Time to Wake Up, The Best is Yet to Come
I was on my way to home from office, I turn my radio on, and suddenly I heard an anchor told the audience that “Now, you can be cool with stuff from Ramayana, and don’t forget that everybody has a right to be cool”
I smirked and I can see that Jane is now on “full throttle” mode to make Ramayana great again !. Personally, I think that once people realized that shopped at Ramayana is no longer associated with “lower class” image, it will attract people from higher income class to shop at Ramayana too.
Finally, an analysis must end with concrete actions. Our company decided to invest in the Ramayana for the following reasons :
1. Ramayana slowly but sure successfully raised their company image in customer eyes. Shopping at Ramayana no longer means that you are a lower class people. Partnership with the artist and active social media presence will help Ramayana effort in the short and long run. Ramayana also proved their sales are not dependent on artist product, given the contribution of sales only around 1-2% of total sales. It means their market strategy has worked well to attract crowds to buy their other products. I expect people from slightly higher income class will started to shop at Ramayana and it will widen Ramayana customer basis.
2. Almost 40% of sales come from ex Java island. Farmers income depend on commodities prices. This year, palm oil and coal prices have gone up sharply, we foresee an increase in GDP and consumer spending on ex Java island.
3. Supermarket business continued to experienced improvement on bottom line, and next year when there are more conversions to SPAR, supermarket loss expected to be only half of FYE 2016 loss and we might see supermarket to bear a fruit in bottom line on 2018. That condition will unlock Ramayana’s value and lead further re-rating.
4. In 2017, the Jakarta government will start supporting high school students who hold KJP cards to continue their bachelor education at a university. Government will give a subsidy amount Rp 18 million per year with a breakdown of Rp 7.2 million for tuition and rest Rp 10.8 million for living expenses. So, next year we can see greater impact of KJP to Ramayana performance.
5. At the macro level, we expect post tax amnesty period, people will “dare” to buy property again (although I know, it will take some time). The rise of property construction project will benefit and raised builder workers income which already slowed down in the last 2 years as people afraid to buy property because of the taxman. We all know that builder workers are one of Ramayana market target, and I expect higher builder workers income will bode well for Ramayana performance too.
Another important point is “JANE EFFECT”. Jane has just started the journey to bring Ramayana back to it’s throne. She still has many ideas, plan, and strategies. Recent Ramayana performance already showed that Jane initial step is bearing a fruit and we can’t wait to see her next steps. Jane is working hard every day and according to Mr. Aloysius, sometimes she is still active in whatsapp group on 1 AM to talk about new ideas and strategy. If the management care enough about the company, especially like what Jane doing now, then we as shareholder can just sit, relax, and watch the transformation play.
Sure, some will argue the share price has going up and they want to wait to see more signs that this transformation is sustainable before buy the shares ( for example, waiting until supermarket post a profit, next year SSSG will growth 6-7% again, SSSG in ex Java keep growing until next year, etc). I truly understand that, but I remember what George Soros said a few years ago…..
“Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected.” – George Soros
I believe Ramayana is now already on it’s way to entering new era with Jane Tumewu, and we just don’t want miss the train !