Multi Indocitra, Tbk - PT. PEFINDO

INVESTMENT PARAMETERS
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Target Price Adjustment
Multi Indocitra, Tbk
We made some adjustments to our previous forecast and adjust MICE’s Target
Price to the range of Rp 410 - Rp 460 per share, based on the following
considerations:
Although MICE’s sales performance in 2011 was slightly lower than our
previous projection, but MICE’s profitability achievement was above ours.
During 2011, MICE succeeded to book operating and net profit as much as
Rp 53 billion and Rp 36 billion, respectively. It was higher by 3% and 16%
than our projection, mainly due to MICE’s efficiency in COGS which further
cascaded the bottom line performance.
Up to 1H12, MICE succeeded to book encouraging result with 18% YoY of
revenue growth. It positively affects the performance of profitability, namely
gross, operating and net profit which grew by 12% YoY, 2% YoY and 6%,
respectively. Positive result in 1H12 was mainly bolstered by the sales of
baby care products, contribution of HORI as well as better efficiency in
operational expense. And in 2012, we are confident that MICE could generate
Rp 532 billion of revenue considering both baby care and lamp demand
continues to grow.
Since its launching in 2010, HORI has been posting magnificent performance.
In 2011, MICE successfully sold as many as 2.5 million units of lamp or
equivalent to Rp 43 billion. Considering HORI products are used by
household, in which appears as the largest customer of PLN and expected to
continue growing each year, plus more than 32 HORI outlets in domestic, we
believe HORI’s sales volume could hit 3.6 million units, or around Rp 65
billion in 2012.
Assumption of risk free rate, equity premium and beta reach 5.8%, 6.3% and
1.4x, respectively.
Keep Success in Maintaining its Predicate as Market Leader
In general, MICE classifies its products into two big categories, among others:
baby acessories and lamp. Of those products, the major contribution to MICE’s
total revenue comes from baby accessories especially in plastic feeding bottle
and silicon nipples. According to recent data, the sales value of plastic feeding
bottle and silicon nipples with Pigeon brand are taking account of 65% in
national level. During 2008 – 2011 periods, MICE’s revenue from plastic feeding
bottle and silicon nipples grew at 19% CAGR. Considering the GDP of Indonesian
that continues to soar, in which can trigger stronger purchasing power and
augmented with MICE’s integrated marketing activities to enlarge Pigeon brand
equity, we believe the revenue from plastic feeding bottle and silicon nipples will
climb by 14% YoY or reach Rp 206 billion in 2012.
Business Prospects
We are positive to view MICE’s business prospect in the years ahead based on
these consideration: Indonesian economy that managed to grow by 6.4% YoY in
1H12 and estimated to reach 6.2% YoY by the end of 2012, stable growth of
birthrate, huge number of young family generation, sell its products to domestic
as well as strong Pigeon brand as market leader in baby care products.
Meanwhile, we view that the other MICE’s product line, CFL (HORI), also looks
prospective underpinned by CFL market which is predicted to climb by 23% YoY
or reach 320 million units in 2012. By considering above factors and augmented
with MICE’s vigorous promotion, we believe MICE will be able to record Rp 532
billion of revenue this year, or reflecting 14% YoY growth and 12% CAGR in
2011 – 2015 periods.
October 18 th , 2012 Page 2 of 11