Aspirasi Hidup Indonesia (ACES.IJ Rp 880; BUY TP Rp 1,100) Strong Aug24 SSSG; YTD Monthly Sales Surpass Pre-Pandemic Levels, in line with our FY24F

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Aspirasi Hidup Indonesia (ACES IJ)

Strong Aug24 SSSG; YTD Monthly Sales Surpass Pre-Pandemic Levels, in line with our FY24F

ACES reported strong SSSG of 11% yoy in Aug24 and 9.9% for 8M24, exceeding mgmt’s/our FY24 target of at least 7%/7.6%.
Aug24-YTD average monthly sales grew 14% yoy, exceeding pre-pandemic levels of Rp671bn/month.
We estimate 3Q24E/9M24E net profit growth of 13%/18% yoy to form 66/68% of FY24F/Cons. Maintain Buy rating with unchanged TP.

Solid 11% SSSG in Aug24, Led by Ex-Java and Strategic Sales Promotions

ACES reported a strong SSSG of 11% yoy in Aug24 (vs. Jul24: 4.6%) with Ex-Java achieving an impressive 14.9% yoy, followed by Java ex Jakarta at 10.7%. We believe that sustained thematic promotions across both offline and online channels contributed to this robust SSSG in Aug24, despite the high base from last year (Aug23: 10.3% yoy). Based on our channel checks between Jul24 and early Sept24, ACES launched several promotion campaigns, including the “Boom Sale” (initially from 9th Jul24, but extended until late Jul24 to 6th Aug24), “Upgrade Your Outdoor Space”, Independence Day and the thematic “Kitchen Fest” promo in early Sept24. The strong Aug24 SSSG drove 8M24 to 9.9% yoy (vs 8M23: 7%).

Aug24 boosted YTD sales to 65% of our FY24F target

In Aug24, ACES reported monthly sales of Rp705bn, up 15.8% yoy but down -0.7% mom. This brought 8M24 sales to Rp5.5tr (+14% yoy vs our FY24F: +11.1% yoy) and representing 65% of our FY24F, i.e in line. ACES anticipates the strong SSSG to continue in Sept24, driven by ongoing promotional themes focusing on hobbies and relaxation-related products. Additionally, it opened a new outlet in Mall Puri Indah (West Jakarta), bringing the total stores to 241 in Sept YTD.

Maintain Buy; Solid Sept sales will support 3Q24 net profit growth of 13% yoy

We note that the average monthly sales as of Aug YTD have already increased by 14% yoy, surpassing the pre-pandemic monthly sales of Rp671bn in FY19. Assuming monthly sales of Rp695bn in Sept24 (+19% yoy from a low base, -1.4% mom), this would result in an estimated 3Q24E revenue of Rp2.1tr (+13.5% yoy and -1.5% qoq). Assuming a stable gross margin of 48.5% in 3Q24E and normalized opex at 37.4%, we estimate 3Q24E net profit of Rp207bn (+13% yoy) and 9M24E net profit of Rp572bn (+18% yoy), potentially forming 66%/68% of our/consensus FY24F est., i.e in line. Our forecast has accounted for a reduced tax rate of 19% (due to the cancellation of treasury shares) to support FY24 net profit growth of 10% yoy. We maintain our Buy rating on ACES with an unchanged TP of Rp1,100 (implying 20x FY25 PE, in line with the average 3yr PE) as we believe ACES’ FY24-26F EPS CAGR of 11% is intact. Key risks are soft purchasing power, margin pressure from product mix, and higher-than-expected opex.

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