According to MANA, The cargo ship MV Thaison 4 and the KM Mulya Sejati, which was carrying 27 people, mostly Indonesian fishermen, collided before dawn on Saturday.
Media reports cite witnesses saying the sailboat capsized after being hit in the stern.
Search efforts continue with two naval vessels and a helicopter deployed.
Earlier this month, over 50 died after an overcrowded speedboat carrying Indonesian migrant workers sunk en route from Malaysia to Batam, Indonesia.