UNVR Jul2022

UNVR

Contact our analyst Eka

25% Upside, BUY
28th July 2022
Price Rp 4720
Target price Rp 5885

High-single digit growth

UNVR sales grew by a high single-digit percentage, after another quarter of price-driven growth, supported by strong performances in oral care, deodorants and cooking aids, but volumes were still down, most notably in Home and Personal Care (HP).
UNVR sales increased by +6.4% YoY to IDR 21.46 trillion in 1H2022. For 2Q2022, sales grew 7.4% YoY but were -2% QoQ to IDR 10.62 trillion. The domestic sales in 1H2022 increased +6.8% to IDR 20.6 trillion while export sales decreased -3.9% YoY to IDR 440.3 billion in line with higher domestic sales in the 2Q2022 which grew 7.8% YoY to IDR 10.2 trillion.
Food & Refreshment (FR) sales increased +8.1% YoY to IDR 7.23 trillion in 1H2022 boosted by Royco, Bango, Sariwangi and Buavita, while HP sales also increased +5.5% YoY to IDR 14.2 trillion due to higher prices.
As commodity prices remain high, UNVR is raising pricing across all categories which has resulted in lower volumes. With the price hike, the 1H2022 gross margin in HP was steady at 50.3%, while operating margins decreased to 28.6% from 29.9% in 1H2021.
FR GPM was also steady at 44.2% in 1H2022, while the OPM increased to 19.3% from 15.5% in 1H2021.
We are targeting UNVR’s sales for 2022F to reach IDR 41.9 trillion or +6% YoY growth.

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2Q2022 Result: Lower bottom line QoQ

UNVR booked bottom line profit of IDR 1.41 trillion, lower by -30% QoQ but up +4.5% YoY, due to higher opex in 2Q2022. The net profit margin decreased to 13.3% compared to 18.6% in 1Q2022. For 1H2022, UNVR still booked +12.6% YoY growth in bottom line profit to IDR 3.43 trillion.
Operating profit decreased by -30% QoQ but increased slightly +1.7% YoY to IDR 1.84 trillion due to higher advertising and market research expenses in 2Q2022, up by +64% YoY. As a result, OPM decreased to 17.3% from 24.4% in 1Q2022. Despite this, in the 1H2022, UNVR still recorded operating profit growth of 11% YoY.
Gross profit slightly declined -3.8% QoQ but increased +4.5% YoY to IDR 5.07 trillion in 2Q2022 with a lower GPM of 47.7%.
We are targeting UNVR’s net profit for 2022F to reach IDR 6.62 trillion or +15% YoY growth.

Valuation: Maintain BUY with TP 5,885

We are targeting UNVR to trade at 32x PE within a year. Target Price is IDR 5,885 which represents 25% upside. BUY

Previously

UNVR May2022