Nov 13, 2013 Matahari Putra Prima - PT Trimegah Sekuritas ... · TRIM Company Focus Nov 13, 2013 2...

TRIM COMPANYFOCUS

Sebastian Tobing

[email protected]

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Matahari Putra PrimaHyper-growth

Strong growth outlookWe initiate MPPA with a Buy and 19% upside on the back of 1) MPPA’s largest store network implies it will be the prime benefi ciary of growth in modern retail grocery outside Java, implying it can grow faster than other hypermarkets, 2) Strong growth outlook with EPS CAGR (2013-16E) of 25% on the back of 23% revenue CAGR and margin expansion, and 3) Strong balance sheet with potential upside in dividend payout.

Plenty of upside for modern retail grocery business outside Java Currently only 14% of total grocery value in Indonesia is modern grocery retail, far below neighboring countries such as Philippines (25%), Thailand (42%), and Malaysia (53%). We expect MPPA to grow aggressively at ~20 stores per year in coming three years, most of which will be in outside Java market which has lower sales per store but higher profi t per store. Currently stores in Java contribute 66.5% of revenue but 44.9% of operating profi t. Hypermart currently has ~2.6x as many stores as its competitors outside Java as its competitors have been mainly focused in Java market.

Strong balance sheetWe estimate the company’s EBITDA to net interest expense ratio to be 11.4x in 2014E with only 9 days of cash cycle, implying the company has a healthy FCFF generation, particularly from 2015 onward. We believe there is some upside risk to our dividend payout ratio of 30%, which implies a 0.5% dividend yield.

On the ground visitWe visited three hypermarkets: Hypermart, Carrefour, and Lotte. We found that there is potential upside in margins from selling own brands as we noticed many owned brands in Carrefour and Lottemart but less in Hypermart store. Hypermart store feels more luxurious and easier to navigate, but could improve by adding a canteen in their store and by having more promotions or lower prices.

Valuation: DCF-based target price of Rp2,700 (19% upside)We use DCF valuation method with a WACC of 11.0% to arrive at our target price of Rp2,700. Current price implies 27x PE but we believe the company’s strong growth justifi es such valuation. MPPA trades at 2014 PEG of 1.08x to fall to 0.9x in 2015.

BUY - Rp2700

Stock Price

Nov 13, 2013

Reuters Code MPPA.JK

Bloomberg Code MPPA.IJ

Issued Shares (m) 5,378

Mkt Cap (Rpbn) 12,369

Average Daily T/O (m) 11.4

52-Wk range Rp3,150 / Rp900

Stock Data

PT. Multipolar Tbk. 50.3%

Prime star Investment Pte. Ltd. 26.1%

Public 13.6%

Major Shareholders:

EPS 13E 14F

Consensus (Rp) NA NA

TRIM VS Cons (%) NA NA

Consensus

Share Price Rp2,275

Sector Consumer Retail

Target Price Rp2,700 (19%)

Prev. TP -

Initiate Coverage

Matahari Putra Prima opened its fi rst hypermart in 2004. It divested its department store business in 2010 to focus wholly on hypermarket business.

Revenue (Rpbn) 8,909 10,868 11,968 14,761 18,361

Revenue Growth (%) 4.3 22.0 10.1 23.3 24.4

EBITDA (Rpbn) 309 365 730 933 1,192

EBITDAGrowth (%) (10.5) 18.4 99.7 27.9 27.8

Core net profi t (306) 184 382 460 598

EPS Growth (%) (98.2) (159.9) 108.2 20.4 29.9

ROAE(%) (4.8) 3.9 9.5 10.4 12.3

DPS (Rp) 482 9 10 21 26

Div Yield (%) 21.2 0.4 0.5 0.9 1.1

P/E (x) (39.9) 66.7 32.0 26.6 20.5

P/BV (x) 2.2 3.2 2.9 2.7 2.4

EV/EBITDA (x) 41.2 30.5 17.0 13.1 10.2

Year end 31 Dec 2011 2012 2013E 2014E 2015E

Forecast & Rating

TRIM Company Focus - Nov 13, 2013

2

Hypermarket business is on hyper-growth mode

Given strong economic growth outlook of 5-6% GDP growth in the next fi ve years, increasing urbanization

rate, and increasing labor force, disposable income is forecasted by EIU to grow signifi cantly with 2012-

17E CAGR of 11.8%. This in turn implies potential growth of 5.8% CAGR (2012-17E) in food expenditure

and 15.3% in non-food expenditure. Not only Indonesia has a healthy population growth at 4% CAGR

(2009-12), Indonesia’s middle income group has also grown at a strong pace of 13% CAGR (2009-12)

while its’ high income group grew at 12% CAGR (2009-12).

Indonesian USD140bn retail market (source: EIU), approximately USD97bn is grocery retail, of which

only USD14bn or 14% of total grocery value is modern grocery retail. Hypermarkets currently has 24%

of the modern grocery retail business, with the remaining shared by convenience stores (36%) and

supermarkets (39%).

Figure 1. Urbanization and increase in labor force in Indonesia

Source: EIU

Figure 2. Indonesia’s disposable income and growth in consumer

Source: EIU

Figure 3. Expenditure per Capita/Month

Source: Company, Central Bureau of Statistics, and Mark Plus

High Income >475

Middle Income 74-475

Low Income <74


3

Figure 4. Modern retail grocery as % of total retail grocery

Source: company and Euromonitor

84%

71%

63%

62%

53%

44%

42%

25%

14%

4%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

USA

Singapore

China

Hong Kong

Malaysia

Taiwan

Thailand

Philippines

Indonesia

Vietnam


4

Management strategy

In the middle of aggressive expansion

Since selling its department store business back in 2010 to focus on hypermart, MPPA has accelerated

annual store opening from 5 stores in 2010 to 15-17 per year in 2011-12. This year, we expect MPPA to

open 19 new stores (11 new stores opened up to end of Oct13) and expect a pace of ~20 new stores in

the next three years, similar to management’s guidance.

Figure 5. MPPA’s number of Hypermart stores and growth rate in 2013-16

Source: Trimegah, company, and Euromonitor

21% CAGR 2013-16E

5163

8099

120

150

175195

215235

255

0

50

100

150

200

250

300

2010 2011 2012 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E

Figure 6. MPPA’s number of Hypermart stores and growth rate in 2013-16

Source: Trimegah, company, and Euromonitor

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5.0

10.0

15.0

20.0

25.0

30.0

35.0

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2010 2011 2012 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

MPPA's Hypermart revenue Market share

Most of the new stores will be opened outside Java, which are usually smaller in area and revenue but

higher in profi tability, mostly due to lower labor and rental costs. Stores in Java currently contributes

approximately 66.5% of revenue but only 44.9% of operating profi t while stores outside Java contributes

42.5% of revenue but 55.1% of operating profi t. As the proportion of stores outside Java grows, we

expect the average area per store to be smaller, revenue per m2 to decline but operating profi t per m2

to grow.

MPPA owns three distribution centers that supplies to all of its store locations. Having its own distribution

center helps improve supply chain which in turn help reduce working capital requirement.


5

Thriving and gaining market share

There are four major companies competing in hypermarkets in Indonesia from largest to smallest:

Carrefour (majority owned by CT Trans group), Hypermart (MPPA), Giant (Jardine group’s Dairy Farm),

and Lottemart (Lotte group from Korea). As of Sep13, Hypermart has the largest number of stores in

Indonesia overall and particularly outside Greater Jakarta and outside Java, while Carrefour has the

largest number of stores in Greater Jakarta.

Since 2007, Hypermart has gained signifi cant market share while Carrefour has lost market share. We

believe this is due to: 1) Hypermart’s aggressive expansion in under-penetrated markets outside Greater

Jakarta area, particularly outside Java, and 2) Carrefour slowing down its expansion as new ownership

(Trans group) had little experience in retail business.

We expect Hypermart to continue its aggressive expansion outside Java as it aims to be the fi rst mover

in many cities

Figure 7. Number of stores per company

Source: MPPA

Figure 8. Market share versus competitors

Source: MPPA

22

3930

7

30

15

6

39

28

13

7

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89

82

49

20

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30

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60

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90

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Hypermart Carrefour Giant Lottemart

Greater Jakarta Other Java Outside Java Total


6

Carrefour and Lottemart usually own larger stores (7000-8000m2) versus MPPA’s slightly smaller

(averaging 6,809m2 per store in 2012) format. We expect MPPA’s average store size to decline as it

opens more stores outside Greater Jakarta area. From the perspective of items sold in their stores,

MPPA focuses more on food items, which implies it competes more directly with Giant. Only 26% of

Hypermart’s sales is non-food versus 45% for Carrefour.

Initiatives that could drive improvement in margins and upside in revenue growth

Despite signifi cant increase in market share in the past fi ve years, we believe there is still potential

upside that make us confi dent in our projection of 23% hypermart revenue CAGR in 2013-16E and

operating margin increase from 4.5% in 2013 to 4.7% in 2016E.

1) Further expansion outside Java. Outside Java areas are still under-penetrated and more

profi table. As MPPA continues to expand in outside Java, we believe operating margin could

grow from 4.5% in 2013E to 4.7% in 2016E.

2) Selling more non-food items. There is upside to revenue growth and margins if MPPA sells

more non-food items in Hypermart stores. While we think MPPA is unlikely to reach the 45% non-

food contribution to Carrefour’s sales, there is certainly room for higher non-food contribution

from currently 26% for MPPA.

3) Selling more own-labeled products, which have higher margins. Currently only 3.5% of

Hypermart sales is its own labeled products. Although we do not have the fi gure for MPPA’s

competitors, we noticed more own-labeled products on Carrefour and Lotte’s shelves. Outside

Java is where the opportunity lies

Figure 9.

Source: MPPA

Hypermart Carrefour

Non-Food,

74%

Food, 26%

Non-Food,

55%

Food, 45%

Figure 10. MPPA’s hypermart locations as at end of Sep13 (total 89 stores)

Source: Population Census 2010, BPS


7

Figure 11. Map of Hypermart stores and sales contribution

Source: MPPA


8

Figure 13. Hypermart, Carrefour, and Lottemart’s entrances

Source: TRIM Research

Figure 12. Hypermart, Carrefour, and Lottemart’s entrances


On The Ground

Visit

Takeaways from on the ground visits

We visited Hypermart, Carrefour, and Lotte mart in southern Jakarta on 7 Nov. Takeaways:

Carrefour is more crowded, but to be fair, Hypermart location that we visited in Kemang village is fairly

new. Lottemart that we visited has been in Ratu Plaza was a store that Lotte mart acquired two years

ago from Makro group. We feel the Hypermart store we visited is more luxurious compared to Carrefour

and Lottemart. Hypermart store is also easier to navigate due to larger signs and better grouping and

arrangements of items. In short, the shopping experience felt better in Hypermart despite shorter aisle

– we estimate Hypermart’s aisle to be about 2.2m wide versus Carrefour and Lottemart’s 2.7m. The

Hypermart store that we visited also feels cleaner than Carrefour and Lottemart’s. Lottemart does have

larger number of cashiers at 27 cashier counters versus Hypermart’s 16 cashier counters and Carrefour’s

20 cashier counters. We believe Hypermart can improve by adding canteens in their hypermarts. We

noticed a canteen with sitting area near cashier counters in Carrefour that sells freshly made traditional

food and snack. We also noticed a canteen in Lottemart that we visited that sells Korean food, inline with

its identity as a Korean retail chain.


9

Promotions in the store

Carrefour has most attractive promotions (discounted items) given the variety and as they are easily

found, situated right at the center of the store. Hypermart has less promotion and not as strategically

placed as Carrefour. Lottemart’s promotion is much harder to fi nd and less attractive as Carrefour and

Hypermart.

Upside from selling own brand

We noticed that Carrefour and Lottemart have own branded items, mostly those that people buy often

i.e. sugar. Carrefour and Lottemart also promote their own branded items heavily. We have not noticed

any own branded items in Hypermart, which we think an opportunity for the company. Own brand should

result in higher margin, particularly as the store would not have to spend heavily on promotion.

Figure 14. Hypermart stores are neat with nice big signs


Figure 15. Carrefour store was less neat, while Lottemart store was harder to navigate


Quick price survey on 10 popular items

We surveyed 10 items that we reckon to be popular brands and to be basic needs that people often buy

i.e. laundry detergent, toothpaste, sugar. We then rank the Hypermart, Carrefour, and Lottemart from 1

to 3 for every item with 1 being cheapest and 3 being most expensive. Hence, the lower the sum means

the cheaper the store. Our survey shows that Lottemart is the cheapest with 17 points and being the

cheapest for 5 items while Carrefour in the middle with 19 points and Hypermart the most expensive

with 24 points, being the cheapest for only 1 item.


10

We will be watching prices more closely in coming months in case Hypermart prices become too

expensive and drive customers away. Currently we do not believe there is public perception that one

is cheaper than another. Note that our survey is done at one location for each hypermarket store, i.e. it

may not be refl ective of overall trend. To be fair, the Hypermart store we surveyed is located in Kemang

village, a new mall with captive market (located within an apartment complex) with rental rate that is likely

to be higher than the Carrefour location (Blok M area, an old shopping complex) and Lottemart location

(Ratu Plaza, also an old shopping complex). All are located in Jakarta.


Figure 16. Price survey in three Hypermarket stores

Barang Description

Hyper-

mart

(Rp)

Car-

refour

(Rp)

Lotte

Mart

(Rp)

Hyper-

mart

(USD)

Car-

refour

(USD)

Lot-

temart

(USD)

Hyper-

mart

Carre-

four

Lotte

Mart

Rinso antinoda 900g Laundry Detergent 16,000 16,650 15,500 1.4 1.5 1.4 2.0 3.0 1.0

Sania 2 liter Fried oil 21,975 21,550 23,500 1.9 1.9 2.1 2.0 1.0 3.0

Kopi Kapal Api 165g Coffee 10,925 9,490 10,300 1.0 0.8 0.9 3.0 1.0 2.0

Lux bar wake me up 85g Soap 2,325 2,500 2,400 0.2 0.2 0.2 1.0 3.0 2.0

Pepsodent White 120g Toothpaste 5,100 4,690 5,200 0.4 0.4 0.5 2.0 1.0 3.0

Dancow Enrich Instant 400g Milk Powder 35,575 37,450 34,200 3.1 3.3 3.0 2.0 3.0 1.0

Indomie goreng Instant Noodle 1,965 1,650 1,600 0.2 0.1 0.1 3.0 2.0 1.0

Daging ayam boiler (per kg) Chicken meat 39,900 31,750 29,800 3.5 2.8 2.6 3.0 2.0 1.0

Daging sapi giling (per kg) Beef 108,850 78,000 74,600 9.6 6.8 6.5 3.0 2.0 1.0

Gula lokal Sugar 13,800 12,900 13,300 1.2 1.1 1.2 3.0 1.0 2.0

24.0 19.0 17.0


11

Risk

Delays in store openings may lead to lower than expected revenue growth

Revenue growth might be lower than projected if there are delays in store openings, which in turn may

be caused by construction delays, some of which might not be within management control (particularly

if the company rents space in malls owned by third party).

Margin could be lower if there is sudden downturn in purchasing power

Although we are optimistic in Indonesia’s long-term economic outlook and potential growth in purchasing

power, there could be short-term downturns that may cause MPPA’s margins to fall in the near-term,

which would negatively affect our earnings projections.

Rental risk

MPPA does not own any land asset. It rents space for all of its stores. Although rental rate has been

consistently ~3% of sales and company has a long-term deal with most landowners that ties rental rate

at 2.5-2.8% of sales, there is a risk the rental cost could increase in the future. Note that we think the

company majority owner (Lippo Group)’s expertise in property helps MPPA in dealing with landowners

(some of MPPA’s stores are located in malls owned by the group).

Competition risk

There are currently four major hypermarket businesses including MPPA’s Hypermart. There is a risk that

other hypermarket businesses, i.e. Carrefour, Giant, or Lottemart become signifi cantly more aggressive,

which pose risk on revenue growth and margin projections.

Salary cost risk

There is a risk that MPPA’s revenue growth may lag salary cost growth if minimum wage is increased

signifi cantly. MPPA has ~10,000 employees, most of whom are employed in the stores. This could have

temporary negative impact on margins.


12

Figure 18. EBITDA to net interest expense (x)


EBITDA to net interest expense (x)

0.6 0.92.0

11.412.8

14.8

17.7 17.4

21.1

24.6

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5.00

10.00

15.00

20.00

25.00

30.00

2011 2012 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E


Figure 17. Revenue drivers and earnings estimates

2010 2011 2012 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E

Revenue drivers

Number of stores 51 63 80 99 120 150 175 195 215 235 255

New stores built in the year 5 12 17 19 21 30 25 20 20 20 20

Average Revenue per store 133 130 120 122 122 127 131 133 135 137

Revenue per existing store 152 133 133 134 135 137 138 140 141 142

Revenue per new store 52 119 66 66 67 68 68 69 70 70

Total revenue 8,545 8,909 10,868 11,968 14,761 18,361 22,316 25,657 28,710 31,823 34,995

Hypermart revenue 7,747 8,365 10,380 11,884 14,671 18,266 22,214 25,549 28,595 31,700 34,864

Others 798 543 488 84 89 95 101 108 115 123 131

Gross profi t 1,867 1,558 1,898 2,090 2,577 3,206 3,896 4,480 5,013 5,556 6,110

EBITDA 345 309 365 730 933 1,192 1,443 1,645 1,832 2,022 2,214

Operating profi t 54 (220) 280 539 672 845 1,038 1,206 1,364 1,527 1,697

Pretax profi t 57 164 267 565 669 853 1,050 1,214 1,384 1,539 1,703

Core net profi t (124) (306) 184 382 460 598 746 869 997 1,112 1,235

Core EPS (24) (57) 34 71 86 111 139 162 185 207 230

Revenue growth (%) 4.3 22.0 10.1 23.3 24.4 21.5 15.0 11.9 10.8 10.0

EBITDA growth (%) -10.5 18.4 99.7 27.9 27.8 21.1 14.0 11.4 10.3 9.5

Operating profi t growth (%) -507.9 -227.0 92.7 24.7 25.8 22.9 16.2 13.1 12.0 11.1

Core EPS growth (%) 136.7 -159.9 108.2 20.4 29.9 24.8 16.5 14.7 11.6 11.1

Financials

We expect MPPA to build 21/30/25 stores in 2014/15/16E while average revenue per store to stay roughly

fl at at Rp122bn in 2014 and 2015 and to rise faster from 2016-20 as we expect the number of new stores

opened per year decline. We estimate revenue to grow by 23/24/22% in 2014/15/16E that translates to

core EPS growth of 20/30/25% in 2014/15/16E which implies an EPS CAGR (2013-16E) of 25%.

MPPA has a healthy balance sheet with net debt to EBITDA of only 0.3x in 2013E and EBITDA to net

interest expense of 2x in the same year. Given its strong balance sheet, the company should be able to

give higher dividend payout (or perhaps in the form of another special dividend) versus our assumption

of 30% dividend payout. Note that net debt to EBITDA temporarily went up to positive territory in 2011 as

the company gave out Rp2.6tr dividend post divestment of Matahari Department Store in 2010.

We expect MPPA to maintain its cash cycle at around 9 days in the foreseeable future. The company

has three distribution centers in Tangerang (Greater Jakarta), Cibitung (West Java), and Surabaya (East

Java). Currently 59% of items sold went through its own distribution centers. We expect this number to

rise in the future as company plans to open another distribution center in 2014.


13

Figure 19. Cash cycle

Figure 20. Product fl ow from MPPA’s distribution centers

Source: MPPA


Cash Cycle

7.5

8.0

8.5

9.0

9.5

10.0

2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E


14

Valuation

We use DCF valuation method to arrive at target price of Rp2,700, implying a 17% upside. We initiate the

stock with a Buy with the following reasons: 1) MPPA’s largest store network implies it will be the prime

benefi ciary of growth in modern retail grocery in outside Java, implying it can grow faster than other

hypermarkets, 2) Strong growth outlook with EPS CAGR (2013-16E) of 25% on the back of 23% revenue

CAGR and margin expansion, and 3) Strong balance sheet with potential upside in dividend payout.

Multiple valuation with 27x 2014PE is high versus market’s 14x 2014PE but the company’s strong growth

justifi es such valuation. MPPA trades at 2014 PEG of 1.08x to fall to 0.9x in 2015.

We examined Carrefour’s 60% stake sale to CT group (Chairul Tanjung) in Nov 2012. The 60% stake was

sold for USD750m, implying USD1.25bn value for the whole Carrefour Indonesia. This further implies

value of USD22m per store. If we apply the same value to MPPA’s Hypermart stores (89 stores as at end

of Sep13), we arrive at hypothetical fair value of Rp2,871 using Carrefour’s transaction as comparison.

Column1 Column2

Risk free rate 7.5%

Market premium 5.0%

Beta 1.00

Debt rate 10.0%

Debt proportion 30.0%

Tax rate 25.0%

Equity cost of capital 12.5%

Debt cost of capital 7.5%

WACC 11.0%

LT growth rate 5.0%

Description 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E

EBIT (1- tax) 633 778 904 1,023 1,146 1,273 1,405 1,528 1,642 1,759 1,881

Depreciation and Amortisation 348 406 439 469 494 517 536 536 537 537 537

Changes in non-cash Working Capital 27 (52) (24) (5) (29) (19) (18) (21) (16) (17) (18)

Capex (949) (812) (674) (674) (674) (674) (674) (537) (537) (537) (537)

FCFF 59 320 645 812 936 1,096 1,249 1,506 1,626 1,743 1,863

29,564

Discounted FCFF 53 260 472 535 556 586 602 654 635 614 9,380

707

Total discounted FCFF 14,346

Net cash (debt) (25)

NAV 14,321

# of shares 5,378

NAV / share 2,663

Target price after rounding 2,700

Upside 19%

Figure 21. WACC and DCF calculations



15

Hypothetical value of MPPA shares based on sale value of Carrefour’s 60% stake to CT in Nov 2012

Company background and ownership

Matahari Putra Prima opened its fi rst department store in 1958 in Jakarta. The company opened its fi rst

department store outside Jakarta in 1980 and went public in 1992 to fuel further expansion. In 2004, the

company opened its fi rst Hypermart store. Aggressive expansion resulted in 10 Matahari department

stores, 4 Kids2kids stores, 13 Hypermarts, 4 Cut Price stores, and 1 supermarket by 2005. The company

decided to divest Matahari Department Stores for Rp7.2tr in 2010 as management decided to focus on

hypermart business. Following the divestment, company opened 12 new Hypermart stores in 2011 and

17 new Hypermart stores in 2012.

Matahari Putra Prima is owned by Lippo group through its listed holding companies: Multipolar (MLPL IJ)

and Star Pacifi c (LPLI IJ) . Temasek also owns a signifi cant market share (26%) in MPPA.


Figure 22. Hypothetical value of MPPA shares based on sale value of Carrefour’s 60% stake to CT in Nov 2012

Ownership sold 60%

Value for 60% USD mn 750

Total value USD mn 1,250

Number of stores 82 as at end of Sep13

Value per store 15

Number of Hypermart stores 89 as at end of Sep13

Hypothetical value per store USD mn 15

Total MPPA EV USD mn 1,357

Total MPPA EV Rp bn 15,466

MPPA's net cash (debt) (25) end of 2014 projection

MPPA's hypothetical fair value Rp bn 15,441

MPPA's hypothetical fair value Rp/share 2,871 based on Carrefour's store sale value

Figure 24. MPPA ownership

Source: MPPA

50%

6%

26%

17%

Multipolar (Lippo group)

Star pacific (Lippo group)

Prime Star Investment Pte

Ltd (Temasek)

Public

Source: Bloomberg

Figure 23. Comparison versus other listed retail companies

Company name Ticker Price 2013 PE (x) 2014 PE (x) 2015 PE (x)

Modern Internasional MDRN IJ 860 54.0 41.9 31.0

Sumber Alfaria Trijaya AMRT IJ 520 32.3 25.2 19.7

Ace Hardware Indonesia ACES IJ 620 23.9 19.9 16.7

Mitra Adiperkasa MAPI IJ 4950 19.5 15.8 12.2

Matahari Department Store LPPF IJ 11400 28.7 21.0 16.5

Average 31.7 24.8 19.2

Matahari Putra Prima MPPA IJ 2275 32.0 26.6 20.5


16

Balance Sheet (Rpbn)

Key Ratio Analysis

Interim Result (Rpbn)

3Q12 4Q12 1Q13 2Q13 3Q13

Sales 2,998 2,897 2,640 2,807 3,263

Gross Profi t 543 454 419 433 513

Operating Profi t 77 (49) 40 56 141

Net Profi t 78 67 63 159 99

Gross Margins (%) 18.1 15.7 15.9 15.4 15.7

Opr Margins (%) 2.6 (1.7) 1.5 2.0 4.3

Net Margins (%) 2.6 2.3 2.4 5.7 3.0

Income Statement (Rpbn)

Year end 31 Dec 2010 2011 2012E 2013F 2014F

Revenue 8,909 10,868 11,968 14,761 18,361

% growth 4.3 22.0 10.1 23.3 24.4

Gross Profi t 1,558 1,898 2,090 2,577 3,206

Opr Profi t (220) 280 539 672 845

EBITDA 309 365 730 933 1,192

% growth (10.5) 18.4 99.7 27.9 27.8

Net Int Inc/(Exp) 60 (46) (7) (36) (25)

Gain/(loss) Forex - - - - -

Other Inc/(Exp) 384 (12) 27 (2) 8

Pre-tax Profi t 164 267 565 669 853

Tax (44) (29) (141) (167) (213)

Minority Int. 15 19 - - -

Extra. Items - - - - -

Core net profi t (306) 184 382 460 598

% growth (98.2) 110.0 92.2 18.4 27.5

Year end 31 Dec 2010 2011 2012E 2013F 2014F

Profi tability

Gross Margins (%) 17.5 17.5 17.5 17.5 17.5

Op Margins (%) (2.5) 2.6 4.5 4.6 4.6

EBITDA Margins (%) 3.5 3.4 6.1 6.3 6.5

Net Margins (%) (3.4) 1.7 3.2 3.1 3.3

ROE (%) (5.4) 4.8 9.1 10.0 11.7

ROA (%) (3.0) 2.2 5.0 5.3 6.0

Stability

Current Ratio (x) 1.2 2.9 2.8 2.4 2.3

Net Debt/Equity (x) 0.40 0.47 0.14 0.13 0.12

Int Coverage (x) 0.9 (1.3) (3.0) (11.4) (14.3)

Effi ciency

A/P days 64 58 58 60 58

A/R days 1 1 1 1 1

Inventory Days 63 68 66 67 67

Capital History

Date

18-Dec-92 IPO @ Rp7,150

Cash Flow (Rpbn)

Year end 31 Dec 2010 2011 2012E 2013F 2014F

Core net profi t (306) 184 382 460 598

Depr/Amort 234 275 191 262 348

Others (664) (472) - - -

Chg in Opr Ass&Liab 895 347 (66) (46) 27

CF's from Oprs 157.7 334.0 507.4 675.5 972.7

Disposal of Fixed Assets 14.5 90.3 - - -

Capex (492) (382) (700) (755) (949)

Others 648 3,106 - - -

CF's from Investing 171 2,814 (700) (755) (949)

Dividens paid (2,591) (47) (55) (115) (138)

Change in ST Borrowing - - (175) - -

Net Chg. in LT Borrowing 1,102 50 (1,052) - -

Net Chg. in capital stocks - (2,420) (0) - -

Others (2) (772) (1,054) 372 187

CF's from Financing (1,491) (3,190) (2,337) 258 49

Net Cash Flow (1,162) (41) (2,529) 178 73

Cash at BoY 3,955 1,795 2,916 386 565

Cash at EoY 4,303 2,761 376 633 802

Free Cashfl ow 650 716 1,207 1,430 1,922

Cash at EoY 4,303 2,761 376 633 802

Free Cashfl ow 650 716 1,207 1,430 1,922

Year end 31 Dec 2010 2011 2012E 2013F 2014F

Cash and Deposits 1,795 2,916 386 565 637

Accounts and notes 35 43 41 56 68

Inventories 1,266 1,671 1,777 2,230 2,774

Other Current Assets 523 455 501 618 769

LT investment & LT 884 0 - - -

Net Fixed Assets 1,644 775 966 1,228 1,575

Other long term Asset 4,162 2,365 3,949 4,042 4,223

Total Assets 10,308 8,225 7,621 8,738 10,047

Account Payable 1,290 1,422 1,561 1,998 2,428

ST Debt 779 537 362 362 362

Other Current Liabilities 891 757 833 1,027 1,278

LT Debt 1,494 1,280 228 228 228

Other LT Liabs 171 383 422 521 648

Total Liabilities 4,625 4,379 3,406 4,136 4,943

Minority Interest 50 0 - - -

Shareholder's Equity 3,113 603 603 603 603

Retained earning & other 2,520 3,242 3,611 3,998 4,500


17

Technical Corner Gina Nasution

[email protected]

• MPPA formed a white candle yesterday with strong volume. This week we think MPPA is likely to rebound and will test

strong resistance at level 2,475 (R1) with support at level 2,175 (S2)

• In December, we think there could be profi t taking as Stochastic Oscillator shows bearish signal. If MPPA could not break

the strong resistance level at 2,475, it is likely to come back down to support level of 2,025.

• Looking further ahead, we expect MPPA to form double top formation in the next six months to reach resistance level of

Rp2,725.

• 6m technical target price: Rp2,725.

Support Resistance

S1 S2 R1 R2

2,175 2,025 2,475 2,725

PT Trimegah Securities Tbk

18th Fl, Artha Graha Building

Jl. Jend. Sudirman Kav. 52-53

Jakarta 12190, INDONESIA

Tel : (6221) 2924 9088 Fax : (6221) 2924 9163

DISCLAIMER

This report has been prepared by PT Trimegah Securities Tbk on behalf of itself and its affi liated companies and is provided for information purposes

only. Under no circumstances is it to be used or considered as an offer to sell, or a solicitation of any offer to buy. This report has been produced

independently and the forecasts, opinions and expectations contained herein are entirely those of Trimegah Securities.

While all reasonable care has been taken to ensure that information contained herein is not untrue or misleading at the time of publication, Trimegah

Securities makes no representation as to its accuracy or completeness and it should not be relied upon as such. This report is provided solely for

the information of clients of Trimegah Securities who are expected to make their own investment decisions without reliance on this report. Neither

Trimegah Securities nor any offi cer or employee of Trimegah Securities accept any liability whatsoever for any direct or consequential loss arising

from any use of this report or its contents. Trimegah Securities and/or persons connected with it may have acted upon or used the information herein

contained, or the research or analysis on which it is based, before publication. Trimegah Securities may in future participate in an offering of the

company’s equity securities.

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