Prasetiya Mulya School of Business and Economics

Valerian

Trisakti School Of

Management

Disclosures:

Ownership and material conflicts of interest:

The author(s), or a member of their household, of this report does not hold a financial interest in the

securities of this company.

The author(s), or a member of their household, of this report does not know of the existence of any

conflicts of interest that might bias the content or publication of this report.

Receipt of compensation:

Compensation of the author(s) of this report is not based on investment banking revenue.

Position as a officer or director:

The author(s), or a member of their household, does not serve as an officer, director or advisory board

member of the subject company.

Market making:

The author(s) does not act as a market maker in the subject company’s securities.

Disclaimer:

The information set forth herein has been obtained or derived from sources generally available to the

public and believed by the author(s) to be reliable, but the author(s) does not make any

representation or warranty, express or implied, as to its accuracy or completeness. The information is

not intended to be used as the basis of any investment decisions by any person or entity. This

information does not constitute investment advice, nor is it an offer or a solicitation of an offer to buy

or sell any security.

1. An Executive Summary

Indonesia has shown a significant increase in the retail industry over the last few

years. The fact that retail sales have increased since 2008 at 10% CAGR to US $ 400

billion in 2014, the industry is still expecting to grow over the next two years.

With a high and positive competition comes from industry for the long term, the

expansion plan seems to be a must-do-list for retail players to gain a higher market

share. However, the implementation of an aggressive expansion to date also has the

potential to produce a low SSG, which can cause temporary cannibalization effect.

Growth of Revenue’s Modern Retailer in Indonesia

source: Aprindo

Additionally, retailers are required to put more attention on the stock. Retailers with

low inventories will result in poor efficiency, such as the bottom line would produce a

smaller margin. Although, high inventory levels also reflect the investment rate of

return of zero, as the company lost investment opportunities. Distribution and

transportation costs are also a major concern for retailers. Logistics costs in Indonesia

has become one of the highest in the whole world. Consequently, if domestic fuel

prices still low, supported by better infrastructure, lower logistics costs will be spread

retailers' margin.

2. I. Company Overview–LPPF.IJ

a. Company Profile

PT Matahari Department Store Tbk (Matahari) is a retailer of apparel, accessories,

beauty products and homeaware that targets fashion conscious, value-minded

consumers. Backed by a trusted network of local and international suppliers,

Matahari’s mix of affordable fashion, quality and modern, visually appealing stores

delivers an exciting and dynamic shopping experience, making Matahari as the

department store of choice for Indonesia’s burgeoning middle class.

b. Business Profile

In 2011, Matahari Department Store merged with Meadow Indonesia, enabling

Matahari to streamline its corporate structure. However, this corporate action also

led to the company's negative equity (liabilities exceed assets) and therefore the

company cannot pay dividends yet.

c. Company’s Investment Plan

Issuers Lippo Group, PT Matahari Department Store Tbk. (LPPF) will open 77-79 new

stores by 2016 to meet the needs of the middle class whose economies continue to

be strong in the country. This particular year, the company will open 12-14 new

stores. Lippo Group in collaboration with Matahari Department Store launched e-

commerce MatahariMall.com. According to the Director of Lippo Group, John Riady,

this project has been planned since 9 months ago. MatahariMall.com claimed to be

the largest e-commerce in Indonesia like Alibaba in China. II. Company

Overview–RALS.IJ

a.Company Profile

Ramayana Being One of the most prominent department stores in Indonesia,

positioned to cater to the lower- to lower middle market, Ramayana has grown and

prospered with the increased disposable income of average Indonesians, numbering

in the tens of million families. First established as a modest effort in 1978, today

Ramayana stands as a market leader in its retail segment. With the good growth of

the store, new lines of products were added to compliment the original focus of the

business, which was garment and clothing.

.b. Business Profile

OWNERSHIP STRUCTURE

PT Ramayana Makmursentosa : 55.88%

Paulus Tumewu : 3.66%

Free float : 40.46%

c. Company’s Investment Plan

PT Ramayana Lestari Sentosa Tbk (RALS) took the Dutch retail company Spar

supermarket Spar International to build 15 this year. Finance Director Ramayana

Lestari Sentosa, Suryanto said, in improving the services business, particularly retail

business daily necessities and food products, the company has been working

exclusively with Spar International, Amsterdam-based retail network with 12,000

stores worldwide. Ramayana rename Robinson became Spar supermarket.

3.Macroeconomic and Industry Overview

a.Macroeconomic Overview

Indonesian macroeconomic conditions showed significant progress in January 2015.

The increased seasonal demand for consumer goods from various countries of export

destinations in December amid the trend of the weakening rupiah, the catalyst for

the trade balance recorded a surplus of USD186.80 million, slightly above forecasts

consensus amounted to USD173 million, and has also increased from a deficit of

USD425.40 million in November

Historical Inflation in Indonesia in 2014

source: bps.go.id

Inflation is expected to reach an average of 4.2% in the second half of 2015 and will

likely reach an average of 5.8% for the full year due to the increase in electricity

tariffs and the pressure rises in food prices due to drought at the end of 2014.

Inflation is projected to rise for a while until it reaches an average of 6.9% in 2015,

assuming the government raised fuel prices 30% -50%.

Rupiah exchange rate in the range of IDR12,388 - IDR12,735 per USD before finally

closed at IDR12,672 per USD. Rupiah depreciated by 1.91% compared to the end of

December 2014 at a level IDR12,434 per USD.

3.b.Industry Overview

i. Industry Growth

The growth of retail business in 2014 will be particularly many challenges. Because,

first, retail businesses have to face a number of challenges such as the weakening of

the rupiah against the dollar will increase the selling price of goods and ultimately

can reduce people's purchasing power.

The second challenge is the tightening of licensing the opening of new stores which

refers to a circular letter of the Minister of Trade No. 1310 / M-DAG / SD / 12/2014

issued on December 22, 2014 which asked the governors, regents and mayors in

order to temporarily not issue business licenses Stores Modern before the regulation

of the Spatial Plan (RTRW) and the Detailed Spatial Plan (RDTR), including zoning

regulations enacted or issued. ii. Market Share Between Competitors

Market Share of Retail

source :AC Nielsen

Market Share Of Retail

Source : Aprindo

Until now Matahari Department Store still controls a market share of 32.8%, followed

by the Ramayana by 22.4%. While MAPI, YOGA, and CENTRO each hold not more

than 10% market share.

iii. Porter’s 5 Forces

1.LPPF.IJ

1.THREAT OF NEW ENTRANTS

The threat of new entrants candidates essentially "moderate" because of the existing

market Now this has been so dominated by big players both local and foreign. To be

able to get into this industry at least needed capital, experience, and extensive

distribution network which is quite difficult for potential new entrants.

Analysis of the threat of new entrants candidates:

a. Economies of scale in the retail industry is quite high and prospective new entrants

should be able to get an adequate financial return in order to continue to make new

investments.

b. The need for capital is quite large depending on the format that will be entered.

Prospective newcomers who have capital more have the opportunity to be able to

expand the business to compete with existing players or entering new markets.

2. THREAT OF SUBSTITUTE PRODUCTS

The threat of substitute products or substitutions in the retail industry can be said is

"strong enough" because it was present long before the modern retail industry,

namely form of traditional markets and shops. Therefore, modern retailers

determine the segment itself is the upper middle class..

3. BARGAINING POWER OF SUPPLIERS

Matahari Department Store retail company that has had big names have strong

bargaining position against the manufacturers and distributors so that they can

obtain a larger margin and get discount price. Analysis power of suppliers :

a. The number of suppliers is expected to continue to grow in the future especially in

the era of free trade that have been opened so that the retailer can enter the goods

of foreign products. This leads to dependency retailers to one supplier to be low and

the increasing number of products that will be used as an alternative option.

b. Retailers can just replace the supply of one type of goods from one supplier to

another.

4. BARGAINING POWER OF BUYERS

The strength of consumers are "strong" because they usually tend to be loyal at a

particular retail and easily transform the shopping habits to their liking. Analysis

power of buyers :

a. Number of main buyers are likely to continue to increase due to the growth in the

number of women who work / career and also the number of men who come to shop

because they also can find their needs.

b. Purchasing power is expected to increase along with the improving economy of

Indonesia.

5. RIVALY AMONG EXISTING FIRMS

Competition among companies that occurred in the retail business format that is

between traditional and modern retail formats, or competition between local and

foreign retailers can said to be "strong." On the one hand, the low purchasing power

so that the level of consumption was low while increasing the number of outlets.

Competition in the retail industry is also characterized by the presence of a variety of

new retail formats that arise because consumers are looking for other shopping

alternatives tailored to their abilities. New retail format in question is a form of

factory outlets, specialty stores, and online retailers.

2. RALS.IJ

4.2.1 Analisis Porter 5 Forces

1.Competition In The Industry

For middle-class market segments, Ramayana Department Store to compete with

Matahari and Pasaraya. Ramayana become a leader in the retail segment of medium.

In the supermarket sector, Ramayana has Robinson is still unable to compete with

other supermarkets such as Carrefour or Hypermart belonging to the Matahari Dept

Store. PT Ramayana Lestari Sentosa Tbk has a total of 118 outlets Ramayana and

Robinson throughout Indonesia. Of total outlets, only 98 outlets that have a service

supermarket in it. On September 1, 2014, announced a partnership with the Dutch

supermarket company, SPAR International BV But that will be converted into SPAR

supermarket just 30 stores within the next three years.

2.Threats New Entries

Barriers to entry in the Indonesian retail industry is relatively small, especially for new

players who are ready to be capital and concepts. Moreover Ramayana own many

outlets throughout Indonesia. If a new player or an existing player in this industry

managed to build and develop a business model that is more acceptable in the

market, the market share held by the company will certainly decrease.

3.Threats Product Substitution

In the modern retail business, the threat of substitute products or substitutions can

be said to be "quite strong." The threat of substitute products is derived from the

market as well as traditional stores. Which provides a variety of basic needs required

by consumers for everyday life such as food, snacks, soft drinks, equipment / home

appliances, and others. The advantages of the traditional markets and shops are

relatively cheaper price and also the location that is closer to the residence of the

population, especially for the middle to lower. Besides the other replacement

product that began to develop at this time, namely in the form of shopping system

through telephone lines, internet, and catalog shopping.

4.Bargaining Power Of Suppliers

Almost all products sold by the company are local products company even has a

private label. On the average, Ramayana has 2000 suppliers both permanent and

seasonal. Suppliers have an important role in the promotion strategy, but the

company has a stronger position than the supplier. If one supplier out, there are

many suppliers are willing to cooperate with the company.

5.Bargaining Power Of Buyers

Generally all the products sold and in production by the company are common

products. A variety of different brands with different quality and price in the market

selling a competitive product for the company. So that consumers can choose which

products they want to buy or consume. In this case the general buyer or consumer

more has a strong position compared to the company.

iv. SWOT Analysis

1.LPPF.IJ

Strength :

a. Has the largest sales area and has a very good track record in the field of retail

industry

b. Has a good brand awareness

c. Has a membership program that attracts many customers

Weakness :

a. Prices tend to be more expensive than competitors' products

b. Less rapid adaptation to competitors and lack of customer loyalty.

c. Prone to theft of goods companies and consumer goods because there is no

daycare goods to customers

Opportunity :

a. Indonesia's economic growth increasing

b. Market share of retail business in Indonesia are quite large

Threats :

a. many emerging competitors with cheaper price and moving in the same plane

b. Minimum Wage and price of products from suppliers who continue to rise

2. RALS.IJ

Strengths

a. Has a high reputation by receiving numerous award, Ramayana stands as a market

leader in its retail segment.

b. Sell products at affordable prices with good quality and has discount programs that

attract consumers

Weakness

a. Monotonous outlets layout that makes customers do not linger in the store

b. The lack of use of the website for consumers

c. Low quality of human resources that make Ramayana unable to compete with

other department stores in terms of human resources

Opportunity

a.The weakening of the rupiah at the end of the year, giving an increase in sales,

especially in Java, because the money sent by the international labor (TKI) back to

Indonesia contributed positively to the increase in sales of Ramayana in the region.

b.The company plans to open 15 supermarkets SPAR during 2015 both within and

outside of Java

Threats

a. Decline in purchasing power due to rising fuel prices

b. Increased regional minimum wage set by the government

c. Increasing public awareness of the Internet makes e-commerce more attractive.

d. Competitive pricing and more product choice makes people interested in shopping

via the internet.

V. Business Risk

1. LPPF.IJ

Problems that occur in the PT Matahari Department Store Tbk (LPPF) has delayed

payments of dividends to investors, delays occurred in 2012 and in 2013. The

condition occurs, indicated that PT Matahari the Department Store Tbk (LPPF) have a

high level of debt ratio, it is strengthened by the expression Nasril Janson (2010),

capital market analysts from AmCapital Indonesia, which revealed that, PT Matahari

the Department Store Tbk (LPPF) will make payment of the debt to the Lippo Group

le CVC Capital Partners. So to increase investors' confidence back then in 2014 the

Matahari Dept Store decided to distribute a dividend amount Rp 157,6 per share.

Besides the risk of Matahari Department Store Business also refers to the variation of

EBIT, the EBIT change the company from time to time. Investors are strongly

considering this case because the business risks can be a parameter on the level of

risk.

LPPF

Year EBIT mean (EBIT - Mean)^2

2.010 692.916 1.483.470 624.974.994.473

2.011 1.241.301 1.483.470 58.645.630.826

2.012 1.584.351 1.483.470 10.177.056.866

2.013 1.814.868 1.483.470 109.824.899.523

2.014 2.083.912 1.483.470 360.531.075.718

Total 7.417.348 1.164.153.657.405

average 1.483.470 232.830.731.481

Business Risk = 0,3253

2. RALS.IJ

RALS

Year EBIT mean (EBIT - Mean)^2

2.010 365.122 378.109 168.662.169

2.011 377.582 378.109 277.729

2.012 446.417 378.109 4.665.982.864

2.013 403.012 378.109 620.159.409

2.014 298.412 378.109 6.351.611.809

Total 1.890.545 11.806.693.980

average 378.109 2.361.338.796

Business Risk = 0,1285

4. I. Financial Projection

Sales variability is the prime determinant of operating earnings variability. In turn, the

variability of sales is mainly caused by a firm’s industry and is largely outside the

control of management. In this research, we use sales volatility as the basic of

increase in companies sales.

Financial Projection–LPPF.IJ

LPPF

Year Sales mean (Sales - Mean)^2

2014 7.925.547 5.662.843 5.119.828.486.534

2013 6.754.326 5.662.843 1.191.334.702.696

2012 5.616.932 5.662.843 2.107.838.285

2011 4.700.712 5.662.843 925.696.446.013

2010 3.316.699 5.662.843 5.504.392.607.194

Total 28.314.216 12.743.360.080.723

average 5.662.843 2.548.672.016.145

Sales Volatility = 0,2819

a.Statement of Financial Position

b. Statement of Comprehensive Income

LPPF

Balance Sheet

2013 2014 2015 2016

Cash and Equivalents 772.217 785.895 980.011 1.222.074

Account & Notes Receivable 671.770 867.759 1.082.095 1.349.373

Inventories 723.809 955.231 1.191.173 1.485.393

Fixed Assets 767.073 799.487 996.960 1.243.209

Total Assets 2.936.882 3.408.372 4.250.240 5.300.049

Account Payable 1.358.879 1.559.485 1.944.678 2.425.013

Other Current Liabilities 531.302 959.036 1.195.918 1.491.310

Other Non-Current Liabilities 1.828.073 712.261 888.189 1.107.572

Total Liabilities 3.718.254 3.230.782 4.028.785 5.023.895

Total Equity (781.372) 177.590 221.455 276.154

Total Liabilities and Equity 2.936.882 3.408.372 4.250.240 5.300.049

c. Statement of Cash Flows

II. Financial Projection –RALS.IJ

RALS

Year Sales mean (Sales - Mean)^2

2014 5.861.348 5.484.640 141.908.766.581

2013 6.000.818 5.484.640 266.439.521.213

Statement Of Comprehensive Income

2013 2014 2015 2016

Revenue 6.754.326 7.925.547 9.883.157 12.324.297

COGS (2.391.274) (2.877.507) (3.588.251) (4.474.549)

Gross Profit 4.363.052 5.048.040 6.294.906 7.849.748

Operating Expenses (2.548.184) (2.964.128) (3.696.268) (4.609.246)

EBIT 1.814.868 2.083.912 2.598.638 3.240.502

Finance Income/Cost (291.246) (233.368) (262.307) (327.097)

EBT 1.523.622 1.850.544 2.336.331 2.913.405

Tax (373.462) (431.426) (467.266) (582.681)

Profit for the year 1.150.160 1.419.118 1.869.065 2.330.724

Other Comprehensive Income

Comprehensive Income 1.150.160 1.419.118 1.869.065 2.330.724

EPS 394 486 641 799

Statement of Cash Flows

2013 2014 2015 2016

CF from Operating Activities

Receipt from customers 13.937.039 15.927.265 14.932.152 15.429.709

Payment to suppliers (9.244.711) (10.477.757) (9.861.234) (10.632.853)

Payment to empolyees and others (2.568.884) (3.219.894) (4.750.220) (3.985.057)

Cash generated from operation 2.123.444 2.229.614 2.176.529 2.203.072

Interest received 17.928 22.583 20.256 20.256

Tax paid (470.437) (377.795) (424.116) (528.873)

Net Cash Flows from operating activities 1.670.935 1.874.402 2.093.367 2.506.253

CF from investing activities

Acquisition of fixed asset (162.307) (171.197) (166.752) (168.975)

Advanced payment for purchase fixed asset (76.965) (99.523) (88.244) (93.884)

Proceeds from sale of fixed asset 1.355 1.723 1.539 1.631

Net Cash Flow used in Investing Activities (237.917) (268.997) (253.457) (261.227)

Cash Flow from financing activities 0

Repayment of Bank Loans (1.650.000) (2.647.253) (2.148.627) (2.397.940)

Proceeds frm Bank Loan-net 250.000 1.659.200 954.600 1.306.900

Dividend Payment (460.156) (230.078) (690.234)

Payment Interest and Bank charge (274.281) (169.097) (221.689) (221.689)

Net Cash Flow used in financing activities (1.674.281) 1.617.306 (1.645.794) (2.002.963)

Net decrease in cash and and equivalents (241.263) (11.901) 194.116 242.063

Cash and cash equivalent at beginning of year 1.039.059 797.796 785.895 980.011

Cash and cash equivalent at ending of year 797.796 785.895 980.011 1.222.074

Restricted cash and equivalents (25.579)

Cash and Cash Equivalent at the end of year 772.217 785.895 980.011 1.222.074

2012 5.699.709 5.484.640 46.254.588.733

2011 5.086.158 5.484.640 158.788.063.717

2.010 4.775.168 5.484.640 503.350.802.573

Total 27.423.201 1.116.741.742.817

average 5.484.640 223.348.348.563

Sales Volatility = 0,0862

d. Statement of Financial Position

e. Statement of Comprehensive Income

RALS

Balance Sheet

2013 2014 2015 2016

Cash and Equivalents 869.000 625.373 747.187 908.089

Account & Notes Receivable 1.191.995 1.745.323 1.468.659 1.784.927

Inventories 872.064 808.569 840.317 1.021.274

Fixed Assets 1.445.497 1.375.402 1.410.450 1.714.183

Total Assets 4.378.556 4.554.667 4.466.612 5.428.474

Account Payable 894.785 889.070 891.928 1.084.000

Other Current Liabilities 68.582 78.474 73.528 89.362

Other Non-Current Liabilities 198.018 227.676 212.847 258.683

Total Liabilities 1.161.385 1.195.220 1.178.303 1.432.044

Total Equity 3.217.171 3.359.447 3.288.309 3.996.430

Total Liabilities and Equity 4.378.556 4.554.667 4.466.612 5.428.474

Statement Of Comprehensive Income

2013 2014 2015 2016

Revenue 6.000.818 5.861.348 7.123.560 8.657.584

COGS (3.860.568) (3.813.511) (4.634.732) (5.632.798)

Gross Profit 2.140.250 2.047.837 2.488.829 3.024.785

Operating Expenses (1.737.238) (1.749.425) (2.126.155) (2.584.012)

EBIT 403.012 298.412 362.674 440.773

Finance Income/Cost 54.686 89.712 72.199 72.199

EBT 457.698 308.124 434.873 512.972

Tax (67.163) (33.049) (86.975) (102.594)

Profit for the year 390.535 355.075 347.898 410.378

Other Comprehensive Income (2.369) 81 (1.144) (1.144)

Comprehensive Income 388.166 355.156 346.754 409.234

EPS 55,04 50,04 48,87 57,67

f.Statement of Cash Flows

5. Valuation

a. Discounted Cash Flow

In this study, we use the Free Cash Flow To The Firm because of the composition of

the non-current liabilities to Ramayana and Matahari Department Store unstable. For

WACC, we use the RDT of long-term debt and k using CAPM. RFR used is the average

return movement JIBOR daily basis during 2014, we did not use because it is less SBI

rate reflecting actual market conditions. Market Return (Rm) is the movement of the

JCI return on a daily basis during 2014. eta regression between daily with JCI Return

Return Return Ramayana or the daily newspaper The Matahari Department Store.

We use growth to growth based on Return On Investment Capital

LPPF

LPPF

Year EBIT Tax rate Depreciation

&

Capex Change in

Working

FCFF

Statement of Cash Flows

2013 2014 2015 2016

CF from Operating Activities

Receipt from customers 7.963.835 7.925.361 8.338.433 8.353.706

Payment to suppliers (6.470.240) (6.463.904) (6.467.072) (6.465.488)

Payment to empolyees and others (586.360) (570.223) (578.292) (574.257)

Cash generated from operation (40.279) 329 (19.975) (9.823)

Interest received 52.663 87.100 69.882 78.491

Tax paid (88.335) (56.007) (72.171) (64.089)

Net Cash Flows from operating activities 831.284 922.656 1.270.805 1.318.540

CF from investing activities

Acquisition of fixed asset (421.664) (126.809) (274.237) (200.523)

Other Cash Flows from investing (500.508) (826.594) (663.551) (745.073)

Proceeds from sale of fixed asset 3.352 1.676 838

Net Cash Flow used in Investing Activities (918.820) (953.403) (936.112) (944.757)

Cash Flow from financing activities

Repayment of Bank Loans

Proceeds frm Bank Loan-net

Dividend Payment (212.880) (212.880) (212.880) (212.880)

Payment Interest and Bank charge

Net Cash Flow used in financing activities (212.880) (212.880) (212.880) (212.880)

Net decrease in cash and and equivalents (300.416) (243.627) 121.814 160.902

Cash and cash equivalent at beginning of year 1.169.416 869.000 625.373 747.187

Cash and cash equivalent at ending of year 869.000 625.373 747.187 908.089

Restricted cash and equivalents

Cash and Cash Equivalent at the end of year 869.000 625.373 747.187 908.089

Amortization Capital

2010 692916 25% 109282 160689 413517 54763

2011 1241301 25% 159557 215378 -213681 1088835,75

2012 1584351 25% 180127 248497 -285015 1404908,25

2013 1814868 20% 212620 243523 238871 1182120,4

2014 2083912 20% 234983 232475 -213900 1883537,6

LPPF

Year ROIC Reinvestment

Rate

[(ROICt-ROICt-1)/ROICt-

1]

Growth

2010 0,231467443 1,104907377

2011 0,384308157 0,001822819 0,660311929 0,000700524

2012 0,405584927 -0,030732247 0,055363825 -0,012464536

2013 0,49436593 0,332251436 0,218896209 0,16425379

2014 0,48912783 0,011141905 -0,010595592 0,005449816

total 0,157939594

average growth 0,039484899

RALS

RALS

Year EBIT Tax rate Depreciation &

Amortization

Capex Change in

Working

Capital

FCFF

2010 365122 20% 250853 354026 126839 62085,6

2011 377582 20% 279822 166479 93193 322215,6

2012 446417 20% 380072 170056 232129 335020,6

2013 403012 20% 448631 421664 -36520 385896,6

2014 298412 20% 464125 126809 316183 259862,6

RALS

Year ROIC Reinvestment

Rate

[(ROICt-ROICt-

1)/ROICt-1]

Growth

2010 0,083792056 1,646247693

2011 0,080357048 0,859654327 -0,040994435 0,02808485

2012 0,087675325 1,12614719 0,091071994 0,189807315

2013 0,073633773 1,194579814 -0,160153973 -0,072192554

2014 0,052414282 1,855622428 -0,28817607 -0,190914953

total -0,045215343

average growth -0,011303836

WACC LPPF and Ramayana

Year Wd We rd tax rdt% k% WACC %

RALS 2014 0,063470363 0,936529637 0,083 20% 6,64 5,622794128 5,687356554

LPPF 2014 0,159635886 0,840364114 0,083 20% 6,64 5,700176139 5,850205754

Valuation of Company (in million Rupiah except valuation/share)

Valuation

2014 RALS LPPF

FCFF 259862,6 1883537,6

WACC 0,056873566 0,058502058

Growth -0,011303836 0,039484899

Firm Value 3768479,75 102954857,1

Total Liability 1195220 3230782

outstand share 7096000000 2917918080

Valuation/share 362,6352522 34176,44786

b. Relative Valuation

LPPF

LPPF P/E Ratio P/CF Ratio P/BV Ratio P/Sales Ratio

2014 30,86419753 23,23753516 11,67315403 5,522492164

2013 27,60373096 26,84574068 11,37222456 4,69845514

2012 10,11185606 5,544468724 4,243569031 1,38678372

2011 14,83075 6,359073139 6,503147957 1,472965408

2010 117,8309524 131,8452677 12,00251079 2,176936283

RALS

RALS P/E Ratio P/CF Ratio P/BV Ratio P/Sales Ratio

2014 15,7873701 21,57232322 1,668679399 0,95640798

2013 18,79269622 19,01998515 2,281429119 1,223124514

2012 19,64093117 24,83997987 2,735772378 1,460057866

2011 12,47622627 14,61987117 1,657899463 0,92619037

2010 15,04309657 86,17296378 1,995981311 1,120400405

6. Conclusion and Recommendation

Matahari Department Store is a giant retail company that takes the upper middle

segment with a market share of 32.8%, while the Ramayana is a retail company with

a market share of middle to lower and control of 22.4%. Results of valuation with

Free Cash Flow yield value LPPF stock is Rp 34176.44786 per share and stock value

RALS is Rp 362.6352522 per share.

The acquisition of Matahari Department Store implementation of the Ramayana

would not have a significant impact on the profitability of the Matahari due to

differences in market segmentation. It will increase the cost of the company, the

merger costs related to the change of ownership and legal entities.

Instead Merger Matahari Department Store of the Ramayana is actually beneficial

because it increases the Ramayana despite create EPS EPS Matahari Department

Store down. The increase in EPS Ramayana remains favorable because of Ramayana

has acquired by Matahari. Comparison LPPF stock declines than gains RALS clearly

shows that the increase in EPS RALS is greater than the decrease in LPPF. It should be

implemented merger between the Matahari Department Store on Ramayana Lestari

Sentosa.

Merger EPS EPS

Stockholders Before Merger After Merger

LPPF 486 466,3106965

RALS 50,04 93,2621393

1 Share LPPF swap 8 Share RALS

Attachment

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RtaWQDbWVkaWFxdW90ZXNzZWFyY2gEc2VjA2dldHF1b3Rlc2J0bgRzbGsDbXVsdGlfcXVvdGU

-

http://finance.yahoo.com/q;_ylt=AgZADNoxGMY9pRsTk_ZiJ2jkNbkF;_ylu=X3oDMTI0YzhxMn

BwBHNlYwNVSCAzIERlc2t0b3AgU2VhcmNoIDExBHNsawNVSCAzIERlc2t0b3AgQXNzaXN0ZWQ

gVmVydGljYWwgU2VhcmNo;_ylc=X1MDMjE0MjQ3ODk0OARfcgMyBGZyA3VoM19maW5hb

mNlX3dlYl9ncwRmcjIDc2EtZ3AEZ3ByaWQDBG5fZ3BzAzMEb3JpZ2luA2ZpbmFuY2UueWFob28

uY29tBHBvcwMxBHBxc3RyAwRxdWVyeQNMUFBGLkpLLARzYWMDMQRzYW8DMQ--

?p=http%3A%2F%2Ffinance.yahoo.com%2Fq%3Fs%3DLPPF.JK%26ql%3D0&uhb=uhb2&fr=uh

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