Matahari Putra Prima(MPPA IJ)

Transcription

1 Equity Research Company Update Friday, 03 August 2018 SELL Maintain Last price (IDR) 236 Target Price (IDR) 200 Upside/Downside -18.0% Previous Target Price (IDR) 250 Stock Statistics Sector Bloomberg Ticker Retail MPPA IJ No of Shrs (mn) 5,378 Mkt. Cap (IDRbn/USDmn) 1,269/88 Avg. daily T/O (IDRbn/USDmn) 1.0/0.1 Major shareholders (%) PT Multipolar Tbk 50.2 Prime Star Investment Pte. Ltd Estimated free float 36.5 EPS Consensus (IDR) 2018F 2019F 2020F Danareksa (126.8) (92.2) (64.8) Consensus n/a Danareksa/Cons n/a n/a n/a MPPA relative to JCI Index Matahari Putra Prima(MPPA IJ) Poor top line and weak profitability MPPA booked another deep net loss in 2Q18 on the back of disappointing revenues and lower profitability. As a result, inventory days increased in 1H18. We believe this may create challenges for the management in terms of improving profitability as heavy promotions are likely to continue at its stores. Maintain SELL with a lower TP of IDR200. Continued net losses in 2Q18 due to sluggish revenues and profitability. MPPA booked a large net loss in 2Q18 of IDR103bn (2Q17: IDR7bn net profits vs. 1Q18: IDR160bn net loss), leading to 1H18 net losses of IDR262bn, still within our expectations. The 2Q18 revenues were down by 18.1% yoy despite +1.6% qoq to IDR3.0tn, leading to 12.5% yoy lower 1H18 revenues of IDR5.9tn. This figure is 43.7% of our FY18 estimate and 42.7% of consensus estimates, i.e. below expectations. We think the hypermarkets landscape will remain challenging going forward given stiff competition from both minimarkets and independent retailers in the regions. Meanwhile, the 2Q18 gross margin dropped to 12.2% (2Q17: 15.7%; 1Q18: 11.3%), or much lower compared to the previous year, translating into a low 1H18 gross margin of only 11.8% (1H17: 14.9%). Inventory days increased in 1H18. We think the management needs to tackle the issue of inventory days more seriously as they jumped to 118 days (1H17: 86 days), or much higher than in the previous year. Unless this is done, the company may find it hard to improve its overall gross margin as discounts and heavy promotions may continue at its stores. Expecting weak revenues in In 1H18, the company closed 2 Hypermart stores, 2 Food mart stores, 2 Boston stores, and 2 FMX. At the same time, there were only 2 Hypermart and 1 Boston store openings in 1H18; hence the net store closings as of June 2018 were 5. We think MPPA s revenues in 2018 will still be sluggish due to stiff competition and store closures. As such, we revise down our FY18 revenues forecast by 12.6%. Maintain SELL with a lower TP. Post the 1H18 results, we maintain our SELL call on MPPA with a lower TP of IDR200, based on DCF with 11.4% WACC and 3% terminal growth. Risks to our call include better-than-expected internal turnaround and lower-than-expected inflation. Source : Bloomberg x Adeline Solaiman (62-21) ext.3503 adeline.solaiman@danareksa.com x Natalia Sutanto (62-21) ext.3508 natalia.sutanto@danareksa.com Key Financials Year to 31 Dec 2016A 2017A 2018F 2019F 2020F Revenue (IDRbn) 13,527 12,563 11,746 12,099 12,583 EBITDA (IDRbn) 516 (1,192) (330) (106) 105 EBITDA Growth (%) (17.9) (331.2) (72.3) (67.9) (199.2) Net profit (IDRbn) 38 (1,243) (682) (496) (363) EPS (IDR) 7.2 (231.2) (126.8) (92.2) (67.6) EPS growth (%) (82.7) (3,331.1) (45.1) (27.3) (26.7) BVPS (IDR) (0.7) (68.2) DPS (IDR) (22.8) (2.3) PER (x) 81.1 n/m n/m n/m n/m PBV (x) (866.6) (8.5) Dividend yield (%) (3.9) (0.4) EV/EBITDA (x) 7.0 (3.6) (13.3) (44.4) 45.2 Source : MPPA, Danareksa Estimates See important disclosure at the back of this report 1

2 Exhibit 1. Revenues and Growth Exhibit 2. Net Profits and Growth Exhibit 3. Margins Exhibit 4. Gearing Level Exhibit 5. MPPA s 2Q18 Results (In IDRbn, unless 2Q17 1Q18 2Q18 qoq yoy 1H17 1H18 yoy 2018F A/F Cons. A/cons. otherwise stated) Revenues 3,616 2,915 2, % -18.1% 6,716 5, % 13, % 13, % Gross profits % -36.5% 1, % 1, % 2, % Operating profits 34 (179) (157) n/a n/a (181) (337) n/a (812) n/a 126 Pretax profits 6 (217) (141) n/a n/a (232) (358) n/a (1,013) n/a 75 Net profits 7 (160) (103) n/a n/a (170) (262) n/a (760) n/a 10 Gross margins, % 15.7% 11.3% 12.2% 14.9% 11.8% 12.0% 17.0% Operating margins, % 0.9% -6.2% -5.3% -2.7% -5.7% -6.0% 0.9% Pretax margins, % 0.2% -7.4% -4.8% -3.5% -6.1% -7.5% 0.5% Net margins, % 0.2% -5.5% -3.5% -2.5% -4.5% -5.7% 0.1% Source: Company, Danareksa Sekuritas Estimates See important disclosure at the back of this report 2

3 Exhibit 6. DCF Net present value (IDRbn) 2018F 2019F 2020F 2021F 2022F 2023F 2024F 2025F 2026F 2027F 2028F Net present value estimate Cash flow multiple Discount 11.4% Free cash flow Operating profit (710) (501) (307) (270) (230) (186) (135) (76) (8) (-) Tax Operating profit after tax (482) (336) (186) (158) (125) (92) (54) (9) (+) Amortization and depreciation Gross cash flow (102) (-) Capital expenditures (235) (242) (252) (264) (280) (300) (321) (343) (367) (393) (420) (+) Incremental working capital 356 (4) Free cash flow 18 (187) PV of free cash flow - (167) Total PV of free cash flow 750 PV residual value 1,841 Corporate value 2,591 Shareholder value (IDRbn) 1,101 (+) Cash 735 (-) Non controlling interest 0 Equity value 366 Net equity value per share (1) Cash & cash equivalents 373 Equity value Shareholder value 1,101 TP 200 Source: Company, Danareksa Sekuritas Estimates Exhibit 7. Forecast Changes (In IDRbn, unless Before After Changes otherwise stated) 2018F 2019F 2018F 2019F 2018F 2019F Revenues 13,442 14,383 11,746 12, % -15.9% Gross profits 1,613 2,301 1,410 1, % -34.8% Operating profits (812) (78) (710) (501) N/A N/A Pretax profits (1,013) (251) (909) (661) N/A N/A Net profits (760) (188) (682) (496) N/A N/A Gross margins, % 12.0% 16.0% 12.0% 12.4% Operating margins, % -6.0% -0.5% -6.0% -4.1% Pretax margins, % -7.5% -1.7% -7.7% -5.5% Net margins, % -5.7% -1.3% -5.8% -4.1% See important disclosure at the back of this report 3

4 Exhibit 8. Income Statement Revenue 13,527 12,563 11,746 12,099 12,583 COGS (11,233) (11,560) (10,337) (10,598) (10,972) Gross profit 2,294 1,003 1,410 1,500 1,611 EBITDA 516 (1,192) (330) (106) 105 Oper. profit 170 (1,548) (710) (501) (307) Interest income Interest expense (83) (118) (200) (170) (170) Forex Gain/(Loss) Income From Assoc. Co s Other Income (Expenses) 7 (11) (10) (10) (11) Pre-tax profit 101 (1,670) (909) (661) (485) Income tax (63) Minority interest Net profit 38 (1,243) (682) (496) (363) Core Net Profit 38 (1,243) (682) (496) (363) Exhibit 9. Balance Sheet Cash & cash equivalent Receivables Inventory 2,747 1,582 1,274 1,336 1,323 Other Curr. Asset Fixed assets - Net 1,576 1,486 1,341 1,187 1,027 Other non-curr.asset 1,024 1,455 1,466 1,478 1,490 Total asset 6,702 5,427 5,307 4,628 4,432 ST Debt 140 1,490 1, Payables 2,318 1,411 1,416 1,481 1,593 Other Curr. Liabilities ,005 Long Term Debt Other LT. Liabilities Total Liabilities 4,272 4,253 4,815 4,631 4,799 Shareholder'sFunds 2,430 1, (4) (367) Minority interests Total Equity & Liabilities 6,702 5,427 5,307 4,628 4,432 See important disclosure at the back of this report 4

5 Exhibit 10. Cash Flow Net income 38 (1,243) (682) (496) (363) Depreciation and Amort Change in Working Capital (4) 115 OtherOper. Cash Flow 26 (251) Operating Cash Flow 458 (250) Capex (459) (267) (235) (242) (252) Others Inv. Cash Flow (152) (116) Investing Cash Flow (611) (383) (225) (222) (248) Net change in debt (300) 0 New Capital Dividend payment (123) (12) Other Fin. Cash Flow (153) (119) (114) Financing Cash Flow (7) (419) (114) Net Change in Cash (160) (609) (47) Cash - begin of the year Cash - end of the year Exhibit 10. Key Ratios Year to 31 Dec 2016A 2017A 2018F 2019F 2020F Growth (%) Sales (2.0) (7.1) (6.5) EBITDA (17.9) (331.2) (72.3) (67.9) (199.2) Operating profit (46.9) (1,008.7) (54.2) (29.4) (38.7) Net profit (82.7) (3,331.1) (45.1) (27.3) (26.7) Profitability (%) Gross margin EBITDA margin 3.8 (9.5) (2.8) (0.9) 0.8 Operating margin 1.3 (12.3) (6.0) (4.1) (2.4) Net margin 0.3 (9.9) (5.8) (4.1) (2.9) ROAA 0.6 (20.5) (12.7) (10.0) (8.0) ROAE 1.6 (69.0) (81.9) (202.9) Leverage Net Gearing (x) (437.2) (4.4) Interest Coverage (x) 2.1 (13.1) (3.5) (2.9) (1.8) Source : MPPA, Danareksa Estimates See important disclosure at the back of this report 5