Supra Boga Lestari: FY12 results within expectation (RANC, Rp880, Buy, TP: Rp1,000)
FY12 NPAT came at Rp36bn (+66.2%yoy), forming 95% of our estimate and 100% of consensus. Net sales and operating profit were broadly aligned with our forecasts, both with 101% realization. We continue to maintain our Buy call and Rp1,000 TP.
FY12 sales grew 21.0 %yoy to Rp1,077bn, with 7% SSSG and 3 new stores opening (2 Farmers Market and 1 Farmers Market) for a total selling space of 6,300sqm (20.3% of existing). Gross margin were relatively unchanged, while operating margin declined from 4.1% to 3.4% as G&A expenses rose 31.0%yoy mostly on rising salaries & allowances. Dissecting 9M12, 4Q12 NPAT came at Rp9bn, up 86.8%yoy or 4.7%qoq. Operating and net margins were weaker on YoY basis, but stronger QoQ.
At pretax profit level, RANC nevertheless booked a solid 64.7%yoy growth to Rp46bn, helped by other income that grew 138.9%yoy. This is also within our expectation, on the back of strong growth of suppliers’ income. As we had written before, the hiring of new COO in mid-2011 (ex-HERO) enabled RANC to obtain more suppliers’ income in the form of listing fees and event promotions.
For 2013, RANC would open 2 Ranch Market and 3 Farmers Market, adding a total selling space of 13,500sqm. The number of new stores opening is in-line with our assumption, but the total selling space addition is 23% higher than our 10,975sqm assumption. SSSG is guided for at least 8%, lower than our 10% assumption. As reported by the local newspaper recently, RANC guided for Rp48bn NPAT this year, aligned with our current Rp50bn estimate. We will review our financial model to incorporate FY12 results. RANC currently trades at 27.4x FY13F PE.
Tuesday, April 2, 2013
Indomobil Sukses Internasional weak but expected
Indomobil Sukses Internasional: FY12 weak, but expected (IMAS, Buy, Rp5,500, TP: Rp6,150)
We reduced our TP on IMAS from Rp6,550 to Rp6,150 as we incorporate weak FY12 results into our model. We retained 80k units of Nissan sales assumption this year, but lowered operating margins to factor in dealerships roll-out. Weak 4Q12 was largely anticipated, and does not really make a difference given the tender offer price floor protection. We retain our BUY call. Downside is protected, while upside could be rewarding, in our view. Post-acquisition, Salim should also have more incentives to grow IMAS.
Weak FY12 results were partially driven by Nissan dealership expansion that was not supported by pick-up in sales volume. This year, Nissan would continue to expand its dealership by opening 20-25 outlets from the existing 85 outlets. The 24-29% growth in dealership number would lead to higher cost/sales, as we only expect a 19% volume growth for Nissan. We slashed FY13F operating margin assumption to 3.8% from 4.1%, but still expecting an improvement YoY.
While it is painful in the short term, expanding dealership network is the key to long-term success in the Indonesian market. It enables Nissan to strengthen its secondary market, a key to win both consumer and corporate customers. The decision to continuously expand, despite declining market share, is also the right one, paving the way for the launching of Datsun LCGC in early 2014.
We reduced our TP on IMAS from Rp6,550 to Rp6,150 as we incorporate weak FY12 results into our model. We retained 80k units of Nissan sales assumption this year, but lowered operating margins to factor in dealerships roll-out. Weak 4Q12 was largely anticipated, and does not really make a difference given the tender offer price floor protection. We retain our BUY call. Downside is protected, while upside could be rewarding, in our view. Post-acquisition, Salim should also have more incentives to grow IMAS.
Weak FY12 results were partially driven by Nissan dealership expansion that was not supported by pick-up in sales volume. This year, Nissan would continue to expand its dealership by opening 20-25 outlets from the existing 85 outlets. The 24-29% growth in dealership number would lead to higher cost/sales, as we only expect a 19% volume growth for Nissan. We slashed FY13F operating margin assumption to 3.8% from 4.1%, but still expecting an improvement YoY.
While it is painful in the short term, expanding dealership network is the key to long-term success in the Indonesian market. It enables Nissan to strengthen its secondary market, a key to win both consumer and corporate customers. The decision to continuously expand, despite declining market share, is also the right one, paving the way for the launching of Datsun LCGC in early 2014.
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