Daily Brief Indonesia: Arwana Citramulia, Matahari Department Store, GoTo and more

In today’s briefing:

Arwana Citramulia (ARNA IJ) – Grand Master of Tiles
Matahari Department Store (LPPF IJ) – Freshening Merchandise Is Paying Dividends
GoTo (GOTO IJ): Lock Up Expiry & Index Implications

Arwana Citramulia (ARNA IJ) – Grand Master of Tiles

Arwana Citramulia (ARNA IJ) booked yet another positive set of earnings in 3Q2022 driven by increased efficiency and cost reduction leading to 32% YoY growth in profits above consensus.
There are a number of potential positives in 4Q related to new capacity coming on stream which should help to boost sales of the company’s higher end products.
Consensus has caught up with the company’s projects profit growth forecast of +30% for FY2022 but this may prove conservative, with valuations looking attractive on a 9x forward PER multiple.

Matahari Department Store remains an unappreciated transformational retail growth story in Indonesia with the new management team improving the merchandise mix and restarting the company’s store expansion in earnest.
The company plans to add a total of 10 new stores this year and 12-15 new stores next year, as well as adopt an increasingly omnichannel approach to expansion.
Matahari Department Store remains attractive from a valuation perspective trading on 8x FY23E PER with a forecast dividend of 9.9% for FY2023E, which makes it look ripe for a rerating.

GoTo (GOTO IJ) listed on 11 April and closed at its lowest point since listing yesterday. The lock-up on pre-IPO shareholders expires on 30 November.
GoTo (GOTO IJ) has confirmed that it is working with pre-IPO shareholders to explore a coordinated secondary offering.
The lock-up expiry will result in a lot of shares hitting the market in December. The increased float could result in MSCI/FTSE inclusion early next year.

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