Indonesian Retail Companies in Focus: Mitra Adiperkasa
The plan of Indonesian retail company Mitra Adiperkasa to sell 20 percent of its stake in subsidiary MAP Boga Adiperkasa is expected to have a good impact on the financial performance and share performance of the company. MAP Boga Adiperkasa is a leading food and beverage retailer that operates five exclusive brands in Indonesia (including Starbucks, Pizza Express, Krispy Kreme, Cold Stone Creamery, and GODIVA).
In early April 2017 the direction of Mitra Adiperkasa visited the Indonesia Stock Exchange in Jakarta to discuss the listing of its subsidiary. Mitra Adiperkasa owns a 99.99 percent stake in MAP Boga Adiperkasa. It is expected that the initial public offering (IPO) of its subsidiary on the Indonesia Stock Exchange will boost the share performance of Mitra Adiperkasa. It is also an indication that Mitra Adiperkasa is more serious about tapping opportunities in Indonesia's food and beverage industry.
In 2017 Mitra Adiperkasa plans to open 200 new retail shops (including 60 new Starbucks branches) in its food and beverage division. This should help to achieve the company's target to see a 12-13 percent growth in sales this year. Funds collected through the IPO can be used to finance its expansion plans (although the company also has plenty of internal cash reserves to rely on). As franchise holder, the company currently operates 273 Starbucks branches, mostly concentrated on Java and Bali.
In full-year 2016 Mitra Adiperkasa reported a 10.5 percent (y/y) growth of sales to IDR 14.14 trillion (approx. USD $1.06 billion) and a whopping 235.0 percent (y/y) growth of net profit to IDR 238 billion (approx. USD $17.9 million). These positive results were partly attributed to the company's decision to close many stores that were not making a profit. This was part of the company's 2014-2016 transformation period.
Most of Mitra Adiperkasa's revenue - about 97 percent of the total - is collected in Indonesia, the remainder originates from Vietnam, Thailand, Australia and Singapore. Last year it opened its first Zara store in Ho Chi Minh, Vietnam.
Stock Quote Mitra Adiperkasa - MAPI:
The main threat for the company is the rupiah exchange rate. When the rupiah depreciates, then Mitra Adiperkasa's earnings as well as its share performance slide significantly because the company imports the bulk of its products. As such, its performance is closely related to the performance of the rupiah.
The target price of Mitra Adiperkasa's shares is now set at IDR 7,700 a piece. On Tuesday (11/04) the company's shares surged 2.40 percent to IDR 6,400. So far this year, Mitra Adiperkasa's shares have climbed 18.52 percent.
Forecast Mitra Adiperkasa's Future Earnings:
| 2015 | 2016 | 2017F | 2018F | |
| Net Revenues | 12,833 | 14,150 | 15,738 | 17,804 |
| EBITDA | 924 | 1,383 | 1,399 | 1,624 |
| Profit per Share¹ |
18.1 | 125.6 | 263.1 | 357.2 |
| P/E Ratio (x) |
353 | 51.0 | 24.3 | 17.9 |
| ROE (%) | 1.1 | 6.7 | 12.9 | 15.5 |
| EV/EBITDA | 12.2 | 8.1 | 8.0 | 6.9 |
in billion IDR rupiah unless stated otherwise
¹ in IDR rupiah
Source: UOB Kay Hian (11/04/2017)