FY11 net profit jumped to IDR360bn (+79.2% y-o-y, +51.3% q-o-q), reaching 119.2% of our estimates and beating our and consensus expectations, boosted by wider-than-expected profit margins and sales. Sales productivity rose to IDR12.7m/sq m from IDR11.2m/sq m riding on faster SSSG, which improved to 14% y-o-y from 10% y-o-y. As February SSSG grew at a faster 15% y-o-y, the group should see lower operating cost per unit sales. We are raising our FY12-13 earnings to IDR477bn-600bn (+12.6%-9.0%) premised on improved operating efficiency. We maintain BUY, at a higher target price of IDR7,700, based on DCF valuation, implying a 26.8x-21.3x FY12-13 PE.
Above in all lines. FY11 sales rose to IDR5.9trn (+25.0% y-o-y) on the back of a larger selling space, which expanded to 465k sq m (+10.1% y-o-y), as well as higher sales productivity of IDR12.7m/sq m in 2011, up from IDR11.2m/sq m in the prior year. Same-stores-sales-growth (SSSG) also improved to 14% y-o-y in FY11 from 10% y-o-y in FY10. These led to its FY11 EBIT margin improving to 10.6% (+110bps y-o-y) and EBIT jumping to IDR622bn (+38.6% y-o-y). The lower losses on disposal of assets further boosted MAPI’s earnings to IDR360bn (+79.2% y-o-y), hence beating our and street estimates.
Healthy balance sheet. The NDER stood at 0.5x in 2011, with cash increasing to IDR300bn (+20.6% y-o-y) while total debts rose to IDR1,118bn (+17.1% y-o-y). The company’s effective debt interest rate fell to 11.0% pa from 13.0% pa. This year, MAPI plans to refinance IDR300bn of debt at the current interest rate of 12.3%.
Solid outlook. As the company’s Feb 2012 sales surged 27% y-o-y while SSSG rose 15% y-o-y, these should signify a promising outlook for FY12 earnings. We see MAPI’s FY12 selling-area productivity improving to IDR13.4m/sq m on the back of higher traffic at its department stores and food & beverages outlets. Elsewhere, MAPI also plans to increase its selling area by 60k sq m (+12.8% y-o-y) by adding 250-300 stores.
Tweaking up forecasts. We raise our FY12-13 earnings estimates to IDR477bn-IDR600bn (+12.6%-9.0%) on the back of improved operating efficiency owing to faster SSSG, which has helped to lower fixed operating-costs per unit sales.
Raising TP to IDR7,700. The counter is trading at 23.5x-18.7x FY12-13 PE, or 0.4x-0.4x FY12-13 PEG, slightly lower than the peer average of 25.5x-19.9x FY12-13 PE, or 0.7x-0.6x FY12-13 PEG. Given its promising earnings growth, the counter deserves to trade at a premium. We maintain BUY, and raises our target price to IDR7,700, based on DCF valuation, which implies a 26.8x-21.3x FY12-13 PE.
source: OSK Nusadana Securities Indonesia - Equity Research Team dated 29 March 2012
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