Daily Brief Indonesia: GoTo, Ace Hardware Indonesia, Bank Mandiri Persero and more

In today’s briefing:

GoTo: Going Gets Tough

GoTo’s share price lost more than 75% last year following its weaker-than-expected performance and lock-up expiry despite the company entering into a coordinated secondary offering of shares with pre-IPO shareholders.
The company’s share price has moved up 24% YTD partially driven by cost cutting measures that is expected to improve the company’s profitability.
Nevertheless, we expect this share price rebound to be temporary with e-commerce and food delivery market in Indonesia slowing down.

Ace Hardware has been a distinct laggard amongst listed retailers in Indonesia, with its valuations drifting to multi-year lows, given a slow recovery from the pandemic and limited digital strategy.
The company has continued to see lacklustre SSSG finish flat for last year but has recently opined a more optimistic outlook for 2023, planning to open 10-15 new stores.
Ace Hardware Indonesia (ACES IJ) trades on 13.7x FY2023E PER and 12.7x FY2024E PER when it used to trade on twice that multiple with not dissimilar growth rates.

Bank Mandiri (BMRI IJ) finished the year with a strong showing of loan growth across the board driven by corporate and commercial loans but micro was also a feature.
Both the bank’s consumer app under Livin’ and its digital corporate platform under Kopra continue to help drive CASA growth and transactions plus the bank is opening “smart” branches.
Bank Mandiri (BMRI IJ) is optimistic about the outlook for loan growth and NIMs in 2023, with its digital initiatives continuing to gain traction and drive growth. Valuations are attractive.

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