matahari putra prima - mirae asset · alfamart (amrt; not rated) and indomaret (pt indomarco...

Analysts who prepared this report are registered as research analysts in Indonesia but not in any other jurisdiction, including the U.S.

PLEASE SEE ANALYST CERTIFICATIONS AND IMPORTANT DISCLOSURES & DISCLAIMERS IN APPENDIX 1 AT THE END OF REPORT.

Matahari Putra Prima (MPPA IJ)

Fighting for survival amid fierce competition

SSSG nose-dived in 4Q16: Non-food category was the key drag

In 4Q16, same-store sales growth (SSSG) for Matahari Putra Prima (MPPA) came in at -

9.4% YoY, deteriorating further from the 3Q16 result of -8.9% YoY. In the quarter, the

company displayed underperformance relative to other retail players. We attribute this

to: 1) a broader shift in consumption toward minimarkets; 2) renovations aimed at

converting existing locations into G7-concept stores; and 3) sluggishness in the non-

food category (e.g., electronics and home linens; just 30% of revenue) in ex-Java due to

the absence of a full recovery in the region’s purchasing power. All in all, we believe the

biggest drag on SSSG was weakness in non-food items, which tend not to be staples.

Expecting better revenue growth and normalized margins going forward

MPPA’s ongoing renovations to introduce the G7 concept to existing locations have led

to a significant reduction in inventory sold, hurting overall SSSG. However, we expect

the amount of inventory days to normalize as renovations are completed going forward.

We also expect SmartClub, MPPA’s modern wholesale business, to show improvement in

sales on the back of its competitive pricing strategy. According to MPPA, the average

selling price (ASP) of SmartClub stores is 10% lower than that of other channels, on the

condition that customers buy in bulk. In addition, although SmartClub’s average

sales/sqm are lower than that of Hypermart, the two businesses generate similar OP

margins, thanks to SmartClub’s lower operating expenses. (SmartClub posts sales just

1.5x greater than Hypermart’s despite boasting 2x more area.) Meanwhile, we note that

in 3Q16, MPPA’s inventory days increased to 96 from 89 in 2Q16. However, we ascribe

this to a high base of comparison stemming from the impact of the Lebaran holiday in

July. Hence, we expect inventory days to gradually decline going forward.

Cut earnings estimates and trim target price to IDR1,420/share

We revise down our 2016-18 earnings forecasts for MPPA given weak SSSG in 4Q16 as

well as the lower-than-expected number of new store additions in 2016. Furthermore,

we see fiercer competition from minimarkets and convenience stores, which we believe

are eating into MPPA’s revenue share. (The company’s revenue growth is weaker than

that of supermarkets and minimarkets.) Nevertheless, we expect better margins going

forward given that the company has culled unprofitable stock-keeping units (SKUs) to

reduce inventory days. We also believe that MPPA’s diversified business structure grants

the company exposure to both traditional and modern grocery retail channels. All in all,

we recommend Hold on MPPA with a target price of IDR1,420/share.

Notably, should MPPA’s major shareholders (including Temasek Holdings Pte Ltd) sell

their stakes at a USD1bn valuation, the stock would receive a boost. This scenario

implies a valuation of 0.80x EV/sales, representing a discount of around 36% to our

target price, which corresponds to 0.52x EV/sales.

Trade

Company Report February 16, 2017

Recommendation Hold

Target Price (12M, IDR) 1,420

Share Price (2/14/17, IDR) 1,315

Expected Return 8.0%

Consensus OP (17F, IDRbn) 236

EPS Growth (17F, %) 100 P/E (17F, x) 54.8 Industry P/E (17F, x) 19.0 Benchmark P/E (17F, x) 15.6 Market Cap (IDRbn) 7,072.0

Shares Outstanding (mn) 5,378.0 Free Float (mn) 1,273.6 Institutional Ownership (%) 30.4 Beta (Adjusted, 24M) 1.5 52-Week Low (IDR) 1,185 52-Week High (IDR) 2,130

(%) 1M 6M 12M Absolute -6.7 -32.4 -28.7 Relative -8.8 -33.5 -42.9

PT. Mirae Asset Sekuritas Indonesia Christine Natasya +62-21-515-1140 [email protected]

FY (Dec) 12/13 12/14 12/15 12/16F 12/17F 12/18F Revenue (IDRbn) 11,913 13,590 13,929 13,995 14,780 17,872 Gross Profit (IDRbn) 1,889 2,354 2,356 2,232 2,546 3,197 Operating Profit (IDRbn) 389 647 282 144 236 540 Net profit (IDRbn) 445 554 183 64 129 366 EPS (IDR/share) 83 103 34 12 24 68 BVPS 613 526 516 516 536 596 P/E ratio (x) 15.9 12.8 38.6 109.7 54.8 19.3 ROE (%) 12.5% 18.1% 6.5% 2.3% 4.6% 12.0% Note: All figures are based on consolidated data; OP refers to operating profit Source: Bloomberg, Mirae Asset Sekuritas Research Indonesia

60

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2/1

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JCI MPPA(D-1yr=100)

Matahari Putra Prima

2

February 16, 2017

Mirae Asset Sekuritas Indonesia

KDB Mirae Asset Sekuritas Indonesia

SSSG nose-dived in 4Q16

In 4Q16, SSSG for MPPA came in at -9.4% YoY, deteriorating significantly from the 3Q16 result of

-8.9% YoY. However, it should be noted that SSSG weakened QoQ across the entire sector given

the high base of comparison stemming from the Lebaran holiday in 2Q16.

Figure 1. Downtrend in MPPA’s SSSG (quarterly) Figure 2. Downtrend in MPPA’s SSSG (yearly)

Source: Company data, Mirae Asset Sekuritas Research


Figure 3. Revenue breakdown by category (as of FY2015) Figure 4. Revenue breakdown by region



The company displayed underperformance relative to other retail players in 4Q16. We attribute this to: 1) a broader shift in consumption toward minimarkets; 2) renovations aimed

at converting existing locations into G7-concept stores; and 3) sluggishness in the non-food

category (e.g., electronics and home linens; just 30% of revenue) in ex-Java owing to the absence

of a full recovery in the region’s purchasing power. All in all, we believe the biggest drag on SSSG

was weakness in non-food items, which tend not to be staples.

10.3%

4.5%

-9%

-15%

-10%

-5%

0%

5%

10%

15%

1Q

11

2Q

11

3Q

11

4Q

11

1Q

12

2Q

12

3Q

12

4Q

12

1Q

13

2Q

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3Q

13

4Q

13

1Q

14

2Q

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4Q

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1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

MPPA quarterly SSSG

8%

5%

-2%

-5%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

2011 2012 2013 2014 2015 2016F

Yearly SSSG

60%

40%

Java

Ex Java

30%

70%

Non Food

Grocery+Fresh


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February 16, 2017



Figure 5. YoY private consumption growth (%) Figure 6. Retail companies’ yearly SSSG

Source: BPS, Mirae Asset Sekuritas Research


On the macro front, Indonesia saw a 4.99% increase in private consumption in 4Q16.

Nonetheless, growth in discretionary spending (e.g., spending on apparel, footwear, household

appliances, etc.), remained a drag on consumption growth (see Figure 7). Meanwhile, in the US,

employment has already reached the maximum level, leading our strategist to believe that

deployment of direct stimulus would be akin to adding fuel to an already burning fire. Indeed, if

President Trump’s campaign promises come to fruition, US inflation is likely to accelerate,

eventually driving the Fed to raise interest rates more rapidly than expected. Against this

backdrop, Mirae Asset Sekuritas has revised down its economic growth forecasts to 5.0% (from

5.2%) for 2016F, and 5.1% (from 5.4%) for 2017F (please refer to our “Buy Indonesia” strategy

report for more details.)

Figure 7. Apparel, footwear, maintenance services GDP

growth (YoY) Figure 8. GDP vs. YoY SSSG growth

Source: BPS, Company data, Mirae Asset Sekuritas Research

Source: BPS, Company data, Mirae Asset Sekuritas Research

4.37%

3.35% 3.31%

2%

3%

3%

4%

4%

5%

1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16

Apparel, Footwear and Maintenance Services GDP growth (YoY)

-15%

-10%

-5%

0%

5%

10%

15%

2%

3%

3%

4%

4%

5%

5%

6%

6%

7%

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16

Nominal Gross Domestic Product growth (LHS) MPPA quarterly SSSG (RHS)

7.8%

-4.50%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

2012 2013 2014 2015 2016F

LPPF RALS ACES MPPA

4.99

4.8

4.9

5

5.1

5.2

5.3

5.4

5.5

5.6

(%)Private consumption growth (%)

http://www.dwsec-id.com/hmpg/newsRsrch/rsrch/analDtlR.do?ctnsClasCd=01202&notiSeq=8013&rowNumber=1&updateFlag=N&sidebarClipNm=Strategy%20Note%20-%20Buy%20Indon...&searchMonth=11&searchYear=2016&sidebarCtnsId=01001305&


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February 16, 2017



Intensifying competition

Despite the continuing dominance of traditional retail stores in Indonesia, modern grocery retail

businesses have been growing quite rapidly. But despite the emergence of promising market

opportunities, the retail sector is also facing growing challenges in the form of heightened

competition and regulatory tightening.

For the Indonesian grocery retail segment, we believe the growth of minimarkets will continue to

outpace that of larger-format stores such as hypermarkets. We believe that minimarkets and

convenience stores are better positioned to seize on the rebound in consumer spending. Notably,

compared to their larger-format competitors, minimarkets: 1) require less capital; and 2) can

operate in smaller spaces (facilitating greater penetration) .

Alfamart (AMRT; Not Rated) and Indomaret (PT Indomarco Prismatama; unlisted), Indonesia’s

two largest minimarket operators, continue to open more than 1,000 stores per year. We believe

minimarkets are increasingly favored by consumers due to their convenient locations, longer

operating hours, and attractive product prices owing to in-store promotions.

Figure 9. Alfamart’s promotions Figure 10. Indomaret’s promotions

Source: Company data, websites, Mirae Asset Sekuritas Research

Source: Company data, websites, Mirae Asset Sekuritas Research

Figure 11. Alfamart’s store locations



5

February 16, 2017



With minimarkets and convenience stores expected to continue to lead grocery retail segment

growth, MPPA, for which Hypermart (89% of total store area; 78.1% of total revenue) is the core

business driver, has been experiencing a slowdown in revenue growth.

Our analysis shows that, while Hypermart aggressively increased store count at 9% CAGR during

2012-16, revenue expanded at only 6% CAGR—below the industry rate of 17%—during the same

period. We note that Midi Utama Indonesia (MIDI; Not Rated) and Alfamart (AMRT; Not Rated)

are witnessing the fastest revenue growth (see Figures 13 and 21) in the sector.

Figure 12. Revenue breakdown by department Figure 13. Revenue (4-year CAGR, 2012-16F)



Figure 14. Breakdown of MPPA’s total store count Figure 15. Hypermart store count



89%

6%

Hypermart

Foodmart

Boston

FMX

SmartClub

0

20

40

60

80

100

120

140

2012 2013 2014 2015 2016

Hypermart9% CAGR growth (2012-2016F)

6%

17%

24%

0%

5%

10%

15%

20%

25%

30%

MDRN MPPA HERO Industry RANC MIDI AMRT


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February 16, 2017



Figure 16. Indonesia’s overall grocery market breakdown by

channel


channel (including cigarettes)

Source: Company data, Alfamart slides, Mirae Asset Sekuritas Research



channel

Figure 19. Indonesia’s total grocery market breakdown by

category (including cigarettes)



Figure 20. MPPA’s revenue Figure 21. Market share breakdown by revenue


Source: Bloomberg, Company data, Mirae Asset Sekuritas Research

25.2% 26.8% 27.5% 27.5%

15.0% 14.9% 13.7% 13.4%

59.8% 58.3% 58.8% 59.1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 2014 2015 1Q16

Traditional stores Supermarket & Hypermarket Minimarket

16.6% 17.7% 18.2% 18.0%

8.5% 8.5% 7.8% 7.5%

74.9% 73.8% 74.0% 74.5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 2014 2015 1Q16


25.7% 27.5%

15.0% 13.4%

59.3% 59.1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1Q16 2Q16


17% 18%

9% 8%

75% 75%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1Q16 2Q16


13,590 13,929 13,995

6%

0%

10%

20%

30%

40%

50%

60%

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

2014 2015 2016 F 2017 F 2018 F

IDRbn MPPA Revenue (LHS)

MPPA Revenue growth (RHS)

45% 46%53% 54% 56% 57%

22% 21%18% 18% 16%

14%

6% 8% 7% 8% 8% 11%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2011 2012 2013 2014 2015 9M16

MDRN MIDI MPPA DNET HERO RANC AMRT


7

February 16, 2017



Room for revenue growth and margin normalization despite heavy competition

Due to increased transportation costs and inefficiencies stemming from Indonesia’s still-

underdeveloped infrastructure, retailers have not been able to keep pace with the consumer-led

economic boom. This has led consumption to shift to convenience stores, which are highly

accessible.

Appearing to realize the potential threat of convenience stores, MPPA began introducing the G7

concept to existing Hypermart stores in 2014 to improve sales productivity. In 2015, MPPA also

opened a wholesale business under the name SmartClub (currently accounting for around 15% of

total revenue) in order to cater to traditional buyers, which account for 60% of total demand.

MPPA’s ongoing G7-related renovations have led to a significant reduction in inventory sold,

hurting overall SSSG. However, we expect the amount of inventory days to normalize as

renovations are completed going forward. We also expect SmartClub, MPPA’s modern wholesale

business, to show improvement in sales on the back of its competitive pricing strategy. According

to MPPA, the ASP of SmartClub stores is 10% lower than that of other channels, on the condition

that customers buy in bulk. In addition, although SmartClub’s average sales/sqm figure is lower

than that of Hypermart, the two businesses generate similar OP margins, thanks to SmartClub’s

lower operating expenses. (SmartClub posts sales just 1.5x greater than Hypermart’s despite

boasting 2x more area.) Meanwhile, we note that in 3Q16, MPPA’s inventory days increased to 96

from 89 in 2Q16. However, we ascribe this to a high base of comparison stemming from the

impact of the Lebaran holiday in July. Hence, we expect inventory days to gradually decline going

forward.

Figure 22. MPPA’s gross profit and gross margin Figure 23. MPPA’s days of inventory



72

104

89

96

65

70

75

80

85

90

95

100

105

110Average days of inventories

16%

17%

16%

16%

17%

17%

18%

18%

2,050

2,100

2,150

2,200

2,250

2,300

2,350

2,400

2,450

2,500

2,550

2,600

2015 2016 F 2017 F

IDRbn Gross profit (LHS) Gross margin (RHS)


8

February 16, 2017



No further investment in MatahariMall in the short term

With Mitsui & Co. revealing its intention to invest in MatahariMall, MPPA’s stake (around 10%) in

the e-commerce business will be diluted if it does not participate in the rights issue. Based on our

calculation, MPPA’s stake will be reduced to 8.5% post-rights issue. Nevertheless, unlike Matahari

Department Store (LPPF/Buy/TP: IDR19,950), MPPA is highly unlikely to make further

investments in the business, in our view. This is due to the fact that, in terms of balance sheet,

MPPA (IDR261.7bn in cash; 0.2x net debt to equity; as of 3Q16) is not as robust as LPPF

(IDR671bn; -0.45x). Should MPPA invest further in MatahariMall in order to avoid dilution, its

stock price will be hit harder than LPPF’s.

Table 1. MatahariMall’s ownership (post-rights issue)

Shareholders Number of shares Nominal Share value (IDR) % ownership of

MatahariMall

PT Matahari Department Store Tbk 22,226,851 100 2,222,685,100 12.0%

PT Matahari Putra Prima Tbk 15,728,152 100 1,572,815,200 8.5%

PT Duta Wibisana Anjaya 5,000,000 100 500,000,000 2.7%

PT Dutamas Sinar Mustika 10,000,000 100 1,000,000,000 5.4%

PT Investama Digital Ventura 111,653,015 100 11,165,301,500 60.3%

Mitsui Co Ltd 20,599,638 100 2,059,963,800 11.1%

Total 185,207,656 18,520,765,600

Source: Company data, LPPF, Mirae Asset Sekuritas Research

Cut earnings estimates and trim target price to IDR1,420/share We revise down our 2016-18 earnings forecasts for MPPA given weak SSSG in 4Q16 as well as the

lower-than-expected number of new store additions in 2016.

Furthermore, we see fiercer competition from minimarkets and convenience stores, which we

believe are eating into MPPA’s revenue share. (The company’s revenue growth is weaker than

that of supermarkets and minimarkets.) In line with our strategist’s call for muted GDP growth,

we believe that MPPA’s revenue growth will slow in 2017.

Nevertheless, we expect better margins going forward given that the company has culled

unprofitable SKUs to reduce inventory days. We also believe that MPPA’s diversified business

structure will allow the company to: 1) capture both traditional and modern grocery retail

channels; and 2) keep up with current changes in consumption trends.

Should MPPA’s major shareholders (including Temasek Holdings Pte Ltd) sell their stakes at a

USD1bn valuation, the stock would receive a boost. This scenario implies a valuation of 0.80x

EV/sales, representing a discount of around 36% to our target price, which corresponds to 0.52x

EV/sales.


9

February 16, 2017



Table 2. Store count forecast revisions

Old vs New Forecast Old New Changes

2016F 2017F 2018F 2016F 2017F 2018F 2016F 2017F 2018F

Number of new stores

Hypermart 6 6 5 3 3 3 -3 -3 -2

Boston 8 8 8 1 1 1 -7 -7 -7

Foodmart 4 4 4 3 3 3 -1 -1 -1

FMX 8 8 8 -3 8 8 -11 0 0

SmartClub 2 2 3 2 2 2 0 0 -1

Total stores

Hypermart 118 124 129 115 118 121 -3 -6 -8

Boston 116 124 132 109 110 111 -7 -14 -21

Foodmart 27 31 35 26 29 32 -1 -2 -3

FMX 57 65 73 46 54 62 -11 -11 -11

SmartClub 3 5 8 3 5 7 0 0 -1


Table 3. Forecast revisions

Old New Changes

2016F 2017F 2018F 2016F 2017F 2018F 2016F 2017F 2018F

Total Additional Area (Sqm) 66,024 94,320 96,320 44,611 65,270 65,270 (21,413) (29,050) (31,050)

SSSG (%) 1% 2% 3% -5% 2% 1% -5% 0% -2%

IDRbn

Revenue 14,976 16,813 19,421 13,995 14,780 17,872 -7% -12% -8%

Gross profit 2,571 3,064 3,458 2,232 2,546 3,197 -13% -17% -8%

Operating income 215 387 462 124 222 532 -42% -45% 11%

Profit before income tax 182 359 439 84 177 491 -54% -53% 7%

Net income 140 277 341 64 129 366 -54% -53% 7%

EBITDA 578 820 988 504 656 1,024 -13% -20% 4%


Table 4. MPPA’s store count

No of Store 2010 2011 2012 2013 2014 2015 2016

Hypermart 51 63 80 99 107 112 115

Foodmart 21 24 29 29 21 23 26

Boston 54 63 78 94 102 108 109

FMX 37 49 46

SmartClub 1 3



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February 16, 2017



Table 5. Key assumptions

Item Details

Cost of equity 12%

Risk-free rate 7.0%

Beta 1.00

Market premium 5%

Cost of debt 10.0%

Tax 22.8%

After-tax cost of debt 7.7%

Total PV of FCF (IDRbn) 2,667

PV of TV (IDRbn) 4,980

Total PV of FCF and TV 7,647

Cash 2017 (IDRbn) 730

Debt 2017 (IDRbn) 760

Equity value (IDRbn) 7,617

Equity value/share (IDR/Share) 1,416

Source: Mirae Asset Sekuritas Research

Figure 24. MPPA’s ownership structure


Table 6. Potential sale stake valuation implies 0.80x EV/sales

Potential sale stake valuation

Company valuation of USD1bn (IDR) 13,500,000,000,000

Debt (IDR) 760,000,000,000

Cash (IDR) 730,331,817,306

Enterprise value (IDR) 13,529,668,182,694

Implied enterprise value (IDR tr) 14

EV/sales (x) 0.80

No. of shares outstanding 5,377,962,800

Implied price/share 2,516



11

February 16, 2017



Profit & Loss Balance sheet

Year end Dec 31 (IDRbn) 2015 2016E 2017E 2018E


Revenue 13,929 13,995 14,780 17,872

Assets

COGS 11,572 11,763 12,235 14,676

Cash and equivalents 409 448 730 827

Gross Profit 2,356 2,232 2,546 3,197

Receivables 26 36 35 41

Opex (2,074) (2,087) (2,310) (2,657)

Inventories 2,759 2,739 2,682 3,217

Operating Profit 282 144 236 540

Others 777 661 704 837

Other income/(expenses) (49) (61) (69) (69)

Total current assets 3,971 3,885 4,150 4,922

Profit before income tax 233 84 167 471

Fixed assets - net 1,462 1,592 1,690 1,742

Income tax expenses (50) (19) (38) (105)

Prepaid rent-Net 330 316 339 409

Minority interest - - - -

Others 531 521 537 586

Net profit 183 64 129 366

Total non-current assets 2,323 2,429 2,565 2,737

EBITDA 589 504 656 1,024 Total assets 6,294 6,314 6,715 7,659

Liabilities and equity

Growth & margins 2015 2016E 2017E 2018E Short-term bank loans and

current maturities

250 250 250 250

Net Revenue 2.5% 0.5% 5.6% 20.9% Accounts payables 1,763 1,858 1,933 2,319

EBITDA -35.1% -14.5% 30.2% 56.1% Others current liabilities 801 723 808 1,021

Net profit -67.0% -64.8% 100.2% 183.2% Total current liabilities 2,815 2,831 2,990 3,589

Profitability (%) Long term debt 400 400 510 510

Gross margin 16.9% 15.9% 17.2% 17.9% Others 304 307 332 356

Operating margin 1.9% 0.9% 1.4% 2.9% Total non-current liabilities 704 707 842 866

EBITDA margin 4.2% 3.6% 4.4% 5.7% Total liabilities 3,519 3,538 3,832 4,456

Minority interests 0 0 0 0

Cash Flow (Summarized) Shareholders' equity 2,776 2,776 2,883 3,203


CF from operation

Net profit 183 64 129 366

Ratio analysis

Year end Dec 31

2015

2016E

2017E

2018E Depreciation/amortization 233 359 420 484

Change in working capitals (830) 180 117 (262) Current ratio 1.4 1.4 1.4 1.4

Others - - - - Quick ratio 0.2 0.2 0.3 0.2

CF from operation (413) 603 666 588 Debt to equity 0.2 0.2 0.3 0.2

CF from Investments

Net debt to equity 0.1 0.1 0.0 (0.0)

Net capex (422) (490) (517) (536)

Others - - - -

CF from investment (422) (490) (517) (536)

CF from financing activity

Increase/(decrease) in debt 650 - 110 -

Increase/(decrease) in equity - - - -

Dividend payments (194) (64) (23) (45)

Others 41 (10) 46 90

CF from financing activity 497 (74) 133 45

Net changes in cash (339) 39 282 96 Beginning balance 748 409 448 730

Ending balance - from CF 409 448 730 827

Source: Mirae Asset Sekuritas Research


12

February 16, 2017



APPENDIX 1

Important Disclosures & Disclaimers

Stock Ratings Industry Ratings Buy Relative performance of 20% or greater Overweight Fundamentals are favorable or improving

Trading Buy Relative performance of 10% or greater, but with volatility Neutral Fundamentals are steady without any material changes

Hold Relative performance of -10% and 10% Underweight Fundamentals are unfavorable or worsening Sell Relative performance of -10%

* Ratings and Target Price History (Share price (----), Target price (----), Not covered (■), Buy (▲), Trading Buy (■), Hold (●), Sell (◆)) * Our investment rating is a guide to the relative return of the stock versus the market over the next 12 months. * Although it is not part of the official ratings at Mirae Asset Securities, we may call a trading opportunity in case there is a technical or short-term material development. * The target price was determined by the research analyst through valuation methods discussed in this report, in part based on the analyst’s estimate of future earnings. The achievement of the target price may be impeded by risks related to the subject securities and companies, as well as general market and economic conditions. Analyst Certification The research analysts who prepared this report (the “Analysts”) are registered with the Indonesian jurisdiction and are subject to Indonesian securities regulations. They are neither registered as research analysts in any other jurisdiction nor subject to the laws and regulations thereof. Opinions expressed in this publication about the subject securities and companies accurately reflect the personal views of the Analysts primarily responsible for this report. Except as otherwise specified herein, the Analysts have not received any compensation or any other benefits from the subject companies in the past 12 months and have not been promised the same in connection with this report. No part of the compensation of the Analysts was, is, or will be directly or indirectly related to the specific recommendations or views contained in this report but, like all employees of PT Mirae Asset Securities Indonesia, the Analysts receive compensation that is impacted by overall firm profitability, which includes revenues from, among other business units, the institutional equities, investment banking, proprietary trading and private client division. At the time of publication of this report, the Analysts do not know or have reason to know of any actual, material conflict of interest of the Analyst or PT Mirae

Asset Securities Indonesia except as otherwise stated herein. Disclaimers This report is published by PT Mirae Asset Sekuritas Indonesia (“Mirae Asset”), a broker-dealer registered in the Republic of Indonesia and a member of the Indonesia Exchange. Information and opinions contained herein have been compiled from sources believed to be reliable and in good faith, but such information has not been independently verified and Mirae Asset makes no guarantee, representation or warranty, express or implied, as to the fairness, accuracy, completeness or correctness of the information and opinions contained herein or of any translation into English from the Bahasa Indonesia. If this report is an English translation of a report prepared in the Indonesian language, the original Indonesian language report may have been made available to investors in advance of this report. Mirae Asset, its affiliates and their directors, officers, employees and agents do not accept any liability for any loss arising from the use hereof. This report is for general information purposes only and it is not and should not be construed as an offer or a solicitation of an offer to effect transactions in any securities or other financial instruments. The intended recipients of this report are sophisticated institutional investors who have substantial knowledge of the local business environment, its common practices, laws and accounting principles and no person whose receipt or use of this report would violate any laws and regulations or subject Mirae Asset and its affiliates to registration or licensing requirements in any jurisdiction should receive or make any use hereof. Information and opinions contained herein are subject to change without notice and no part of this document may be copied or reproduced in any manner or form or redistributed or published, in whole or in part, without the prior written consent of Mirae Asset. Mirae Asset, its affiliates and their directors, officers, employees and agents may have long or short positions in any of the subject securities at any time and may make a purchase or sale, or offer to make a purchase or sale, of any such securities or other financial instruments from time to time in the open market or otherwise, in each case either as principals or agents. Mirae Asset and its affiliates may have had, or may be expecting to enter into, business relationships with the subject companies to provide investment banking, market-making or other financial services as are permitted under applicable laws and regulations. The price and value of the investments referred to in this report and the income from them may go down as well as up, and investors may realize losses on any investments. Past performance is not a guide to future performance. Future returns are not guaranteed, and a loss of original capital may occur.

Disclosures

As of the publication date, PT Mirae Asset Securities Indonesia, and/or its affiliates do not have any special interest with the subject company and do not

own 1% or more of the subject company's shares outstanding.


13

February 16, 2017



Distribution United Kingdom: This report is being distributed by Mirae Asset Securities (Europe) Ltd. in the United Kingdom only to (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”), and (ii) high net worth companies and other persons to whom it may lawfully be communicated, falling within Article 49(2)(A) to (E) of the Order (all such persons together being referred to as “Relevant Persons”). This report is directed only at Relevant Persons. Any person who is not a Relevant Person should not act or rely on this report or any of its contents. United States: This report is distributed in the U.S. by Mirae Asset Securities (America) Inc., a member of FINRA/SIPC, and is only intended for major institutional investors as defined in Rule 15a-6(b)(4) under the U.S. Securities Exchange Act of 1934. All U.S. persons that receive this document by their acceptance thereof represent and warrant that they are a major institutional investor and have not received this report under any express or implied understanding that they will direct commission income to Mirae Asset or its affiliates. Any U.S. recipient of this document wishing to effect a transaction in any securities discussed herein should contact and place orders with Mirae Asset Securities (America) Inc., which accepts responsibility for the contents of this report in the U.S. The securities described in this report may not have been registered under the U.S. Securities Act of 1933, as amended, and, in such case, may not be offered or sold in the U.S. or to U.S. persons absent registration or an applicable exemption from the registration requirements. Hong Kong: This document has been approved for distribution in Hong Kong by Mirae Asset Securities (Hong Kong) Ltd., which is regulated by the Hong Kong Securities and Futures Commission. The contents of this report have not been reviewed by any regulatory authority in Hong Kong. This report is for distribution only to professional investors within the meaning of Part I of Schedule 1 to the Securities and Futures Ordinance of Hong Kong (Cap. 571, Laws of Hong Kong) and any rules made thereunder and may not be redistributed in whole or in part in Hong Kong to any person. All Other Jurisdictions: Customers in all other countries who wish to effect a transaction in any securities referenced in this report should contact Mirae Asset or its affiliates only if distribution to or use by such customer of this report would not violate applicable laws and regulations and not subject Mirae Asset and its affiliates to any registration or licensing requirement within such jurisdiction. Mirae Asset Securities International Network

PT. Mirae Asset Sekuritas Indonesia Mirae Asset Securities Co. Ltd. (Seoul) Mirae Asset Securities (Hong Kong) Ltd. Equity Tower 50th Floor Jl.Jend Sudirman, SCBD Lot 9 Jakarta 12190

Head Office 14, Eunhaeng-ro, Yeongdeungpo-gu Seoul 150-973 Korea

Suites 2005-2012 Two International Finance Centre 8 Finance Street, Central Hong Kong

Tel: 62-21-515-1140 Tel: 82-2-768-3026 Tel: 85-2-2514-1304

Mirae Asset Securities (America) Inc. Mirae Asset Securities (Europe) Ltd. Mirae Asset Securities (Singapore) Pte. Ltd. 320 Park Avenue, 31st Floor. New York, NY 10022 United States

41st Floor, Tower 42 25 Old Broad Street London EC2N 1HQ United Kingdom

Six Battery Road #11-01 Singapore, 049909

Tel: 1-212-407-1000 Tel: 44-20-7982-8000 Tel: 65-6671-9845

Tokyo Representative Office Beijing Representative Office Shanghai Representative Office 7F, Yusen Building, 2-3-2 Marunouchi, Chiyoda-ku Tokyo 100-0005 Japan

2401A, 24th Floor. East Tower Twin Tower, B-12 Jianguomenwai Avenue Chaoyang District, Beijing 100022 China

Room 38T31, 38F SWFC 100 Century Avenue, Pudong New Area, Shanghai, 200120 China

Tel: 81-3- 3211-5511 Tel: 86-10-6567-9699 Tel: 86-21-5013-6392

Ho Chi Minh Representative Office Mirae Asset Investment Advisory (Beijing) Co., Ltd

Mirae Asset Securities (Mongolia) LLC

Suites 901B. Centec Tower 72-74 Nguyen Thi Minh Khai St, Ward 6 District 3, HCMC

2401B,24th Floor. East Tower Twin Tower, B-12 Jianguomenwai Avenue Chaoyang District, Beijing 100022 China

#406, Blue Sky Tower, Peace Avenue 17 1 Khoroo, Sukhbaatar District Ulaanbaatar 14240 Mongolia

Tel: 84-8-3910-6000 Tel: 86-10-6567-9699 Tel: 976-7011-0807

matahari putra prima - mirae asset · alfamart (amrt; not rated) and indomaret (pt indomarco...

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