Mitra Adiperkasa (MAPI IJ)

Improving Demand and Healthier Inventory Support 2H26  Outlook

 

  • sees resilient demand in Jul-Aug26, potentially supporting 3Q26 SSSG improvement on stronger seasonality & a low base. 
  • FY26 guidance remains unchanged, with healthier inventory levels supporting margin buffer and limiting huge discounting risks.
  • Maintain Hold rating with TP of Rp1,520 based on an updated 3yr mean PE multiple of 11.3x FY26F.

 

Demand seems resilient in 3Q26

Following post-Eid seasonality and the normalization in digital sales from iPhone, MAPI’s 2Q26 SSSG moderated to +3.3%, bringing 1H26 SSSG to +8.2%. Growth was primarily supported by higher selling prices and improved conversion, while traffic was rather stable. Despite the price hikes, mgmt. has not observed meaningful downtrading, with consumer spending instead reflecting brand-level performance rotation. Within fashion, Alo and M&S were the key outperformers, while Starbucks continued its recovery from the low base post-boycott. Encouragingly, mgmt. noted an improvement in consumption trends towards the end of 2Q26, which remained resilient in Jul-Aug26. Therefore, we expect 3Q26 SSSG to improve from 2Q26, supported by stronger seasonal demand and a favorable low-base effect as both 2Q25 and 3Q25 posted negative SSSG.

 

FY26 guidance unchanged despite strong 1H26 performance

Mgmt. continues to maintain its conservative FY26 guidance of high-single digit revenue growth (1H26 +23.4% yoy). On profitability, it targets 39-40% gross margin and 9% EBIT margin, broadly in line with our estimates. Despite ongoing cost volatility, mgmt. remains focused on protecting margins by passing through FX-related costs to consumers, while closely monitoring the need for further price adjustments should the IDR weaken further. MAPI’s inventory position also improved in 1H26, inventory days declined to 111 days (below its internal target of 126 days), while aged inventory fell to 24%. We believe the healthier inventory position should reduce the risk of heavy discounting in 2H26.

 

Maintain Hold with new TP of Rp1,520

Overall, we tweaked upwards our FY26/27 earnings estimates slightly by +1.6/1.7%, mainly reflecting higher SSSG assumptions of 6.7% in FY26F (vs. 5.8% prev) and higher net store additions, while keeping our margin assumptions unchanged. We maintain our Hold rating, as we see limited share price upside post MTO. Our TP is slightly lowered to Rp1,520, based on an updated 3yr mean PE multiple of 11.3x FY26F. Key risks include weaker-than-expected purchasing power and further IDR depreciation.

 

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