I didn't buy, my third criterion was not met," he said.

Based on the company's financial statements, Bukalapak still recorded a net loss. In 2020, Bukalapak's net loss reached Rp1.35 trillion, down from the previous year's Rp2.79 trillion.

The net loss per share of Bukalapak attributable to shareholders of the parent entity is Rp171.48, a decrease from the previous Rp365.79.

In addition to still making losses, according to Mr. Lo, Bukalapak's valuation is still quite expensive for him. In the first quarter of 2021 financial statements, Bukalapak recorded revenue of IDR 423.7 billion.

With this assumption, the annualized income is around Rp. 1.69 trillion. Thus, the calculation of revenue per share becomes Rp1.69 trillion divided by 103.06 billion shares, which is Rp16 per share. So the IPO price of Bukalapak is Rp.850, which reflects the price to sales ratio of 51.7 times.

"The valuation for me is very expensive, smart investors buy cheap valuations or Mercy sells at Avanza prices," said Lo Kheng Hong.