MAPI Rekomendasi Beli

Mitra Adiperkasa A middle class growth story Strong revenues growth to be maintained At the top line, net revenues grew a brisk 25% to Rp5,890 bn in 2011. Furthermore, profitability remains good with the gross margin edging up to 51.66% in 2011, or slightly above our previous forecast of 50.2%. Going forward, MAPI is confident it can maintain its high margins. This year, with the continued high demand from the country's burgeoning middle class coupled with the company's aggressive expansion strategy, we expect revenues to grow another 25% to Rp7,314 bn. Strong performance in the first quarter MAPI has indicated sales growth of 29% yoy in the first quarter of 2012 to Rp1,637 bn, up from Rp1,269.10 bn in 1Q11. This represents 22% of our total revenues forecast for the full year, consistent with MAPI's seasonal average in the first quarter in previous years. To help spur revenues growth, MAPI is adding more brands to its portfolio (in the first quarter of the year, MAPI added 3 new brands: Spanx, Diva, and HossIntropia). Although the company's focus is on store expansion, MAPI will still acquire new brands in an effort to maintain its position as the leading retail marketing company in Indonesia. Continuing to expand its retail network MAPI added 32 new stores across the country in the first quarter of 2012, mostly in the food and beverages segment, lifting the total number of stores it manages to 1,076. This translated into the addition of 5,214 sqm of store space during the period, resulting in total store space of 470,352 sqm. For 2012, MAPI plans to add around 60,000 sqm of additional floor space, most of it in Jakarta thanks to the opening of two new department stores (Sogo in Kota Kasablanka and Debenhams in Kemang Village), which together shall add 30,000 sqm of store space. With Rp600 billion of capex needed for this year's expansion, financed from internally generated cash and external financing, we expect net gearing to reach 52% in 2012. TP raised to Rp7,200 We are encouraged by 2011's excellent performance and remain confident that the company can repeat this success again in 2012. Our confidence is grounded in the country's solid economic growth which is creating a burgeoning middle class and therefore higher demand for MAPI's products. We raise our Target Price to Rp7,200, implying a FY12/13 PE of 25.5-20.5x. BUY maintained.