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STOCK RECOMMENDATION – JAKARTA. PT Sumber Alfaria Trijaya Tbk (AMRT) is projected to continue its double-digit performance growth in 2024. AMRT's performance will be supported by the expansion of opening new stores.
Bahana Securities analyst Christine Natasya said, AMRT recorded a profit of IDR 1.2 trillion in the fourth quarter of 2023, making the net profit for 2023 IDR 3.4 trillion, growing 19.2% year on year. This figure is in line with Bahana Securities' estimates.
The gross margin for the fourth quarter of 2023 was 22.9%, higher than 20.9% in the third quarter of 2023, and 21.0% in the fourth quarter of 2022. The EBITDA margin for the fourth quarter of 2023 was 4.7% compared to 1.7% in the third quarter of 2023, and 4.8% in the fourth quarter of 2022.
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Christine sees AMRT's Gross Profit Margin (GPM) expansion is mainly due to the increase in gross margin for the food and non-food segments.
The company's revenue in the fourth quarter of 2023 reached IDR 26.9 trillion, growing 2.8% quarter on quarter and 8.6% year on year. Thus, this result makes the 2023 revenue IDR 106.9 trillion, still growing double digits by 10.3% year on year.
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If detailed, the revenue growth in Jabodetabek in the fourth quarter of 2023 was -1.3% quarter on quarter, but grew 3.8% year on year. The Java region outside Jabodetabek grew 4.5% quarter on quarter and 6.4% year on year, while revenue from regions outside Java in the fourth quarter of 2023 was recorded to increase 2.1% quarter on quarter and 8.5% year on year.
Christine expects another double-digit revenue for AMRT in 2024. In 2023, AMRT managed to record a total of 22.3 thousand stores. This number grew 9% year on year from the opening of 1,274 new Alfamart stores and 569 of its subsidiaries' stores.
In line with its expansion, AMRT's salary expenses in the fourth quarter of 2023 of IDR 2.6 billion were observed to decrease -4.2% quarter on quarter and increase 27.5% year on year, while AMRT's rent expenses in the fourth quarter were IDR 126 billion, down -1.2% quarter on quarter and up 6.2% year on year.
AMRT estimates revenue growth in 2024 to be around 10-11% and Same Sales Store Growth (SSSG) between 4-6%.
The company's guide on the number of store expansions for 2024 is around 1000 for Alfamart, 200 for Alfamidi, and about 250 for Lawson.
Bahana Securities estimates AMRT's revenue performance will grow by 11.6% in 2024 to IDR 119.4 trillion, with profit growth of 20.4% year on year to IDR 4.09 trillion.
“We expect another double-digit revenue in 2024,” Christine revealed in research on March 25, 2024.
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Therefore, Christine maintains a Buy with an unchanged target price of IDR 3,400 per share. AMRT is one of the few retailers that managed to record robust growth, despite generally weakening purchasing power.
This premium valuation is viewed based on AMRT consistently recording double-digit revenue growth since the COVID-19 pandemic in 2020. The risk for AMRT is consumer spending worse than expected, and the operational burden of new stores higher than expected.
