STOCK VALUATION OF PT SUMBER ALFARIA TRIJAYA, TBK IN

COMPARISON WITH HERO SUPERMARKET TBK. AND MATAHARI

PUTRA PRIMA

CHAPTER 1

Introduction

Grocery retail business in Indonesia are one of the most growing industries among other industries

in Indonesia. Retail concept in the forms of minimarket and supermarket has been introduced to

growing countries where the consumer havent had any experience in large scale retail shop. A shop

where product are diverse, while price are relatively low (Jim and kim, 2001). The availability of the

concept encourage proliferation of retail business in indonesia. One of the examples of such

company is PT. Sumber alfaria trijaya, tbk or also known as alfamart.

Alfamart is one of the giant company in business landscape of grocery retail business. Business

seems challenging due to competitor such as MPPA (matahari putra pratama, the owner of

Hypermart grocery retail supermarket) and HERO (Hero Supermarket). Also, the business landscape

is threatened due to challenging economic condition in Indonesia. As Indonesia experienced global

financial volatility due to the US election (depreciation of IDR to -3%). Despite that condition,

Grocery retail business seems to keep expanding.

(highlight harga saham)

Among all of the three competition, alfamart seems to be more stable unlike its competitor. Figure

1.1 shows the stock price movement of the three company (AMRT, HERO, MPPA.stock price data are

taken from 2014 to early 2017. AMRT stock price are seems to not fluctuate if compared to its

competition.
 Closing Price
4500
4000
3500
3000
2500
MPPA
2000
1500 AMRT
1000 HERO
500
0
1-Apr-14

1-Oct-14

1-Apr-15

1-Oct-15

1-Jan-16

1-Apr-16

1-Oct-16
1-Jan-14

1-Jan-15

1-Jan-17
1-Jul-14

1-Jul-15

1-Jul-16
(pergerakan harga saham 3 perusahaan[AMRT, HERO, MPPA])

Figure 1.2 shows the trading volume of the stocks. From the figure, MPPA is the most traded stocks

from early 2014 to early 2015 and it started to decrease its trading volume up until now. HERO

Stocks are the lowliest traded stocks as its trading volume never exceed 10 million shares.

Trading Volume
60000000

50000000

40000000

30000000 MPPA

20000000 AMRT

10000000 HERO

0
1-Apr-14

1-Oct-14

1-Apr-15

1-Apr-16
1-Oct-15

1-Oct-16
1-Jan-17
1-Jan-14

1-Jan-15

1-Jan-16
1-Jul-14

1-Jul-15

1-Jul-16

Based on the 2015 annual report, subsidiaries store are expanded by 13.94% to 12,258 units. And

the net revenue rose by 16.31%

History of ALFAMART

Established in 1989 by Djoko Susanto and family Alfaria Trijaya Resources Tbk (Alfamart / Company),

started his business in the field of trade and distribution, then in 1999 began to enter the sector

minimarket. Expansion exponentially started the Company in 2002 by acquiring 141 stores

Alfaminimart and took a new name Alfamart.

Alfamart is a community outlet, so we always participate in improving the welfare of the community

through Corporate Social Responsibility (CSR) which is divided into alfamart Care that helps people

through social activities. Alfamart Smart supports education, Alfamart Sport sponsoring sports

events, Alfamart Clean and Green realizing that a healthy environment, SMEs alfamart help small

and medium entrepreneurs who are around geraigerai Alfamart and alfamart Vaganza who are

actively involved in the development of arts and culture.

For all the achievements and role in society, Alfamart received numerous awards from the

institution-an institution with a reputation for reliable, among which are: Top Brand Award

Superbrands Indonesia Awards, Indonesia's, Service Quality Award, est Brand Award, Indonesia's

Most Admire Company, and CSR Awards Alfamart also managed to reach the highest Store Equity

Index by Nielsen Research for 5 consecutive years.

Company Vision mission and corporate value

Vision

To be Indonesia s largest and globally competitive widely owned retail distribution network

that empowers small enterpreneurs and fylfills customer needs and expectations

Mission
 To satisfy customer needs and expectations by focusinmg on high quality products

and services.

To implement ethical business practices tobe the best in all of our actions

To develop entrepreneurial spirits and skills in the company and society

To develop a reliable, healthy and growing organization which benefits all

stakeholders.

Corporate value

High integrity

Honest , discipline consistent in working based on ethics as well as being responsible

towards duties

Innovation for better improvement

Work creatively, committed to make continuous improvements in work methods

Highest quality and productivity

Able to perform tasks as well as being able to focus on better work outcomes

Teamwork

Actively involved as well as encouraging team spirit and harmony.

Customer satisfaction through the best sevices

To have high initiative to meet customers needs and to ensurte customer

satisfaction.

Business scope

PT Sumber Alfaria Trijaya Tbk is an Indonesia-based company primarily engaged in operating

convenience store chain and managing its franchise. The convenience store chain is operated under

the brand name Alfamart. The Company classifies its business into two operating segments: food

and non-food. Its outlets is available in various areas in Indonesia, such as Jakarta, Cileungsi,
Tangerang, Cikarang, Bandung, Sidoarjo, Cirebon, Cilacap, Semarang, Lampung, Malang, Klaten,

Makassar, Balaraja, Palembang, Bogor, Jember, Medan, Banjarmasin, Jambi and Pekan Baru. Its

subsidiaries include PT Sumber Trijaya Lestari, which is engaged in online retail business; Alfamart

Retail Asia Pte Ltd; PT Sumber Indah Lestari, and PT Midi Utama Indonesia Tbk.

Business Issue

Based on IEQ, Indonesias economy in 2017 is expected to grow 5.3% in real GDP growth. These

forecast are supported by strong Indonesian society consumption and fiscal stimulus for

Infrastructure. National inflation is projected at 3-5%. But risk of inflation is still considerable factor

due to fact that it will change price of commodity. The investment in Indonesia are optimistically will

rise because government policy package are made to create stability in Indonesia macroeconomic

condition. Hence this report will be focused to analyze the future financial performance of PT.

ALFAMART.

However, due to recent expansion, increase in operating expense is becoming the challenge for the

company. As ALFAMART are opening more outlets in Indonesia, wage expense are exponentially

increased as it follows the number of increasing employees. There are also electricity cost,

transportation cost rent of car. However, the impact of the expansion resulted in increase of

income. Figure 1.3 shows the financial highlight of the company reflecting the current condition of

the company.
Regarding current condition of of ALFAMART, this paper will analyse movement of stock based on

the financial performance of ALFAMART. Also, this paper will discuss wheher it is attractive enough

for the investor to hold, buy or sell his/her portfolio containing ALFAMART stock.

As we compare to the competitior, share price of AMRT is the lowest. AMRT stock has been

declining since it reached its highest in January 2017 to 535. In this final project, the valuation of the

share price is to project the future share price of AMRT.

Final project objective

This final project will be written in investors point of view. The objectives of this final project are:

1. To analyze financial performance of ALFAMART and give suggestion based on future

financial performance.

2. To Analyze prospect of ALFAMART by forecasting of share price

 3. To analyze stock valuation of ALFAMART compared with HERO, and MPPA

4. To give recommendation for investor whether to hold or sell the portfolio of ALFAMART

5. To give recommendation for ALFAMART MANAGEMENT Side

Scope and Limitation

The scope of this final project is from ALFAMART Annual Report such as financial report and the

limitation for this final project are:

1. To analyze the financial performance of the company, it is derived from ALFAMART Annual

report 2010 until 2016

2. The valuation of stock of ALFAMART is derived from ALFAMART, HERO, and MPPA annual

report 2010 until 2016

3. For comparison, this paper might analyze the competitiors on big grocery retailer such as

HERO and MPPA

http://corporate.alfamartku.com/

http://www.pasarmodalpedia.com/wp-content/uploads/2016/01/AMRT-DR-28-Des-2015.pdf

http://finance.yahoo.com/quote/MPPA.JK

http://finance.yahoo.com/quote/HERO.JK

http://finance.yahoo.com/quote/AMRT.JK

https://markets.ft.com/data/equities/tearsheet/profile?s=AMRT:JKT