Results broadly in line or below expectations

In our 3Q25F earnings preview of 13 October, “Still waiting for the spark,” we highlighted our expectation for modest earnings delivery by retailers — which has largely materialized. While not all retailers have disclosed their 3Q25 SSSG figures, initial indications suggest that SSSG likely ranged from flat to a low-single-digit decline y-y, leading the weakest sales growth since the post-Covid recovery to persist (Fig. 2). We observed a decline in several staple product categories within modern trade retail channels — both minimarkets and supermarkets — which led to lower customer traffic and, in turn, weaker impulse buying. For the discretionary retailers, foot traffic remained subdued even in high-end malls, with consumer confidence hovering at low levels, leading to an increase in inventory days for several discretionary retailers (Fig. 5). The softer top-line momentum also translated into margin pressure, with Alfamidi (MIDI IJ, Buy) benefiting from a low base post-Lawson divestment, MAP Aktif (MAPA IJ, Buy) impacted by higher opex from its overseas operations, and Mitra Adiperkasa (MAPI IJ, Buy) — mainly supported by MAPA’s performance — standing out as the only retailer to post positive EBIT growth y-y in 3Q25.

4Q25F outlook: limited catalysts ahead for discretionary retailers

While 4Q has historically been a stronger quarter — particularly for discretionary retailers benefiting from year-end holiday demand — we expect overall y-y sales momentum to remain weak. The government’s efforts to accelerate spending, handing out additional stimulus and the expansion of the free meal program are likely to benefit the lower-income segment of the economy, favoring FMCG and staples over discretionary categories. Our channel checks with mall operators indicate that only select segments such as one-dollar retail chains (e.g., Miniso, Oh!Some — both not listed), entertainment operators (e.g., Timezone, Amazon — both not listed), and certain F&B/restaurant chains have performed well this year, while most other retail categories continue to lag. We believe a sustained recovery in discretionary spending will require consistent policy execution and more positive macro developments to restore consumer confidence.

Earnings bottoming out, but recovery requires clear catalysts

Our stock pecking order remains MIDI (MIDI IJ, Buy) > Alfamart (AMRT IJ, Buy) > Erajaya (ERAA IJ, Buy) > MAPA (MAPA IJ, Buy) > MAPI (MAPI IJ, Buy) > Azko (ACES IJ, Buy). While the weaker-than-expected SSSG for both MIDI and AMRT came as a surprise, we believe the government’s efforts to accelerate spending could serve as a positive catalyst in the coming quarters. MIDI should continue to deliver resilient earnings growth following the divestment of its Lawson business. We also expect AMRT to benefit from increased promotional support in 4Q25F, which should help bolster its gross margin.

We see limited downside risk for ERAA, as the company is likely to benefit from strong sales turnover and solid gross margins driven by the iPhone 17 launch in 4Q25F and 1Q26F. The delay in iPhone 16 sales last year should also provide a favorable low base for comparison. Similarly, we see limited downside risk for MAPA, supported by its relatively strong gross margin in 3Q25 despite elevated clearance activity. That said, we are less optimistic about a near-term recovery in SSSG. Conversely, we see limited near-term catalysts for MAPI and ACES, as both may continue to face muted discretionary spending trends.

Fig. 1: Results review summary

Ticker	Rating	Mkt Cap (IDRtn)	y-y Sales growth 3Q25 (%)	y-y EBIT growth 3Q25 (%)	y-y Sales growth 9M25 (%)	y-y EBIT growth 9M25 (%)	Sales contribution to cons est (%)	EBIT contribution to cons est (%)	Nomura expectations	Implied FY26F P/E (x)	P/E stdev to 3-year mean
ACES	Buy	8.6	-1.5%	-30.7%	1.7%	-33.3%	71.2%	49.1%	Below	9.7	-1.3 SD
AMRT	Buy	85.1	5.7%	-32.1%	7.1%	-6.8%	72.6%	60.8%	Below	21.9	-0.7 SD
ERAA	Buy	6.4	11.8%	-40.4%	7.7%	-11.8%	73.6%	59.5%	In-line	6.0	-1.0 SD
LPPF	Neutral	3.6	-13.5%	-84.7%	-10.0%	-17.5%	74.5%	72.7%	In-line	4.6	-1.9 SD
MAPA	Buy	18.8	13.6%	10.9%	12.3%	7.1%	71.8%	72.8%	In-line	9.7	-0.7 SD
MAPI	Buy	22.4	8.9%	12.0%	8.8%	4.0%	73.1%	67.7%	In-line	8.5	-1.2 SD
MIDI	Buy	10.2	0.0%	42.7%	4.0%	28.7%	72.0%	76.4%	In-line	15.2	-1.3 SD
RALS	Reduce	2.8	-16.3%	n.a	-11.2%	-35.5%	56.6%	82.0%	In-line	7.8	-1.7 SD

 

Fig. 2: 1Q24-3Q25 retailers sales y-y growth trend (%)

Fig. 3: 1Q24-3Q25 retailers EBIT y-y growth trend (%)

 

Fig. 4: 1Q24-3Q25 retailers NPAT y-y growth trend (%)

Fig. 5: 1Q24-3Q25 retailers inventory days  trend (days)

INVESTMENT RATINGS
A rating of ‘Buy’, indicates that the analyst expects the stock to outperform the Benchmark over the next 12 months. A rating of ‘Neutral’, indicates that the analyst expects the stock to perform in line with the Benchmark over the next 12 months. A rating of ‘Reduce’, indicates that the analyst expects the stock to underperform the Benchmark over the next 12 months. A rating of ‘Suspended’, indicates that the rating, target price, and estimates have been suspended temporarily to comply with applicable regulations and/or firm policies. Securities and/or companies that are labelled as ‘Not Rated’ or ‘No Rating’ are not in regular research coverage. Benchmark is Indonesia Composite Index (‘IDX Composite’). A ‘Target Price’, if discussed, indicates the analyst’s forecast for the share price with a 12-month time horizon, reflecting in part of the analyst’s estimates for the company’s earnings, and may be impeded by general market and macroeconomic trends, and by other risks related to the company or the market in general. 

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Jody Wijaya (jody.wijaya@verdhana.id)

Sandy Ham (sandy.ham@verdhana.id)

Nayla Yasmin (nayla.yasmin@verdhana.id)

Samuel Christian (samuel.christian@verdhana.id)