EraBlue : On-The-Ground Insight
Key Takeaways :
• We visited the EraBlue store located in Ciledug, Tangerang. PT Erablu Elektronik (store brand: EraBlue), a JV partnership of Erajaya Digital and The Gioi Di Dong from Vietnam.
• We foresee EraBlue potentially disrupting the retail electronics market through a stand-alone concept, which has previously been a footprint for Ace Hardware (ACES) and Electronic City (ECII)
• We estimate domestic smartphone sales will recover primarily due to China reopening, which will alleviate shortages. BI estimated that the retail sales of ICT equipment could manage to ramp up +23% MoM in Dec-22.
• We upgrade our call for ERAA IJ to BUY with a TP of IDR560, implying PE/PBV of 8.4x/1.1x in FY23E. We fine tuned our figures with +1.5% YoY ASP and +5.2% YoY sales volume in FY23E, expecting better profitability from FY22E which was offset by higher GPM. Downside risks include: 1) Lower ASP; 2) below expectation sales volume.
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