Live Chat Software
Berita Dan Riset Terbaru
Company Research
Danareksa Equity Snapshot - ACES12 Maret 2018
March 12, 2018 16:19

Ace Hardware Indonesia(ACES IJ)

Solid Feb-18 performance

In February 2018, ACES recorded: 1) solid revenues growth of nearly +20.3% yoy (in-line with our expectations) and 2) strong SSSG driven by outer Java areas. Recently, the company opened 1 new store in Bandung Ubertos, West Java, with around 1,800 sqm of retail space. More new store openings can be expected in the coming months. We maintain our BUY call on the company with an unchanged TP of IDR1,450.

Solid Feb-18 revenues growth. ACES recorded robust revenues in Feb-18 of IDR469.0bn, +20.3% yoy and -10.4% mom, leading to IDR992.7bn of revenues in 2M18, +19.7% yoy. This figure is 15.2% of our full year estimate - within expectations. We think the solid growth largely reflects improvements in both the home improvements and lifestyle divisions, especially after importing goods became more difficult since early 2017, thus reducing competition from smaller players.

Strong Feb-18 SSSG. The Feb-18 SSSG improved to 13.6% YTD, driven by brisk SSSG in outer Java areas of 22.0% YTD (Feb-17: 3.9%; Jan-18: 14.8%), much better on a yearly and monthly comparison. Meanwhile, the Jakarta SSSG in Feb-18 was strong at 10.9% YTD (Feb-17: 4.8%; Jan-18: 6.7%). The Rest of Java SSSG reached 10.3% YTD (Feb-17: 7.7%; Jan-18: 9.3%).

Recent new store opening in West Java. ACES opened 1 new store on March 3, 2018 in Bandung Ubertos, West Java. The store has about 1,800 sqm of retail space.  This will lift the total number of ACES stores operating throughout Indonesia to 145. All in all, there are around 10-15 new store openings in the pipeline in 2018. To give an additional boost to sales, ACES will hold 2 boom sales events this year, one in 1H18 and the other in 2H18, as well as an annual year-end sales event in Dec-18. Assuming 14 new store openings, we estimate that revenues will grow by around 13.5% yoy in 2018.

Maintain BUY with an unchanged TP of IDR1,450. ACES currently trades at 24.6x P/E 2018, or about +1 std based on the 2012-2017 P/E band. We like the company for its sound profitability and we estimate a relatively stable gross profit margin in 2018 of 47.9%. The company’s cash position is also very strong and its inventory days are expected to improve in 2018. The risks to our forecast include: 1) lower-than-expected purchasing power, 2) weakening of the IDR/USD exchange rate as 80% of ACES’ goods are imported, and 3) higher inventory days which are already >200 days. Maintain BUY with an unchanged TP of IDR1,450, implying +1.5 std based on the 2012-2017 P/E band.

… read more 20180312 ACES