Company Update / Consumer Staples / IJ / Click here for full PDF version
Author(s): Lukito Supriadi ;Andrianto Saputra
- delivered 1Q24 net profit of Rp1.1tn (+52.9% yoy) which is above our/consensus estimates at 34% vs. 5yr average of 27%
- Revenue of Rp8.7tr (+3.7% yoy) was in-line, driven by stellar domestic sales growth of +9.1% yoy, while export booked -4.8% yoy decline
- We fine tune our FY24/25F earnings by +1/+2% on better opex (A&P) assumption. Maintain our BUY call with unchanged TP of Rp3,650
1Q24 results: earnings beat magnified by FX gain
posted 1Q24 net profit of Rp1.1tr (+52.9% yoy), which is above our/consensus expectation at 34% vs. 5yr average of 27%. This includes FX gain of Rp75bn (vs. 1Q23's FX loss of RP184bn), adjusting for that core profit growth registered 13.8% yoy growth - which is still above expectations at 32% (vs. 5yr average of 27%).
Sales growth of 3.7% was driven by domestic sales as exports slumped
On the other hand, 1Q24 total sales grew merely 3.7% yoy driven mainly by robust domestic sales growth (+9.1% yoy) while export booked -4.8% yoy growth dragged by soft Vietnam exports. The domestic strength was attributed from election spending and social aid disbursement. We note the sell-in seasonality for does not differ materially from 1Q23's despite Lebaran being brought forward by ten days.
Slight improvement in GPM with cost savings in A&P
's 1Q24 GPM of 27.8% (+39bps yoy) remained quite stable as raw materials price remain conducive. Local wheat price benefited from the full impact of price decline (-16% to -18% in FY23) and global wheat prices have remained stable since then. This has somewhat offset the strength in coffee and cocoa prices. On the other hand, CPO's price strength has retraced back to Jan24's level as the premium to SBO was unsustainable.
FY24/25F earnings adjustment to reflect improving opex/sales ratio
On opex, A&P was meaningfully lower - declining from 9.1% of sales in 1Q23 to 8.1% of sales in 1Q24. 1Q24 opex/sales ratio was 12.8% compared to 1Q23's 13.8%. This resulted in net profit margin of 12.7% (+409bps yoy). We upgrade 's FY24/25F earnings by +1/+2% to account for more controlled opex spending (particularly A&P), while accounting for some raw material cost volatility in FY24F.
Maintain BUY with unchanged TP of Rp3,650/sh
Given 's -7/-11% 1M/12M share price retracement, we view that downside risks for seem limited, especially on the back of 1Q24's stellar results. We maintain our BUY call for with unchanged TP of Rp3,650 based on FY24F PE multiple of 25.0x (-0.5s.d. from its 5yr mean).
Sumber : IPS