Examining the Future Direction of Berkah Prima (BLUE) After a Change in Controlling Shareholder: Will it Change its Business Model?

Examining the Future Direction of Berkah Prima (BLUE) After a Change in Controlling Shareholder: Will it Change its Business Model?

The printing company PT Berkah Prima Perkasa Tbk (BLUE) has the potential to change its focus to the mining business after Dragonmine Mining, a company from Hong Kong, became the controlling shareholder of BLUE. Dragonmine Mining will acquire 334.4 million shares of BLUE, or 80% of all shares that have been placed and fully paid up.

Based on its profile, Dragonmine Mining (Hong Kong) Limited is a private company headquartered in Hong Kong and owned by Huayou Hongkong Limited. Although BLUE has not yet disclosed in detail the identity of Dragonmine Mining, Huayou Hongkong Limited is a subsidiary of Zhejiang Huayou Cobalt Co., Ltd., which focuses on overseas investment in the mining and mineral sectors.

Huayou has five main business pillars that cover the entire lithium-ion battery material industry chain. In its global strategy, the nickel industry in Indonesia is one of the sectors considered strategic.

The Chinese company continues to expand its presence in Indonesia to build an integrated battery ecosystem, including through the development of the Titan Project in collaboration with PT Aneka Tambang Tbk (ANTM) and Indonesia Battery Corporation (IBC).

In line with this, Head of Research at NH Korindo Sekuritas Indonesia, Ezaridho Ibnutama, sees an opportunity for BLUE to change its business direction after the change in controlling shareholder. According to him, this step could be a way to improve the performance of companies with weak performance on the Indonesia Stock Exchange (IDX).

Moreover, during the previous period when market supervision was limited, Ezaridho said, this opened up opportunities for companies with better quality to enter the stock exchange through a backdoor listing scheme.

He also mentioned that the IDX has now released new regulations that allow issuers to change their stock codes (tickers). Moreover, he said that about 30% of companies listed on the IDX are still recording net losses.

“With the reform of the capital market which requires a higher proportion of publicly traded shares based on market capitalization size, these new regulations are triggering new obstacles in IPO actions,” said Ezar, Monday (February 24).

In addition, Dragonmine Mining is part of the Zhejiang Huayou Cobalt Co., Ltd. network, which has invested billions of dollars in nickel projects in Indonesia, including in the Morowali and Pomalaa Industrial Zones.

He believes that the potential for nickel assets to be included in BLUE’s business structure is open. Along with this acquisition news, BLUE’s shares also soared. Year-to-date, its share price has increased by about 117% and has soared by almost 1,900% in the last year.

“However, BLUE’s share price had corrected in the middle of fluctuating market conditions when it announced the CSPA facts,” he said.

Ezaridho said that Dragonmine’s move to acquire BLUE is not an isolated phenomenon. If you look at a similar pattern, Ezaridho said that this step is like the Chinese battery material manufacturer CNGR Group becoming the controlling shareholder in PT Solusi Kemasan Digital Tbk (PACK).

The company, which initially operated in the packaging business, was then acquired by PT Eco Energi Perkasa, a company owned by Deng Weiming, the founder of CNGR Advanced Material Co., Ltd., which is known as one of the largest battery manufacturers in the world.

After the acquisition, Ezaridho said, PACK changed its name to PT Abadi Nusantara Hijau Investama Tbk and announced a plan for a large rights issue to include nickel mining and smelting assets into its business.

He said that for global players such as Zhejiang Huayou Cobalt Co., Ltd. and CNGR Advanced Material Co., Ltd., acquiring small-capitalization issuers such as BLUE and PACK is a quick way to enter the capital market. According to him, this step offers an express route compared to having to conduct an IPO from the beginning, which is a longer process.

“They use listed companies to attract capital from local and institutional investors through rights issues to finance nickel downstreaming projects in Indonesia,” he said.