UNVR
Contact our analyst Eka
17% Upside, Hold
27th July 2021
Price Rp 4,500
Target price Rp 5,270
27th July 2021
Price Rp 4,500
Target price Rp 5,270
2Q2021 Margin Drop
- The domestic market remains challenging as large parts of Indonesia have entered lockdown (PPKM) following a sharp rise in Covid-19 cases.
- UNVR sales declined high single digit -6.8% YoY and -3.8% QoQ to IDR 9.89 trillion in 2Q2021. For 1H2021, UNVR’s sales also decreased -7.33% YoY to IDR 21.77 trillion.
- Home and Personal care (HP) contributed the most at 67%. HP gross profit margin decreased to 52% in 2Q2021 lower compared to 57% in 2Q2020 and 56% in 1Q2021. Operating margins for HP also decreased to 29% from 36% in 2Q2020 and 31% in 1Q2021.
- Meanwhile the Foods & Refreshment (FR) GPM was higher compared to last year at 43% from 35%, but lower than 1Q2021’s 46%. OPM was stable at 12%, but lower compared to 1Q2021’s 18%.
- The PPKM will continue until August which will affect purchasing power in the domestic market in 3Q2021. We expect lower sales in 3Q2021, but a slight recovery after the PPKM ends.
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2Q2021FY Results Lower
Valuation: HOLD with TP 5,270
- With a decrease in sales, UNVR booked net profit of IDR 1.34 trillion down by -23.3% YoY from IDR 1.75 trillion in 2Q2020, and down -21% QoQ. The net profit margin also fell from 16.5% in 1Q2021 to 13.6% in 2Q2021.
- Operating profit also decreased by -22.9% YoY and -18.6% QoQ o IDR 1.81 trillion from an increase in marketing expenses in 2Q2021. The OPM also decreased to 18.3% from 22.1% last year.
- Gross profit declined -8.6% YoY -3.8% QoQ to IDR 9.8 in 2Q2021 due to lower sales with a lower GPM of 49% from 52.4 in 1Q2021.
- As the 2Q2021 result was below our expectations, we revise our net profit target to IDR 7.08 trillion in 2021F.
Valuation: HOLD with TP 5,270
- As the domestic market remains challenging and 1H2021 UNVR results are below expectations, we revise our UNVR target.
- We are targeting UNVR to trade at 26.7x PE within a year. Target Price is IDR 5,270 which represents 17% upside. HOLD
Previously