Company Note Matahari Department Store Bloomberg: LPPF.IJ Reuters: LPPF.JK Samuel Equity Research 11 January 2017 Target Price Rp 19,500 Last Price Rp 15,675 Potential Upside 24% JCI Index 5,315 Share isued (bn) 2.92 Market Cap. (Rp tn) 45.4 52-Weeks High/Low 14,500/22575 Avg Daily Vol (mn) 6.51 Free Float 44.4% Nominal Value Rp 1,000 Book value/share 17 Relative to JCI Chart 120 JCI 100 Company Background Shareholder Structure BUY (Maintain) LPPF 80 May-16 Jul-16 Sep-16 Nov-16 Rp1,166 PT Matahari Department Store Tbk memiliki bisnis ritel yang terbagi dalam beberapa jenis produk seperti baju, aksesoris, tas, sepatu, kosmetik, peralatan rumah tangga, dan merupakan operator terbesar dalam segmen Department Store di Indonesia Multipolar Tbk 20.5% Capital Group Company 6.5% Fil LTD 3.1% Blackrock 2.2% T Row e Price Associates 2.1% Ameriprise Fin Group 1.7% Morgan Stanley Investment Inc 1.0% Public 62.7% Marlene Tanumihardja +62 21 2854 8387 marlene@samuel.co.id New Year, New Optimism! Meskipun harga saham LPPF pada tahun 2016 lalu sempat turun sebanyak 61% dari harga tertingginya, namun pada tahun ini kami menyimpan sejumlah optimisme. Diawali dengan optimisme membaiknya kinerja 4Q16 seiring usaha manajemen untuk lebih fokus pada segmen Direct Purchase yang mendatangkan marjin lebih tinggi, stabilnya inflasi sampai dengan Desember 16 kemarin, dan ekspektasi peningkatan daya beli (bullishnya harga komoditas), turut menjadi sentimen positif untuk prospek kinerja LPPF pada tahun 2017. Didukung oleh masih berlanjutnya ekspansi pembukaan gerai gerai baru serta mulai meredanya kekhawatiran investor, kami merekomendasikan BUY dengan TP Rp 19,500/lembar saham, 17E PE: 20.6x, dan PBV: 16.7x. Melanjutkan optimisme dengan beberapa sentimen positif. Kami tetap memproyeksikan kinerja positif untuk LPPF, terutama dengan dorongan mulai berkurangnya kekhawatiran para investor menyangkut investasi tambahan pada Mataharimall.com pada bulan November 2016 lalu. Sebagai kilas balik, LPPF berencana untuk menyuntikkan dana dengan total sebesar Rp590 miliar yang dilakukan secara bertahap sampai dengan 3Q17, untuk meningkatkan kepemilikan sebesar 19% (sebelumnya: 9.5%), dan menghindari dilusi kepemilikan setelah masuknya investasi dari Mitsui. Meskipun kami melihat kesuksesan bisnis e-commerce hanya mampu terlihat dalam kurun waktu jangka panjang, namun giatnya manajemen untuk fokus pada segmen Direct Purchase (yang notabene memberikan marjin yang lebih kuat dan strong brand recognition), meyakinkan kami akan kondisi neraca keuangan dan likuiditas masih mampu tersokong. Ekspansi toko yang masih on track. Tahun ini, LPPF merencanakan untuk membuka 6-8 gerai baru, dengan mayoritas pembukaan gerai baru tersebut masih berada di Jawa (Jawa: 35.1%, vs. Luar Jawa: 49.1%, vs. Jabodetabek: 15.8%). Dengan ekspektasi terhadap membaiknya daya beli (salah satu penyebabnya adalah bullishnya harga komoditas), kami memprediksi SSSG pada tahun ini sebesar 7.5.% ( 16E: 6.5% ). Valuasi dan Rekomendasi: Kami masih optimis kinerja LPPF lebih baik pada tahun ini, seiring dengan mulai meredanya kekhawatiran para investor terutama menyangkut investasi tambahan pada lini bisnis e-commerce, menyusul harga saham yang mulai naik sebesar 16.5%. Secara historis, LPPF diperdagangkan pada 5-years PE sebesar 22.6x, sedangkan pada saat ini, LPPF hanya diperdagangkan dengan PE sebesar 16.6x. BUY. Forecast and Valuation (at closing price Rp15,675 per share) Y/E Dec (Rp bn) 2013A 2014A 2015E 2016F 2017F 2018F Revenue 6,753 7,926 9,006 10,908 11,925 13,270 EBITDA 3,308 3,718 3,957 4,290 4,930 5,899 Net profit 1,147 1,448 1,772 2,131 2,440 2,760 EPS (Rp) 496 607 730 836 946 983 EBITDA margin (%) 28% 28% 27% 25% 25% 26% BV/Share (Rp) -268 55 379 747 1166 1639 PBV (x) -58 287 41 21 13 10 Dividend per Share (1) 158 292 365 418 473 EV/EBITDA 14 11.9 11.0 10.1 8.7 7.1 Dividend Yield (%) 1.0% 1.9% 2.4% 2.8% 3.1% 3.2% P/E (x) 31.6 25.8 21.5 18.7 16.6 15.9 www.samuel.co.id
Rp Bn Matahari Department Store Figure 1. Sales Performance and SSSG 14,000 12,000 10,000 8,000 6,000 4,000 2,000-2011 2012 2013 2014 2015 2016F 2017F 2018F 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% SSSG Sales Source : Company, SSI Research Figure 2. PE Band 32 27 22 17 12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Average ST dev +1 ST dev -1 PER - Roll ST dev +2 ST dev -2 Source : Bloomberg, Company, SSI Research Figure 3. Sector Valuation Company Rec Source : Bloomberg, Company, SSI Research Last Target Market Cap P/E PEG EV/EBITD A ROE (%) EPS CAGR (%) Price (Rp) Price (Rp) (Rpbn) 17E 17E 17E 17E 16E-19E RALS BUY 1,225 1,565 8,799 18.8 0.3 10.8 12.6 28.1 MAPI BUY 5,300 6,700 7,968 24.9 0.2 6.6 9.0 74.0 ACES BUY 800 1,000 14,578 21.8 1.5 15.4 19.1 11.1 LPPF BUY 15,675 21,300 44,354 16.6 0.4 8.7 72.0 12.1 Sector Average 20.5 0.6 10.4 28.2 31.3 www.samuel.co.id Page 2 of 5
Figure 4. Store Layout Source : Various Sources www.samuel.co.id Page 3 of 5
Key Financials Profit and Loss Cash Flow Rp bn 15A 16E 17E 18E Yr-end Dec (Rp bn) 15A 16E 17E 18E Revenue 9,006 10,908 11,925 13,270 Net income 1,772 2,131 2,440 2,760 COGS (3,336) (4,050) (4,304) (4,573) Depreciation & amort. 206 (210) (2) (3) Gross profit 5,670 6,858 7,621 8,697 Others 52 27 75 16 Gross margin (%) 63% 63% 64% 66% Working capital (127) 160 22 83 Operating profit 2,329 2,684 3,012 3,407 Operating cash flow 1,902 2,108 2,534 2,857 Operating margin (%) 26% 25% 25% 26% Net - Capital expenditure (358) (501) (934) (510) EBITDA 2,569 2,966 3,308 3,718 Investing cash flow (529) (1,005) (928) (506) EBITDA margin (%) 29% 27% 28% 28% Net - Borrowings (410) 0 0 0 Other income (expenses) 0 (150) 0 0 Other financing (839) (983) (1,175) (1,329) Pre-tax profit 2,236 2,478 2,835 3,249 Financing cash flow (1,249) (983) (1,175) (1,329) Income tax - net (464) (348) (395) (488) Net - Cash flow 124 119 432 1,023 Net profit 1,772 2,131 2,440 2,760 Cash at beginning 786 947 1,066 1,498 Net profit margin (%) 20% 20% 20% 21% Cash at ending 947 1,066 1,498 2,520 Balance Sheet Key Ratios Yr-end Dec (Rp bn) 15A 16E 17E 18E Yr-end Dec (Rp bn) 15A 16E 17E 18E Cash & ST Investment 938 1,066 1,498 2,520 ROE (%) 160% 98% 72% 58% Receivables 76 119 120 136 ROA (%) 46% 38% 35% 32% Inventories 1,008 1,284 1,333 1,433 Revenue growth (%) 14% 21% 9% 11% Others 242 297 325 382 EBITDA growth (%) 10% 15% 12% 12% Total current assets 2,264 2,766 3,275 4,471 EPS growth (%) 22% 20% 15% 13% Net fixed assets 877 1,587 2,524 3,037 Interest coverage (x) 0.0 0.0 1.0 2.0 Other assets 739 1,242 1,235 1,231 Debt to equity (%) 0 0 0 0 Total assets 3,879 5,596 7,035 8,738 Net gearing (%) -86-49 -44-53 Payables 1,704 2,069 2,199 2,336 ST. debt and curr. maturity 0 0 0 0 Major Assumptions Other current liabilities 735 931 975 1,110 15A 16E 17E 18E LT Bank Loans 0 0 0 0 SSSG (%) 5.8 6.5 7.5 8.5 Other long term liabilities 334 416 460 512 Average Store Size (sqm 6,287 6,385 6,383 6,336 Total liabilities 2,773 3,415 3,634 3,958 Productivity/sqm (Rp Bn) 18 19 19 20 Total equity 1,106 2,180 3,400 4,780 Inventory days 109 114 111 113 www.samuel.co.id Page 4 of 5
Research Team Andy Ferdinand, CFA Head Of Equity Research,Strategy, andy.ferdinand@samuel.co.id +6221 2854 8148 Banking, Consumer Rangga Cipta Economist rangga.cipta@samuel.co.id +6221 2854 8396 Muhamad Makky Dandytra, CFTe Technical Analyst makky.dandytra@samuel.co.id +6221 2854 8382 Akhmad Nurcahyadi, CSA Auto, Aviation, Cigarette, Construction akhmad.nurcahyadi@samuel.co.id +6221 2854 8144 Healthcare, Heavy Equipment, Property Arandi Ariantara Cement, Telecommunication, Utility arandi.ariantara@samuel.co.id +6221 2854 8392 Marlene Tanumihardja Poultry, Retail, Small Caps marlene@samuel.co.id +6221 2854 8387 Sharlita Lutfiah Malik Mining, Plantation sharlita.malik@samuel.co.id +6221 2854 8339 Adde Chandra Kurniawan Research Associate adde.kurniawan@samuel.co.id +6221 2854 8338 Private Wealth Management Evelyn Satyono Head of PWM / evelyn.satyono@samuel.co.id +6221 2854 8380 Head of Institutional Marketing Muhamad Alfatih CSA, CTA, CFTe Senior Technical Portfolio Advisor m.alfatih@samuel.co.id +6221 2854 8129 Ronny Ardianto Institutional Equity Sales ronny.ardianto@samuel.co.id +6221 2854 8399 Clarice Wijana Institutional Equity Sales clarice.wijana@samuel.co.id +6221 2854 8395 Wahyudi Budiono Dealer wahyudi.budiyono@samuel.co.id +6221 2854 8152 Equity Sales Team Kelvin Siwah Long Head of Equities kelvin.long@samuel.co.id +6221 2854 8150 Yulianah Institutional Equity Sales yulianah@samuel.co.id +6221 2854 8146 Indra S. Affandi Institutional Equity Sales indra.siswandi@samuel.co.id +6221 2854 8334 Lucia Irawati Head of Retail Equity Sales lucia.irawati@samuel.co.id +6221 2854 8173 Ferry Khusaeri Equity Sales ferry.khusaeri@samuel.co.id +6221 2854 8304 Iwan Setiadi Equity Sales iwan.setiadi@samuel.co.id +6221 2854 8313 Lia Chaterina Equity Sales liachaterina@samuel.co.id +6221 2854 8315 Amelia Sintama Equity Sales amelia@samuel.co.id +6221 2854 8308 Salt World Widjaja Equity Sales salt@samuel.co.id +6221 2854 8163 Jovita Widjaja Equity Sales jovita.widjaja@samuel.co.id +6221 2854 8314 James Wihardja Equity Sales james.wihardja@samuel.co.id +6221 2854 8397 Joseph Soegandhi Equity Sales joseph.soegandhi@samuel.co.id +6221 2854 8872 Dian Anggraeni Equity Sales dian.anggraeni@samuel.co.id +6221 2854 8301 Sylviawati Equity Sales sylviawati@samuel.co.id +6221 2854 8112 Verawati Gunawan Equity Sales verawati.gunawan@samuel.co.id +6221 2854 8312 Cenni Liawisusi Equity Sales cenni.liawisusi@samuel.co.id +6221 2854 8303 Frans Ferdiansah Equity Sales frans.ferdiansah@samuel.co.id +6221 2854 8337 Muhamad Faisyal Dealer m.faisal@samuel.co.id +6221 2854 8155 Wulan Budi Setyowati Dealer wulan.setyowati@samuel.co.id +6221 2854 8369 Bismar Ferryaman Dealer bismar.ferryaman@samuel.co.id +6221 2854 8368 Online Trading Sales Team Nugroho Nuswantoro Head Of Marketing OLT nugroho@samuel.co.id +6221 2854 8372 Wahyu Widodo Marketing wahyu.widodo@samuel.co.id +6221 2854 8371 Rina Lestari Customer Service rina.lestari@samuel.co.id +6221 2854 8180 Martha Lamtiurma Tampubolon Customer Service martha.lamtiurma@samuel.co.id +6221 2854 8182 Mohamad Andhika Prasetia Customer Service andhika@samuel.co.id +6221 2854 8183 DISCLAIMERS : Analyst Certification : The views expressed in this research accurately reflect the personal views of the analyst(s) about the subject securities or issuers and no part of the compensation of the analyst(s) was, is, or will be directly or indirectly related to the inclusion of specific recommendations or views in this research. The analyst(s) principally responsible for the preparation of this research has taken reasonable care to achieve and maintain independence and objectivity in making any recommendations. This document is for information only and for the use of the recipient. It is not to be reproduced or copied or made available to others. Under no circumstances is it to be considered as an offer to sell or solicitation to buy any security. Any recommendation contained in this report may not be suitable for all investors. Moreover, although the information contained herein has been obtained from sources believed to be reliable, its accuracy, completeness and reliability cannot be guaranteed. All rights reserved by PT Samuel Sekuritas Indonesia. www.samuel.co.id Page 5 of 5