Highlights

• A solid FY2017 top-line growth (+20.3% y/y) to IDR 5.9 tn, supported by an aggressive store expansion.
• Year-end momentum boosted 4Q2017 net sales to IDR 1.7 tn (+17.3% q/q & 23.9% y/y).
• Projected strong 1Q18 sales, with 3 new stores opened year to date.
• Enhancement in inventory management, with inventory days for FY2017 declined to 202 days, from 220 days in FY2016.

2017 Result Overview

ACES net sales rose 20.3% to IDR 5.9 tn in 2017, beating our estimate of IDR 5.5 tn, supported by 17 newly-opened stores (37,304 sqm in total area). The fastest growing segment was Toys with 36.4%, followed by Lifestyle (24.7%) and Home Improvement (16.7%).

Similarly, COGS rose 20.1% to IDR 3.1 tn, bringing gross profit to IDR 2.8 tn (+20.5%). GPM unsurprisingly stabilized at 47%.

Operating profit managed to increase 10% despite 33.6% surge in SG&A expenses. OPM and NPM were under pressure with OPM was down to 16.3% from 17.8% while NPM was squeezed to 13.1% from 14.3%.

Net Profit grew disappointedly 10.6% to IDR 781 bn, lower than our estimate of IDR 808 bn (13.8%) and EPS stood at IDR 45.6, missing our IDR 47.4 projection.