24 March 2011

INDONESIA EQUITY
Investment Research

FY10 Results Review

Andrey Wijaya
+62 (21) 2598 6888
andrey.wijaya@id.oskgroup.com Mitra Adiperkasa
Mainly in Line
BUY ÛÜ As envisaged. Net profits surged 22.6% y-o-y to IDR201bn in FY10, backed by a 15% y-o-
Target IDR2,925 y growth in revenue to IDR4.7trn. Gross margin expanded by 40bps to 50.4%, driven by
Previous IDR2,925 MAPI’s policy of directing its new store expansion to the higher yielding segments. Some
Price IDR2,675 59% of the 40,595 new retail outlets added this year are specialty stores and F&B outlets.
As such, almost 70% of MAPI’s revenue was contributed from these two segments, where
CONSUMER gross margin can reach as high as 40%-45% from specialty stores and 60%-65% from
MAPI is one of the largest Indonesia's F&B outlets, compared to 28% from department stores.
retailers, targeting the medium- to high-end
segment. It operates department stores,
specialty stores, and food & beverage retail Strategic efforts pay off. FY10 operating margin also expanded strongly to 9.5% from
chains, including Sogo, Debenhams, Zara,
7.5% previously, helped by: i) the company’s astute move to collaborative its marketing
Mark & Spencer, Sports Warehouse,
Starbucks, Burger King, Domino’s Pizza. strategies with local banks, which cut down its advertising cost by 10bps to 1.2% of sales;
ii) cost savings from letting go of two underperforming brands this year (Harvey Nichols and
Stock Statistics
Armani); and iii) having more stores enables the company to meet its principal’s quota,
Bloomberg Ticker MAPI
Share Capital (m) 1,660 which allowed it to source for more goods and materials locally, and hence saving on
Market Cap (IDRbn) 4,441 freight costs in the F&B division (for stores like Starbucks or Burger King). This will continue
52 week H│L Price (IDR) 2,900 600
to bolster MAPI’s cash flow from operating activities at IDR770bn for FY10, doubling from
3mth Avg Vol (‘000) 4,574
YTD Returns 0.0 IDR270bn in FY09.
Beta (x) 1.0
Expansion driven margin. This year, MAPI will add around 40,000sq m in retail outlets. Its
Major Shareholders (%)
Satya Mulia Gema 58.8 capex for FY11f is estimated at IDR350-400bn as the expansion plan does not include a
new department store. A third of the new stores will be outside Java and will be financed by
internal funds. If required, the company can raise more loans considering its current net
Share Performance (%) gearing of 0.5x compared with at 0.7x in FY09 after bringing down its interest bearing debts
Month Absolute Relative to IDR955bn by 14.7% y-o-y.
1m 10.3 8.9
3m 2.9 4.5
6m 74.8 49.5 Maintain BUY, TP IDR2,925. We remain positive on company’s future outlook, as it taps
12m 291.4 194.0 into the middle segment of the market, which comprises more than 50% of Indonesia’s
population. Maintain BUY, with our target price of Rp2,925, which puts the counter at
6-month Share Price Performance
3,100
17.1x-12.9x 2011f-12f PE.
2,900

2,700

2,500

2,300

2,100

1,900

1,700

1,500
Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11

FYE Dec (IDR bn) FY08 FY09 FY10 FY11f FY12f

Revenue, IDR bn 3,486 4,112 4,713 5,481 6,350
Net profit, IDR bn (70) 164 201 284 375
% chg y-o-y (160.5) (335.0) 22.6 41.4 32.0
Consensus - - 205 281 354
EPS, IDR (42) 99 121 171 226
DPS 12 - 15 18 26
Dividend yield, % 0.4 - 0.6 0.7 1.0
ROE (6.2) 12.7 13.7 16.5 18.3
ROA (1.9) 4.9 5.7 7.6 9.2
PER, x (63.6) 27.1 22.1 15.6 11.8
PBV, x 3.9 3.4 3.0 2.6 2.2
EV/EBITDA, x 10.4 9.1 7.4 6.4 5.4

OSK Research | See important disclosures at the end of this report 1

 24 March 2011

Results Table (IDR bn)

(IDR bn) 2009 2010 Chg YoY Comments

Sales 4,112 4,713 14.6% In line

COGS (2,054) (2,336) 13.7%
Gross profit 2,058 2,376 15.5% In line

Marketing expense (1,515) (1,664) 9.8%

GA expense (235) (263) 12.2%
Total operating expense (1,750) (1,927) 10.1%

Operating profit 308 449 45.9% In line

Interest income 5 6 10.5%

Interest expense (114) (124) 8.5%
Net interest expense (109) (118) 8.4%

Gain of forex 165 1 -99.6%

Equity in net income of association 3 4 32.6%
Amortisation of goodwill (10) (12) 21.2%
Loss on disposal/sale assets (12) (57) 383.9%
Gain (loss) on derivative (30) 7 -125.1%
Others-net (34) 2 -105.0%
Total other expense (26) (173) 569.7%

Pre-tax income 282 276 -2.1%

Tax expense (118) (75) -36.6%

Minority interest (0) 0 -101.8%
Net income 164 201 22.6% In line

Margin
Gross profit 50.0% 50.4%
Operating profit 7.5% 9.5%
Net profit 4.0% 4.3%

Source: Company, OSK Research

OSK Research | See important disclosures at the end of this report 2

 24 March 2011

OSK Research Guide to Investment Ratings

Buy: Share price may exceed 10% over the next 12 months
Trading Buy: Share price may exceed 15% over the next 3 months, however longer-term outlook remains uncertain
Neutral: Share price may fall within the range of +/- 10% over the next 12 months
Take Profit: Target price has been attained. Look to accumulate at lower levels
Sell: Share price may fall by more than 10% over the next 12 months
Not Rated (NR): Stock is not within regular research coverage

All research is based on material compiled from data considered to be reliable at the time of writing. However, information and opinions expressed
will be subject to change at short notice, and no part of this report is to be construed as an offer or solicitation of an offer to transact any securities or
financial instruments whether referred to herein or otherwise. We do not accept any liability directly or indirectly that may arise from investment
decision-making based on this report. The company, its directors, officers, employees and/or connected persons may periodically hold an interest
and/or underwriting commitments in the securities mentioned.

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