matahari putra prima - mirae asset · alfamart (amrt; not rated) and indomaret (pt indomarco...
TRANSCRIPT
Analysts who prepared this report are registered as research analysts in Indonesia but not in any other jurisdiction, including the U.S.
PLEASE SEE ANALYST CERTIFICATIONS AND IMPORTANT DISCLOSURES & DISCLAIMERS IN APPENDIX 1 AT THE END OF REPORT.
Matahari Putra Prima (MPPA IJ)
Fighting for survival amid fierce competition
SSSG nose-dived in 4Q16: Non-food category was the key drag
In 4Q16, same-store sales growth (SSSG) for Matahari Putra Prima (MPPA) came in at -
9.4% YoY, deteriorating further from the 3Q16 result of -8.9% YoY. In the quarter, the
company displayed underperformance relative to other retail players. We attribute this
to: 1) a broader shift in consumption toward minimarkets; 2) renovations aimed at
converting existing locations into G7-concept stores; and 3) sluggishness in the non-
food category (e.g., electronics and home linens; just 30% of revenue) in ex-Java due to
the absence of a full recovery in the region’s purchasing power. All in all, we believe the
biggest drag on SSSG was weakness in non-food items, which tend not to be staples.
Expecting better revenue growth and normalized margins going forward
MPPA’s ongoing renovations to introduce the G7 concept to existing locations have led
to a significant reduction in inventory sold, hurting overall SSSG. However, we expect
the amount of inventory days to normalize as renovations are completed going forward.
We also expect SmartClub, MPPA’s modern wholesale business, to show improvement in
sales on the back of its competitive pricing strategy. According to MPPA, the average
selling price (ASP) of SmartClub stores is 10% lower than that of other channels, on the
condition that customers buy in bulk. In addition, although SmartClub’s average
sales/sqm are lower than that of Hypermart, the two businesses generate similar OP
margins, thanks to SmartClub’s lower operating expenses. (SmartClub posts sales just
1.5x greater than Hypermart’s despite boasting 2x more area.) Meanwhile, we note that
in 3Q16, MPPA’s inventory days increased to 96 from 89 in 2Q16. However, we ascribe
this to a high base of comparison stemming from the impact of the Lebaran holiday in
July. Hence, we expect inventory days to gradually decline going forward.
Cut earnings estimates and trim target price to IDR1,420/share
We revise down our 2016-18 earnings forecasts for MPPA given weak SSSG in 4Q16 as
well as the lower-than-expected number of new store additions in 2016. Furthermore,
we see fiercer competition from minimarkets and convenience stores, which we believe
are eating into MPPA’s revenue share. (The company’s revenue growth is weaker than
that of supermarkets and minimarkets.) Nevertheless, we expect better margins going
forward given that the company has culled unprofitable stock-keeping units (SKUs) to
reduce inventory days. We also believe that MPPA’s diversified business structure grants
the company exposure to both traditional and modern grocery retail channels. All in all,
we recommend Hold on MPPA with a target price of IDR1,420/share.
Notably, should MPPA’s major shareholders (including Temasek Holdings Pte Ltd) sell
their stakes at a USD1bn valuation, the stock would receive a boost. This scenario
implies a valuation of 0.80x EV/sales, representing a discount of around 36% to our
target price, which corresponds to 0.52x EV/sales.
Trade
Company Report February 16, 2017
Recommendation Hold
Target Price (12M, IDR) 1,420
Share Price (2/14/17, IDR) 1,315
Expected Return 8.0%
Consensus OP (17F, IDRbn) 236
EPS Growth (17F, %) 100 P/E (17F, x) 54.8 Industry P/E (17F, x) 19.0 Benchmark P/E (17F, x) 15.6 Market Cap (IDRbn) 7,072.0
Shares Outstanding (mn) 5,378.0 Free Float (mn) 1,273.6 Institutional Ownership (%) 30.4 Beta (Adjusted, 24M) 1.5 52-Week Low (IDR) 1,185 52-Week High (IDR) 2,130
(%) 1M 6M 12M Absolute -6.7 -32.4 -28.7 Relative -8.8 -33.5 -42.9
PT. Mirae Asset Sekuritas Indonesia Christine Natasya +62-21-515-1140 [email protected]
FY (Dec) 12/13 12/14 12/15 12/16F 12/17F 12/18F Revenue (IDRbn) 11,913 13,590 13,929 13,995 14,780 17,872 Gross Profit (IDRbn) 1,889 2,354 2,356 2,232 2,546 3,197 Operating Profit (IDRbn) 389 647 282 144 236 540 Net profit (IDRbn) 445 554 183 64 129 366 EPS (IDR/share) 83 103 34 12 24 68 BVPS 613 526 516 516 536 596 P/E ratio (x) 15.9 12.8 38.6 109.7 54.8 19.3 ROE (%) 12.5% 18.1% 6.5% 2.3% 4.6% 12.0% Note: All figures are based on consolidated data; OP refers to operating profit Source: Bloomberg, Mirae Asset Sekuritas Research Indonesia
60
70
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90
100
110
120
2/1
6
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/16
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/16
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2/1
7
JCI MPPA(D-1yr=100)
Matahari Putra Prima
2
February 16, 2017
Mirae Asset Sekuritas Indonesia
KDB Mirae Asset Sekuritas Indonesia
SSSG nose-dived in 4Q16
In 4Q16, SSSG for MPPA came in at -9.4% YoY, deteriorating significantly from the 3Q16 result of
-8.9% YoY. However, it should be noted that SSSG weakened QoQ across the entire sector given
the high base of comparison stemming from the Lebaran holiday in 2Q16.
Figure 1. Downtrend in MPPA’s SSSG (quarterly) Figure 2. Downtrend in MPPA’s SSSG (yearly)
Source: Company data, Mirae Asset Sekuritas Research
Source: Company data, Mirae Asset Sekuritas Research
Figure 3. Revenue breakdown by category (as of FY2015) Figure 4. Revenue breakdown by region
Source: Company data, Mirae Asset Sekuritas Research
Source: Company data, Mirae Asset Sekuritas Research
The company displayed underperformance relative to other retail players in 4Q16. We attribute this to: 1) a broader shift in consumption toward minimarkets; 2) renovations aimed
at converting existing locations into G7-concept stores; and 3) sluggishness in the non-food
category (e.g., electronics and home linens; just 30% of revenue) in ex-Java owing to the absence
of a full recovery in the region’s purchasing power. All in all, we believe the biggest drag on SSSG
was weakness in non-food items, which tend not to be staples.
10.3%
4.5%
-9%
-15%
-10%
-5%
0%
5%
10%
15%
1Q
11
2Q
11
3Q
11
4Q
11
1Q
12
2Q
12
3Q
12
4Q
12
1Q
13
2Q
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3Q
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4Q
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1Q
14
2Q
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3Q
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4Q
14
1Q
15
2Q
15
3Q
15
4Q
15
1Q
16
2Q
16
3Q
16
4Q
16
MPPA quarterly SSSG
8%
5%
-2%
-5%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
2011 2012 2013 2014 2015 2016F
Yearly SSSG
60%
40%
Java
Ex Java
30%
70%
Non Food
Grocery+Fresh
Matahari Putra Prima
3
February 16, 2017
Mirae Asset Sekuritas Indonesia
KDB Mirae Asset Sekuritas Indonesia
Figure 5. YoY private consumption growth (%) Figure 6. Retail companies’ yearly SSSG
Source: BPS, Mirae Asset Sekuritas Research
Source: Company data, Mirae Asset Sekuritas Research
On the macro front, Indonesia saw a 4.99% increase in private consumption in 4Q16.
Nonetheless, growth in discretionary spending (e.g., spending on apparel, footwear, household
appliances, etc.), remained a drag on consumption growth (see Figure 7). Meanwhile, in the US,
employment has already reached the maximum level, leading our strategist to believe that
deployment of direct stimulus would be akin to adding fuel to an already burning fire. Indeed, if
President Trump’s campaign promises come to fruition, US inflation is likely to accelerate,
eventually driving the Fed to raise interest rates more rapidly than expected. Against this
backdrop, Mirae Asset Sekuritas has revised down its economic growth forecasts to 5.0% (from
5.2%) for 2016F, and 5.1% (from 5.4%) for 2017F (please refer to our “Buy Indonesia” strategy
report for more details.)
Figure 7. Apparel, footwear, maintenance services GDP
growth (YoY) Figure 8. GDP vs. YoY SSSG growth
Source: BPS, Company data, Mirae Asset Sekuritas Research
Source: BPS, Company data, Mirae Asset Sekuritas Research
4.37%
3.35% 3.31%
2%
3%
3%
4%
4%
5%
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16
Apparel, Footwear and Maintenance Services GDP growth (YoY)
-15%
-10%
-5%
0%
5%
10%
15%
2%
3%
3%
4%
4%
5%
5%
6%
6%
7%
1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16
Nominal Gross Domestic Product growth (LHS) MPPA quarterly SSSG (RHS)
7.8%
-4.50%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
2012 2013 2014 2015 2016F
LPPF RALS ACES MPPA
4.99
4.8
4.9
5
5.1
5.2
5.3
5.4
5.5
5.6
(%)Private consumption growth (%)
Matahari Putra Prima
4
February 16, 2017
Mirae Asset Sekuritas Indonesia
KDB Mirae Asset Sekuritas Indonesia
Intensifying competition
Despite the continuing dominance of traditional retail stores in Indonesia, modern grocery retail
businesses have been growing quite rapidly. But despite the emergence of promising market
opportunities, the retail sector is also facing growing challenges in the form of heightened
competition and regulatory tightening.
For the Indonesian grocery retail segment, we believe the growth of minimarkets will continue to
outpace that of larger-format stores such as hypermarkets. We believe that minimarkets and
convenience stores are better positioned to seize on the rebound in consumer spending. Notably,
compared to their larger-format competitors, minimarkets: 1) require less capital; and 2) can
operate in smaller spaces (facilitating greater penetration) .
Alfamart (AMRT; Not Rated) and Indomaret (PT Indomarco Prismatama; unlisted), Indonesia’s
two largest minimarket operators, continue to open more than 1,000 stores per year. We believe
minimarkets are increasingly favored by consumers due to their convenient locations, longer
operating hours, and attractive product prices owing to in-store promotions.
Figure 9. Alfamart’s promotions Figure 10. Indomaret’s promotions
Source: Company data, websites, Mirae Asset Sekuritas Research
Source: Company data, websites, Mirae Asset Sekuritas Research
Figure 11. Alfamart’s store locations
Source: Company data, Mirae Asset Sekuritas Research
Matahari Putra Prima
5
February 16, 2017
Mirae Asset Sekuritas Indonesia
KDB Mirae Asset Sekuritas Indonesia
With minimarkets and convenience stores expected to continue to lead grocery retail segment
growth, MPPA, for which Hypermart (89% of total store area; 78.1% of total revenue) is the core
business driver, has been experiencing a slowdown in revenue growth.
Our analysis shows that, while Hypermart aggressively increased store count at 9% CAGR during
2012-16, revenue expanded at only 6% CAGR—below the industry rate of 17%—during the same
period. We note that Midi Utama Indonesia (MIDI; Not Rated) and Alfamart (AMRT; Not Rated)
are witnessing the fastest revenue growth (see Figures 13 and 21) in the sector.
Figure 12. Revenue breakdown by department Figure 13. Revenue (4-year CAGR, 2012-16F)
Source: Company data, Mirae Asset Sekuritas Research
Source: Company data, Mirae Asset Sekuritas Research
Figure 14. Breakdown of MPPA’s total store count Figure 15. Hypermart store count
Source: Company data, Mirae Asset Sekuritas Research
Source: Company data, Mirae Asset Sekuritas Research
89%
6%
Hypermart
Foodmart
Boston
FMX
SmartClub
0
20
40
60
80
100
120
140
2012 2013 2014 2015 2016
Hypermart9% CAGR growth (2012-2016F)
6%
17%
24%
0%
5%
10%
15%
20%
25%
30%
MDRN MPPA HERO Industry RANC MIDI AMRT
Matahari Putra Prima
6
February 16, 2017
Mirae Asset Sekuritas Indonesia
KDB Mirae Asset Sekuritas Indonesia
Figure 16. Indonesia’s overall grocery market breakdown by
channel
Figure 17. Indonesia’s overall grocery market breakdown by
channel (including cigarettes)
Source: Company data, Alfamart slides, Mirae Asset Sekuritas Research
Source: Company data, Alfamart slides, Mirae Asset Sekuritas Research
Figure 18. Indonesia’s overall grocery market breakdown by
channel
Figure 19. Indonesia’s total grocery market breakdown by
category (including cigarettes)
Source: Company data, Alfamart slides, Mirae Asset Sekuritas Research
Source: Company data, Alfamart slides, Mirae Asset Sekuritas Research
Figure 20. MPPA’s revenue Figure 21. Market share breakdown by revenue
Source: Company data, Mirae Asset Sekuritas Research
Source: Bloomberg, Company data, Mirae Asset Sekuritas Research
25.2% 26.8% 27.5% 27.5%
15.0% 14.9% 13.7% 13.4%
59.8% 58.3% 58.8% 59.1%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2013 2014 2015 1Q16
Traditional stores Supermarket & Hypermarket Minimarket
16.6% 17.7% 18.2% 18.0%
8.5% 8.5% 7.8% 7.5%
74.9% 73.8% 74.0% 74.5%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2013 2014 2015 1Q16
Traditional stores Supermarket & Hypermarket Minimarket
25.7% 27.5%
15.0% 13.4%
59.3% 59.1%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1Q16 2Q16
Traditional stores Supermarket & Hypermarket Minimarket
17% 18%
9% 8%
75% 75%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1Q16 2Q16
Traditional stores Supermarket & Hypermarket Minimarket
13,590 13,929 13,995
6%
0%
10%
20%
30%
40%
50%
60%
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
2014 2015 2016 F 2017 F 2018 F
IDRbn MPPA Revenue (LHS)
MPPA Revenue growth (RHS)
45% 46%53% 54% 56% 57%
22% 21%18% 18% 16%
14%
6% 8% 7% 8% 8% 11%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2011 2012 2013 2014 2015 9M16
MDRN MIDI MPPA DNET HERO RANC AMRT
Matahari Putra Prima
7
February 16, 2017
Mirae Asset Sekuritas Indonesia
KDB Mirae Asset Sekuritas Indonesia
Room for revenue growth and margin normalization despite heavy competition
Due to increased transportation costs and inefficiencies stemming from Indonesia’s still-
underdeveloped infrastructure, retailers have not been able to keep pace with the consumer-led
economic boom. This has led consumption to shift to convenience stores, which are highly
accessible.
Appearing to realize the potential threat of convenience stores, MPPA began introducing the G7
concept to existing Hypermart stores in 2014 to improve sales productivity. In 2015, MPPA also
opened a wholesale business under the name SmartClub (currently accounting for around 15% of
total revenue) in order to cater to traditional buyers, which account for 60% of total demand.
MPPA’s ongoing G7-related renovations have led to a significant reduction in inventory sold,
hurting overall SSSG. However, we expect the amount of inventory days to normalize as
renovations are completed going forward. We also expect SmartClub, MPPA’s modern wholesale
business, to show improvement in sales on the back of its competitive pricing strategy. According
to MPPA, the ASP of SmartClub stores is 10% lower than that of other channels, on the condition
that customers buy in bulk. In addition, although SmartClub’s average sales/sqm figure is lower
than that of Hypermart, the two businesses generate similar OP margins, thanks to SmartClub’s
lower operating expenses. (SmartClub posts sales just 1.5x greater than Hypermart’s despite
boasting 2x more area.) Meanwhile, we note that in 3Q16, MPPA’s inventory days increased to 96
from 89 in 2Q16. However, we ascribe this to a high base of comparison stemming from the
impact of the Lebaran holiday in July. Hence, we expect inventory days to gradually decline going
forward.
Figure 22. MPPA’s gross profit and gross margin Figure 23. MPPA’s days of inventory
Source: Company data, Mirae Asset Sekuritas Research
Source: Company data, Mirae Asset Sekuritas Research
72
104
89
96
65
70
75
80
85
90
95
100
105
110Average days of inventories
16%
17%
16%
16%
17%
17%
18%
18%
2,050
2,100
2,150
2,200
2,250
2,300
2,350
2,400
2,450
2,500
2,550
2,600
2015 2016 F 2017 F
IDRbn Gross profit (LHS) Gross margin (RHS)
Matahari Putra Prima
8
February 16, 2017
Mirae Asset Sekuritas Indonesia
KDB Mirae Asset Sekuritas Indonesia
No further investment in MatahariMall in the short term
With Mitsui & Co. revealing its intention to invest in MatahariMall, MPPA’s stake (around 10%) in
the e-commerce business will be diluted if it does not participate in the rights issue. Based on our
calculation, MPPA’s stake will be reduced to 8.5% post-rights issue. Nevertheless, unlike Matahari
Department Store (LPPF/Buy/TP: IDR19,950), MPPA is highly unlikely to make further
investments in the business, in our view. This is due to the fact that, in terms of balance sheet,
MPPA (IDR261.7bn in cash; 0.2x net debt to equity; as of 3Q16) is not as robust as LPPF
(IDR671bn; -0.45x). Should MPPA invest further in MatahariMall in order to avoid dilution, its
stock price will be hit harder than LPPF’s.
Table 1. MatahariMall’s ownership (post-rights issue)
Shareholders Number of shares Nominal Share value (IDR) % ownership of
MatahariMall
PT Matahari Department Store Tbk 22,226,851 100 2,222,685,100 12.0%
PT Matahari Putra Prima Tbk 15,728,152 100 1,572,815,200 8.5%
PT Duta Wibisana Anjaya 5,000,000 100 500,000,000 2.7%
PT Dutamas Sinar Mustika 10,000,000 100 1,000,000,000 5.4%
PT Investama Digital Ventura 111,653,015 100 11,165,301,500 60.3%
Mitsui Co Ltd 20,599,638 100 2,059,963,800 11.1%
Total 185,207,656 18,520,765,600
Source: Company data, LPPF, Mirae Asset Sekuritas Research
Cut earnings estimates and trim target price to IDR1,420/share We revise down our 2016-18 earnings forecasts for MPPA given weak SSSG in 4Q16 as well as the
lower-than-expected number of new store additions in 2016.
Furthermore, we see fiercer competition from minimarkets and convenience stores, which we
believe are eating into MPPA’s revenue share. (The company’s revenue growth is weaker than
that of supermarkets and minimarkets.) In line with our strategist’s call for muted GDP growth,
we believe that MPPA’s revenue growth will slow in 2017.
Nevertheless, we expect better margins going forward given that the company has culled
unprofitable SKUs to reduce inventory days. We also believe that MPPA’s diversified business
structure will allow the company to: 1) capture both traditional and modern grocery retail
channels; and 2) keep up with current changes in consumption trends.
Should MPPA’s major shareholders (including Temasek Holdings Pte Ltd) sell their stakes at a
USD1bn valuation, the stock would receive a boost. This scenario implies a valuation of 0.80x
EV/sales, representing a discount of around 36% to our target price, which corresponds to 0.52x
EV/sales.
Matahari Putra Prima
9
February 16, 2017
Mirae Asset Sekuritas Indonesia
KDB Mirae Asset Sekuritas Indonesia
Table 2. Store count forecast revisions
Old vs New Forecast Old New Changes
2016F 2017F 2018F 2016F 2017F 2018F 2016F 2017F 2018F
Number of new stores
Hypermart 6 6 5 3 3 3 -3 -3 -2
Boston 8 8 8 1 1 1 -7 -7 -7
Foodmart 4 4 4 3 3 3 -1 -1 -1
FMX 8 8 8 -3 8 8 -11 0 0
SmartClub 2 2 3 2 2 2 0 0 -1
Total stores
Hypermart 118 124 129 115 118 121 -3 -6 -8
Boston 116 124 132 109 110 111 -7 -14 -21
Foodmart 27 31 35 26 29 32 -1 -2 -3
FMX 57 65 73 46 54 62 -11 -11 -11
SmartClub 3 5 8 3 5 7 0 0 -1
Source: Company data, Mirae Asset Sekuritas Research
Table 3. Forecast revisions
Old New Changes
2016F 2017F 2018F 2016F 2017F 2018F 2016F 2017F 2018F
Total Additional Area (Sqm) 66,024 94,320 96,320 44,611 65,270 65,270 (21,413) (29,050) (31,050)
SSSG (%) 1% 2% 3% -5% 2% 1% -5% 0% -2%
IDRbn
Revenue 14,976 16,813 19,421 13,995 14,780 17,872 -7% -12% -8%
Gross profit 2,571 3,064 3,458 2,232 2,546 3,197 -13% -17% -8%
Operating income 215 387 462 124 222 532 -42% -45% 11%
Profit before income tax 182 359 439 84 177 491 -54% -53% 7%
Net income 140 277 341 64 129 366 -54% -53% 7%
EBITDA 578 820 988 504 656 1,024 -13% -20% 4%
Source: Company data, Mirae Asset Sekuritas Research
Table 4. MPPA’s store count
No of Store 2010 2011 2012 2013 2014 2015 2016
Hypermart 51 63 80 99 107 112 115
Foodmart 21 24 29 29 21 23 26
Boston 54 63 78 94 102 108 109
FMX 37 49 46
SmartClub 1 3
Source: Company data, Mirae Asset Sekuritas Research
Matahari Putra Prima
10
February 16, 2017
Mirae Asset Sekuritas Indonesia
KDB Mirae Asset Sekuritas Indonesia
Table 5. Key assumptions
Item Details
Cost of equity 12%
Risk-free rate 7.0%
Beta 1.00
Market premium 5%
Cost of debt 10.0%
Tax 22.8%
After-tax cost of debt 7.7%
Total PV of FCF (IDRbn) 2,667
PV of TV (IDRbn) 4,980
Total PV of FCF and TV 7,647
Cash 2017 (IDRbn) 730
Debt 2017 (IDRbn) 760
Equity value (IDRbn) 7,617
Equity value/share (IDR/Share) 1,416
Source: Mirae Asset Sekuritas Research
Figure 24. MPPA’s ownership structure
Source: Company data, Mirae Asset Sekuritas Research
Table 6. Potential sale stake valuation implies 0.80x EV/sales
Potential sale stake valuation
Company valuation of USD1bn (IDR) 13,500,000,000,000
Debt (IDR) 760,000,000,000
Cash (IDR) 730,331,817,306
Enterprise value (IDR) 13,529,668,182,694
Implied enterprise value (IDR tr) 14
EV/sales (x) 0.80
No. of shares outstanding 5,377,962,800
Implied price/share 2,516
Source: Company data, Mirae Asset Sekuritas Research
Matahari Putra Prima
11
February 16, 2017
Mirae Asset Sekuritas Indonesia
KDB Mirae Asset Sekuritas Indonesia
Profit & Loss Balance sheet
Year end Dec 31 (IDRbn) 2015 2016E 2017E 2018E
Year end Dec 31 (IDRbn) 2015 2016E 2017E 2018E
Revenue 13,929 13,995 14,780 17,872
Assets
COGS 11,572 11,763 12,235 14,676
Cash and equivalents 409 448 730 827
Gross Profit 2,356 2,232 2,546 3,197
Receivables 26 36 35 41
Opex (2,074) (2,087) (2,310) (2,657)
Inventories 2,759 2,739 2,682 3,217
Operating Profit 282 144 236 540
Others 777 661 704 837
Other income/(expenses) (49) (61) (69) (69)
Total current assets 3,971 3,885 4,150 4,922
Profit before income tax 233 84 167 471
Fixed assets - net 1,462 1,592 1,690 1,742
Income tax expenses (50) (19) (38) (105)
Prepaid rent-Net 330 316 339 409
Minority interest - - - -
Others 531 521 537 586
Net profit 183 64 129 366
Total non-current assets 2,323 2,429 2,565 2,737
EBITDA 589 504 656 1,024 Total assets 6,294 6,314 6,715 7,659
Liabilities and equity
Growth & margins 2015 2016E 2017E 2018E Short-term bank loans and
current maturities
250 250 250 250
Net Revenue 2.5% 0.5% 5.6% 20.9% Accounts payables 1,763 1,858 1,933 2,319
EBITDA -35.1% -14.5% 30.2% 56.1% Others current liabilities 801 723 808 1,021
Net profit -67.0% -64.8% 100.2% 183.2% Total current liabilities 2,815 2,831 2,990 3,589
Profitability (%) Long term debt 400 400 510 510
Gross margin 16.9% 15.9% 17.2% 17.9% Others 304 307 332 356
Operating margin 1.9% 0.9% 1.4% 2.9% Total non-current liabilities 704 707 842 866
EBITDA margin 4.2% 3.6% 4.4% 5.7% Total liabilities 3,519 3,538 3,832 4,456
Minority interests 0 0 0 0
Cash Flow (Summarized) Shareholders' equity 2,776 2,776 2,883 3,203
Year end Dec 31 (IDRbn) 2015 2016E 2017E 2018E
CF from operation
Net profit 183 64 129 366
Ratio analysis
Year end Dec 31
2015
2016E
2017E
2018E Depreciation/amortization 233 359 420 484
Change in working capitals (830) 180 117 (262) Current ratio 1.4 1.4 1.4 1.4
Others - - - - Quick ratio 0.2 0.2 0.3 0.2
CF from operation (413) 603 666 588 Debt to equity 0.2 0.2 0.3 0.2
CF from Investments
Net debt to equity 0.1 0.1 0.0 (0.0)
Net capex (422) (490) (517) (536)
Others - - - -
CF from investment (422) (490) (517) (536)
CF from financing activity
Increase/(decrease) in debt 650 - 110 -
Increase/(decrease) in equity - - - -
Dividend payments (194) (64) (23) (45)
Others 41 (10) 46 90
CF from financing activity 497 (74) 133 45
Net changes in cash (339) 39 282 96 Beginning balance 748 409 448 730
Ending balance - from CF 409 448 730 827
Source: Mirae Asset Sekuritas Research
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February 16, 2017
Mirae Asset Sekuritas Indonesia
KDB Mirae Asset Sekuritas Indonesia
APPENDIX 1
Important Disclosures & Disclaimers
Stock Ratings Industry Ratings Buy Relative performance of 20% or greater Overweight Fundamentals are favorable or improving
Trading Buy Relative performance of 10% or greater, but with volatility Neutral Fundamentals are steady without any material changes
Hold Relative performance of -10% and 10% Underweight Fundamentals are unfavorable or worsening Sell Relative performance of -10%
* Ratings and Target Price History (Share price (----), Target price (----), Not covered (■), Buy (▲), Trading Buy (■), Hold (●), Sell (◆)) * Our investment rating is a guide to the relative return of the stock versus the market over the next 12 months. * Although it is not part of the official ratings at Mirae Asset Securities, we may call a trading opportunity in case there is a technical or short-term material development. * The target price was determined by the research analyst through valuation methods discussed in this report, in part based on the analyst’s estimate of future earnings. The achievement of the target price may be impeded by risks related to the subject securities and companies, as well as general market and economic conditions. Analyst Certification The research analysts who prepared this report (the “Analysts”) are registered with the Indonesian jurisdiction and are subject to Indonesian securities regulations. They are neither registered as research analysts in any other jurisdiction nor subject to the laws and regulations thereof. Opinions expressed in this publication about the subject securities and companies accurately reflect the personal views of the Analysts primarily responsible for this report. Except as otherwise specified herein, the Analysts have not received any compensation or any other benefits from the subject companies in the past 12 months and have not been promised the same in connection with this report. No part of the compensation of the Analysts was, is, or will be directly or indirectly related to the specific recommendations or views contained in this report but, like all employees of PT Mirae Asset Securities Indonesia, the Analysts receive compensation that is impacted by overall firm profitability, which includes revenues from, among other business units, the institutional equities, investment banking, proprietary trading and private client division. At the time of publication of this report, the Analysts do not know or have reason to know of any actual, material conflict of interest of the Analyst or PT Mirae
Asset Securities Indonesia except as otherwise stated herein. Disclaimers This report is published by PT Mirae Asset Sekuritas Indonesia (“Mirae Asset”), a broker-dealer registered in the Republic of Indonesia and a member of the Indonesia Exchange. Information and opinions contained herein have been compiled from sources believed to be reliable and in good faith, but such information has not been independently verified and Mirae Asset makes no guarantee, representation or warranty, express or implied, as to the fairness, accuracy, completeness or correctness of the information and opinions contained herein or of any translation into English from the Bahasa Indonesia. If this report is an English translation of a report prepared in the Indonesian language, the original Indonesian language report may have been made available to investors in advance of this report. Mirae Asset, its affiliates and their directors, officers, employees and agents do not accept any liability for any loss arising from the use hereof. This report is for general information purposes only and it is not and should not be construed as an offer or a solicitation of an offer to effect transactions in any securities or other financial instruments. The intended recipients of this report are sophisticated institutional investors who have substantial knowledge of the local business environment, its common practices, laws and accounting principles and no person whose receipt or use of this report would violate any laws and regulations or subject Mirae Asset and its affiliates to registration or licensing requirements in any jurisdiction should receive or make any use hereof. Information and opinions contained herein are subject to change without notice and no part of this document may be copied or reproduced in any manner or form or redistributed or published, in whole or in part, without the prior written consent of Mirae Asset. Mirae Asset, its affiliates and their directors, officers, employees and agents may have long or short positions in any of the subject securities at any time and may make a purchase or sale, or offer to make a purchase or sale, of any such securities or other financial instruments from time to time in the open market or otherwise, in each case either as principals or agents. Mirae Asset and its affiliates may have had, or may be expecting to enter into, business relationships with the subject companies to provide investment banking, market-making or other financial services as are permitted under applicable laws and regulations. The price and value of the investments referred to in this report and the income from them may go down as well as up, and investors may realize losses on any investments. Past performance is not a guide to future performance. Future returns are not guaranteed, and a loss of original capital may occur.
Disclosures
As of the publication date, PT Mirae Asset Securities Indonesia, and/or its affiliates do not have any special interest with the subject company and do not
own 1% or more of the subject company's shares outstanding.
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February 16, 2017
Mirae Asset Sekuritas Indonesia
KDB Mirae Asset Sekuritas Indonesia
Distribution United Kingdom: This report is being distributed by Mirae Asset Securities (Europe) Ltd. in the United Kingdom only to (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”), and (ii) high net worth companies and other persons to whom it may lawfully be communicated, falling within Article 49(2)(A) to (E) of the Order (all such persons together being referred to as “Relevant Persons”). This report is directed only at Relevant Persons. Any person who is not a Relevant Person should not act or rely on this report or any of its contents. United States: This report is distributed in the U.S. by Mirae Asset Securities (America) Inc., a member of FINRA/SIPC, and is only intended for major institutional investors as defined in Rule 15a-6(b)(4) under the U.S. Securities Exchange Act of 1934. All U.S. persons that receive this document by their acceptance thereof represent and warrant that they are a major institutional investor and have not received this report under any express or implied understanding that they will direct commission income to Mirae Asset or its affiliates. Any U.S. recipient of this document wishing to effect a transaction in any securities discussed herein should contact and place orders with Mirae Asset Securities (America) Inc., which accepts responsibility for the contents of this report in the U.S. The securities described in this report may not have been registered under the U.S. Securities Act of 1933, as amended, and, in such case, may not be offered or sold in the U.S. or to U.S. persons absent registration or an applicable exemption from the registration requirements. Hong Kong: This document has been approved for distribution in Hong Kong by Mirae Asset Securities (Hong Kong) Ltd., which is regulated by the Hong Kong Securities and Futures Commission. The contents of this report have not been reviewed by any regulatory authority in Hong Kong. This report is for distribution only to professional investors within the meaning of Part I of Schedule 1 to the Securities and Futures Ordinance of Hong Kong (Cap. 571, Laws of Hong Kong) and any rules made thereunder and may not be redistributed in whole or in part in Hong Kong to any person. All Other Jurisdictions: Customers in all other countries who wish to effect a transaction in any securities referenced in this report should contact Mirae Asset or its affiliates only if distribution to or use by such customer of this report would not violate applicable laws and regulations and not subject Mirae Asset and its affiliates to any registration or licensing requirement within such jurisdiction. Mirae Asset Securities International Network
PT. Mirae Asset Sekuritas Indonesia Mirae Asset Securities Co. Ltd. (Seoul) Mirae Asset Securities (Hong Kong) Ltd. Equity Tower 50th Floor Jl.Jend Sudirman, SCBD Lot 9 Jakarta 12190
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