Mirae Asset Sekuritas
Published on Aug 21, 2019
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GULA KOPI Web Series Episode 1.

In this episode we will discuss the business model and prospects of PT Buyung Poetra Sembada Tbk. (HOKI).

As of July 31, 2019, the target price for HOKI shares is IDR1,040 / share.

On September 1, 2017, the rice industry in Indonesia underwent a landscape change, where the government through the Ministry of Trade (KEMENDAG) issued a regulation on the Highest Retail Price (HET) for rice.

The purpose of holding HET is that the price of rice can be affordable by the general public. With the HET policy, some rice players who do not have economies of scale will be affected. So that the market share of HOKI competitors can be taken by HOKI.

Because in the future HOKI has the potential to take market share from its competitors, HOKI sees an additional demand for HOKI rice. HOKI will increase its production capacity for the next few years. In 2016, HOKI’s production capacity only reached 35 tons per hour. Then, slowly but surely HOKI will increase its production capacity to 55 tons per hour in 2019. Furthermore, HOKI will increase its production capacity to 95 tons per hour until 2021.

Apart from having good quality rice, the competitive advantage of HOKI is its distribution channels that are widespread throughout Indonesia. HOKI uses distribution channels such as Indomaret, Giant, Lotte, Hero, and Yogya. So that with a widespread distribution channel, HOKI rice products can be absorbed by the market.