Mobile market leader expanding into higher-growth Active Lifestyle. PT Erajaya Swasembada Tbk (ERAA),  the country’s largest mobile retail player, is on track to accelerate its growth trajectory in 2026-27F on the back of store expansions coupled with continued brand acquisitions in the fast-growing segments of Active Lifestyle and others, including EV (XPENG). Number of stores increasing to 2,322, up 633 outlets or +37.5% since end-2022, will provide ERAA with a growth base over the next two years. On the segment front, the company has expanded into the EV segment by becoming the exclusive sole agent of XPENG in Indonesia and and the first assembly line outside of china, while for its active lifestyle portfolio newly introduced brands are Wilson and Under Armour. The management is aiming for these fast-growing segments to contribute c.25–30% of total revenues in the next few years, up from 16.1% in 9M25. In 2025F, sales from active lifestyle & others amounted to IDR 11.3tn (+32.0% YoY), before reaching IDR  15.1tn (+34.0% YoY) in 2026F and IDR 19.4tn (+28.2% YoY) in 2027F.

 

100-150 store openings per annum & margin expansions to support growth. In the next several years, we expect ERAA’s growth story to implementation of net store openings totalling to 100–150 outlets annually (ERAL: 50–60 stores per annum; FnR: 30–40 stores). On the profitability front, we project EBIT to expand at five-year CAGR of +18.0% over 2025–2030F, supported by: (1) continued uptrading in the handset business; (2) more favorable business mix over the medium term; and (3) improved operating leverage driven by opex efficiencies, particularly from street-level outlets, as the company plans to redesign stores and optimize operating hours. The above mentioned strategic business plans should pave the way for delivery robust profitability, with net profit projected to grow at a five-year CAGR of +18.4% over 2025–2030F, reaching approximately IDR 2.7tn by 2030F.

 

Undervaluation: Buy with TP of IDR 800 on attractive P/S multiple. Given ERAA’s strong earnings growth in 2026-27F, the stock is undervalued with 2026F P/S of 0.1x, the lowest in the sector. Thus, we assign a BUY rating with TP of IDR 800, translating to +85% upside and P/S multiple of 0.2x, still at 67% discount to its peers (figure 26). We note that assuming adj-market cap augmentation to IDR 5.2tn or IDR 740 per share, ERAA could potentially qualify for inclusion in MSCI Small Cap Index, while eligibility for the MSCI Large Cap Index would require adj-market capitalization of around IDR 31.4tn, equivalent to IDR 4,500 share price. Key risks: 1) weaker-than-expected purchasing power and SSSG, 2) IDR depreciation, and 3) geopolitical risks to disrupt the company’s product imports.