PT. Media Nusantara Citra (Ticker: MNCN) Stock Analysis: Why I Invested all of my money in this company!

I purchased 787,000 shares of PT. Media Nusantara Citra (Ticker: MNCN) on August 14, 2020, at an average price of Rp940 per share, totaling Rp740,000,000 in investment. This is all of my money in one of my brokerage account, and it's a large portion of my net worth. The reason why I initiated this investment is because of the value I see in the underlying of the company. PT. Media Nusantara Citra (Ticker: MNCN) is a reliable blue-chip company listed in the Indonesia Stock Exchange and its prestige of being in the LQ45 list. 

It is an integrated media company in Indonesia. The company has core businesses in content and the ownership and operations of 3 out of the ten national Free-To-Air televisions in Indonesia. MNCN has 3 Free-To-Air ( FTA ) TVs - RCTI, MNCTV, and GlobalTV - as well as 18 channels created and produced by MNC that is broadcasted on Pay-TV. Currently, MNC also has other media-based business that supports the core businesses of MNC. Those businesses consist of radio, print media, talent management, and a production house.

Before investing in the company, I also noticed Lo Kheng Hong, a value investor in Indonesia and has a reputation of being known as the Warren Buffett of Indonesia, announced he has a total of 942,184,700 shares of PT. Global Mediacom Tbk (Ticker: BMTR) on August 18, 2020. This company is the holding company of PT. Media Nusantara Citra and Lo Kheng Hong have a close to 6.14% shares of the trading company in the open market. 

I didn't invest in PT. Media Nusantara Citra (Ticker: MNCN) just because of seeing Lo Kheng Hong invested in it. Before Lo Kheng Hong invested in the company, I was already attracted to PT. Media Nusantara Citra business model. I was surprised at the trading price it was trading at relatively to many financial metrics. The company is indeed trading at an attractive valuation. It has a price-to-earnings ratio of close to 6 with an attractive PEG ratio of 0.14. Historically, the company has always traded in the P/E of above 10. The current P/E ratio shows that the company is trading below the market value.

PT. Media Nusantara Citra (Ticker: MNCN) has a tracking record of growing its revenue and net income every year. If you looked at the company's net income in 2014, it stated that it had earned 1,883 billion rupiahs. And as of 2019, the company noted a net profit of 2,353 billion rupiahs, net income growth of 24.9%. This shows how the company is always finding a solution to grow its business and creating value for its shareholders. 

Moreover, the company has a strong balance sheet that stated a 700 billion rupiah cash balance in Q2 2020. I'm convinced that the company can sustain the liabilities it carries in its balance sheet. As of 2020, the company has a record of having a debt-to-equity ratio of 0.35. This is considered a meager debt-to-equity ratio it carries. I'm very confident that the company is not going through any financial difficulty paying its debt obligation in the short term.  

What's exciting for me to point out is the offering price during its IPO. MNCN offering price of Rp900 in June 2007 shows that the company is a bargain at the current price now. As this article is written (August 18, 2020), MNCN stock price is trading at Rp900 to Rp950 price range. The trading price now is close to the IPO price that happened in June 2007. This stock has been in the stock market exchange for more than 13 years, and the price now is trading close to the IPO price in 2007. I believe the market way misprices the price it is trading at currently. There is no way for a blue-chip company with a robust financial fundamental and business model to be priced at the current trading price. It's no wonder Lo Kheng Hong decided to purchase this company to his portfolio holding. 

   

Conclusion

I hope that by writing this article, you understand why I am investing in PT. Media Nusantara Citra (Ticker: MNCN). I am very confident about this stock investment and have placed a large sum of my money into investing in this stock. I have no idea where the stock will head in the near term moment, but I believe that holding this company as one of my investments is excellent to purchase. I'm not going to worry about the stock price fluctuation in the short term since I am a value investor and willing to hold this stock for a long time. I'm an optimist that the stock has the potential to go up in value in five years' time.