UNVR
Contact our analyst Eka
22% Upside, BUY
4th May 2021
Price Rp 5,900
Target price Rp 7,180
4th May 2021
Price Rp 5,900
Target price Rp 7,180
Stable Margins
- In 1Q2021, UNVR sales decreased -7.8% YoY to IDR 10.3 trillion.
- Home and Personal care (HP) contributed the most at 67% of revenue, but down from 70% in 1Q2020. HP gross profit margin was stable at 56% in 1Q2021, while operating margins for HP decreased to 31% from 32%.
- Meanwhile the Foods & Refreshment (FR) sales contribution increased to 33% from 30% last year, with a higher GPM of 46% from 43%. OPM also increased to 18% from 16% in 1Q2020.
- The domestic market remains challenging, following Public Activity Restrictions in early 2021 and this resulted in slower than expected sales growth in 1Q2021.
- We expect higher 2Q2021 sales because of the Eid celebrations.
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1Q2021FY Results: Below expectation
Valuation: Maintain BUY with TP 7,180
- From the decrease in sales, UNVR booked net profit of IDR 1.69 trillion down by -8.8% YoY from IDR 1.86 trillion in 1Q2020. The net profit was below our expectations of positive growth in 1Q2021.
- Lower expenses in 1Q2021 inline with lower sales, resulted in an operating profit decrease of -6.8% YoY to IDR 2.22 trillion, while the margin remained stable at 21.6%.
- Gross profit also decreased -7.8% YoY to IDR 5.39 in 1Q2021 due to lower sales with a stable GPM of 52.4%.
- As the 1Q2021 result was below our expectations, we revise our net profit target to IDR 7.17 trillion in 2021F, stable compared to last year.
Valuation: Maintain BUY with TP 7,180
- We are targeting UNVR to trade at 36x PE within a year. Target Price is IDR 7,180 which represents 22% upside. BUY
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