Fantastic Stock Price Target, How Prospective Is WIR Asia (WIRG)?

JAKARTA, – The latest technology issuer, PT WIR Asia Tbk (WIRG) promises bright prospects in line with the still large metaverse business potential. The latest research by RHB Sekuritas even mentions that WIRG can be the next big things in internet.

Besides the potential to dominate the metaverse market, WIR Asia also has the opportunity to become a technology company augmented reality (AR) and three-dimensional leading in Asean. Metaverse is a virtual world on the internet that is made as close as possible to the real world and can be felt by users.

“Business opportunities from this sector will be fully utilized by WIR Asia,” RHB Sekuritas analyst team wrote in their research.

WIR Asia also has a great opportunity in line with the government’s plan to build the Metaverse Indonesia G20 Virtual Reality Archipelago. In this plan, the government will involve several State-Owned Enterprises (BUMN) such as banks and several conglomerates.

Read also: Salim Group Collaborates with WIR Asia (WIRG) to Work on Metaverse Platform

Technically, RHB Sekuritas describes WIRG’s stock as a property engaged in property that promises long-term profits from the sale of land in the metaverse. and recurring revenue streams from advertising, revenue sharing from tenants, and in-game currency.

So far, the five existing business segments have generated operating cash flow of IDR 8-12 billion, namely from prepaid reloads and electricity through the platform owned by Mind Store, which is equivalent to 67.9% of revenue. Then, software development is equivalent to 17.9%, digital media advertising is equivalent to 5.8%, brand consulting is 6.9% and platform commission is 1.5%.

The segment that became the largest revenue source was software development and brand consulting, which contributed the largest gross profit of 51.4% and 30.4% to WIRG’s total revenue.

Read also: Metaverse Becomes New Economy, Money Turnover Can Reach US$ 3 Trillion

For WIRG’s financial projections, RHB projects an average revenue growth of 76% from 2021 to 2026, which will be supported by the AR industry which continues to grow and provides a large space for the company to grow, both in terms of advertising and the education sector to increase customer engagement or engagement.

Land sales in the metaverse are predicted to contribute around 15-20% of revenue, while the rest is driven by growth generating commission-based transactions and ad revenue and DAV business online to offline (O2O) multimedia platform at Alfamart outlets and other public places.

RHB Sekuritas recommends buying WIRG shares with a target price of IDR 1,900 or 60% discount from the average NAV of the metaverse market, 0.8 times EV/sale for commission-based transactions, and 3.6 times EV/sale for projects.

In trading on the IDX, Friday (20/5/2022), WIRG closed up Rp 20 (2.6%) to a level of Rp 770. Thus, WIRG still has the potential to print gain by 147%.

The price target also takes into account the estimated surge in WIRG’s net profit to Rp 288 billion this year compared to last year’s Rp 11 billion. The company’s revenue is also predicted to jump to Rp 1.81 trillion in 2022 compared to last year’s Rp 751 billion.

Read also: Metaverse, the Virtual World Gen Z Loves

RHB Sekuritas also estimates that net profit will continue to increase with a target to become IDR 746 billion in 2023 and IDR 1.4 trillion in 2024. Meanwhile, revenue is estimated to soar to IDR 4.13 trillion in 2023 and IDR 6.6 trillion in 2024.

“As for this projection, it is not without risk. WIRG’s business can be depressed if land sales are lower than projected and cannot cover the initial investment which costs quite a lot, which is around Rp 80 billion to Rp 100 billion, said the RHB analyst team.

JV with Salim Grup Group

The Salim Group and WIR Asia (WIRG) form a joint venture (joint venture/JV) to develop the metaverse platform.

Executive Director Salim Group, Axton Salim said that business challenges in the digital era require not only superior human resources (HR), but also high technology support to be able to compete in the domestic and global arena.

The memorandum of understanding for cooperation was signed by Axton Salim and the President Director of WIR Asia, Michael Budi Wirjatmo.

Read also: Citibank Projects Total Metaverse Users Can Reach 5 Billion

“We value cooperation through joint venture with the WIR Group will provide a tremendous opportunity for future corporate business development. By adopting the metaverse platform, we can explore potential and business opportunities that were previously unimaginable,” Axton said in a written statement.

Meanwhile, Michael Budi Wirjatmo emphasized that his party will present a leading technology solution, based on the company’s expertise and experience in developing metaverse technology that has been recognized in many countries.

“We have the ability to build and develop technology Virtual Reality (VR), Augmented Reality (AR), and Artificial Intelligence (AI) that can support the Salim Group’s business to enter a new era of borderless digital through the metaverse technology we developed,” said Michael.

Editor : Jauhari Mahardhika ([email protected])