Our target price of Rp870 for ACES is derived from 10Y DCF and 10.7% WACC, based on 7% risk-free rate, 6% market risk premium, and 0.9 beta, based on Bloomberg. Our target price implies 15x 1Y Fwd PE, at 2SD below 5Y mean, which we think is appropriate given the strong market leadership, mid-single-digit SSSG, yet riskier retail landscape with rising online competition, black market imports, and weak middle-class purchasing power.

Key risk factors that could cause ACES share price below our TP include: a) weaker-than-expected sales recovery post re-branding into "Azko"; b) worse-than-expected IDR depreciation; c) weak purchasing power.