Indonesia’s Kino XXI is targeting IPO, a report says

Indonesia’s largest cinema chain, Cinema XXI, could go public through an IPO early next year.

Initial details were reported by the Nikkei newspaper, citing its partner financial industry publication Dealstreet Asia. They said the company could seek to raise $300 million in fresh capital.

Last year, financial news outlet Bloomberg said the owners of Cinema XXI were looking to raise $500 billion to $1 billion through an IPO. The reasons for the large discrepancy are unclear.

The company holds a 60% market share of the Indonesian cinema industry and operated 225 cinema halls with a total of 1,217 screens as of December 2022.

In addition, the Indonesian cinema market saw one of the strongest recoveries of any region in Asia. Cinema admissions surpassed pre-COVID levels last year, hitting an all-time record in mid-December.

Cinema XXI was founded in 1987 at a time of state-sanctioned monopolies in many industries. Cinema XXI previously held a leading position in Indonesian film showing and also dominated the import of Hollywood films through various subsidiaries.

Its dominance in the exhibition space was punctuated by a local private equity funded company, Blitz Megaplex, which opened its first multiplex cinema in 2006 and later sold it to CJ-CGV of Korea. A bigger challenge came from Cinemaxx, which was initially backed by Lippo, a large local conglomerate. Cinemaxx has since been renamed Cinepolis after the Mexican multinational exhibitions group took a significant minority stake in 2019.

A change in the law in 2016 lifted restrictions on foreign investments in the cinema sector. Later that year, Singapore sovereign wealth fund GIC invested US$265 million in PT Nusantara Sejahtera Raya (NSR), the parent company of Cinema XXI. However, the Nikkei reports that GIC’s stake has now been reduced to less than 0.1% of the company’s capital and that the main shareholder of Cinema XXI is Harkatjaya Bumipersada, who owns a 79.98% stake, followed by Adi Pratama Nusantara at 19 .99%.

The Muslim-majority country has long been considered a huge, underdeveloped growth market for cinema, although its geographic status as a vast archipelago brings with it infrastructure problems. The growth of streaming platforms now represents a double-edged sword: it is both a challenge to the cinematic experience and a training ground for more local filmmakers, some of whom are beginning to achieve greater international success.