Co-founder of Pollux Properti became a billionaire after the company's shares grew by 500%. Analysts claim that this is a mistake.
According to Bloomberg, the value of the company's shares has grown by more than 500% since mid-July 2019, and Niko Purnomo is now a billionaire, with a fortune of around $3.6 billion. Nuomo himself believes that such a rapid share value rise is a result of deep trust established between the company and clients. This growth should attract even more investors and future partners, opening up new prospects for the company.
"These results increase investor confidence because Pollux is able to complete megaprojects. In addition, we are confident that our projects will provide a stable regular income in the future. Our projects are located mainly in ultra-prestigious locations and are undoubtedly landmark buildings," Purnomo says. As for the "completion of megaprojects", the company has now completed the construction of only one of the planned buildings - the World Capital Tower business complex, which is one of the tallest buildings in Jakarta. However, other projects, such as the Pollux Skysuites residential complex in the elite business district and the Meisterstadt complex on Batam Island, are currently under construction, so it is too early to judge the company's success.
According to the company's reports, it's profit growth was 201% compared to 2018 and now amounts to $2.5 million, and the company's capitalization is about $4.1 billion. On October 14, 2019, the company's shares could be purchased at a price of $0.49 per share.
Such a sharp increase in the company's shares caused controversy among analysts. Bloomberg conducted a survey among analysts and all of them came to the conclusion that the growth of the company's shares is unreasonable. Firstly, the value of the company is 34 times higher than the size of its net assets and ten times higher than the market average. Secondly, such growth of shares should correspond to the large volume of trading, which in the case of Pollux Properti reached only $70 thousand from the middle of June.
Analysts have put forward their own evidence that the growth of the companies' shares is unjustified. John Teja, director of consulting company Ciptadana Sekuritas in Jakarta, noted that "the shares have very little liquidity, so the price does not necessarily reflect the fundamental indicators of the company". And Christopher Andre Benas, who is engaged in real estate in Jakarta in the research institute RHB called such a growth of shares excessive, even if we take into account all the undeveloped land. He said that "valuation makes no sense" and the Indonesian market "likes to exaggerate everything".
However, whether the company's shares are growing reasonably or not, they are still growing. This situation has drawn the attention of the Indonesian Financial Services Authority. In early September, the regulator even suspended trading in the company's shares. Now trading has resumed, but the Indonesian authorities are still closely monitoring the situation on the Indonesian Stock Exchange.