How BUKA Invests
As of Q3 2023.
Disclaimer: this article is not a buy, hold, sell recommendation. It is merely an information regarding how an entity invests to broaden our knowledge about investing in general. Note that this article is based on BUKA’s investment activities per Q3 2023 recorded in their unaudited financial statement. They might change their investment strategy in future which renders factual information of this article less relevant.
Bukalapak Tbk is officially the first unicorn in Indonesia that has gone public. It is a huge prop for them for achieving this feat, having an IPO with total value of ~Rp 21T. We are not going to comment on how the company is doing, the valuation, the stock price etc. That information is easily searchable and you can have your own thoughts and opinion on that matter. What we will be writing is how Bukalapak Tbk invests.
After they receive money from the public, their financial statement is readily available for us to see. If you look at their finance income, it is apparent that it has increased quite notably from Rp 340 bio to Rp 569 bio (a handsome 67.3%) from 9M2022 to 9M2023. Note this image is taken from their unaudited financial report 9M2023 that is available at the IDX website.
A cursory look at the information, it seems that they are invested in:
Time deposits
Bank bonds
Government bonds
How much is invested in their time deposits
If you go to page 116 in the link that we provided just now, the number is clearly stated. Just do the math and round it 1 decimal place you will get Rp 16.6T.
What is the annual returns of the time deposits? For Rupiah time deposits it is 5 - 6.25% and for US Dollar time deposits it is 5.25%. Using this figure, conservatively Bukalapak stands to make Rp 830Bio from time deposits investments alone in one year.
Long Term Investments
BUKA also makes long term investments that they do not wish to reap the rewards anytime soon. This is done by investing in private equity and venture capital. The amount is Rp 1T as of 9M2023. It also invests in long term government bonds at Rp 228Bio.
There are other long term investment they make in young companies such as Allo Fresh, Crewdible, Belanja Online Streaming and Irresbonavenue Selaras Sukses that amounts to around Rp 765Bio.
In total, their long term investment that I see in the financial report is around Rp 2T.
What Percentage is Their Cash Position
That can easily be discerned by looking at the total amount of cash first as shown below.
After rigorous punching the calculator we arrive at the amount being at Rp3T give or take.
Closing Remarks
Based on the information above, a pie chart is definitely what we need to breakdown and visualise BUKA’s investments. Visualisation constructed is based on information that I found in financial report disclosed and shared earlier.
Moral of the story: different people or entities have different investing styles. After receiving money from the public, they choose to invest mostly in time deposits and perhaps can be justified by a whole host of reasons. It can be waiting for the next opportunity or it can also be in the midst of planning for the next phase of the development of the company itself.
What do you think about their investments? Too conservative or too aggressive or balanced enough? Will BUKA change their investing strategy in future?
In the mean time, we will be monitoring their growth and development closely.