UNVR Mar2022

UNVR

Contact our analyst Eka

25% Upside, BUY
7th March 2022
Price Rp 3520
Target price Rp 4400

4Q2021 Lower Sales

Competition in the domestic market and Covid-19 related restrictions in 2021 resulted in a decrease in UNVR sales especially in 4Q2021. UNVR sales decreased by -9.5% YoY or -3.4% QoQ to IDR 9.52 trillion in 4Q2021.
For 2021FY, UNVR sales also decreased, by -7.97% YoY to IDR 39.5 trillion. The domestic sales in 2021 decreased -8.1% to IDR 37.8 trillion from IDR 41.15 trillion in 2020. The sales were lower than we expected, at only 95% of our estimate.
Home and Personal care (HP) sales decreased the most, -12.1% YoY to IDR 26.37 trillion, while Food & Refreshment (FR) sales increased slightly +1.4% YoY to IDR 13.17 trillion.
The increase in commodity prices has also had an impact on higher COGS reflected in depressed margins for all business segments. HP gross profit margin decreased to 51% in 4Q2021 compared to 56% in 4Q2020. Operating margins were steady at 31% in 4Q2021. For 2021FY HP’s GPM & OPM were 53% and 29% respectively.
FR’s GPM also declined to 42% from 46% last year, the OPM also decreased to 15% compared to 4Q2020’s 20%.
We are conservative on the outlook for UNVR 2022F sales performance as Omicron cases rise in 1Q2022 and the domestic market continues to be competitive. We are targeting UNVR’s 2022F sales to reach IDR 40.13 trillion with low single digit growth.

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Lower Margin

With the decrease in sales, UNVR booked a lower net profit of IDR 1.38 trillion down by -20% YoY but up +3.5% QoQ. The net profit margin fell from 16.4% in 4Q2020 to 14.5% in 4Q2021. For 2021 net profit also declined by -20% YoY to IDR 5.76 trillion with a lower NPM at 14.6%.
Operating profit decreased by -20.7% YoY but was higher +5.2% QoQ to IDR 1.86 trillion because of lower opex in 4Q2021. So, the OPM rose to 19.6% from 18% in 3Q2021. For 2021, operating profit decreased -18.7% to IDR 7.67 trillion with a lower OPM of 19.4%.
Gross profit declined -18.8% YoY to IDR 4.53 trillion in 4Q2021 with a lower GPM of 47.6% from 53.1% in 4Q2020.
We are targeting UNVR net profit for 2022F to reach IDR 5.99 trillion or +4% YoY growth.

Valuation: BUY with TP 4,400

We are targeting UNVR to trade at 28x PE within a year. Target Price is IDR 4,400 which represents 25% upside. BUY

Previously

UNVR Oct2021