Behind Cashlez's Optimism to Immediately Floor on the Stock Market

Cashlez, startup fintech moving in payment gateway and mPOS, perform corporate action to be listed on the stock exchange. According to the plan, the company is eyeing funds of between Rp90 billion and Rp100 billion by releasing 300 million ordinary shares or 20,29% of the issued and fully paid capital after the IPO. The offer price is in the range of Rp.298-Rp.358 per share.

President Director of Cashlez Tee Teddy Setiawan said that the proceeds from the IPO would be used to acquire similar companies operating in Indonesia. payment gateway named Softorb Technology Indonesia (STI). Then the rest is used for working capital.

"About 48,57 percent will be used to take over 51 percent of STI's shares. The remaining 51,43 percent will be used as working capital for the company," he said.

Teddy explained that companies are interested in STI because they focus on front-end. Meanwhile, Cashlez focuses on Back-end. "We need front-end which canfeed transactions, one of which is carried out by STI to providing front end what they have."

"So integrally this business is sustainable. And it must be 51% majority, so that we can synergize even more in terms of finances, we can consolidate it to be healthier," Teddy continued, quoted from Cash.

The company appointed Sinarmas Sekuritas as the implementing underwriter for the securities issuance. It is targeted that Cashlez will receive an effective statement from the OJK on April 7, 2020 and the public offering period will be held the following day. The listing of shares on the IDX is planned for April 20, 2020.

Sumitomo Corporation as the shareholder said that it believes that payment systems are increasingly needed in the new era to come, such as MaaS (Mobility-as-a-Service). In this case, the mPOS (Mobile Payment of Sale/online cash register) system from Cashlez will provide benefits for consumers and service providers.

In terms of performance, in the October 2019 period, Cashlez posted a net income of Rp11,73 billion, an increase of 96,07% yoy. This increase was supported by an increase in the volume of transactions processed. Until February 2020, the transaction volume at Cashlez reached Rp1,3 trillion.

Teddy targets 120% revenue growth. STI will help support its contribution as a subsidiary.

Cashlez's position in the industry

As an mPOS player, Cashlez expands its services by accepting card payments, either credit or debit cards based on an application on a smartphone that can be connected to a smartphone. card reader via bluetooth.

In addition, merchants can also accept digital payment methods with QR codes (LinkAja, Ovo, GoPay, ShopeePay, and Kredivo), Cashlez-Link for payments on the site E-commerce, and payment virtual accounts.

The number of Cashlez merchants is claimed to have doubled from the position as of August 2019 of 6 thousand merchant scattered in various big cities. Merchant most of them came from the fashion & accessories, retail, electronics, professional services, automotive, and watches & jewelry business segments.

There are many and varied players like Cashlez, each offering their advantages. Among them are Qasir, Pawoon, Nuta, Youtao, and one of the closest is Moka. From the Moka product range, it is not only about innovation in mPOS, but has touched other verticals related to business merchant.

In a previous interview, Moka's Co-Founder and CEO Haryanto Tanjo explained his ambition to become a "merchants great app." The company targets 100 thousand merchant joined Moka this year, while now there are more than 30 thousand i. Two-thirds of those who join are culinary businesses, and the rest are retail and services.

Whether you want to IPO or not, the business model adopted by this online cashier application player is SaaS with a target of b2b consumers. Naturally, businesses have economic units clearer, like what The roadmapits to lead to profitability and its monetization scheme is sure to subscribe.

The online cashier application business is actually still in its early stages, aka immature. Because, there are still many merchant, especially those who have not been properly educated on the benefits of digital applications for business development. The percentage of business people who have been touched by the digital world is still far behind those who are still offline.

Quoting from the Ministry of Cooperatives and Small and Medium Enterprises (Kemenkop UKM), in 2017 as many as 3,79 million micro, small and medium enterprises (MSMEs) have used online platforms to market their products. This number is around 8 percent of the total MSME actors in Indonesia, which is 59,2 million.

Don't worry about market conditions

In the midst of the global economic slowdown due to the Covid-19 virus pandemic, Teddy admitted that he was still optimistic that Cashlez shares could be well absorbed by the public. According to him, the IPO is a long-term plan that has been prepared long before the outbreak of the virus.

"The impact is only from retail investors. But from institutional investors it continues," said Teddy as quoted from Investor.id.

The company has also gathered three large investors to absorb shares. This investor was met when Cashlez held a roadshow, they are individual investors with extensive networks and institutions who share a common vision with the company.

As is known, the stock exchange regulator together with OJK have prepared all the steps to suppress the sluggish capital market. One of them is to encourage institutional investors with jumbo funds to invest, namely BPJS Employment (now BPJAMSOSTEK), the Association of Indonesian Pension Funds (ADPI), and the Association of Financial Institution Pension Funds (ADPLK).

The three institutions used this momentum to buy shares of companies with good fundamentals at 'discounted' prices. BPJAMSOSTEK has prepared an allocation of IDR 8 trillion to buy shares this year. This allocation of funds is assumed to only buy, not sell.

The majority of shares purchased are categories blue chips which are included in the LQ45 Index and BUMN shares. As of December 2019, BPJAMSOSTEK managed funds amounting to Rp431,6 trillion. This money is allocated to instruments fixed income 71,4%, shares 19,09%, mutual funds 9,34%, and the rest is direct investment (property and investment).

This type of investor has the characteristics of buying shares for long-term needs in order to get optimal profits, so they are not sold at any time in a short period of time.

The Indonesian Central Securities Depository (KSEI) noted that Indonesia had 2,47 million capital market investors last year, up from 1,61 million investors in the previous year. Local investors have a composition of 98,97% and the rest are foreign investors. Not much different, retail investors accounted for 98,89% of the total, while institutional investors accounted for 1,2%.