MAPI - Store expansions with world class brands boosts performance

KBVS Update
Tuesday, 24 October 2023

MAPI - Store expansions with world class brands boosts performance
(Re-initiate BUY; TP: IDR2,400)

We expect Mitra Adiperkasa's (MAPI) revenue to grow 22.5% yoy/ 24.7% yoy/ 15.2% yoy, in 2H23F/ '23F/ '24F due to its continuous store expansions in domestic and overseas market.

With MAPI's digital ecosystem improvement and its total members' growth, we expect digital sales to grow by around 11%-12% yoy in ‘23F/ '24F implying around 8%-9% sales contribution to MAPI’ total sales.

MAPI has the exclusivity of various world class brands. We expect MAPI' gross profit to grow by 22.4% yoy/ 25.9% yoy/ 15.7% yoy, in 2H23F/ ‘23F/ ‘24F on better merchandise mix. We also expect a 40 bps yoy/ 20 bps yoy gross margin expansions, in '23F/ '24F.

All in all, we expect MAPI’ EBIT and net profit to grow by 24.6% yoy/27.3% yoy/15.2% yoy and 26.8% yoy/ 29% yoy (exclude one-offs in 2022)/ 18.2% yoy, in 2H23F/'23F/'24F. We also expect MAPI' EBIT and net margins to expand by 20 bps yoy/10 bps yoy in '23F/'24F and 20 bps yoy, each in '23F/'24F due to higher sales expectations, good merchandise mix and better cost management.

Re-initiate MAPI with a BUY and TP of IDR 2,400/share (14.5x ‘24F P/E). We like MAPI due to; a) its store expansions, b) world class brands portfolio, and c) better cost management. d) high ROE (24.6% & 24.4% in ‘23F & 24F), and e) in a net cash position since 2021.

Regards,
Andre Suntono – KBVS Research Team