Chapter 7

Figures converted from Indonesian rupiah at historical FX rates — see data/company.json.fx_rates. Ratios, margins, and multiples are unitless and unchanged.

MICE and Hotel Economics

CBDK put the whole of its $137.7 million of net IPO proceeds into one asset: the NICE convention centre. Eight months of trading have produced $2.7 million of revenue and a $2.5 million gross loss. Depreciation is 81% of the March quarter's cost line — a $155.3 million building written off over 20 years, the same term as the affiliate lease on the land beneath it.

Sources: FY2025 Annual Report, Realization of Funds from Public Offering [1]; Q1 2026 interim statements, Note 8 Investment Properties [2]; FY2025 Annual Report, Note 22 Operating Segment [3]; Q1 2026 interim statements, Note 22 Operating Segment [4].

Where the IPO proceeds went

The company's own use-of-proceeds report leaves no ambiguity. Gross proceeds of $138.1 million, issue costs of $0.4 million, net proceeds of $137.7 million — the planned use and the realised use are the same single line, a subscription for new shares in PT Industri Pameran Nusantara, with nil remaining [5]. CBDK states the money was to be used by IPN "as additional funds to finance the construction project of a building" for meetings, incentives, conferences and exhibitions [6]. The listing raised money for one building.

That building now sits in investment property at a cost of $155.7 million, of which $155.3 million is the structure and $0.4 million the land parcel [7]. $103.2 million of it was spent during 2025 alone, and $155.2 million moved out of assets under construction when the venue was judged ready for use [8]. NICE covers about 123,000 square metres of gross build area on a roughly 188,000 square metre site, with 54,560 square metres of exhibition halls across three buildings [9] [10]. It has been partially operational since August 2025 and, per the February 2026 deck, was expected to reach full operation in early 2026 [11].

The second leg is not built. Hilton Jakarta PIK2 is a 20-floor, 271-room hotel on the NICE site, scheduled to open in 2027, and the hotel segment "has not yet recorded any contribution to the Company's Revenue" [12]. The February 2026 deck puts its investment value at about $48.0 million [13]. The hotel segment carried $6.0 million of assets at 31 March 2026 [14], so most of that $48.0 million is still ahead — and it will arrive with its own depreciation.

Together the convention and hotel segments held $183.2 million of assets at 31 March 2026 against consolidated assets of $1,345.9 million — 13.6% of the balance sheet [15]. At the end of 2024 the convention segment held $73.7 million and produced no revenue at all [16].

What the venue has earned since August 2025

The segment note has now been filed three times since NICE opened. Differencing the cumulative figures gives the operating quarters directly.

Source: derived by differencing the reported cumulative segment notes — 9M 2025 [17], FY2025 [18] and Q1 2026 [19].

As reported: the nine months to September 2025 carried $0.12 million of convention revenue against $0.03 million of cost [20]; the full year, $2.36 million against $2.78 million, a gross loss of $0.42 million [21]; the March 2026 quarter, $0.35 million against $2.40 million, a gross loss of $2.05 million [22]. Cumulative revenue of $2.7 million is 1.75% of what the building cost.

Fourteen events were held in 2025 [23], which averages $0.17 million of revenue per event. The March 2026 quarter was not empty either: the February 2026 deck names a K-pop concert at NICE on 17 January and Westlife on 10 February [24]. The quarter still produced $0.35 million.

The revenue note gives a second reading of the same activity. Rental revenue rose from $0.06 million in 2024 to $2.13 million in 2025, and cost of revenues shows convention and exhibition at $2.78 million against nil the prior year [25]. Final tax on rental rose in step, from $0.01 million to $0.21 million [26] — 9.9% of gross rentals, and CBDK's policy note confirms final tax "is imposed on the gross value of transactions without taking into account the gain or loss arising from the transactions" [27]. The segment pays tax on turnover in years it loses money.

Four-fifths of the cost line is depreciation

The interim statements disclose where the depreciation lands. In the March 2026 quarter, investment-property depreciation of $1.94 million was charged in full to cost of revenues, with nothing in general and administrative expenses [28]. That is 81.1% of the segment's $2.40 million cost line. What is left — $0.45 million of everything else it takes to run the venue — sits against $0.35 million of revenue.

Sources: segment revenue and cost from the FY2025 [29] and Q1 2026 [30] segment notes; depreciation from the investment property notes [31] [32]; other cost derived as the difference.

On that basis the two periods say almost opposite things. FY2025's gross loss of $0.42 million sits on top of $1.53 million of positive margin before depreciation. The March quarter's $2.05 million loss sits on top of a $0.10 million deficit before depreciation. The venue went from covering its running costs to not quite covering them, and depreciation did the rest.

The depreciation charge itself is not yet at its full weight. CBDK depreciates investment property, land excepted, straight-line over 20 years [33]. On a building carried at $155.3 million that is $7.8 million a year, and the March quarter's $1.94 million is exactly the quarterly rate [34] [35]. The whole of FY2025 carried $1.95 million [36] — one quarter's worth. The building only began depreciating when it left assets under construction, around the start of the December quarter, two months after NICE opened its doors. The FY2025 segment result therefore absorbed roughly three months of the asset's annual cost, not twelve.

Source: derived from the FY2025 and Q1 2026 segment notes [37] [38] and the investment property carrying value and 20-year depreciation policy [39] [40].

Covering its own cost of sales takes roughly $9.6 million of revenue a year — about 1.7 times the rate implied by NICE's best five months, and about 6.9 times the March quarter's rate. That is before any share of the group's selling and administrative expense, before a normalised land cost, and before the hotel starts depreciating in 2027.

The land is leased, and the rent moves with the result

IPN does not own the ground under NICE. On 8 November 2024 it entered a joint operation agreement with PT Kukuh Mandiri Lestari; on 21 March 2025 the parties converted it into a lease of 187,740 square metres in Tangerang for 20 years, under which "IPN will pay the lease fee to KML with variable amount based on IPN's financial performance (profit/loss)" [41]. KML is one of the commonly controlled counterparties mapped in Ownership and Affiliates.

Two things follow from that structure. First, the 20-year depreciation life matches the 20-year lease term exactly: the building is written down to nil over precisely the period CBDK holds the right to stand on the land. Second, because the rent is wholly variable rather than fixed or indexed, no right-of-use asset appears among non-current assets and no lease liability appears among liabilities on the consolidated balance sheet [42] [43]. A $151.8 million building stands on land the group records no obligation to pay for [44].

The same clause cuts the other way, and it is the strongest fact against reading the segment loss as the full economic picture. While IPN loses money, the rent it owes the affiliate should be low or nil, so the landlord is absorbing the start-up phase. The $2.05 million March-quarter loss is struck before any land cost a third-party lessor would have charged. If NICE eventually earns money, the rent rises with it — an arrangement whose value to CBDK's minority shareholders depends on terms no filing in this corpus discloses.

What the filings do not disclose

The gaps here are unusually wide for an asset of this size.

No filing in the corpus states hall utilisation, occupancy, day rates, attendance, forward bookings in dollars, or revenue per event. The segment note stops at gross profit — there is no segment operating result, so the marketing and administrative cost of running NICE cannot be separated from the group's.

Fixed assets rose from $8.8 million to $26.5 million during 2025, and the FY2025 notes contain no fixed-asset schedule at all [45]. How much of that increase is MICE equipment (depreciated over four to nine years) and how much is hotel construction is not stated.

The target-versus-realisation table sets 2026 targets for three real-estate product lines totalling $33.8 million, and none for the segment that absorbed the entire IPO [46].

The annual report also contradicts itself on the transaction. Under material commitments for capital goods investment it states that "the Company did not carry out any capital goods investment classified as a material transaction under the aforementioned regulation" — POJK 17/2020 [47]. The next page reports realised capital expenditure of $138.0 million, being the IPN subscription of $137.7 million plus $5,940 for 99% of the hotel vehicle PT Citra Kirana Bisnis Distrik [48]. Eleven pages later the directors state that that same transaction "constitutes a material transaction as referred to in POJK 17/2020" [49]. The charitable reading is that the first passage means purchases of fixed assets rather than subscriptions for shares; the report does not say so.

Management asserts that no impairment of investment property is required and that none is pledged as collateral [50]. No independent valuation of NICE appears anywhere in the corpus — the same position the land inventory occupies in Land at Cost. External research that might have supplied a market mark on Greater Jakarta venue economics was not available for this run.

The ramp case, and what would settle it

Eight months is a short window, and the calendar argues that the March quarter understates the venue. The February 2026 deck lists a dense second and third quarter: The Magic of Michael Jackson on 3–5 April, Pet Adventure Wonderland on 9–12 April [51], then Hammersonic on 2 May, seven trade expos across 6–9 May, Java Jazz on 29–31 May, Keramika and Megabuild on 4–7 June and Indo Fisheries on 16–18 June [52], with a Kahitna anniversary concert on 5 September [53]. NICE was only partially operational through that period [54].

Ramp is also a documented pattern in this market rather than a hope. PWON, an IDX-listed developer that has built a mature recurring base, attributes its 2026 hospitality growth to assets moving "beyond their initial opening phase, higher occupancy and average room rates" [55]. Its recurring segments produced $49.7 million of $55.0 million of first-quarter 2026 EBITDA, 90% of the total [56]. PWON runs malls, offices and hotels rather than a convention venue, and no listed pure venue operator sits in this corpus, so it is a reference for what a finished recurring base looks like, not a like-for-like margin comparison.

My read on the record available: the recurring-income leg is not yet earning its capital, and the shortfall is structural rather than marginal — $7.8 million of annual depreciation against $2.7 million of revenue in the whole of its operating life so far, with the hotel's own charge still to come. The strongest fact against that read is the one above: the venue reached full operation only in early 2026, and its booked calendar loads into the middle of the year, so no period yet observed is a fair run rate.

The test is dated and specific. The half-year 2026 statements, due at the end of July 2026, carry the segment note. Convention revenue above roughly $4.8 million for the six months would put NICE on a path to cover its own cost of sales within the year and make the ramp case the right one. Revenue near the March quarter's rate would leave the building consuming something like $8.2 million a year of reported profit — against group profit attributable to shareholders of $81.8 million in FY2025 [57] — for as long as it takes the calendar to fill.