Backed by Gelael and Salim Group with new connection through PT SFN. PT Fast Food Indonesia Tbk (FAST), exclusive franchise rights holder of two globally renowned fast-food brands (KFC and Taco Bell), is on the verge of  undergoing exciting expansion strategy ahead backed by its new connection through PT Shankara Fortuna Nusantara (SFN), in one of its subsidiaries, Jagonya Ayam Indonesia (c.35% owned). As of 2024, FAST had expanded its retail network to 715 outlets across 36 provinces and 173 cities nationwide, underscoring its strong nationwide presence with solid shareholder structure: Gelael Group holding 41.2% and Salim Group, through DNET controlling 37.5%. With the two groups having maintained continued long-term strategic partnership since 1990, the new collaboration with PT SFN will provides fresh and positive sentiment, helping ensure FAST’s turnaround story at the same time.

 

Improving profitability on the back of new strategic store expansion plans. Going forward, FAST aims to reinforce its medium-to-long-term growth trajectory through targeted store optimization and network expansion. These plans include opening and relocation of outlets to underpenetrated areas, such as secondary cities and hub islands, as around 70% of Quick-Service Restaurant (QSR) outlets are currently still concentrated in tier-1 cities. FAST targets to open 50–70 net new outlets annually with the goal of operating around 1,000 stores by 2030F. If executed successfully, this strategy would drive 2026–2030F revenue CAGR of +11.0%, supported by higher store productivity and sustainable SSSG of around +2.0%. On the profitability front, EBIT margin is expected to recover to ~4% by 2030F (pre-pandemic levels), thanks to easing cost pressures, improved store efficiencies, and strategic relocations. As a result, FAST’s bottom line is projected to turn positive by 2027F, posting 3-year net profit CAGR of +41.3% to reach IDR 302bn by 2030F. In addition, FAST’s entry into integrated poultry operations through subsidiaries could unlock new revenue streams and secure internal broiler supply, potentially reducing input costs by 8–13%, thereby enhancing long-term operating margin resilience. The poultry business is expected to commence in 2027F, potentially contributing around IDR 853bn in incremental revenue, with projected 5-year CAGR (2027–32F) of +5.2% as production ramps up amid healthy demand.

 

Spec-Buy with IDR 1,000 TP on turnaround story and market cap re-rating. Beyond its expansion initiatives, FAST stands to benefit from Indonesia’s rapidly growing food service industry, which is projected to book 2025–30F CAGR of +13.0%, supported by rising digital delivery platforms as well as improving household purchasing power going forward. In terms of rating, we assign Spec-BUY on FAST with TP of IDR 1,000 (+98% upside, P/S multiple of 0.9x), in line with its larger regional peers. However, assuming further adj-market cap augmentation to IDR 4.6tn or IDR 4,800 per share, FAST could potentially qualify for inclusion in MSCI Small Cap Index. Key risks: 1) weaker-than-expected purchasing power, 2) intensifying geopolitical issues (lingering boycott effects), and 3) swings in raw materials prices