SINGAPORE (BLOOMBERG) - Ask Nico Purnomo Po about the world-beating stock rally that turned him into Indonesia's latest billionaire, and he'll tell you the market is rewarding his property company's ability to complete big projects in prime locations.

"There were concerns before about whether we could execute what we had promised to customers, but we've proven ourselves," Mr Po, 37, the chief operating officer and controlling shareholder of PT Pollux Properti Indonesia, said in an interview.

Other market observers aren't so sure. To them, Pollux Properti's more than 500 per cent gain since mid-July looks like the latest example of a thinly traded stock surging way ahead of fundamentals.

The rally, by far the biggest among more than 4,700 shares in the Bloomberg World Index, has lifted Pollux Properti's valuation to 34 times net assets, 10 times higher than the industry average in Indonesia. Daily trading in the stock over the period has averaged around US$70,000 (S$95,900), meaning it doesn't take much to boost the price.

"The shares have very little liquidity, so the price might not necessarily be a reflection of the company's fundamentals," said Mr John Teja, a director at PT Ciptadana Sekuritas in Jakarta.

Mr Christopher Andre Benas, a Jakarta-based analyst who covers the real estate sector at RHB Research Institute, puts it more bluntly: "The valuation doesn't make sense."

Indonesia's stock exchange questioned the rise in August, and Pollux Properti pointed to an improvement in its financial situation. The bourse halted the shares from trade briefly in early September after they kept surging, and said last Friday that it continues to monitor the stock.

Mr Fahri Hilmi, a capital markets director at Indonesia's Financial Services Authority, known as OJK, said the group was coordinating with the exchange regarding Pollux Properti's rise.

MULTI-BILLIONAIRE

On paper, the gains have lifted Mr Po's net worth to US$3.6 billion, according to the Bloomberg Billionaires Index. He owns 85 per cent of the company (his father, Po Sun Kok, is the chairman), via two holding firms. Mr Po also has a 90 per cent stake in the family's Singapore-listed property business in Singapore, Pollux Properties Ltd.

While Pollux Properti recently completed the World Capital Tower, one of the tallest buildings in Jakarta, many of its key assets are still works in progress.

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There's the luxury condominium, Pollux Sky Suites, in Mega Kuningan, a high-end business district in the city, plus another ambitious development on the island of Batam, an hour by fast ferry from Singapore's southern coast.

Long the poor cousin to neighbouring Bintan, where those seeking a weekend getaway can stay at resorts with rooms starting from $1,000 a night, Batam will soon be home to Meisterstadt Batam.

The project, now a huge construction site, will eventually house a 100-storey tower for financial firms, shopping mall, hospital and high-rise condominiums. Pollux has a 51 per cent stake in Meisterstadt, the brainchild of late Indonesian president B J Habibie, who also was a Po family friend.

It's a long way from the company's humble beginnings. Mr Po's grandmother used to sell shirts she sewed herself to friends in Semarang, a city in Indonesia's Central Java province. That textile business still exists via PT Golden Flower, although the company now supplies big-label brands like Calvin Klein, Zara and Muji. Shares in Golden Flower are up almost 800 per cent since its June listing.

Mr Po, who declined to comment on his family's wealth, was born in Semarang and came to Singapore for an education, studying computing at the National University of Singapore (NUS). He got his start in real estate in the city-state and later shifted his focus back to Indonesia, where housing and infrastructure needs have been escalating as the population grows.

TROPICAL ISLAND

"I spearheaded the expansion into property," Mr Po said of his transitioning of the business several years ago. "I saw good opportunities and felt it was the right time to enter."

He said Pollux Properti's meteoric share-price rise reflects the company's "investment properties, which will yield recurring income once operational." In an Aug 15 filing, the company said first-half profit was 35.9 billion rupiah (S$3.5 million), a 201 per cent increase from the same period a year earlier.

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"These completions boost investor confidence, as Pollux is able to complete mega-size projects," he said. "There's also certainty that these projects will provide stable recurring income for the future. Our projects are mostly located at ultra-prime locations and definitely landmark iconic buildings."

Mr Po also sees opportunities linked to Indonesia's plan to move its capital from Jakarta to the island of Borneo. Pollux Properti doesn't own any land in the area yet, but has begun a feasibility study on several potential sites, he said.

Some analysts are much less optimistic. Pollux Properti may struggle to woo Singaporean buyers to its Meisterstadt Batam project, given a challenging financing environment, said Ms Christine Li, the head of research for Singapore and South-east Asia at Cushman & Wakefield.

"Because the Singapore government has implemented several rounds of property-cooling measures, even financing overseas purchases has been tightened indirectly," she said. "This could potentially affect the affordability."

Even when taking into account Pollux Properti's undeveloped land, the stock surge since mid-July looks overdone, RHB's Benas said.

"The Indonesian market likes to exaggerate things," he said. "It's just sentiment."