Best performing major IPO in 2023 - Indonesia's Amman Mineral Internasional

PT Amman Mineral Internasional Tbk, an Indonesian mining company, managed the best performance globally among major initial public offerings (IPOs) this year as analysts touted the offer's attractive valuation, prospects earnings and potential inclusion in a local benchmark index, according to a Bloomberg analysis.

Shares in Amman Mineral Internasional, the company that owns the second-largest gold and copper mine in the Southeast Asian country, have risen 163 percent since their debut on July 7. This is the largest gain among the 32 companies that have launched major IPOs globally in 2023, respectively that have raised at least $500 million so far, according to Bloomberg data.

Amman Mineral International is followed by ADNOC Logistics & Services (UAE) with a gain of more than 80%, Hunan Yuneng New Energy (China), also with an increase of more than 80%, Nextracker (USA), with a share advance of more than 60%, and with similar growth, Mankind Pharma (India), according to Bloomberg figures.

Amman Mineral's performance comes as mining stocks are hit globally by rising inflation and interest rates, as well as China's weaker economy, which means lower demand for raw materials. Given the conditions, the Bloomberg World Mining Index has fallen 7% this year.

"Amman Mineral's post-listing performance was supported by low valuations since debut and expectations that the company will be included in the LQ45 index of the most liquid stocks traded on the Jakarta Stock Exchange," said Andre Benas, Head of Research from BCA Sekuritas.

• Amman Mineral - the biggest offer on the Jakarta market in 2023

Amman Mineral's new share offering of more than $700 million was the biggest on the Jakarta Stock Exchange this year as the market enjoyed a busy year of listings. According to Bloomberg, revenue raised by companies through IPOs has doubled from the same period in 2022. Amman Mineral's offering was also the largest in Asia outside mainland China this year, according to Bloomberg data.

Amman Mineral posted a net profit of $1.1 billion in 2022, more than three times the previous year's figure.

Arief Budiman, head of research at Ciptadana Sekuritas, expects 2023 to be another solid year for the mining company, but the outlook beyond this year is less certain.

"Amman Mineral's earnings will peak this year but start to decline next year as the company's production is expected to decline," Budiman explained.

Amman's market capitalization is now about 298 trillion Indonesian rupiah, surpassing conglomerate Astra International's 261 trillion Indonesian rupiah.

Analysts attribute the sustained rise in Amman shares to the stability of global copper prices, which are down just 3% year-to-date. In contrast, zinc prices fell by 24% and nickel by 33%, according to jakartaglobe.id.

Closing at 4,470 Indonesian rupiah in yesterday's trading, Amman shares rose 4.4 percent from the previous day, surpassing the 4,200 rupiah price target set by market research firm Mandiri Sekuritas.

The company is currently in the process of building a copper smelter in West Sumbawa, West Nusa Tenggara province, with an annual capacity of 900,000 tons.

Amman Minerals chief executive Alexander Ramlie was quoted by Reuters as saying the company's business outlook is solid due to rising demand for copper and the metal's importance in the global transition to renewable energy. Indonesia, Southeast Asia's largest economy, is stepping up its use of renewable energy.