On Monday, Nomura/Instinet has raised its rating for Aspirasi Hidup Indonesia (ACES:IJ) (OTC: ACEHF) stock, moving from a Neutral to a Buy position, with a new price target set at IDR1,110.00, up from the previous IDR935.00. The upgrade comes after a thorough evaluation of the company's recent performance and strategic initiatives.
The firm's analyst cites ACES's resilience and adaptability as key factors in the positive reassessment. Having navigated nearly three decades of market changes, ACES has demonstrated a robust ability to face significant challenges. The company's rebranding strategy has been making promising progress, which is expected to contribute to higher growth.
One of the main drivers for the optimistic outlook is ACES's potential for an increased number of store openings starting next year. The company is looking to expand its store network beyond the current projection of 20 stores for 2024F. The expansion plan is particularly focused on the ex-Java regions, which may represent up to 70% of the new store openings.
By adjusting the population/city area criterion for new stores from 500,000 to 200,000, ACES has tapped into a broader customer base within the A-C income classes who are willing to spend in Ace stores. This strategic move has resulted in an increase of penetrated cities from 51 in 2021 to 69 as of the third quarter of 2024.
ACES's track record of success in these newly penetrated cities bolsters the company's confidence. With a 100% success rate in meeting sales and profit targets in these locations over the past one to two years, ACES is emboldened to pursue a more aggressive store expansion strategy. The company is targeting approximately 100 new promising areas for future development.
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