ERAA - Business expansion continues with adjustments in ‘26F
KBVS Update
Tuesday, 28 April 2026
ERAA - Business expansion continues with adjustments in '26F
(BUY, with adjusted TP IDR500)
* Erajaya Swasembada (ERAA) plans to open 200 new stores (net) in ‘26F, revising its initial target of 200-300 store openings on current macroeconomic conditions amidst heightened geopolitical tensions. ERAA will also continue to grow its member base in ‘26F via MyEraspace, following a 28% yoy increase to 16.7 mn members in FY25. Moreover, ERAA has sufficiently restocked low to mid-tier cellphone units, despite continued increases in chipset prices. Thus, we adjusted our ‘26F revenue and earnings for ERAA to incorporate its solid FY25 results and strategy in ‘26F. As a result, we still expect both ERAA’ revenue and earnings to grow by 9.3% yoy, to IDR83.8 tn (+6.6% from prior) and IDR1.31 tn (-5.7% from prior), respectively in ‘26F on more stores and higher sales contributions from members, despite a challenging macroeconomic backdrop.
* After weak 3Q25 earnings (-18.8% yoy/-40.5% qoq), ERAA’ 4Q25 earnings significantly grew 70% yoy/88.9% qoq on higher sales during festivities and better costs management. As a result, ERAA’ earnings grew 15.8% yoy in FY25, which came above ours (101.4%) and cons’ (105.2%) expectation.
* ERAA’ revenue grew 45.4% yoy/40% qoq in 4Q25 on higher sales amidst festivities as the company launched iPhone 17 in Oct’25. ERAA’ business segment growth in 4Q25; cellphones at IDR19.2 tn (+47.6% yoy/+47.1% qoq), Computer & electronics at IDR906 bn (+31.6% yoy/+10.9% qoq), and accessories & others at IDR3.76 tn (+47.4% yoy/+22.9% qoq). As a result, ERAA’ revenue grew 17.4% yoy in FY25, which came above ours (107.7%) and cons’ (106.4%) expectation.
* Thanks to higher sales amidst festivities, ERAA’ gross profit grew 36.2% yoy/33.1% qoq in 4Q25. While, ERAA’ EBIT significantly grew by 42.6% yoy/147.6% qoq in 4Q25 on better costs management. All in all, ERAA’ net margin expanded to 1.7% (+30bps yoy/+40bps qoq) in 4Q25 and maintained its net margin at 1.6% in FY25.
* Maintain BUY on ERAA with adjusted TP of IDR 500/share (+23.8% upside), which implies 6.1x ‘26F P/E. Currently, ERAA is trading at 5.1x ‘26F P/E or at -1.25stdev of its 5 years’ mean P/E.
Regards,
Andre Suntono - KBVS Research team