Mitra Adiperkasa (MAPI IJ) (Buy) - Broad-based softness

Broad-based softness

Tougher road ahead; maintain Buy with lower TP of IDR1,750

1Q25 review: Softness across the group

The group reported weak same-store sales growth (SSSG) of just +0.1% y-y in 1Q25, with softness observed across all business segments. MAP Active (MAPA IJ, Buy) remains the company’s main growth and profit driver. In contrast, the specialty store segment ex-MAPA saw a revenue decline of -4% y-y, which we believe was due to the overall weak retail SSSG and the delayed availability of the iPhone 16 for Digimap (unlisted). Meanwhile, the F&B segment continued to struggle, with SSSG declining -9% y-y, despite an already sharp -28% y-y drop in 1Q24. This suggests that the challenges extend beyond the impact of the boycott. Overall 1Q25 results indicating the company is currently facing a particularly tough environment.

Focus on survival

Periods of challenge present an opportune time for the company to conduct a comprehensive review of its overall business strategy, especially as top-line growth will remain subdued for the rest of the year, in our view. A key focus should be on reviewing the cost structure, given the company’s aggressive expansion over recent years. We believe Digimap may emerge as a strong performer in 2Q25F, following the delayed iPhone 16 launch in early April. However, the downtrading trend and increasing competition in the coffee sector may continue to weigh on the performance of the Starbucks (SBUX US, Not rated) brand within the F&B portfolio. As the largest fashion retailer in Indonesia, we believe MAPI should use this time to consolidate underperforming stores and stay relevant by aligning with evolving consumer preferences (refer to Cultural exports as a form of influence).

Maintain Buy with a lower TP of IDR1,750 (+31% upside)

We revise our 2025F/2026F earnings forecasts downward by 11%/8%, reflecting softer overall growth in the company’s business. As a result, we lower our TP to IDR1,750 (from IDR1,960), based on an unchanged 15x 2025F P/E multiple. Despite challenges ahead, we continue to recognize MAPI as Indonesia’s largest and most dominant all-around lifestyle retailer. Nevertheless, we maintain our preference for MAPA over MAPI, as MAPA offers higher projected 2024-027F revenue/NPAT CAGRs of 16%/26%, compared to MAPI’s 10%/20%. MAPA also boasts a higher 2025F ROE of 21% vs MAPI’s 15%, while both stocks trade at similar P/E multiples of 11.5 and 11.8x. Key downside risks include a prolonged slowdown in mid-to-upper-income consumer spending.

Year-end 31 Dec	FY24		FY25F		FY26F		FY27F
Currency (IDR)	Actual	Old	New	Old	New	Old	New
Revenue (bn)	37,836	43,002	40,871	48,648	45,608	0	50,916
Reported net profit (bn)	1,768	2,181	1,932	2,662	2,446	0	3,021
Normalised net profit (bn)	1,768	2,181	1,932	2,662	2,446	0	3,021
FD normalised EPS	106.48	131.39	116.36	160.34	147.36		181.99
FD norm. EPS growth (%)	-6.7	21.3	9.3	22.0	26.6		23.5
FD normalised P/E (x)	12.5	–	11.5	–	9.1	–	7.3
EV/EBITDA (x)	3.5	–	3.1	–	2.6	–	1.6
Price/book (x)	1.9	–	1.7	–	1.5	–	1.3
Dividend yield (%)	1.6	–	2.2	–	2.8	–	3.4
ROE (%)	16.3	17.7	15.5	18.7	17.2		18.4
Net debt/equity (%)	net cash	net cash	net cash	net cash	net cash		net cash

Source: Company data, Verdhana estimates

Key data on Mitra Adiperkasa

Income statement (IDRbn)
Year-end 31 Dec	FY23	FY24	FY25F	FY26F	FY27F
Revenue	33,319	37,836	40,871	45,608	50,916
Cost of goods sold	-18,225	-21,695	-23,263	-25,678	-28,660
Gross profit	15,094	16,140	17,609	19,929	22,257
SG&A	-11,498	-12,690	-13,934	-15,326	-16,857
Employee share expense	0	0	0	0	0
Operating profit	3,596	3,450	3,675	4,603	5,400
EBITDA	6,452	6,598	7,423	8,212	9,077
Depreciation	-901	-1,023	-1,219	-1,173	-1,195
Amortisation	-1,955	-2,124	-2,529	-2,436	-2,482
EBIT	3,596	3,450	3,675	4,603	5,400
Net interest expense	-386	-516	-486	-602	-590
Associates & JCEs	93	105	114	127	142
Other income	-100	-206	-206	-206	-109
Earnings before tax	3,203	2,834	3,097	3,922	4,843
Income tax	-858	-686	-750	-950	-1,173
Net profit after tax	2,345	2,147	2,347	2,972	3,670
Minority interests	-452	-380	-415	-526	-649
Other items	0	0	0	0	0
Preferred dividends	0	0	0	0	0
Normalised NPAT	1,894	1,768	1,932	2,446	3,021
Extraordinary items	0	0	0	0	0
Reported NPAT	1,894	1,768	1,932	2,446	3,021
Dividends	-177	-354	-483	-612	-755
Transfer to reserves	1,717	1,414	1,449	1,835	2,266
Valuations and ratios
Reported P/E (x)	11.7	12.5	11.5	9.1	7.3
Normalised P/E (x)	11.7	12.5	11.5	9.1	7.3
FD normalised P/E (x)	11.7	12.5	11.5	9.1	7.3
Dividend yield (%)	0.8	1.6	2.2	2.8	3.4
Price/cashflow (x)	11.4	3.7	12.2	7.4	6.4
Price/book (x)	2.2	1.9	1.7	1.5	1.3
EV/EBITDA (x)	3.6	3.5	3.1	2.6	1.6
EV/EBIT (x)	6.4	6.5	6.1	4.6	2.7
Gross margin (%)	45.3	42.7	43.1	43.7	43.7
EBITDA margin (%)	19.4	17.4	18.2	18.0	17.8
EBIT margin (%)	10.8	9.1	9.0	10.1	10.6
Net margin (%)	5.7	4.7	4.7	5.4	5.9
Effective tax rate (%)	26.8	24.2	24.2	24.2	24.2
Dividend payout (%)	9.3	20.0	25.0	25.0	25.0
ROE (%)	20.9	16.3	15.5	17.2	18.4
ROA (pretax %)	18.0	14.4	14.2	16.5	20.0
Growth (%)
Revenue	23.7	13.6	8.0	11.6	11.6
EBITDA	10.5	2.3	12.5	10.6	10.5
Normalised EPS	-10.6	-6.7	9.3	26.6	23.5
Normalised FDEPS	-10.6	-6.7	9.3	26.6	23.5
Source: Company data, Verdhana estimates

Cashflow statement (IDRbn)
Year-end 31 Dec	FY23	FY24	FY25F	FY26F	FY27F
EBITDA	6,452	6,598	7,423	8,212	9,077
Change in working capital	-3,071	171	-1,748	-570	-705
Other operating cashflow	-1,435	-789	-3,865	-4,630	-4,897
Cashflow from operations	1,946	5,980	1,810	3,013	3,475
Capital expenditure	-1,723	-1,723	-1,009	-1,276	-1,370
Free cashflow	223	4,257	800	1,737	2,104
Reduction in investments	0	0	0	0	0
Net acquisitions	0	0	0	0	0
Dec in other LT assets	0	0	0	0	0
Inc in other LT liabilities	0	0	0	0	0
Adjustments	-758	-506	-89	-139	-155
CF after investing acts	-535	3,751	712	1,598	1,949
Cash dividends	-168	-177	-354	-483	-612
Equity issue	0	0	0	0	0
Debt issue	2,248	-579	-1,233	-1,000	-500
Convertible debt issue	0	0	0	0	0
Others	-1,721	-2,630	137	198	5,762
CF from financial acts	359	-3,386	-1,449	-1,285	4,650
Net cashflow	-176	365	-738	313	6,599
Beginning cash	3,851	3,675	4,040	3,303	3,616
Ending cash	3,675	4,040	3,303	3,616	10,215
Ending net debt	-819	-1,737	-1,803	-3,116	-10,215
Balance sheet (IDRbn)
As at 31 Dec	FY23	FY24	FY25F	FY26F	FY27F
Cash & equivalents	3,675	4,040	3,303	3,616	10,215
Marketable securities	443	625	625	625	625
Accounts receivable	1,085	1,086	1,332	1,486	1,659
Inventories	8,088	8,290	10,323	11,396	12,718
Other current assets	1,700	1,804	1,949	2,175	2,428
Total current assets	14,992	15,846	17,532	19,298	27,646
LT investments	356	373	373	373	373
Fixed assets	5,291	6,194	5,985	6,087	6,262
Goodwill	111	88	88	88	88
Other intangible assets	163	155	168	187	209
Other LT assets	6,605	6,869	6,945	7,064	1,643
Total assets	27,517	29,525	31,091	33,098	36,220
Short-term debt	2,856	2,303	1,500	500	0
Accounts payable	4,095	4,373	5,246	5,789	6,459
Other current liabilities	4,100	4,300	4,103	4,443	4,817
Total current liabilities	11,051	10,976	10,849	10,732	11,276
Long-term debt	0	0	0	0	0
Convertible debt
Other LT liabilities	4,054	4,098	4,250	4,410	4,580
Total liabilities	15,105	15,074	15,099	15,142	15,856
Minority interest	2,414	2,749	2,749	2,749	2,749
Preferred stock
Common stock	1,333	1,333	1,333	1,333	1,333
Retained earnings	7,307	8,943	10,521	12,484	14,893
Proposed dividends
Other equity and reserves	1,357	1,426	1,389	1,389	1,389
Total shareholders' equity	9,998	11,702	13,243	15,206	17,616
Total equity & liabilities	27,517	29,525	31,091	33,098	36,220
Liquidity (x)
Current ratio	1.36	1.44	1.62	1.80	2.45
Interest cover	9.3	6.7	7.6	7.6	9.2
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)	114.07	106.48	116.36	147.36	181.99
Norm EPS (IDR)	114.07	106.48	116.36	147.36	181.99
FD norm EPS (IDR)	114.07	106.48	116.36	147.36	181.99
BVPS (IDR)	602.26	704.93	797.76	916.03	1,061.18
DPS (IDR)	10.64	21.30	29.09	36.84	45.50
Activity (days)
Days receivable	10.6	10.5	10.8	11.3	11.3
Days inventory	128.4	138.1	146.0	154.4	153.6
Days payable	74.3	71.4	75.5	78.4	78.0
Cash cycle	64.6	77.2	81.4	87.2	86.8
Source: Company data, Verdhana estimates

Company profileIncorporated in 1995, MAP is the leading lifestyle retailers in Indonesia with over 2,600 retail stores and a diversified portfolio of over 150 brands that includes sports, fashion, department stores, kids, food & beverage, and lifestyle products. Some of MAP's iconic brands include Starbucks, Zara, Marks & Spencer, SOGO, SEIBU, Oshkosh B'Gosh, Reebok, among many others. As of 3M22, specialty stores contributes 74% towards MAP's revenue, followed by department stores (12%), Food & Beverage (13%), and others (1%).

Valuation MethodologyOur target price of IDR1,750 is based on 2025F target P/E of 15x, +1SD of its three-year mean. The benchmark index of the stock is JCI Index.

Risks that may impede the achievement of the target priceDownside risks include a prolonged slowdown in mid-to-upper-income consumer spending

ESGMAP is committed to be a responsible and relevant driver of positive change in society. Driven by their "Better Business for a Better World" philosophy, MAP continue to uphold sustainability at the forefront of our business strategies and operations. As of 3rd Nov 2021, MAPI received a BBB MSCI ESG rating.

Fig. 1: MAPI result recap

MAPI IJ				QoQ	YoY	3M25/	3M25/
Profit and loss statement (IDRbn)	1Q24	4Q24	1Q25	(%)	(%)	Verdhana	Consensus
Revenue	8,788	10,220	9,300	(9.0)	5.8	22.8	22.0
COGS	(5,041)	(5,903)	(5,216)	(11.7)	3.5
Gross profit	3,748	4,316	4,085	(5.4)	9.0
EBIT	697	1,062	769	(27.6)	10.3	20.9	18.4
Other income/(expenses)
Net financing income/(expense)	(127)	(131)	(106)	(19.2)	(16.4)
Net forex gain/(losses)	1	(32)	(8)	(75.2)	n.a.
Others	20	(139)	23	n.a.	15.5
Pre-tax profit	592	761	678	(10.8)	14.5
Net profit	398	468	472	1.0	18.6	24.4	21.4

Gross margin (%)	42.6	42.2	43.9
EBIT margin (%)	7.9	10.4	8.3
Pre-tax margin (%)	6.7	7.4	7.3
Net margin (%)	4.5	4.6	5.1

Balance sheet (IDRbn)	Mar-24	Dec-24	Mar-25
Cash and equivalents	2,830	4,040	3,536
Inventory	8,852	8,290	9,804
Total assets	28,222	29,525	31,284
Total liabilities	15,287	15,074	16,060
Interest bearing liabilities	3,880	2,733	3,559
Equity	10,434	11,702	12,347

Inventory Days	133.4	144.1	135.9
ROA (%)	5.6	6.3	6.0
ROE (%)	15.3	16.0	15.3
Gearing (%)	37.2	23.4	28.8
Net gearing (%)	10.1	n.c.	0.2

Source: Bloomberg Finance L.P., Verdhana estimates

Fig. 2: Earnings forecast changes table

IDR bn	New		Old		Changes
IDR bn	2025F	2026F	2025F	2026F	2025F	2026F
Sales	40,871	45,608	43,002	48,648	-5%	-6%
Gross profit	17,609	19,929	18,665	21,330	-6%	-7%
EBIT	3,675	4,603	3,990	4,786	-8%	-4%
Net profit	1,932	2,446	2,181	2,662	-11%	-8%
Gross margin	43.1%	43.7%	43.4%	43.8%
EBIT margin	9.0%	10.1%	9.3%	9.8%
Net margin	4.7%	5.4%	5.1%	5.5%

Source: Company data, Verdhana estimates

Fig. 3: Performance recap of MAPI’s business by segments

	1Q24	2Q24	3Q24	4Q24	1Q25	y-y
MAPA
Revenue	3,693	4,194	4,533	4,765	4,319	17.0%
EBIT	405	509	655	586	468	15.5%
NPAT	281	305	515	252	340	20.8%
Specialty Stores ex-MAPA
Revenue	3,612	3,393	3,571	3,870	3,471	-3.9%
EBIT	201	332	96	336	228	13.5%
PBT	192	290	21	299	203	5.7%
Department Stores
Revenue	694	700	703	745	760	9.5%
EBIT	101	79	83	151	141	39.6%
PBT	72	51	54	141	120	67.0%
F&B
Revenue	788	838	796	807	719	-8.7%
EBIT	(26)	(22)	(36)	(12)	(62)	135.1%
PBT	(34)	(37)	(39)	(74)	(73)	112.8%
Others
Revenue	75	77	59	73	63	-16.0%
EBIT	33	5	(27)	1	(6)	n.a.
PBT	23	5	(6)	18	4	-82.0%
EBIT Margin
MAPA	11.0%	12.1%	14.4%	12.3%	10.8%
Specialty Stores ex-MAPA	5.6%	9.8%	2.7%	8.7%	6.6%
Department Stores	14.6%	11.3%	11.8%	20.3%	18.6%
F&B	-3.4%	-2.6%	-4.5%	-1.5%	-8.6%
Others	43.8%	6.3%	-46.6%	1.8%	-9.0%

Source: Company data, Verdhana research

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.

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Rating Table

Rating Remains	Buy
Target price Reduced from IDR 1,960	IDR 1,750
Closing price 2 May 2025	IDR 1,335
Implied upside	+31.1%
Market Cap (USD mn)	1,348.8
ADT (USD mn)	1.9

Relative performance chart

Source: LSEG, Verdhana

M cap (USDmn)	1,348.8
Free float (%)	49.0
3-mth ADT (USDmn)	1.9

(%)	1M	3M	12M
Absolute (IDR)	-1.1	3.9	-7.3
Absolute (USD)	-0.4	3.0	-8.7
Rel to Jakarta Stock Exchange Composite Index	-5.8	8.0	-3.1

Research Analysts

Jody Wijaya (jody.wijaya@verdhana.id)

Sandy Ham (sandy.ham@verdhana.id)

Samuel Christian (samuel.christian@verdhana.id)

Tags: RETAIL, MAPI, MAPI JK, MAPI IJ, Jody Wijaya, Sandy Ham, Samuel Christian

Mitra Adiperkasa (MAPI IJ) (Buy) - Broad-based softness

Broad-based softness

Key data on Mitra Adiperkasa

Fig. 1: MAPI result recap

Fig. 2: Earnings forecast changes table

Fig. 3: Performance recap of MAPI’s business by segments

Fig. 4: MAPI P/E band

Fig. 5: MAPI ex-MAPA P/E band

Rating Table

Relative performance chart

Research Analysts

yudi Administrator

Indonesia Retailers - Limited surprises as expected

Map Aktif Adiperkasa MAPA IJ - Buy - Lowest margin for the year

Midi Utama Indonesia MIDI IJ - Buy - Strategic move for a more agile MIDI

Indonesia Retailers - Discretionary retail 3Q24F preview

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

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

Mitra Adiperkasa (MAPI IJ) (Buy) - Broad-based softness

Fig. 1: MAPI result recap

Fig. 2: Earnings forecast changes table

Fig. 3: Performance recap of MAPI’s business by segments

Fig. 4: MAPI P/E band

Fig. 5: MAPI ex-MAPA P/E band

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