Mitra Adiperkasa, Mounting cost pressure, CLSA

Despite strong 4Q11 result, we believe Mitra Adiperkasa (MAPI IJ) might
face near-term potential operating risk from mounting cost pressure and
higher working capital requirement this year. Its plan to open two new
department stores paired with rising salary and rental cost should
translate to lower Ebit margin of 9.4% (vs 2011’s 10.6%). Armed with
these facts, we slightly cut our earnings estimate by 4% for FY12-13CL
and downgrade our recommendation to O-PF, from Buy.