Midi Utama Indonesia (MIDI IJ) (Buy) - Strong start to the year

Strong start to the year

Maintain Buy; TP lowered to IDR530

Solid 1Q26 as festive tailwinds and a cleaner cost base lift earnings

MIDI posted a strong start to the year, with Alfamidi-only revenue and NPAT growing +10% y-y and +15% y-y, broadly tracking our full-year estimates. 1Q26 SSSG printed at +4.6% y-y (Fig. 3), aided by the earlier Eid festive timing and a pickup in staple product purchases – particularly rice, where modern trade supply has normalized since Dec-25 and also cigarettes. The festive lift also provided the company with improved operating leverage flexibility, allowing the opex-to-sales ratio to edge lower. GPM declined y-y on a consolidated basis, though this is largely a compositional effect from the Lawson deconsolidation rather than any underlying deterioration of MIDI’s core profitability. We expect Alfamart (AMRT IJ; Buy) to deliver a similar result trend.

Minimarket will be relatively resilient in challenging macro backdrop

Near-term SSSG trends look constructive. We estimate April-only SSSG at low single-digit y-y, even against a soft -15% y-y base last year from the festive timing shift. Lebaran sales tracked at a solid +10% y-y (vs. +14% y-y last year), and management expects further improvement from May as the base gets easier, especially during July–Nov when last year’s rice scarcity in modern trade weighed on traffic. We believe the company remains on track to meet its mid-single-digit y-y SSSG FY guidance, which should support margin expansion. While the direct impact of higher oil prices is likely to be limited, any ASP increases by FMCG players has always been passed on to consumers.

Maintain Buy with a lower TP of IDR530 (~63% implied upside)

We raise 2026F–2027F earnings by 12% and 4%, respectively, and roll forward our forecasts to 2028F, resulting in an adjusted TP of IDR530 (from IDR630), based on a 2026F P/E target of 19.2x, in line with its five-year average (previously 25x). We believe Alfamidi is one of the few companies in our consumer coverage likely to deliver relatively resilient financial performance in a challenging macro backdrop, given the defensive nature of its business model focused on necessities. MIDI is also likely to propose increasing its dividend payout ratio to 50% (from 45%) at the upcoming EGMS, reflecting the company’s efforts to enhance returns to minority shareholders. Key downside risk remains a sharper-than-expected deterioration of consumer purchasing power. Currently, the stock trades at 11.6x 2026F P/E (EPS: IDR28).

Year-end 31 Dec	FY25		FY26F		FY27F		FY28F
Currency (IDR)	Actual	Old	New	Old	New	Old	New
Revenue (bn)	20,642	21,966	22,203	24,199	24,363	0	26,683
Reported net profit (bn)	792	839	938	978	1,013	0	1,085
Normalised net profit (bn)	792	839	938	978	1,013	0	1,085
FD normalised EPS	23.70	25.11	28.05	29.24	30.29		32.46
FD norm. EPS growth (%)	45.0	12.8	18.3	16.5	8.0		7.1
FD normalised P/E (x)	13.8	–	11.6	–	10.8	–	10.0
EV/EBITDA (x)	6.2	–	5.6	–	5.0	–	4.4
Price/book (x)	2.4	–	2.1	–	1.9	–	1.8
Dividend yield (%)	2.3	–	3.6	–	4.3	–	4.6
ROE (%)	18.3	17.2	19.5	18.0	18.9		18.3
Net debt/equity (%)	net cash	net cash	net cash	net cash	net cash		net cash

Source: Company data, Verdhana estimates

Key data on Midi Utama Indonesia

Income statement (IDRbn)
Year-end 31 Dec	FY24	FY25	FY26F	FY27F	FY28F
Revenue	19,888	20,642	22,203	24,363	26,683
Cost of goods sold	-14,656	-15,247	-16,377	-17,946	-19,629
Gross profit	5,232	5,396	5,826	6,417	7,055
SG&A	-4,717	-4,632	-4,825	-5,350	-5,933
Employee share expense
Operating profit	515	764	1,001	1,067	1,121
EBITDA	1,502	1,671	1,887	2,119	2,348
Depreciation	-987	-907	-886	-1,052	-1,226
Amortisation
EBIT	515	764	1,001	1,067	1,121
Net interest expense	-49	-29	-24	-15	-1
Associates & JCEs
Other income	204	204	225	247	271
Earnings before tax	670	939	1,202	1,299	1,391
Income tax	-195	-166	-264	-286	-306
Net profit after tax	476	772	938	1,013	1,085
Minority interests	71	20	0	0	0
Other items
Preferred dividends
Normalised NPAT	546	792	938	1,013	1,085
Extraordinary items
Reported NPAT	546	792	938	1,013	1,085
Dividends	-181	-246	-396	-469	-506
Transfer to reserves	366	546	542	544	579
Valuations and ratios
Reported P/E (x)	19.9	13.8	11.6	10.8	10.0
Normalised P/E (x)	19.9	13.8	11.6	10.8	10.0
FD normalised P/E (x)	19.9	13.8	11.6	10.8	10.0
Dividend yield (%)	1.7	2.3	3.6	4.3	4.6
Price/cashflow (x)	6.6	10.7	5.6	6.3	4.3
Price/book (x)	2.6	2.4	2.1	1.9	1.8
EV/EBITDA (x)	7.1	6.2	5.6	5.0	4.4
EV/EBIT (x)	20.7	13.5	10.6	9.9	9.2
Gross margin (%)	26.3	26.1	26.2	26.3	26.4
EBITDA margin (%)	7.6	8.1	8.5	8.7	8.8
EBIT margin (%)	2.6	3.7	4.5	4.4	4.2
Net margin (%)	2.7	3.8	4.2	4.2	4.1
Effective tax rate (%)	29.1	17.7	22.0	22.0	22.0
Dividend payout (%)	33.1	31.0	42.2	46.3	46.7
ROE (%)	13.9	18.3	19.5	18.9	18.3
ROA (pretax %)	6.5	9.0	10.6	9.8	9.4
Growth (%)
Revenue	14.6	3.8	7.6	9.7	9.5
EBITDA	20.2	11.2	12.9	12.3	10.8
Normalised EPS	5.8	45.0	18.3	8.0	7.1
Normalised FDEPS	5.8	45.0	18.3	8.0	7.1
Source: Company data, Verdhana estimates

Cashflow statement (IDRbn)
Year-end 31 Dec	FY24	FY25	FY26F	FY27F	FY28F
EBITDA	1,502	1,671	1,887	2,119	2,348
Change in working capital	174	-121	343	67	167
Other operating cashflow	-31	-534	-299	-461
Cashflow from operations	1,645	1,016	1,931	1,725	2,514
Capital expenditure	-360	-273	-531	-560
Free cashflow	1,285	743	1,400	1,165	2,514
Reduction in investments
Net acquisitions	0	0	0	0	0
Dec in other LT assets	-30	-30	-30	-30	-30
Inc in other LT liabilities	68	68	68	68	68
Adjustments	-1,171	49	-1,901	-949	-2,023
CF after investing acts	152	829	-463	254	530
Cash dividends	-181	-246	-396	-469	-506
Equity issue	0	-126	0	0	0
Debt issue	-63	0	0	0	0
Convertible debt issue	0	0	0	0	0
Others	143	-259	607	235	212
CF from financial acts	-101	-631	211	-234	-294
Net cashflow	51	198	-252	20	235
Beginning cash	327	378	576	324	344
Ending cash	378	576	324	344	580
Ending net debt	-378	-576	-324	-344	-580
Balance sheet (IDRbn)
As at 31 Dec	FY24	FY25	FY26F	FY27F	FY28F
Cash & equivalents	378	576	324	344	580
Marketable securities	0	0	0	0	0
Accounts receivable	442	382	495	462	581
Inventories	2,701	3,013	3,125	3,602	3,756
Other current assets	104	91	91	91	91
Total current assets	3,626	4,063	4,035	4,498	5,007
LT investments	0	0	0	0	0
Fixed assets	4,776	4,799	6,256	6,994	7,635
Goodwill	0	0	0	0	0
Other intangible assets	0	0	0	0	0
Other LT assets	331	268	275	285	296
Total assets	8,733	9,130	10,567	11,778	12,938
Short-term debt	0	0	0	0	0
Accounts payable	2,342	2,506	2,702	3,005	3,237
Other current liabilities	1,521	1,475	1,848	2,054	2,262
Total current liabilities	3,864	3,981	4,549	5,059	5,499
Long-term debt	0	0	0	0	0
Convertible debt	0	0	0	0	0
Other LT liabilities	578	606	934	1,091	1,232
Total liabilities	4,442	4,588	5,483	6,150	6,731
Minority interest	162	0	0	0	0
Preferred stock	0	0	0	0	0
Common stock	334	334	334	334	334
Retained earnings	2,378	2,924	3,466	4,010	4,588
Proposed dividends	0	0	0	0	0
Other equity and reserves	1,417	1,283	1,283	1,283	1,283
Total shareholders' equity	4,129	4,542	5,083	5,627	6,206
Total equity & liabilities	8,733	9,130	10,567	11,778	12,938
Liquidity (x)
Current ratio	0.94	1.02	0.89	0.89	0.91
Interest cover	10.6	26.0	41.7	69.8	1,527.1
Leverage
Net debt/EBITDA (x)	net cash	net cash	net cash	net cash	net cash
Net debt/equity (%)	net cash	net cash	net cash	net cash	net cash
Per share
Reported EPS (IDR)	16.34	23.70	28.05	30.29	32.46
Norm EPS (IDR)	16.34	23.70	28.05	30.29	32.46
FD norm EPS (IDR)	16.34	23.70	28.05	30.29	32.46
BVPS (IDR)	123.50	135.84	152.04	168.31	185.62
DPS (IDR)	5.41	7.35	11.85	14.02	15.15
Activity (days)
Days receivable	8.0	7.3	7.2	7.2	7.1
Days inventory	62.8	68.4	68.4	68.4	68.6
Days payable	54.8	58.0	58.0	58.0	58.2
Cash cycle	16.0	17.7	17.6	17.5	17.5
Source: Company data, Verdhana estimates

Company profilePT. Midi Utama Indonesia Tbk (MIDI) is engaged in the general trading which includes business in supermarket and mini market. The main business of the Company is in retail of consumer products through minimarkert network known as “Alfamidi” and “Alfaexpress” which started its commercial operation in 2007.

Valuation MethodologyOur target price of IDR530 is based on a19.2x 2026F P/E in line with its five-year average. The discount reflects MIDI's 2026F ROE of 18% compared to AMRT's 21.5%.Benchmark index is JCI.

Risks that may impede the achievement of the target priceKey downside risks include sustained weakness in consumer purchasing power.

ESGAs a public company, the Company is committed to consistently improving the quality of Good Corporate Governance (GCG) practices in all aspects of the Company. Mechanisms and coordination between GCG organs continue to be improved, including by measuring the quality of GCG implementation independently or self-assessment, which the results serve as the basis for analyzing the strengths and weaknesses of GCG practices in the Company to provide recommendations and improvement steps in the coming year.

Fig. 1: 1Q26 Earnings result

The consolidated bottom line was further boosted by the absence of Lawson’s IDR40bn operating loss that weighed on 1Q25

MIDI IJ				QoQ	YoY			YoY	3M26/	3M26/
Profit and loss statement (IDRbn)	1Q25	4Q25	1Q26	(%)	(%)	3M25	3M26	(%)	Nomura	Consensus
Revenue	5,525	5,367	5,880	9.6	6.4	5,525	5,880	6.4	26.5%	26.4%
COGS	4,074	3,918	4,415	12.7	8.4	4,074	4,415	8.4
Gross profit	1,451	1,449	1,465	1.1	1.0	1,451	1,465	1.0
EBIT (Incl. fee based)	217	182	312	71.8	43.7	217	312	43.7	28.6%	31.4%
Net interest income/(expense)	(11)	(9)	(6)	(32.8)	(42.6)	(11)	(6)	(42.6)
Other income (expense)	48	87	52	(40.0)	8.4	48	52	8.4
Pre-tax profit	234	238	337	41.6	44.0	234	337	44.0
Net profit	190	202	266	31.7	39.5	190	266	39.5	28.3%	30.7%

Gross margin (%)	26.3	27.0	24.9			26.3	24.9
EBIT margin (%)	3.9	3.4	5.3			3.9	5.3
Pre-tax margin (%)	4.2	4.4	5.7			4.2	5.7
Net margin (%)	3.4	3.8	4.5			3.4	4.5

Balance sheet (IDRbn)	Dec-24	Dec-25	Mar-26
Cash and equivalents	769	576	1,084
Total assets	9,536	9,130	9,667
Total liabilities	5,072	4,588	4,860
Interest bearing liabilities	-	-	-
Equity	4,464	4,542	4,807

ROA (%)	8.0	8.8	11.0
ROE (%)	17.1	17.8	22.1
Gearing (%)	-	-	-
Net gearing (%)	n.c.	n.c.	n.c.

Source: Company data, Verdhana estimates

Fig. 2: Forward P/E band

Source: Bloomberg, Verdhana estimates

Fig. 3: Quarterly y-y SSSG

Source: Company data, Verdhana research

Fig. 4: Alfamidi-only revenue (IDRbn)

Source: Company data, Verdhana estimates

Fig. 5: MIDI NPAT ex-Lawson (IDRbn)

Source: Company data, Verdhana estimates

Fig. 6: 1Q26 financial results

Source: Company data, Verdhana estimates

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.

GENERAL DISCLOSURE/DISCLAIMER
This report is prepared by PT Verdhana Sekuritas Indonesia (“PTVSI”) a securities company registered in Indonesia, supervised by Indonesia Financial Services Authority (OJK) and a member of the Indonesia Stock Exchange (IDX).

This report is intended for client of PTVSI only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of PTVSI.

The research set out in this report is based on information obtained from sources believed to be reliable, but PTVSI do not make any representation or warranty as to its accuracy, completeness or correctness. The information in this report is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed and it may not contain all material information concerning the company (or companies) referred to in this report. Any information, valuations, opinions, estimates, forecasts, ratings or targets herein constitutes a judgment as of the date of this report is published, and there is no assurance that future results or events will be consistent.

This report is not to be construed as an offer or a solicitation of an offer to buy or sell any securities or financial products. PTVSI and its associates, its directors, and/or its employees may from time to time have interests in the securities mentioned in this report or it may or will engage in any securities transaction or other capital market services for the company (companies) mentioned herein.

ANALYST CERTIFICATION
The research analyst primarily responsible for the content of this report and certifies that the views about the companies including their securities expressed in this report accurately reflect his/her personal views. The analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report.

RESTRICTIONS ON DISTRIBUTION

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Rating Table

Rating Remains	Buy
Target price Reduced from IDR 630	IDR 530
Closing price 28 April 2026	IDR 326
Implied upside	+62.6%
Market Cap (USD mn)	633.3
ADT (USD mn)	0.4

Relative performance chart

Source: LSEG, Verdhana

M cap (USDmn)	633.3
Free float (%)	16.0
3-mth ADT (USDmn)	0.4

(%)	1M	3M	12M
Absolute (IDR)	7.9	5.8	-6.9
Absolute (USD)	6.4	2.7	-8.8
Rel to Jakarta Stock Exchange Composite Index	7.8	20.4	-12.6

Research Analysts

Jody Wijaya (jody.wijaya@verdhana.id)

Sandy Ham (sandy.ham@verdhana.id)

Nayla Yasmin (nayla.yasmin@verdhana.id)

Samuel Christian (samuel.christian@verdhana.id)

Tags: RETAIL, Midi Utama Indonesia, MIDI JK, MIDI IJ, Jody Wijaya, Sandy Ham, Nayla Yasmin, Samuel Christian

Midi Utama Indonesia (MIDI IJ) (Buy) - Strong start to the year

Strong start to the year

Key data on Midi Utama Indonesia

Fig. 1: 1Q26 Earnings result

Fig. 2: Forward P/E band

Fig. 3: Quarterly y-y SSSG

Fig. 4: Alfamidi-only revenue (IDRbn)

Fig. 5: MIDI NPAT ex-Lawson (IDRbn)

Fig. 6: 1Q26 financial results

Rating Table

Relative performance chart

Research Analysts

yudi Administrator

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Indonesia Retailers - Discretionary retail 3Q24F preview

Map Aktif Adiperkasa (MAPA IJ) (Buy) - Emerging stronger

Mitra Adiperkasa (MAPI IJ) (Buy) - Expecting short-term pressure

Midi Utama Indonesia (MIDI IJ) (Buy) - Strong start to the year

Fig. 1: 1Q26 Earnings result

Fig. 2: Forward P/E band

Fig. 3: Quarterly y-y SSSG

Fig. 4: Alfamidi-only revenue (IDRbn)

Fig. 5: MIDI NPAT ex-Lawson (IDRbn)

Fig. 6: 1Q26 financial results

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