CUAN’s Stock Split Plan Draws Fire from Former Investor Association Leader
Key Takeaways
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JAKARTA, Investortrust.id — A prominent figure in Indonesia’s retail investor community has lodged a formal protest against a proposed stock split by PT Petrindo Jaya Kreasi Tbk (CUAN), warning that the move could expose small investors to heightened risk due to questionable fundamentals.
Sanusi, former chairman of the Indonesian Securities Investors Association (Missi), issued an open letter to the Financial Services Authority (OJK) and the Indonesia Stock Exchange (IDX), arguing that the 1:10 stock split by CUAN—controlled by tycoon Prajogo Pangestu—risks misleading retail investors and inflating volatility.
“As a retail investor, I am deeply concerned. This corporate action endangers small investors because the company’s fundamentals do not justify its current high valuation,” Sanusi wrote in the letter, which was also shared with Investortrust.id.
Red Flags in Financial Indicators
Sanusi cited a string of financial metrics that he claimed signaled overvaluation and fragility.
Based on trailing twelve-month (TTM) data, CUAN posted:
• a price-to-earnings (PE) ratio of 61.92×, compared to the IDX median of 8.10×,
• a price-to-book value (P/BV) of 25.92×,
• a price-to-sales (P/S) ratio of 8.82×,
• a net profit margin of just 0.80%,
• negative free cash flow of Rp 5.17 billion,
• a debt-to-equity ratio of 3.04×, and
• an Altman Z-Score of 2.24, below the threshold for financial safety.
“These numbers reflect an overpriced stock with thin profit margins and weak operational cash flow,” Sanusi wrote. “The company is essentially burning cash while carrying a high debt load, with signs of financial stress that raise red flags for potential bankruptcy within two years.”
Retail Investors at Risk?
Sanusi argued that stock splits do not alter a company’s valuation or fundamentals but may create an illusion of affordability for inexperienced investors. “Retail enthusiasm could spike irrationally, thinking the stock is cheaper, while in reality, the value remains unchanged,” he warned.
He further cautioned that the move could invite pump-and-dump schemes, with sharp post-split declines trapping small investors who buy near the peak.
To mitigate such risks, Sanusi urged OJK and IDX to conduct deeper evaluation of CUAN’s stock split plan, postpone or reject the corporate action until the company strengthens its financial health, and increase surveillance for potential market manipulation during and after the split.
“I trust OJK and IDX to uphold transparency, market integrity, and investor protection. I sincerely hope this letter contributes meaningfully to their review process,” Sanusi concluded.
CUAN Defends Split, Cites Rapid Growth
CUAN’s management responded that the stock split is designed to enhance liquidity and broaden investor participation by lowering the share price per unit.
“This corporate action aims to make our stock more accessible and increase trading activity,” the company stated in its official response to the exchange.
CUAN emphasized that the move is grounded in strong post-IPO performance. Since listing in 2023, the company’s revenue surged 719% and net profit jumped 929% through 2024. “This growth has been reflected in CUAN’s soaring stock price,” management said.
According to the company, the stock split will not affect financials but is expected to widen the investor base and support future expansion.
Under the proposal, CUAN’s shares will be split at a 1:10 ratio, reducing the nominal value to Rp 20 per share and increasing the share count from 11.24 billion to 112.41 billion. The corporate action is scheduled to take effect on Thursday, July 10, 2025, pending shareholder approval at an extraordinary general meeting on Thursday, June 26, 2025.
Despite a sharp year-on-year jump in revenue to $213.93 million in the first quarter of 2025 (up 147.8% from $86.33 million), CUAN’s net profit plunged 93.13% to $2.27 million, driven by surging cost of goods sold and operating expenses.