UNVR May2022

UNVR

Contact our analyst Eka

21% Upside, BUY
13th May 2022
Price Rp 4700
Target price Rp 5700

Returned to Growth

After a decrease in 2021FY, UNVR returned to growth in 1Q2022 due to an increased in sales volume in line with increasing public mobility.
UNVR sales increased by +5.40% YoY to IDR 10.8 trillion in 1Q2022. The domestic sales in 1Q2021 increased +5.8% YoY or +13.9% QoQ to IDR 10.3 trillion while export sales decreased -3.9% YoY to IDR 440.3 billion.
Food & Refreshment (FR) sales increased +8.15% YoY to IDR 3.71 trillion, the highest quarterly sales since 2020. Home and Personal care (HP) sales also increased +4.03% YoY to IDR 7.13 trillion.
In terms of margins, higher prices across all UNVR’s products helped to maintain stable 1Q2022 margins compared to the 4Q2021 but margins were still lower compared to the 1Q2021.
The HP gross profit margin was steady at 50.5%, while operating margins increased slightly to 32%.
FR GPM increased to 45% from 41.7% in 4Q2021, while the OPM also increased to 23% from 15.3% in 4Q2021.
As we expect prices and domestic sales volume will increase further, we are targeting UNVR’s sales for 2022F to reach IDR 41.9 trillion or +6% YoY growth.

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Strong Profit Growth

In line with the increase in sales, UNVR net profit grew +19% YoY to IDR 2.02 trillion. The net profit margin rose to 18.6% compared to 16.5% in 1Q2021. The strong bottom line profit was due to lower opex such as a lower promotion expense (-45%), and trademark costs (-44%).
This resulted in double digits growth of operating profit by +18.6% YoY to IDR 2.64 trillion while the OPM increased to 24.4% from 21.6% in 1Q2021.
From higher raw material cost, COGS increased +13.8% YoY, so, gross profit declined -2.2% YoY to IDR 5.27 in 1Q2022 with a lower GPM of 48.7% from 52.4% in 1Q2021.
We are targeting UNVR net profit for 2022F to reach IDR 6.66 trillion or +15% YoY growth.

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Valuation: Upgrade to BUY with TP 5,700

We are targeting UNVR to trade at 31x PE within a year. Target Price is IDR 5,700 which represents 21% upside. BUY

Previously

UNVR Mar2022