Mitra Adiperkasa (MAPI IJ)

Growth Recovery May Take Longer, but Valuation Looks Compelling

• Given 3Q’s low seasonality and ongoing store consolidation, we expect MAPI to book a modest sales growth in 3Q25 with a stronger recovery in 4Q25.
• We lowered our FY25/26F earnings est. by 15.9% and 15.4%, forecasting 8.3% rev growth in FY25F led by Active and Fashion, while F&B remain weak.
• Current 10x PE FY25F post 15% YTD share price drop looks attractive, given robust EPS growth outlook. Reinitiate with a Buy rating and TP of Rp1,400.  

Muted 3Q25 outlook, with improvement to be seen in 4Q25

MAPI posted 2Q25 revenue growth of +11.5% yoy, driven mainly by new store expansion with a net addition of 42 outlets, mostly in the Active segment. This growth came despite a decline in consolidated 2Q25 SSSG to -3.5% (vs. +0.1% in 1Q25). The management highlighted fashion segment performed reasonably well in Jul25, while Aug25 sales are expected to be driven by the successful ‘Buy1Get1’ promotion on selected Active brands. Given 3Q’s historically low seasonality for MAPI and management’s focus on consolidation, we expect modest growth in 3Q25, followed by a stronger recovery in 4Q25.

Recovery may take longer this time

MAPI’s consolidated SSSG dropped into negative territory of -1.7% yoy in 1H25, still below the management target of low positive single digit. While MAPI may still deliver high single-digit topline growth this year, we believe the momentum will remain driven by new store openings rather than same-store performance. Our historical review shows that the only other period when SSSG across some of MAPI’s business lines turned negative (excluding the pandemic in FY20) was in FY16 during BI’s tightening cycle, with recovery not materializing until early FY18. This suggests that the current recovery may also take longer before MAPI achieves a full turnaround.

Earnings downgrade; reinitiate with a Buy and TP of Rp1,400

Following MAPI’s soft 2Q25 results, we trimmed our FY25/26F earnings estimates by 15.9% and 15.4% respectively. We forecast SSSG of 1.7% with consolidated revenue growth of 8.3% yoy in FY25F, driven by the Active segment of +15.2% yoy (48% of MAPI’s FY25 rev) and Fashion +4.4% yoy, while F&B is projected to remain under pressure with -4.3% yoy revenue decline. We also project 70bps yoy contraction in gross margin due to promotions and IDR weakness. Additionally, the slower recovery in F&B segment has led us to estimate lower EBIT margin of 8.8% in FY25F. Despite the earnings revisions, we view MAPI’s current valuation of 10x PE FY25F, following 15% ytd share price correction, as reasonably attractive. Therefore, we reinitiate with a Buy rating and TP of Rp1,400, based on -1sd of 3yr mean of 12.3x.

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