UNVR
Contact our analyst Eka
32% Upside, BUY
2nd May 2024
Price Rp 2640
Target price Rp 3500
2nd May 2024
Price Rp 2640
Target price Rp 3500
Quarterly Sales improvement
- UNVR recorded a quarterly sales increase of 24.4% QoQ in Q1 2024, although it experienced a year-over-year decline of -4.95% to IDR 10.08 trillion. This improvement follows a period in Q3 2023 when consumers shied away from multinational brands due to geopolitical tensions in the Middle East. The underlying price growth was -4.9% YoY, with flat volume growth of 0.2% YoY.
- Both domestic and export sales declined by -4.7% YoY and -14% YoY, respectively. However, domestic sales saw a quarterly increase of 24.7% QoQ, and imports grew by 13.9% QoQ.
- In the Food & Refreshment (FR) segment, sales decreased by -3.85% YoY but increased by 26.4% QoQ to IDR 3.63 trillion, with the FR gross profit margin (GPM) remaining stable at 44%.
- The Home and Personal Care (HP) sector experienced a decline of -5.57% YoY but saw an increase of 23.2% QoQ to IDR 6.44 trillion. The HP GPM also rose to 53% from 52%.
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Q1 2024 Results: Higher Margins, lower opex
Valuation: Maintain BUY with lower TP 3,500
- UNVR reported positive bottom-line growth with lower general and administrative expenses due to a trademark discount. It maintained a higher margin in Q1 2024, with a gross profit margin of 49.9% attributed to softer commodity prices and a -20% decrease in raw material costs. Gross profit decreased by -3.8% YoY but increased by 28.4% QoQ to IDR 28.4 trillion.
- A significant reduction in trademark, technology, and service fees of -33.5% contributed to a -24.6% reduction in general and administrative expenses YoY, resulting in a higher operating profit, up by 1.3% YoY or 128% QoQ to IDR 1.8 trillion. The operating profit margin (OPM) increased to 18.7% from 10.2% in Q4 2023.
- UNVR’s bottom-line profit reached IDR 1.44 trillion, an increase of 3.1% YoY or 137% QoQ, while the net profit margin improved to 14.4%.
Valuation: Maintain BUY with lower TP 3,500
- Looking ahead, we expect UNVR’s margins to continue improving in 2024 in line with greater efficiency. We maintain our BUY recommendation with a target price of IDR 3,500, corresponding to a 22x PE target within a year.
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