Maintaining Cautious Outlook
Key Takeaways:
▪️UNVR posted 2Q23’s revenue of IDR9.7tn (-8.7% QoQ/-8.8% YoY), making its 1H23’s revenue to be IDR20.3tn, a decrease of -5.5% YoY, as well as below our/cons estimates of 47.0%/47.1%, respectively.
▪️Furthermore, the net profit in 2Q23 came at IDR1.4tn (-3.6% QoQ/-3.9% YoY), translating into a 1H23’s net profit of IDR2.8tn or went down -19.6% YoY, in-line with our estimate of 50.2% yet below the cons of 47.6%.
▪️Management also mentioned that the shutdown of B2B and B2C e-commerce platforms towards the end of the previous year had a noticeable impact on sales in 1H23. Yet, they expect that the impact on 2H23 will be minimal.
▪️Despite those improvements, we remained in a cautious outlook for 2H23. We look back to 5Y prior to the pre-pandemic (FY15–19), the avg. revenue contribution in 1H was 51.1%, while 2H of 48.9%, which might lead to a decline in revenue for FY23E using the 1H23 basis.
▪️We recommend HOLD for UNVR at a lower TP of IDR 4,000, implying PE/PBV of 28.3x/36.7x in FY23E. Upside risks include: 1) significant volume improvement; 2) lower-than-anticipated CPO prices.
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