Translating potential into revenue
Folago Global Nusantara (IRSX) combines digital agency, media commerce, AI, and entertainment into an integrated ecosystem. The company acts as a bridge between affiliates, creators, distribution network (media), and brand owners. This ecosystem is the company’s key competitive advantage, enabling it to convert Indonesia’s massive e commerce GMV into revenue. Currently, IRSX trades at 26x P/E based on annualized 2025F new business profit.
➢ What differentiates Folago from other advertising agencies? Folago’smain competitive advantage lies in its ecosystem, which: a) contains multi-channel distribution network, from public places (roadside) to public transportation (train), thanks to its collaboration with DOOH, and multi-channel network (MCN) such as TikTok, Instagram, etc, and the upcoming Tidak Tidur OTT, developed in collaboration with Internet Rakyat (IRA). b) possesses sizeable numbers of talents (influencers, celebrities, creators, etc.) under Folago agency, which will attract advertising demand from brand owners. c) facilitates various events, such as concerts (national & international, both online and offline) and other entertainment (short movies, cinema)

➢ How huge is the social commerce market? According to Mordor Intelligence, Indonesia's e-commerce market GMV will reach IDR 1,636 tn in 2026, with 25% of this (IDR 409 tn) attributable to short video and live commerce. Currently, Folago’s social commerce GMV stands at USD 20 mn+ monthly and continues to grow. The company typically earns 30–50% of creator commissions. In live gifting events (e.g., voucher gifting), Folago earns 17% commission when streaming occurs on the creator’s account, and 67% when streamed on Folago’s account. ➢ Hidden potential of 30+ million MSMEs. Most advertising industry players currently compete for the top 1% customers, which are large corporations. This leaves 30+ million MSMEs ‘invisible’ to agencies because their marketing budgets cannot meet the cost barriers. However, their potential should not be underestimated; If each MSME spent IDR 100,000/month on advertising, the potential market could reach IDR 36 tn annually. Folago aims to capture this opportunity through affordable AI-powered digital advertising. MSMEs can access Folago’s talent pool, create promotional videos using AI and digital twin technology, and either distribute the content through their own social media or leverage Folago’s ecosystem distribution channels.

➢ Translating tons of ideas into reality. Folago is also expanding across several business lines: a) Folago Pro: concert promotor for local and international artists, both offline and online.b) Cinema Clippers: a network of 300,000+ film promoters nationwide, enabling production houses to promote new movie releases with integrated online ticket sales. c) Folago Pictures: production of short series and cinema films. d) TIDAK TIDUR (upcoming OTT): a streaming platform featuring 3,000+ short drama titles.

IDR 3.7tn rights issue to aid the ecosystem

Rights. IRSX plans to issue up to 12.4 billion new shares, equivalent to 66.67% of its paidup capital, through a 1:2 rights issue. The exercise price is set at IDR 300 per share, potentially raising up to IDR 3.7 trillion. Minority shareholders may face dilution of up to 67% if they choose not to exercise their rights. The controlling shareholder, PT Matra Tri Abadi, will act as the standby buyer for any unsubscribed shares. The rights issue proceed will be used for: a) acquire long-term commercial rights of talents (IDR 2 tn); b) working capital for concert and event promotion (IDR 818.5bn); c) content and film production and distribution (IDR 517.7bn) and d) the rest (IDR 342.3 bn) for working capital across various projects, including ticketing systems, payment point online banking (PPOB), and AI software development.

Warrant. For every 10 new shares subscribed through the rights issue, shareholders will receive 1 Series II warrant. Each warrant can be converted into 1 new share at an exercise price of IDR 350, with an exercise period from 11 September 2026 to 11 September 2028. In total, the company will issue 1.24 billion Series II warrants, potentially generating additional proceeds of up to IDR 433.6 billion, which will be used for working capital and operational support

BBRI - Not a Shiny Time

BBRI - Not a Shiny Time

Mardy Sutanto

26 July 2024 - 07.00am

BBRI - Not a Shiny Time

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