Keep Calm at Some Alarming Threats
Chasing the Momentum This Year
• MAPI recorded revenue at IDR5.63tn in 1Q22 or grew +30.61% YoY, or exceeded the pre- pandemic level growth in 1Q19 with +20.37% YoY. The main driver of this positive performance was the robust sales growth across all business lines along with mobility recovery.
• Net income improved significantly to IDR512.82bn (+1,865.74% YoY) or stood at IDR230.07bn excluding the one-off gain after selling 16.72% share ownership of Burger King Indonesia from the previous 33.52% stake. We believe this year should be MAPI’s momentum to recover with the main driver being: 1) solid omnichannel ecosystem; 2) consumption of the mid to high- income remins strong; and 3) ample expansion growth.
A Guide to Beef Up
• MAPI has an omnichannel ecosystem supporting online sales with an award-winning reward program called “MAPCLUB”.
• In 1Q22, MAPCLUB had 5.2mn members with an average value per transaction of IDR836,000 and an average shopping frequency of 1.6x/year.
• Based on management, MAPCLUB’s members had contributed about ~50-60% of revenues.
• More outlets expansion outside shopping mall such as Starbucks (~60%) and Subway (~55%) which are less sensitive to restrictions is expected to maintain its revenue. In 1Q22, FnB
segments contributed 12.60% to the total revenues.
• CCI Jun-22 remained strong at 128.2 levels (vs 128.9 May-22). Interestingly, the expenditure
proportion of consumption on >IDR5mn incomes category kept climbing up to 70.33 levels (vs 68.78 on May-22), indicating that mid-high consumers could be resilient to potential inflation.
Booster Will Achieve 80% in Oct-22, Good For The Retailer
• However, we considered the unrealized plan by the government to implement a booster vaccine for mall visitors due to increasing of daily covid19 cases and were still waiting for the final draft. Up to 9-Jul’22, the people who had been vaccinated with the 3rd doses or booster reached ~41% (target 1&2: 10.08mn) in Jakarta and ~25% of domestic target.
• If the restrictions affect the occupancy rate, we had built a model depicting when the booster vaccination would reach 80%-90% of total target for Jakarta as ~34% of MAPI’s business located in shopping malls.
• We projected the vaccination rate of 80%-90% will occur in 1W-2W Oct-22 (exhibit 06).
• Last year, the government had imposed 1st doses vaccine as a requirement for mall visitors at 3- Aug’21 when the first dose vaccination rate reached 88.49% in Jakarta. Meanwhile, 3rd doses vaccination as of 9-Jul’22 had only reached 39.94% in Jakarta or less than half compared to the
earlier policy. As a result, this could pressure for MAPI’s 3Q22.
• Given that projection, we expected the restriction mandatory will not disrupt the festive season
in 4Q22, whereas in FY17-FY21, the average contribution in 4Q had reached 29.98% of annual revenue.
Valuation and Recommendation: BUY MAPI with Target Price IDR1,150
We transfer our coverage on MAPI IJ to from Rifqi Ramadhan to Raka Junico. We recommend BUY with target price of IDR1,150 (+28.49% upside) which implies PE/PBV of 13.01x/2.04x in FY22E. Given the catalyst above and put some risk due to potential of restrictions, we estimated MAPI’s top-bottom line will outperfom than pre-pandemic level with the revenue climbing up to IDR22.06tn (+19.73% YoY) and net income rising to IDR1.16tn (+164.53% YoY) mainly driven by: 1) solid omnichannel ecosystem; 2) mid to high consumers remained strong; 3) +2.00% SSSG in FY22E; 4) cost structure optimization. Key downside risks include: 1) unexpected mobility restrictions or covid19 vaccine policy; 2) fatigued mid-high consumers demand; 3) unintended consequences of a weakening USD/IDR.
Disclaimer On
