AMRT - To perform much better in 2H24F after a good 1H24
KBVS Update
Monday, 12 Agustus 2024
AMRT - To perform much better in 2H24F, after a good 1H24'
(Maintain BUY; TP: IDR3,500)
AMRT plans to open another 800 new stores (includes 200 stores with shop in shop concept) in 2H24F. Thus, we expect AMRT' revenue to grow by 11.2% yoy and 10.6% yoy, in 2H24F and ‘24F on higher sales with more new store openings and new members, amidst our anticipation on a weaker than expected 3Q24F.
We expect AMRT’ other income could grow by around 19% yoy in 2H24F, with its fee based income growth at around 7% yoy. We also expect the pressure from AMRT’ opex to be lesser in 2H24F. AMRT’ earnings could still grow by 24.6% yoy and 18.3% yoy, respectively in 2H24F and ‘24F, on higher sales and other income (fee based income, etc) with better cost management, yoy, amidst our anticipation on a weak 3Q24 performance by AMRT.
AMRT’ revenue grew 8% yoy/1.9% qoq in 2Q24, on higher sales of food/groceries’ and non-food, which was at IDR20.8 tn (+5.9% yoy/-2.3% qoq) and IDR9.1 tn (+13.5% yoy/+13.3% qoq). As a result, AMRT’ 1H24 revenue grew 10% yoy on 649 new additional stores and 2 mn new members, which also came in-line with ours' (50.1%) but below cons' (49.4%).
AMRT’ EBIT margin was contracted by 10bps yoy/qoq, in 2Q24 dragged down by its Jabodetabek’ stores EBIT margin that contracted 60bps yoy/50bps qoq. Thanks to a 7% yoy/9.1% qoq higher other income, AMRT’ earnings reached IDR904 bn (+8% yoy/+1.5% qoq) in 2Q24 and maintained a 3% net margin. All in all, AMRT' 1H24 earnings grew 11.3% yoy, which came at 44.6% of ours '24F earnings, but below consensus' (42.6%). Note that, historically, AMRT' 1H earnings achievement was around 44% to 45% of its full year' earnings.
Maintain BUY on AMRT with TP of IDR 3,500/share, which implies 36.1x ‘24F PE due to AMRT’ good 1H24 results and our expectation on another AMRT’ good performance in 2H24F. Currently, AMRT is trading at 28.9x ‘24F PE or slightly above its 5 years’ mean PE.
Regards,
Andre Suntono – KBVS Research Team