Commendable Feat Achieved in FY23
Key Takeaways :
▪ HRTA achieved a bottom-line growth of +20.6% YoY in FY23, reaching IDR305.8bn (105.7% of our estimate), propelled by a commendable +85.8% YoY sales growth, driven by +66.9% YoY growth in gold sales volume.
▪ Margins took a loss, NPM fell to 2.4% from 3.7% in FY22 as its GPM slid to 7.4% from 10.7% on a predominated wholesaler and export sales contribution which is of a lower-margin.
▪ The company plans to open up ~20 new stores in FY24E to widen their market outreach and optimize their margin-buffering segments.
▪HRTA remains undervalued compared to its notable peers; its TTM EV/Sales and EV/EBITDA stands at 0.3x/5.8x vs mean of 2.6x/24.7x while still faced with considerable sales growth upsides.
▪ We call BUY for HRTA to rebound to its fundamental target price (TP) of IDR560 (41% upside), implying a PE of 7.5x and PBV of 1.2x for FY24E, with an estimated bottom line growth of ~12% YoY. Risks include subdued jewelry demand on sharp gold price advances, FFR pivoting overhang and a renewed USD strength.
MNCS Research
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