Mirae (YP) 25 Sep 2018
HOKI BUY UPGRADE TP to 1350 (from 1040)
We raise our target price on Buyung Poetra Sembada (HOKI) to IDR1,350 (from
IDR1,040), as we roll over our valuation into 2019F and revise up our 2018-19 net
profit forecasts to IDR93bn and IDR156bn (+5.3% and +24.1% vs. our previous
estimates), respectively. Our higher earnings estimates are due to the company’s
better-than-expected 1H18 sales volume and its plan to distribute a new Alfamartlabel rice brand named Super Beras Slyp 5kg.
New product, new distribution channel
With its new Alfamart-label brand Super Beras Slyp 5kg, we anticipate further
increases in HOKI’s sales volume. We also note that, in Sumatra, the price gap between premium rice sold in modern markets and that sold in traditional markets is narrowing. Despite Indonesians’ tendency to shop more frequently at Indomaret than at Alfamart, Alfamart is ruling the markets in Jambi and Bangka Belitung Islands provinces. Going forward, we expect Indonesians to shift from traditional to modern markets and from hyper supermarts to minimarts.
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