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Danareksa Equity Snapshot - MAPI 09 Januari 2018
January 09, 2018 15:41

Mitra Adiperkasa(MAPI IJ)

The stellar performance will continue 

The key revenue growth drivers for MAPI, based on our recent visit, are: 1) MAPI’s Fashion specialty stores, 2) Active store expansion, and 3) F&B.  Overall, we expect 15% yoy consolidated revenues growth in 2018.  There will be no further store openings or downsizing in the department store division but the recent Debenhams and Lotus closures will help boost EBITDA margins expansion in 2018. We retain our BUY call on MAPI with a TP of IDR8,100.

Sales of Inditex brands in Vietnam in 4Q17 were robust; MAPI’s IPO of Active will be in either 4Q18 or 2020.  With the recent opening of 4 new Inditex brand stores in Vietnam: 1 ZARA, 1 Massimo Dutty, 1 Pull & Bear, and 1 Stradivarius in Hanoi and Ho Chi Min with floor space of around 500-1,000 sqm each, and the Christmas and New year end sales season, the Vietnam Inditex brand sales contribution was robust in 4Q17. MAPI is looking to open 3-4 more Inditex stores in Vietnam this year along with 6-11 new Inditex stores in Indonesia. The timeframe for MAPI’s IPO of Active is still under discussion (either in 4Q18 or 2020), but this will definitely give CVC an exit strategy. In the meantime, MAPI will aggressively open around 100 new Active stores in 2018 with floor space of around 200-500sqm each.

What are the key growth drivers for MAPI in 2018? The key growth drivers for MAPI’s revenues this year will be: 1) specialty stores for both fashion and Active and 2) food and beverages coming from Starbucks sales. For 2018, we currently estimate 14.9% yoy revenues growth. This is in-line with the management’s expectation of +15% yoy revenues growth this year with estimated 4-5% SSSG in 2018F. The impact from recent department store downsizing in 2017 will positively impact the EBIITDA margin this year by around 22 ppt yoy in our view, translating into better overall profitability.

BUY with a TP of IDR8,100. The 4Q17 F&B SSSG improved due to seasonality and internal efforts to improve the products. Last year’s closures of Debenhams and Lotus will help boost EBITDA margins expansion in 2018. Given: 1) the continued stellar performance from specialty stores and F&B and 2) the focus on performing brands and department store closures, we believe that solid performance should be on the cards in 2018 with double-digit growth in revenues in addition to continued margins expansion. We have a BUY call on MAPI with a TP of IDR8,100, implying 27x P/E 2018F. The risks to our call include lower than expected GDP growth and weak purchasing power.

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