CLSA Ramayana (RALS IJ) sales

August sales is 8% below company’s target but still SSG (YTD) strong up 19.9% yoy and total revenue growth of 21.9% YTD. We have to wait for more details on Sep numbers and details on the margins. Channel checks with some department stores indicate that while sales were strong during the lebaran/Idul Fitri quarter, it was below expectations. We remain cautiously optimistic as there have been visible improvements in supermarket. The stock is not expensive at 14.5x 2010CL P/E and 12.2x 2011CL P/E, no debt and 17% ROE.