Bukalapak

Rp875 - BUY

Norman Choong
Online with a purpose
Brings unique strategy as first ecommerce platform on the JCI
norman.choong@clsa.com
+62 21 5088 7827 Bukalapak is the first Indonesian tech unicorn to be listed on the Jakarta exchange
(JCI). While Bukalapak is a distant third in terms of gross merchandise value share,
Chelene Indriani it is a first mover in the online-to-offline (O2O) model with 50% YoY total
+62 21 5088 7812 processing value (TPV) growth and a much lower burn rate than market leaders.
Ecommerce will become a key sector in Indonesia given its high growth visibility
and huge potential (c.10% online retail penetration with a 300m population),
Bukalapak, being the first to list, means the market is likely to pay for its growth,
in our view. We initiate coverage with a BUY rating and a Rp1,250 target price
based on 23CL P/TPV of 0.55x assuming 40%/60% 3-year Cagrs for its TPV/gross
29 August 2021 profit growth.

Indonesia First mover in online-to-offline

We forecast healthy 40%/60% 3-year Cagrs for total processing value (TPV)/gross
Internet
profit with a rising take rate, and we expect positive Ebitda by 2023. 27% of
Reuters BUKA.JK Bukalapak’s TPV comes from its O2O segment Mitra Bukalapak, a key segment it
Bloomberg BUKA IJ launched in 2016 with a 105% 3-year Cagr. The benefits of Mitra are a low customer
Priced on 27 August 2021 acquisition costs and burn rate, but it is more difficult to scale-up transaction value
Jakarta Comp @ 6,041.4 with subsidies. Bukalapak uses TPV to define total transaction value which is
12M hi/lo Rp1,110/830 typically at 70% of its GMV due to a higher drop rate for tier 2-3 cities.
12M price target Rp1,250
±% potential +43% Easier path to profitability
Bukalapak had a reported take rate of 1.4% in FY20, compared to Shopee’s 6.23%.
Shares in issue 103,062.0m
Free float (est.) 23.4% That said, Buka’s burn rate was much smaller at US$7m-US$10m per month. The
bulk of industry GMV growth is still in the B2C and C2C segments where subsidies
Market cap US$6.3bn
are prevalent, yet this is not a core area for Buka given its smaller size. It aims to
3M ADV US$28.9m
maintain momentum in the O2O segment and achieve positive Ebitda by 2023. We
Foreign s'holding 35.0% do not see significant competitive risk in the O2O segment emerging yet due to the
Major shareholders abovementioned bottlenecks.
PT Kreatif Media Karya 23.9%
API Hong Kong 13.1% Ecommerce will be key sector of the JCI
Archipelago Investment 11.0% As the sole e-marketplace proxy at this juncture and inclusion by institutions at an
early stage, we expect Bukalapak’s index weighting to increase. We also see a
scarcity premium driven by local investor ownership and expect it to only trade at
Blended ESG Score (%)* a discount to Sea Limited, but well above most regional peers.
Overall
Country average 55.1 Initiate coverage with a BUY rating
GEM sector average 63.8 We initiate coverage of Bukalapak with an Rp1,250 target price (43% upside)
*Click to visit company page on clsa.com for details
pegged to a 23CL P/TPV of 0.55x with 40%/60% 3-year (21-23CL) Cagrs for
Stock performance (%) TPV/gross profit. Our target price also translates to a 21CL P/TPV of 1x, which is
1M 3M 12M the trailing FY20 valuation at which Bukalapak was priced on in its IPO. The key risk
Absolute 0.0 0.0 0.0 is competition in the Mitra segment.
Relative 0.0 0.0 0.0
Abs (US$) 0.0 0.0 0.0 Financials
Year to 31 December 19A 20A 21CL 22CL 23CL
Revenue (Rpbn) 1,077 1,352 2,163 3,460 5,190
Revenue growth (% YoY) 268.8 25.5 60.0 60.0 50.0
Ebitda (Rpbn) (2,627) (1,603) (1,364) (745) 188
Net profit (Rpbn) (2,795) (1,832) (1,638) (972) (122)
EPS (Rp) (27.12) (17.78) (15.90) (9.43) (1.19)
CL/consensus (1) (EPS%) - - 3,339 85 12
Dividend yield (%) 0.0 0.0 0.0 0.0 0.0
DPS (Rp) 0.00 0.00 0.00 0.00 0.00
ROE (%) (179.5) (133.1) (14.1) (4.6) (0.6)
Source: Bloomberg Source: www.clsa.com

CLSA and CL Securities Taiwan Co., Ltd. (“CLST”) do and seek to do business with companies covered in its research reports. As such,
investors should be aware that there may be conflicts of interest which could affect the objectivity of the report. Investors should consider
this report as only a single factor in making their investment decisions. For important disclosures please refer to page 25.
 
 
 Online with a purpose Bukalapak - BUY

Financials at a glance
Year to 31 December 2019A 2020A 2021CL (% YoY) 2022CL 2023CL

Profit & Loss (Rpbn)

Revenue 1,077 1,352 2,163 60 3,460 5,190
Cogs (ex-D&A) (114) 63 64 1 68 84
Gross Profit (ex-D&A) 963 1,415 2,226 57.4 3,528 5,275
SG&A and other expenses (3,590) (3,017) (3,591) (4,273) (5,086)
Op Ebitda (2,627) (1,603) (1,364) (745) 188
Depreciation/amortisation (154) (186) (224) (276) (355)
Op Ebit (2,781) (1,789) (1,588) (1,022) (167)
Net interest inc/(exp) 46 6 (1) 98 93
Other non-Op items (60) (49) (49) (49) (49)
Profit before tax (2,795) (1,832) (1,638) (972) (122)
Taxation - - - - -
Profit after tax (2,795) (1,832) (1,638) (972) (122)
Minority interest 0 0 0 0 0
Net profit (2,795) (1,832) (1,638) (972) (122)
Adjusted profit (2,795) (1,832) (1,638) (972) (122)
Cashflow (Rpbn) 2019A 2020A 2021CL (% YoY) 2022CL 2023CL
Operating profit (2,781) (1,789) (1,588) (1,022) (167)
Depreciation/amortisation 154 186 224 20.2 276 355
Working capital changes (396) 339 (78) (45) (78)
Other items (105) 75 (19) 57 29
Net operating cashflow (3,128) (1,188) (1,462) (734) 139
Capital expenditure (70) (70) (330) (285) (415)
Free cashflow (3,197) (1,258) (1,792) (1,019) (276)
M&A/Others 2 1 0 0 0
Net investing cashflow (68) (69) (330) (285) (415)
Increase in loans - - - - -
Dividends 0 0 0 0 0
Net equity raised/other 2,031 1,858 21,699 1,068.1 - -
Net financing cashflow 2,031 1,858 21,699 1,068.1 0 0
Incr/(decr) in net cash (1,165) 601 19,908 3,213.3 (1,019) (276)
Exch rate movements - - - - -
Balance sheet (Rpbn) 2019A 2020A 2021CL (% YoY) 2022CL 2023CL
Cash & equivalents 884 1,484 21,392 1,341.1 20,373 20,097
Accounts receivable 357 166 265 60 424 636
Other current assets 98 94 116 23.1 136 162
Fixed assets 452 335 441 31.7 450 510
Investments 0 - - - -
Intangible assets 3 2 2 0 2 2
Other non-current assets 260 512 505 (1.4) 508 513
Total assets 2,054 2,594 22,721 776 21,895 21,921
Short-term debt - 17 - - -
Accounts payable 62 72 94 30 122 159
Other current liabs 768 793 834 5.3 951 1,089
Long-term debt/CBs - 51 51 0 51 51
Provisions/other LT liabs 68 53 53 0 53 53
Shareholder funds 1,155 1,597 21,678 1,257.3 20,706 20,560
Minorities/other equity 0 11 11 0 11 11
Total liabs & equity 2,054 2,594 22,721 776 21,894 21,921
Ratio analysis 2019A 2020A 2021CL (% YoY) 2022CL 2023CL
Revenue growth (% YoY) 268.8 25.5 60.0 60.0 50.0
Ebitda margin (%) (244.0) (118.6) (63.1) (21.5) 3.6
Ebit margin (%) (258.3) (132.3) (73.4) (29.5) (3.2)
Net profit growth (%) nm nm nm nm nm
Op cashflow growth (% YoY) nm nm nm nm nm
Capex/sales (%) 6.5 5.2 15.3 8.3 8.0
Net debt/equity (%) (76.5) (88.1) (98.4) (98.1) (97.5)
Net debt/Ebitda (x) - - - - -
ROE (%) (179.5) (133.1) (14.1) (4.6) (0.6)
ROIC (%) (2,011.6) (613.3) (492.2) (240.7) (32.6)
Source: www.clsa.com

Find CLSA research on Bloomberg, Thomson Reuters, FactSet and CapitalIQ - and profit from our evalu@tor proprietary database at clsa.com

29 August 2021 norman.choong@clsa.com 2

 



Small and beautiful
Figure 1
Bukalapak’s core focus
Source: Bukalapak
Bulk of its GMV comes from
tier2 and tier 3 cities
Bukalapak uses TPV instead
of GMV to gauge total
transaction flows on its
platform
29 August 2021
Online with a purpose Bukalapak - BUY
First mover in online to offline
Bukalapak is the first Indonesian ecommerce unicorn listed on the Jakarta stock
exchange with a US$6.5bn market cap. The company’s largest shareholders are
Elang Mahkota Technologi (Emtek), China’s Alibaba-affiliated Ant Group (API Hong
Kong), and Singapore sovereign wealth fund GIC (Archipelago Investment). After
the IPO, these held 23.93%, 13.05%, and 11.0%, respectively.
Emtek Group is among the pioneers in the Indonesian tech scene, which also owns
E-wallet Dana and OTT platform Vidio under Surya Citra Media. Distinctive features
shared among Emtek’s group of companies include low gearing and better cash
generation than peers, although these tech ventures are not market leaders.
Similarly, Bukalapak is ranked third in gross merchandise value (GMV), behind
market leader Tokopedia and Shopee, but it has an edge on its targeted segment
Mitra Bukalapak.
Bukalapak is an e-marketplace platform similar to Tokopedia and Shopee but it
focuses on tier-2 and tier-3 cities.
While 70% of industry FY20 GMV is contributed by tier-1 cities, Bukalapak had
70% of its total GMV contributed by tier-2 and tier-3 cities. This difference makes
Bukalapak the first mover in tier-2 and tier-3 cities, utilising the reverse O2O model
– ie, from offline to online with its Mitra Bukalapak agent network.
Bukalapak prefers to use total processing value in calculating its revenue take rate,
while the industry uses gross merchandise value as the benchmark. Bukalapak’s
TPV is typically 70% of its GMV with a 30% drop rate. This is more conservative as
our channel checks also suggest this drop rate is higher than the industry due to a
higher proportion of cash on deliveries and ATM payments relative to tier-1 cities,
although there are no data on the average drop rate for tier 1 cities.
norman.choong@clsa.com 3
 


 Online with a purpose Bukalapak - BUY

Figure 2 Figure 3

Indonesia estimated ecommerce GMV trend Bukalapak GMV market share pie chart

Blibli
6%
Lazada JD
9% 6%

Tokopedia
35%
Bukalapak
14%

Shopee
30%

Source: CLSA, Euromonitor, Google, Temasek, Bain and Co. Source: CLSA, Euromonitor, Google, Temasek, Bain and Co.

FY20 TPV growth was
in-line with industry
We estimate the Indonesian ecommerce industry GMV has grown c.54% YoY for
FY20. Shopee tops the list, exceeding the industry with 100% YoY GMV growth.
Bukalapak also grew its total processing value by 50% YoY, in-line with the market.
There was no disclosure on Tokopedia’s growth rate, yet our channel checks with
management suggest that Tokopedia remains tops in GMV share, but Shopee grew
faster than Tokopedia last year.

Our estimates of the industry GMV growth trend come from various sources, which
includes information disclosed by Sea Limited, Bukalapak, and the 2020 E-conomy
SEA report by Google, Temasek, and Bain and Co.

Figure 4

50% YoY growth last year, Bukalapak TPV growth trend

key segment Mitra
70 (Rptn)
Bukalapak doubled its TPV Mitra (warung) Marketplace
62.2
60

50 47.0

40

30
22.9 22.9
20
10.4
10 5.5

0
2018 2019 2020
Source: CLSA, Bukalapak

We forecast 40% 3-year
Cagr in TPV, supported by
high growth rate in the
Mitra segment
We forecast healthy 40%/60% of 3-year Cagr in total processing value (TPV) and
gross profit with a rising take rate, an expect positive Ebitda by 2023. 27% of
Bukalapak’s TPV comes from its O2O segment Mitra Bukalapak, which it launched
in 2016 with 105% 3-year Cagr. We also expect its Mitra segment growth to
continue to outpace its e-marketplace growth.

29 August 2021 norman.choong@clsa.com 4

 



An online to offline channel
that drive business to
business transactions
Figure 5
Summary of functions available in the Mitra Bukalapak application
Source: Bukalapak
The app helps store owners
increase revenue streams
and reduce supply costs
Market place GMV is more
difficult to scale this way,
but burn rate is much lower
29 August 2021
Online with a purpose Bukalapak - BUY
Mitra Bukalapak: disruption to traditional supply chains
Mitra Bukalapak is a phone application that targets the micro, small, and medium
enterprises (“MSME”). It allows “warung” or stall owners to expand product
offerings into a paying station for utilities, top-ups, and even cash transfers. Owners
can also purchase inventories below traditional offline channel prices due to
reduced layers of distribution. There are approximately 65m MSMEs in Indonesia,
and Bukalapak aims to have 30m registered Mitra by 2025.
The benefit of this business model is the low burn rate as the store owner only
needs to download the application and register with a phone number. However,
scalability is lower than e-marketplace because it relies on business-to-business
(B2B) transaction flows, where the Mitras resupply goods from Bukalapak’s partner
suppliers, integrate these into the partner’s system. That said, we note that getting
Mitras to transact is time-consuming.
This is different from the business-to-consumer (B2C) and consumer-to-consumer
(C2C) transactions that make up a majority of the GMV of e-marketplace, where
growth is largely a function of high marketing expenses. That aside, these Mitras
are also point-of-sale agents and point-of-collection for C2C marketplace
transactions at Bukalapak.com. While this will serve to increase awareness of
ecommerce in rural areas where smartphone ownership and internet accessibility
are lower, the scalability of C2C GMV through these Mitra platforms is also lower
compared to those in tier-1 cities.
For instance, TPV of the e-marketplace of Bukalapak grew 33% YoY for FY20, which
is respectable but trails Shopee’s 100% YoY. Customer acquisition costs and burn
rate through this method are also much lower and will be discussed in the next
section.
norman.choong@clsa.com 5
 


 Online with a purpose Bukalapak - BUY

Figure 6

Mitra Bukalapak model reduces layers of distribution

Source: Bukalapak

It was difficult to build a Figure 6 illustrates how the business model connects the Mitras either directly to
working system and reduce FMCG principals or by removing the layers of middlemen to help its Mitra agents
layers of middlemen lower supply costs.

Management shared that there were many bottlenecks and much red tape to
overcome when it first started the business segment in FY2016. It also took a while
to gain the trust of warung owners and integrate into the wholesaler inventory
system. This is the reason management gave for subsidies not being efficient in
driving this business model compared to GMV flows at e-marketplace. That being
said, there are already numerous competing Mitra brands being introduced given
the large addressable market.

Figure 7

Bukalapak claims to have Mitra Bukalapak agent network

39% market share in the
Mitra segment as of FY20

Source: Bukalapak

29 August 2021 norman.choong@clsa.com 6

 
 
 Online with a purpose Bukalapak - BUY

Figure 8 Figure 9

List of Mitra brands and registered users Market share based on registered accounts
10 (mn) Others
3%
9
8
7 GrabKios
6 16%

5 Tokopedia
45%
4
Bukalapak
3
36%
2
1
0
Tokopedia Bukalapak GrabKios Payfazz Warung Wahyoo
Pintar
Source: CLSA, Companies Source: CLSA, Companies

Mitra Bukalapak will
collaborate with Grab
kiosks, the two have
combined 50% market
share
We estimate there are a total of 19m registered Mitras accounts split across seven
brands; however, we could not find the registered users under Mitra Shopee. We
also highlight that Tokopedia Mitra has 8.9m registered accounts as of FY20, more
than Mitra Tokepedia, but we cannot gauge the value or number of Mitra
transactions. Bukalapak’s active Mitras are about 50% of its total registered
accounts. Mitra Bukalapak is also planning to collaborate with Grab kiosks, where
parent Emtek and Grab have cross shareholdings.

The total number of Mitra Tokopedia accounts is bigger than those of Mitra
Bukalapak, yet Bukalapak has been doubling its Mitra TPV each year since FY18
(Mitra Tokepedia was launched in November 2018). Given the huge potential
market of 65m MSMEs, competition will persist, but Bukalapak had a three-year
headstart to build an integrated system.

Tokopedia and Shopee
likely to prioritise resources
on E-marketplace
We also believe Tokopedia and Shopee will continue to prioritise the e-marketplace
as a bulk of the industry GMV growth will remain in this segment since it is easier
to be scaled with subsidies, in our opinion. Subsidies are less effective in the Mitra
segment; the contributions to Tokopedia and Shopee are also less significant
compared to Bukalapak.

Figure 10 Figure 11

Estimated breakdowns Indonesia online retail sales Estimated Mitra (B2B) as contribution to total TPV
70%

60%

50%

40%

30%

20%

10%

0%
2018 2019 2020 21CL 22CL 23CL

Source: CLSA, Euromonitor, company interviews Source: CLSA, company

29 August 2021 norman.choong@clsa.com 7

 
 
 Online with a purpose Bukalapak - BUY

Next-day delivery is a key selling point

Download is only the first
step; real value is getting
Mitras to transact
The real value of the Mitra model is the Mitra agents switching from their existing
stock resupply method to ordering supplies from the Mitra Bukalapak application.
Bukalapak promises to deliver goods the day after an order is placed at a cheaper
price than existing suppliers. Achieving this requires significant effort in building its
own supply chains and partnerships with distributors and FMCG principals.
Management shared that only Mitra Bukalapak has consistent next-day delivery in
the market at this juncture.

Bukalapak has built a
working system that is
entrenched in wholesale
revenues
Bukalapak currently partners with about 330 wholesalers throughout Indonesia,
with 30-40% wholesaler revenue coming from selling to Mitra Bukalapak agents. In
addition, management shared that it has an informal agreement with these
wholesalers to only deal exclusively in the Bukalapak network; wholesalers that
deal with other Mitra players would be removed.

On a separate note, there were no exclusivity for the Mitras, as the agents can sign
up to more than one Mitra account.

As of FY20, there were 104.9m of registered users on Bukalapak marketplace with

about 16% of the users actively transacting. Meanwhile, Mitra Bukalapak had 6.9m
registered users, of which 48% are actively transacting.

Unlike marketplace, the Mitra app is similar to the superapp model such as Gojek
and Grab, in which account holders need to top up and use the balances in the
application to transact.

Figure 12 Figure 13

Annual transacting users Customer acquisition cost

18 (mn) Users Warung 16.6 250 (Rpk) Customer acquisition cost
222
16
13.6 200
14
165
12
150
10 9.3

8 100 79
6
3.6 50
4
1.6
2 0.7
0
0 2018 2019 2020
2018 2019 2020
Source: CLSA, Bukalapak Source: CLSA, Bukalapak

The channels to top-up are more convenient and include other grocery stores:
1) Indomaret
2) Alfamart
3) Post Indonesia
4) Virtual account transfer
5) ATM transfer
6) QR code

29 August 2021 norman.choong@clsa.com 8

 
 
 Online with a purpose Bukalapak - BUY

Sign-ups are easy Signing up with Mitra Bukalapak can be done online. Users can register through the
website or the app downloaded from Google Playstore. Users only need to input
phone numbers and personal data to register; afterwards, they need to get verified
through providing photo of ID card and physical mom-pop shop, if any. The
verification process will need a maximum of 72 hours.

Mitra Bukalapak has a referral program in which Mitra Bukalapak will get Rp5k
commission fee for each new agent that registers through its referral code. Mitra
Bukalapak will also get a commission for transaction made by the new agent,
amounting to Rp150 for each virtual product transaction and Rp3k for each grocery
transaction above Rp100k (excluding cigarettes). More active new agents will lead
to higher commission for the Mitra Bukalapak agent who referred.

Figure 14 Figure 15

Mitra Bukalapak verification process Referral program

Source: Bukalapak Source: Bukalapak

The Mitra platforms offer several features that are not available in other platforms
yet such as QR, cashier, and bookkeeping. In February 2021, the company launched
QR where it supports payments through banks and various e-wallets.

Mitra Bukalapak also offers a money transfer feature, in which it partners with
Lakupandai Mandiri. Mitra can use their balance fund to transfer money to Bank
Mandiri or other banks supported by ATM Bersama (interbank networks).

Mitra Bukalapak also has bookkeeping features that allow it to input expenses and
income earned. It has both automatic and manual inputs. Several digital
transactions (eg, electricity tokens, data packages, money transfers) are recorded
automatically. Other than that, Mitra can manually input these transactions.

Figure 16

Features are more abundant Comparison of financial inclusion features

Source: Bukalapak

29 August 2021 norman.choong@clsa.com 9

 
 
 Online with a purpose Bukalapak - BUY

Easier path to profitability

E-marketplace TPV growth Bukalapak is more of a niche player in the e-marketplace, as evident by its e-
will be lower than market marketplace TPV growth rate of 33% versus the industry growth rate of c.54% last
due to lack of C2C flows year. Anecdotally, we observed a lack of social commerce and C2C participation in
the Bukalapak e-marketplace.

For instance, our friends who utilised ecommerce businesses typically have
accounts on Instagram, Facebook, Tokopedia, and Shopee, but not Bukalapak. The
reverse O2O promotions by the Mitras will help and contributed to some 20% of
Bukalapak E-marketplace TPV. That said, e-market place GMV growth remains
heavily dependent on cash burn – ie, marketing expenses, promotions, and low
delivery costs.

Figure 17

Market leaders are growing Estimated FY20 GMV for Tokopedia, Shopee, and Bukalapak
faster than industry due to 16 120%
ability to spend on (US$ bn) 2020 GMV (RHS) 2020 - 2021 YoY growth (LHS)
marketing expenses 14
100%
12
80%
10

8 60%

6
40%
4
20%
2

0 0%
Tokopedia Shopee Bukalapak
Source: CLSA, Euromonitor

Bukalapak has a reported take rate of 1.4% in FY20, compared to Shopee’s 6.23%.
That said, Buka’s total business burn rate is also much smaller, at US$7-10m per
month. Looking at the business as a whole, Buka’s Ebitda burn rate is only 10% of
Shopee; we could not compare Tokopedia as it is not listed yet.

Figure 18

Buka relies more on its Bukalapak and Shopee yearly Ebitda since FY18-20
Mitra segment 5,000 (Rp bn) Bukalapak Shopee
0

(5,000)

(10,000)

(15,000)

(20,000)

(25,000)

(30,000)

(35,000)
2018 2019 2020 21CL 22CL 23CL
Source: CLSA, Visible Alpha

29 August 2021 norman.choong@clsa.com 10

 
 
 Online with a purpose Bukalapak - BUY

Figure 19 Figure 20

Take rate of Bukalapak and Shopee Marketing expenses as % GMV for Bukalapak and Shopee
9% Bukalapak Shopee 8% Bukalapak Shopee
8% 7%
7% 6%
6%
5%
5%
4%
4%
3%
3%
2%
2%

1% 1%

0% 0%
2018 2019 2020 21CL 22CL 23CL 2018 2019 2020 21CL 22CL 23CL
Source: CLSA, Visible Alpha Source: CLSA, Visible Alpha

As each player is playing to their strength, where bulk of the industry GMV growth
remain in B2C and C2C segment where subsidies are prevalent, these not a core
area for Buka, given its smaller size. We believe Shopee’s ability to spend will remain
high as long as e-entertainment revenue from Garena stays strong Note that its
mobile game Free Fire remains on the top 3 grossing list on Google playstore this
year, although total downloads slipped to no 7.

Using revenue from Taking a cue from another popular mobile game Clash of Clans, which has grossed
mobile games more than US$1bn revenue per annum since FY12, its yearly revenue now is about
US$500m, or half from its peak. Free Fire was launched in FY17; given the typical
lifecycle of a mobile game that peaks in a few years, Sea Limited should be working
towards introducing a new game as a follow-up to Free Fire.

Cash call is another venue Sea Limited could also tap funding from the financial market given its huge market
cap. Tokopedia’s merger with Gojek and its eventual listing may also lead to funding
from the equity capital market to support GMV growth.

Figure 21

Celebrities’ endorsement for Tokopedia and Shopee

Source: Tokopedia, Shopee

29 August 2021 norman.choong@clsa.com 11

 
 
 Online with a purpose Bukalapak - BUY

Figure 22

It is easier for Bukalapak Bukalapak take rate and Ebitda

to breakeven
500 (Rp bn) Ebitda (LHS) Take rate (RHS) 2.5%

0
2.0%
(500)

1.5%
(1,000)

(1,500)
1.0%

(2,000)
0.5%
(2,500)

(3,000) 0.0%
2018 2019 2020 21CL 22CL 23CL
Source: CLSA

The heavy marketing expenses on the e-marketplace are difficult to be scaled back
without affecting growth, or at least until growth starts to decelerate. On this end,
Bukalapak’s focus on the Mitra model with a low burn rate makes it easier to
achieve profitability.

The following are management guidance:

1) TPV to achieve 50% Cagr until 2023, Mitra to grow faster than marketplace.

2) Gross profit to achieve 70% Cagr until 2023; take rate to rise, from 1.4% in
FY20 to above 2% by 2023.

3) Marketing expenses and G&A to be relatively flat, Ebitda-positive by 2023.

As Mitra is not that scalable
with subsidies, but instead
rely on having a good
supply network
We believe the key to management guidance is the Mitra competitive landscape.
Mitra Bukalapak has proved that it has a working model with 100% 3-year Cagr. A
bulk of the transaction value of this model is not generated by app downloads, but
via the Mitras replenishing goods from the app.

Figure 23

We expect Mitra Bukalapak CLSA forecast on Mitra Bukalapak and e-marketplace TPV
TPV to double again this 12,000 (Rp bn) Marketplace Mitra
year and grow 80% in 22CL
and 70% in 23CL 10,000

8,000

6,000

4,000

2,000

0
2018 2019 2020 21CL 22CL 23CL

Source: CLSA, Bukalapak

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Figure 24

Management prefer to use Bukalapak FY18-23CL gross profit and net profit
gross profit to measure take 6,000 (Rp bn) Gross profit Net profit
rate relative to TPV
5,000
4,000
3,000
2,000
1,000
0
(1,000)
(2,000)
(3,000)
(4,000)
2018 2019 2020 21CL 22CL 23CL
Source: CLSA, Bukalapak

We expect 60% gross profit 3-year Cagr until 23CL, with gross profit growing faster
than TPV (40% Cagr). We also expect take rate to rise from 1.4% in FY20 to 2.1%
in 23CL, driven by a bigger contribution from products with better margins over
time. More detail is provided on the take rate improvement on page 14.

Management prefers to use gross profit as the denominator over TPV to measure
take rate as a bulk of the revenue is in the forms of net commissions received after
cost, or third-party revenue. We also assume marketing expenses and G&A grow
20% and 18% per annum, respectively, lower than gross profit growth. Again,
Bukalapak does not spend aggressively on e-marketplace promotions.

Bukalapak received US$1.5bn of proceeds from its IPO in August but does not
intend to alter its business strategy and guided for monthly cash burn rate to be at
US$7-10m. This will likely result in sizeable finance income until a new use of cash
is being shared with the market.

Figure 25

Our forecast is slightly Summary of assumptions

below management 2018 2019 2020 21CL 22CL 23CL
guidance TPV growth total 100% 50% 41% 40% 42%
TPV growth Mitra 90% 121% 100% 80% 70%
TPV growth market place 106% 32% 20% 15% 15%
Gross profit growth 177% 52% 63% 62% 62%
Take rate 1.4% 1.4% 1.7% 1.9% 2.2%
Selling expense as % to TPV 4% 2% 2% 1% 1%
G&A as % to TPV 2.2% 1.8% 1.5% 1.2% 1.0%

Ebitda – Rp bn (2,377) (2,627) (1,603) (1,364) (745) 188

Net profit (loss) – Rp bn (2,243) (2,795) (1,349) (1,638) (972) (122)
Source: CLSA

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Figure 26 Figure 27

Revenue breakdown of Bukalapak Take rate of each segment

1,600 (Rpbn) Marketplace Mitra BPI 3.00% Take rate
1,400
2.50%
1,200
2.00%
1,000

800 1.50%

600 1.00%
400
0.50%
200

0
0.00%
2018 2019 2020 Physical store Market place Mitra Blended
Source: CLSA, Bukalapak Source: CLSA, Bukalapak

Physical store has high take
rate but not a growth driver
Apart from e-marketplace and Mitras, Bukalapak derives revenue from Buka
Pengadaan, from direct sales of its own product, and from its partners at the e-
marketplace. TPV for BukaPendaan is present in both r-marketplace and Mitra but
does not have a breakdown. Management shares that TPV and revenue from this
segment is about 10% Bukalapak’s total and is likely to remain at the same
proportion.

More products with higher
take rate in the Mitra app
will increase proportion to
total TPV
In terms of take-rate improvement, the bulk of TPV on Mitra at this juncture are
higher traffic and essential products such as fast-moving consumer goods and
phone credits, whereby take rate is about 1% and will remain low.
There will be more products will higher take rates being transacted as platform
adoption grows and the ecosystem develops. Bukalapak started to tap into smaller
merchants other than the key FMCG principals, which will have higher take rates.
Game vouchers have high-single-digit take rates; their contribution is low currently
but increasing. Merchant financing is also still at the nascent stage but expected to
grow its proportion over time.

For e-marketplace, rising take rate ought to be driven by collaboration of parent

company Emtek and its subsidiary Surya Citra Media to drive targeted ads revenue.
General insurance will also help overall blended take rate.

Figure 28

High take rate products Various functions of the application

such as game voucher and
financing is already
presence but takes time to
grow

Source: Bukalapak

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Ecommerce will be a key sector in JCI

As the sole e-marketplace proxy at this juncture and inclusion by institutions at an
early stage, we expect Bukalapak’s index weighting to increase. We also see a
scarcity premium, driven by local investor ownership, and expect it to only trade at
discount to Sea Limited but well above most regional peers.

Figure 29 Figure 30

JCI top 15 market cap – August 2021 JCI top 15 market cap – August 2020
60,000 (US$mn) 60,000 (US$ mn)

50,000 50,000

40,000 40,000

30,000 30,000

20,000 20,000

10,000 10,000

0 0

Source: CLSA, Bloomberg Source: CLSA, Bloomberg

Likely inclusion into most
indexes due to good
liquidity, sizeable market
cap and good sector
The number of tech-related companies in the top 15 market cap list continues to
increase. Notably, Bukalapak is now the 15 th-largest market cap on JCI, while its
parent company Emtek is ninth and digital bank Jago is ranked fifth, already larger
than conglomerates with long histories such as Astra and Indofood.

Bukalapak’s average daily turnover surpassed the US$100m mark going into its
third week of trading, larger than most other stocks on the JCI, which is understable
as it is the first ecommerce IPO in the market. There was also news that market
regulator OJK will provide fast-tracked inclusion in key indices such as LQ45 and
IDX30 for Bukalapak. In our opinion, it is also a likely candidate to be included in
the MSCI.

As inclusion by institutional investors remains at early stage, we expect Bukalapak

to continue to trade at a valuation that is higher than most regional peers and only
at a discount to Sea Limited. To recap, Bukalapak IPOed at 0.7-1x P/TPV for 20-
21CL, while Shopee is trading at 1.3x P/GMV of consensus estimate.

Figure 31

JCI top 15 3-month ADTO

120 (US$ mn)
100

80

60

40

20

0
BUKA BBRI IJ BBCA ARTO TLKM BMRI ASII IJ EMTK BBNI IJ UNVR BRPT ICBP IJ HMSP CPIN IJTPIA IJ
IJ IJ IJ IJ IJ IJ IJ IJ IJ

Source: CLSA, Bloomberg

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Initiate coverage with BUY rating

We initiate coverage on Bukalapak with Rp1,250 target price (43% upside) pegged
to 23CL P/TPV of 0.55x with 40/60% 3-year (21-23CL) Cagr on TPV/gross profit.
Our target price also translates to 21CL P/TPV of 1x, which is the trailing FY20
valuation at which Bukalapak was priced on its IPO. The key risk is on competition
in the Mitra segment.

We choose P/TPV as our primary valuation method because it captures the growth
in the transaction value on its E-marketplace and Mitra Bukalapak platform.
Indonesia ecommerce and digitalisation of the “warungs” are still at nascent stages.

According to Euromonitor, total GMV of ecommerce was at 10% of total retail sales
as of FY20. Indonesia’s ecommerce is estimated to reach US$102bn GMV in 2025
(+26% 5-year Cagr) or c.17% penetration. Should we follow China’s trajectory, then
Indonesia ecommerce’s penetration could hit c.25% by 2025. This would translate
to c.US$150bn online GMV by 2025 (+36% 5-year Cagr).

Figure 32

Indonesia reached 10% Indonesia online retail sales as percentage to total retail sales
ecommerce penetration
in 2020

Source: CLSA, Euromonitor

Monetisation is not a priority of market players yet due to low penetration; instead,
the focus would be to grow GMV market share. CLSA also values Bukalapak peer
Sea Limited using P/GMV for the same reason, in our opinion. Market premium
could be applied to leaders with faster growth rate, and Bukalapak will likely just
grow in-line with the industry, but its Mitra segment is the market leader and will
provide an additional boost for it to grow faster than the industry.

We assume 40%/60% 3-year Cagr on Bukalapak’s TPV and gross profit growth,
largely ahead of global peers and the base case industry growth of 26% 5-year Cagr
listed above.

Price-to-sales method does We believe that price-to-sales is not a good metric with which to value Bukalapak
not reflect low marketing due to the inherent low take rate relative to its global peers. As well, the metric
cost and low burn rate of does not capture the company’s lower burn rate.
Bukalapak

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Figure 33

Peer comparison
3-year GMV Cagr P/GMV P/Sales
2021 2022 2023 2021 2022 2023
Bukalapak 40% 0.70 0.5 0.35 40.8 25.5 15.9
Shopee 69% 1.36 0.8 0.49 15.7 8.0 4.6
eBay 0% 0.52 0.5 0.52 4.6 4.4 4.3
Vipshop 17% 0.32 0.3 0.25 0.5 0.5 0.4
Amazon 18% 1.69 1.4 1.25 3.5 3.0 2.6
MercadoLibre 30% 2.05 1.6 1.30 13.5 10.3 7.8
Alibaba 15% 0.36 0.3 0.26 3.2 2.7 2.3
JD.com 23% 0.20 0.2 0.14 0.8 0.7 0.6
Average 27% 0.9 0.7 0.6 10.3 6.9 4.8
Source: CLSA, Visible Alpha

Our target price also implies 21-23CL P/TPV of 1.1x, 0.75x, and 0.55x, respectively,
which is lower than the currently traded multiple of Shopee. On a further note,
CLSA has an Outperform recommendation on Shopee parent Sea Limited with an
assigned P/GMV target multiple of 1.2x 22CL. The valuation of 1x FY20 trailing
P/GMV for the Bukalapak IPO also serves as a valuation yardstick.

Figure 34

In-line with IPO valuation, Summary of valuation

factors in growth and at a Unit
discount to Shopee 23CL TPV (Rp bn) 240,431
P/TPV multiples 0.55
Share outstanding (bn) 103
TPV per share 1,250
Source: CLSA

We believe the market, especially the local investment community, will be paying
for its growth. The Mitra model is relatively new and does not have a direct
comparison with global peers; however, Mitra Bukalapak has a strong track record
of 102% 3-year Cagr since FY18. Management also indicated that 2Q21 results will
be in-line with its guidance of 50% YoY TPV growth.

Figure 35

Buka is on track to deliver Mitra and E-marketplace TPV growth rate 21-31CL
another triple-digit TPV 120% Mitra Marketplace
growth on Mitra segment
in 2Q21
100%

80%

60%

40%

20%

0%
21CL 22CL 23CL
Source: CLSA

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Key risks
The key risks to our investment thesis are detailed below:

∑ Longer Covid-19 pandemic than expected, which could hinder Indonesian

purchasing power and affect TPV growth trajectory.

∑ Competition on the Mitra segment needs to be monitored closely. Bukalapak is

leading in this segment now with 102% 3-year Cagr in TPV, which is indicative
that 2Q21 YoY growth is also more than 100%.

∑ Regulatory risks are deemed remote at this juncture but have become a key
factor in more mature markets such as China.

∑ Bukalapak might use the sizeable US$1.5bn IPO proceeds into a new business
venture and might alter its current growth profile.

Valuation details
We value Bukalapak based on 23CL P/TPV of 0.55x. Our target price also translates
to 21CL P/TPV of 1x, which is the trailing valuation at which Bukalapak was priced
on its IPO (FY20 P/TPV of 1x). We believe that price-to-sales is not a good metric
at which to value Buka due to the inherent low take rate relative to its global peers,
and the metric does not capture its lower burn rate.

Investment risks
Competition is the biggest risk to the business. At this juncture, Bukalapak has a
sizeable advantage in the Mitra segment due to it being the first mover. The
segment is also more difficult to be scaled given the subsidies; hence, it is relatively
shielded from market leaders Tokopedia and Shopee, which are dominant in the E-
marketplace space. Bukalapak has a lower monthly burn rate than industry of US$7-
10m per month. The sizeable IPO proceeds of US$1.5bn will likely cushion the
business from business and credit risk.

Figure 36

Earnings and balance-sheet risk scores (lower the better)

Score Comments
Earnings-quality flags
Capex indiscipline 0
Cash burn 1 Much lower than peers
Rising non-core or intangibles 0
Rising working capital
Poor cash conversion 0
Earnings-quality risk score (EQRS) 1/4
Balance-sheet-quality flags
Cash burn 1 The nature of the ecommerce business
is to burn cash.
Excessive leverage 0
Frequent fundraising 1 Given the recent IPO, the company will
not need additional funding soon.
Liquidity concerns 1 Proceeds from the IPO can sustain the
business for 10 years at the current burn
rate.
Operational stress 0
Balance-sheet-quality risk score (BQRS) 3/5
Source: CLSA

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Appendix
Figure 37

Corporate structure

Source: CLSA, Company, Bloomberg

Figure 38

Bukalapak company management

Position Name Background
Chief Executive Officer Rachmat Kaimuddin started his career as a senior associate in Boston Consulting Group. He
also had previous experiences in cross-fields such as managing director of PT Cardig Air
Services, CFO at Bosowa Corporindo, and Vice President of Baring Private Equity Asia.
Prior to joining Bukalapak, he served as Director of Finance and Planning in Bank Bukopin.

Rachmat Kaimuddin
President Teddy Oetomo has been the president of Bukalapak since 2020. Prior to joining, he was the
Head of Intermediary Business at Schroders Indonesia and Head of Equity Research of
Credit Suisse Indonesia.

Teddy Oetomo
Chief Financial Officer Ms. Firmansyah has 17 years of experience on leading the financial teams in several
multinational companies, including Novartis and Johnson & Johnson. She graduated from
Universitas Trisakti.

Natalia Firmansyah
Chief Operating Officer Prior to joining Bukalapak, Willix Halim served as the Vice President of Growth of
Freelancer.com from 2011-2016. He graduated from University of Melbourne in 2009, and
attended the Stanford Executive Program in 2013.

Willix Halim

Source: CLSA, Bukalapak

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Figure 39

Bukalapak Board of Commissioners

Position Name Background
President Commissioner Bambang Brodjonegoro previously served as Minister of Research and Technology from
2019 to 2021. Prior to that, he had been spearheading government bodies including
Bappenas (2016-2019), the Ministry of Finance (2014-2016), Commissioner of Pertamina
(2013-2015), and Commissioner of Antam (2012-2013).

Bambang
Brodjonegoro
Independent She has been the independent commissioner of Bukalapak since 2021. Currently she is also
Commissioner an Independent Commissioner at Garuda Indonesia, Director at The Wahid Foundation and
Head of Foreign Affairs Division at Muslimat NU amongst others.

Yenny Wahid
Commissioner He has served as commissioner of the company since 2021. He is also the President
Director of PT Kreatif Media Karya since 2012 and Vice Chairman at PT Elang Andalan
Nusantara since 2017.

Adi Sariaatmadja
Commissioner Laun Eng Boon was appointed as the commissioner since 2019. Currently he serves as
Head, Portfolio Management, TMT & Business Services Global Investments, Strategy and
Risk Private Equity at GIC Private Limited since 2010.

Lau Eng Boon

Commissioner Lu Zhang has served as the commissioner since 2020. Currently he has also been serving as
the Director of Ant Group since 2014.

Lu Zhang
Source: CLSA, Bukalapak

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Detailed financials
Profit & Loss (Rpbn)
Year to 31 December 2018A 2019A 2020A 2021CL 2022CL 2023CL
Revenue 292 1,077 1,352 2,163 3,460 5,190
Cogs (ex-D&A) 65 (114) 63 64 68 84
Gross Profit (ex-D&A) 357 963 1,415 2,226 3,528 5,275
Research & development costs - - - - - -
Selling & marketing expenses (1,997) (2,323) (1,520) (1,824) (2,188) (2,626)
Other SG&A (737) (1,267) (1,497) (1,767) (2,085) (2,460)
Other Op Expenses ex-D&A - 0 0 - - -
Op Ebitda (2,377) (2,627) (1,603) (1,364) (745) 188
Depreciation/amortisation (65) (154) (186) (224) (276) (355)
Op Ebit (2,442) (2,781) (1,789) (1,588) (1,022) (167)
Interest income 50 46 14 7 107 102
Interest expense 0 0 (9) (9) (9) (9)
Net interest inc/(exp) 50 46 6 (1) 98 93
Associates/investments 0 - - - - -
Forex/other income - - - - - -
Asset sales/other cash items 159 (60) (49) (49) (49) (49)
Provisions/other non-cash items - - - - - -
Asset revaluation/Exceptional items - - - - - -
Profit before tax (2,233) (2,795) (1,832) (1,638) (972) (122)
Taxation - - - - - -
Profit after tax (2,233) (2,795) (1,832) (1,638) (972) (122)
Preference dividends - - - - - -
Profit for period (2,233) (2,795) (1,832) (1,638) (972) (122)
Minority interest 0 0 0 0 0 0
Net profit (2,233) (2,795) (1,832) (1,638) (972) (122)
Extraordinaries/others 0 0 0 0 0 0
Profit avail to ordinary shares (2,233) (2,795) (1,832) (1,638) (972) (122)
Dividends - - - - - -
Retained profit (2,233) (2,795) (1,832) (1,638) (972) (122)
Adjusted profit (2,233) (2,795) (1,832) (1,638) (972) (122)
EPS (Rp) (21.7) (27.1) (17.8) (15.9) (9.4) (1.2)
Adj EPS [pre excep] (Rp) (21.7) (27.1) (17.8) (15.9) (9.4) (1.2)
Core EPS (Rp) (21.7) (27.1) (17.8) (15.9) (9.4) (1.2)
DPS (Rp) 0.0 0.0 0.0 0.0 0.0 0.0

Profit & loss ratios

Year to 31 December 2018A 2019A 2020A 2021CL 2022CL 2023CL
Growth (%)
Revenue growth (% YoY) - 268.8 25.5 60.0 60.0 50.0
Ebitda growth (% YoY) - nm nm nm nm nm
Ebit growth (% YoY) - nm nm nm nm nm
Net profit growth (%) - nm nm nm nm nm
EPS growth (% YoY) nm nm nm nm nm nm
Adj EPS growth (% YoY) nm nm nm nm nm nm
DPS growth (% YoY) - - - - - -
Core EPS growth (% YoY) nm nm nm nm nm nm
Margins (%)
Gross margin (%) 122.2 89.4 104.7 102.9 102.0 101.6
Ebitda margin (%) (814.4) (244.0) (118.6) (63.1) (21.5) 3.6
Ebit margin (%) (836.6) (258.3) (132.3) (73.4) (29.5) (3.2)
Net profit margin (%) (765.0) (259.6) (135.5) (75.8) (28.1) (2.4)
Core profit margin (765.0) (259.6) (135.5) (75.8) (28.1) (2.4)
Op cashflow margin (620.4) (290.5) (87.9) (67.6) (21.2) 2.7
Returns (%)
ROE (%) (113.9) (179.5) (133.1) (14.1) (4.6) (0.6)
ROA (%) (79.6) (108.6) (77.0) (12.5) (4.6) (0.8)
ROIC (%) - (2,011.6) (613.3) (492.2) (240.7) (32.6)
ROCE (%) 1,718.9 (5,932.8) (798.7) (540.3) (257.0) (34.7)
Other key ratios (%)
Effective tax rate (%) 0.0 0.0 0.0 0.0 0.0 0.0
Ebitda/net int exp (x) - - - (1,213.0) - -
Exceptional or extraord. inc/PBT (%) - - - - - -
Dividend payout (%) - - - - - -
Source: www.clsa.com

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Balance sheet (Rpbn)

Year to 31 December 2018A 2019A 2020A 2021CL 2022CL 2023CL
Cash & equivalents 2,049 884 1,484 21,392 20,373 20,097
Accounts receivable 105 357 166 265 424 636
Inventories - - - - - -
Other current assets 262 98 94 116 136 162
Current assets 2,417 1,339 1,744 21,773 20,934 20,896
Fixed assets 536 452 335 441 450 510
Investments 1 0 - - - -
Goodwill 0 0 0 0 0 0
Other intangible assets 4 3 2 2 2 2
Other non-current assets 110 260 512 505 508 513
Total assets 3,068 2,054 2,594 22,721 21,895 21,921
Short term loans/OD - - 17 - - -
Accounts payable 135 62 72 94 122 159
Accrued expenses 283 400 378 365 438 525
Taxes payable 12 5 6 0 0 0
Other current liabs 651 363 409 470 514 563
Current liabilities 1,080 831 882 928 1,073 1,247
Long-term debt/leases/other - - 51 51 51 51
Convertible bonds - - - - - -
Provisions/other LT liabs 28 68 53 53 53 53
Total liabilities 1,108 898 986 1,032 1,177 1,351
Share capital 7 1,417 2,508 3,797 3,797 3,797
Retained earnings (3,508) (6,303) (7,655) (9,290) (10,262) (10,409)
Reserves/others 5,460 6,041 6,744 27,172 27,172 27,172
Shareholder funds 1,960 1,155 1,597 21,678 20,706 20,560
Minorities/other equity 0 0 11 11 11 11
Total equity 1,960 1,155 1,608 21,689 20,717 20,570
Total liabs & equity 3,068 2,054 2,594 22,721 21,894 21,921
Total debt 0 0 68 51 51 51
Net debt (2,049) (884) (1,416) (21,341) (20,322) (20,046)
Adjusted EV 88,129 89,295 88,774 68,849 69,868 70,144
BVPS (Rp) 19.0 11.2 15.5 210.3 200.9 199.5

Balance sheet ratios

Year to 31 December 2018A 2019A 2020A 2021CL 2022CL 2023CL
Key ratios
Current ratio (x) 2.2 1.6 2.0 23.5 19.5 16.8
Growth in total assets (% YoY) - (33.1) 26.3 776.0 (3.6) 0.1
Growth in capital employed (% YoY) - nm (10.1) 77.2 11.5 29.7
Net debt to operating cashflow (x) - - - - - -
Gross debt to operating cashflow (x) - - (0.1) 0.0 (0.1) 0.4
Gross debt to Ebitda (x) - - 0.0 0.0 (0.1) 0.3
Net debt/Ebitda (x) - - - - - -
Gearing
Net debt/equity (%) (104.6) (76.5) (88.1) (98.4) (98.1) (97.5)
Gross debt/equity (%) 0.0 0.0 4.2 0.2 0.2 0.2
Interest cover (x) (7,973.4) (7,391.6) (207.6) (185.0) (107.0) (7.6)
Debt cover (x) 0.0 0.0 (17.4) (28.7) (14.4) 2.7
Net cash per share (Rp) 19.9 8.6 13.7 207.1 197.2 194.5
Working capital analysis
Inventory days - - - - - -
Debtor days 131.5 78.3 70.6 36.4 36.4 37.3
Creditor days - 134.1 198.8 189.1 189.1 189.1
Working capital/Sales (%) (244.2) (34.9) (44.7) (25.3) (14.8) (8.6)
Capital employed analysis
Sales/Capital employed (%) (205.5) 456.5 637.3 575.5 825.6 954.5
EV/Capital employed (%) (62,032.1) 37,864.4 41,857.4 18,320.7 16,669.4 12,898.7
Working capital/Capital employed (%) 501.7 (159.1) (285.2) (145.6) (122.4) (82.5)
Fixed capital/Capital employed (%) (377.4) 191.5 158.0 117.4 107.4 93.9
Other ratios (%)
PB (x) 46.0 78.1 56.5 4.2 4.4 4.4
EV/Ebitda (x) (37.1) (34.0) (55.4) (50.5) (93.8) 372.8
EV/OCF (x) (48.7) (28.5) (74.7) (47.1) (95.3) 503.7
EV/FCF (x) (37.6) (27.9) (70.6) (38.4) (68.6) (254.2)
EV/Sales (x) 301.9 82.9 65.7 31.8 20.2 13.5
Capex/depreciation (%) 824.8 45.2 37.4 147.4 103.3 116.9
Source: www.clsa.com

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Cashflow (Rpbn)
Year to 31 December 2018A 2019A 2020A 2021CL 2022CL 2023CL
Operating profit (2,442) (2,781) (1,789) (1,588) (1,022) (167)
Operating adjustments (219) (91) (373) 22 (1) 0
Depreciation/amortisation 65 154 186 224 276 355
Working capital changes 586 (396) 339 (78) (45) (78)
Interest paid / other financial expenses 209 (14) (35) (41) 58 53
Tax paid (10) 0 483 0 0 (24)
Other non-cash operating items - - - - - -
Net operating cashflow (1,811) (3,128) (1,188) (1,462) (734) 139
Capital expenditure (535) (70) (70) (330) (285) (415)
Free cashflow (2,346) (3,197) (1,258) (1,792) (1,019) (276)
Acq/inv/disposals (12) 2 1 - - -
Int, invt & associate div - - - - - -
Net investing cashflow (546) (68) (69) (330) (285) (415)
Increase in loans - - - - - -
Dividends 0 0 0 0 0 0
Net equity raised/others 4,164 2,031 1,858 21,699 - -
Net financing cashflow 4,164 2,031 1,858 21,699 0 0
Incr/(decr) in net cash 1,806 (1,165) 601 19,908 (1,019) (276)
Exch rate movements - - - - - -
Opening cash 242 2,049 884 1,484 21,392 20,373
Closing cash 2,048 884 1,485 21,392 20,373 20,097
OCF PS (Rp) (17.6) (30.3) (11.5) (14.2) (7.1) 1.4
FCF PS (Rp) (22.8) (31.0) (12.2) (17.4) (9.9) (2.7)

Cashflow ratio analysis

Year to 31 December 2018A 2019A 2020A 2021CL 2022CL 2023CL
Growth (%)
Op cashflow growth (% YoY) - nm nm nm nm nm
FCF growth (% YoY) - - - - - -
Capex growth (%) - (87.0) 0.0 373.4 (13.5) 45.5
Other key ratios (%)
Capex/sales (%) 183.2 6.5 5.2 15.3 8.3 8.0
Capex/op cashflow (%) (29.5) (2.2) (5.9) (22.6) (38.9) 298.2
Operating cashflow payout ratio (%) - - - - - 0.0
Cashflow payout ratio (%) - - - - - -
Free cashflow payout ratio (%) - - - - - -

DuPont analysis
Year to 31 December 2018A 2019A 2020A 2021CL 2022CL 2023CL
Ebit margin (%) (836.6) (258.3) (132.3) (73.4) (29.5) (3.2)
Asset turnover (x) 0.1 0.4 0.6 0.2 0.2 0.2
Interest burden (x) 0.9 1.0 1.0 1.0 1.0 0.7
Tax burden (x) 1.0 1.0 1.0 1.0 1.0 1.0
Return on assets (%) (79.6) (108.6) (77.0) (12.5) (4.6) (0.8)
Leverage (x) 1.6 1.6 1.7 1.1 1.1 1.1
ROE (%) (113.9) (179.5) (133.1) (14.1) (4.6) (0.6)

EVA® analysis
Year to 31 December 2018A 2019A 2020A 2021CL 2022CL 2023CL
Ebit adj for tax (2,442) (2,781) (1,789) (1,588) (1,022) (167)
Average invested capital (62) 138 292 323 424 512
ROIC (%) - (2,011.6) (613.3) (492.2) (240.7) (32.6)
Cost of equity (%) 13.0 13.0 13.0 13.0 13.0 13.0
Cost of debt (adj for tax) 8.0 8.0 8.0 8.0 8.0 8.0
Weighted average cost of capital (%) 13.0 13.0 13.0 13.0 13.0 13.0
EVA/IC (%) 0.0 (2,024.6) (626.3) (505.2) (253.7) (45.6)
EVA (Rpbn) 0 (2,799) (1,827) (1,630) (1,077) (234)
Source: www.clsa.com

29 August 2021 norman.choong@clsa.com 23

 
 
 Important disclosures Bukalapak - BUY

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Companies mentioned
Bukalapak (BUKA IJ - RP875 - BUY)
Alfamart (N-R)
Alibaba (BABA US - US$165.24 - BUY)
Alphabet (N-R)
Amazon (N-R)
Ant (N-R)
Ant Financial (N-R)
Antam (ANTM IJ - RP2,260 - BUY)
API Hong Kong (N-R)
Archipelago Investment (N-R)
Astra (ASII IJ - RP5,050 - BUY)
ATM Bersama (N-R)
Bain and Co. (N-R)
Bank Bukopin (N-R)
Bank Central Asia (BBCA IJ - RP32,550 - O-PF)
Bank Jago (ARTO IJ - RP15,525 - BUY)
Bank Mandiri (BMRI IJ - RP5,800 - BUY)
Bank Negara (BBNI IJ - RP5,300 - BUY)
Bank Rakyat (BBRI IJ - RP3,840 - O-PF)
Bappenas (N-R)
Barings Private Equity Asia (N-R)
Barito Pacific (BRPT IJ - RP1,060 - U-PF)
BCG (N-R)
Blibli (N-R)
Bosowa Corporindo (N-R)
Boston Consulting Group (N-R)
Buka Pengadaan (N-R)
Cardig Air Services (N-R)
Chandra Asri (N-R)
CP Indonesia (N-R)
eBay (N-R)
Elang (N-R)
Elang Andalan Nusantara (N-R)
Facebook (N-R)
Freelancer.com (N-R)
Garena (N-R)
Garuda Indonesia (N-R)
GIC Private Limited (N-R)
Gojek (N-R)
Grab (N-R)
GrabKios (N-R)
Gudang Garam (N-R)
Indofood CBP (N-R)
Indomaret (N-R)
Instagram (N-R)
JD.com (JD US - US$77.04 - BUY)
Johnson & Johnson (N-R)
Lakupandai Mandiri (N-R)

29 August 2021 norman.choong@clsa.com 24

 
 
 Important disclosures Bukalapak - BUY

Lazada (N-R)
MercadoLibre (N-R)
NU (N-R)
Payfazz (N-R)
Pertamina (N-R)
Post Indonesia (N-R)
PT Adikarsa Sarana (N-R)
PT Global Digital Niaga (N-R)
PT Kreatif Media Karya (N-R)
PT Pertamina (N-R)
PT Prima Visualindo (N-R)
Sampoerna (N-R)
Sea Limited (SE US - US$321.77 - O-PF)
Shopee (N-R)
Sinar Mas Multiartha (N-R)
Sumber Alfaria (N-R)
Surya Citra Media (SCMA IJ - RP1,915 - BUY)
Telkom (TLKM IJ - RP3,320 - BUY)
Temasek (N-R)
The Northern Trust (N-R)
Tokopedia (N-R)
Unilever Indo (N-R)
United Tractors (UNTR IJ - RP19,475 - BUY)
Vidio (N-R)
Vipshop (VIPS US - US$14.78 - O-PF)
Wahid Foundation (N-R)
Wahyoo (N-R)
Warung Pintar (N-R)

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own personal views about the securities and/or the issuers and that no part of my/our compensation was, is, or will
be directly or indirectly related to the specific recommendation or views contained in this research report.

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29 August 2021 norman.choong@clsa.com 25

 


 Important disclosures
possession of any material, nonpublic information regarding the
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Key to CLSA/CLSA Americas/CLST investment rankings: BUY:
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 Important disclosures
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27