February 19, 2025

Better Habits, Bigger Wins

Market Commentary

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Back then, for many people, exercising was just a plan that never happened. But after covid, something changed.

Now, more people are realizing the importance of a healthy lifestyle, whether it’s subscribing to healthy meal plans or waking up early just to work out.

I’ve personally noticed that booking a badminton court on a weekday evening is almost impossible, it’s always full! GBK is never empty either; every day, you’ll find people running laps around the stadium.

It’s not surprising, though, because running is the simplest form of exercise, no equipment needed, just your feet and determination.

This shift in lifestyle is creating a strong tailwind for the sportswear industry.

In fact, the global sportswear market is projected to grow at an average rate of 6%/year from 2024 to 2028.

One of the biggest beneficiaries of this trend is MAPA, which continues to roll out innovations to keep up with the booming fitness movement.

Running shoes like Asics and Hoka are going viral!

If you attend a running event or just jog on any track, you’ll definitely spot people wearing these two brands.

They’ve almost become a uniform for runners, whether they’re casual joggers or serious athletes chasing their pace goals.

And the numbers prove it, MAPA has successfully increased its revenue per store, surpassing pre-covid levels. This is clear evidence that demand for sportswear remains high.

What’s even more interesting is that despite MAPA’s expansion into tier-2 cities, its gross margin has remained stable at around 45% over the past five years.

Of course, it makes sense that margins might dip slightly in the future. Purchasing power in these cities isn’t as strong as in major urban centers.

However, this expansion is still a smart move, as it opens up a massive untapped market that could drive long-term growth.

Imagine, if fitness awareness is already this strong now, what happens when it spreads even further into smaller cities? The business potential is enormous!

This could also be an opportunity for race event organizers to expand beyond Jakarta, Jogja, or Bali. With more local running events, these smaller cities could see a boost in activity, and if sportswear brands come in as sponsors, even better!

With all these tailwinds, MAPA is expected to record annual revenue growth of around 9% over the next three years.

After years of aggressive expansion, MAPA is now entering its monetization phase. Cash flow is becoming more stable, and with store openings slowing down, capital expenditures are decreasing.

What does this mean? More cash can now be allocated to strengthening MAPA’s core business rather than just opening new stores. SSSG is also projected to grow by 4.0% in 2025F.

With these assumptions, MAPA’s net profit is forecasted to reach IDR 1.8 tn in 2025F.

Looking ahead, the outlook remains bright. With a more measured store expansion pace of around 3%/year and SSSG growth of 6% annually, MAPA’s net profit is expected to grow at a solid CAGR of 9% over the next three years.

Considering the strong momentum in the sportswear industry and MAPA’s well-executed strategy, the stock remains an attractive investment.

With all these positive trends, we recommend a BUY with a target price of IDR 1,070.

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