Company Coverage
Erajaya Swasembada (ERAA IJ): Building New Growth Engines
BUY (Maintained
Current price:
Target price:
Upside:
Previous TP :
Rp595
Rp800
+34.4%
Rp450
Analyst
Analyst
Highlights
- Erablue drives growth. Strong SSSG and rapid store expansion should support continued growth.
- Building new businesses. ERAL, XPENG and new concepts such as Chagee highlight ERAA’s ability to develop new growth platforms.
- Maintain BUY with a higher target price of Rp800.
Analysis
- Erablue expands beyond smartphones. Erablue, Erajaya Swasembada’s (ERAA) home appliance and consumer electronics retail business, delivered 15.9% same-store sales growth (SSSG) in 7M26, while sales revenue grew 89% yoy in 1H26. The network reached 283 stores by July, with 102 stores added ytd. Rapid store expansion alongside strong SSSG should keep Erablue on a strong growth trajectory, while expanding its exposure beyond ERAA’s traditional smartphone business.
- ERAA continues to demonstrate its ability to build new consumer businesses. Sinar Eka Selaras (ERAL) delivered 7.7% SSSG in 7M26, led by Urban Republic, DJI and JD Sports, while Levi’s provides another established brand for further expansion. XPENG is a further example, having booked 1,682 units in 7M26 after only around a year in the Indonesian market, with monthly sales already ahead of BYD’s. The upcoming Mona L03 and GX models should broaden XPENG’s addressable market next year, particularly with Mona targeting a lower price segment. We see XPENG’s rapid ramp-up as evidence that ERAA can scale up new brands effectively, while upcoming F&B concepts such as Oriental Kopi and I’m Donut provide further optionality beyond electronics.
- Smartphone demand appears to be stabilising after the recent slowdown. ERAA’s July SSSG improved to -8.6% yoy from -11.6% in June, while management expects Aug-Sep 26 SSG to remain moderate ahead of new product launches. We expect the product cycle to support 4Q26 sales, with benefits potentially spilling into 2027. Global memory shortages could constrain iPhone 18 availability, but we see this mainly as a timing issue as deferred purchases could support demand once supply improves.
Highlights
- Erablue drives growth. Strong SSSG and rapid store expansion should support continued growth.
- Building new businesses. ERAL, XPENG and new concepts such as Chagee highlight ERAA’s ability to develop new growth platforms.
- Maintain BUY with a higher target price of Rp800.
Analysis
- Erablue expands beyond smartphones. Erablue, Erajaya Swasembada’s (ERAA) home appliance and consumer electronics retail business, delivered 15.9% same-store sales growth (SSSG) in 7M26, while sales revenue grew 89% yoy in 1H26. The network reached 283 stores by July, with 102 stores added ytd. Rapid store expansion alongside strong SSSG should keep Erablue on a strong growth trajectory, while expanding its exposure beyond ERAA’s traditional smartphone business.
- ERAA continues to demonstrate its ability to build new consumer businesses. Sinar Eka Selaras (ERAL) delivered 7.7% SSSG in 7M26, led by Urban Republic, DJI and JD Sports, while Levi’s provides another established brand for further expansion. XPENG is a further example, having booked 1,682 units in 7M26 after only around a year in the Indonesian market, with monthly sales already ahead of BYD’s. The upcoming Mona L03 and GX models should broaden XPENG’s addressable market next year, particularly with Mona targeting a lower price segment. We see XPENG’s rapid ramp-up as evidence that ERAA can scale up new brands effectively, while upcoming F&B concepts such as Oriental Kopi and I’m Donut provide further optionality beyond electronics.
- Smartphone demand appears to be stabilising after the recent slowdown. ERAA’s July SSSG improved to -8.6% yoy from -11.6% in June, while management expects Aug-Sep 26 SSG to remain moderate ahead of new product launches. We expect the product cycle to support 4Q26 sales, with benefits potentially spilling into 2027. Global memory shortages could constrain iPhone 18 availability, but we see this mainly as a timing issue as deferred purchases could support demand once supply improves.
BUY (Maintained
Current price:
Target price:
Upside:
Previous TP :
Rp595
Rp800
+34.4%
Rp450
Analyst
Analyst
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