Expecting Better Performance in 2H23
Key Takeaways:
▪️ SMGR booked a revenue of IDR17.0tn in 1H23 or grew 2.0% YoY (vs IDR16.1tn in 1H22), reflecting 44.2%/44.0% from MNCS/consensus targets.
▪️ Sales volume was stable at 17.9mn tons, bolstered by increased regional sales which improved 21.8% YoY. On the other hand, domestic sales slowed down by -4.3% YoY on the back lower 2Q23 sales as there were fewer working days during that period (both Eid-al-Fitr and Eid-al-Adha fell on 2Q23).
▪️ Notwithstanding, SMGR was able to minimize their opex by -9.5% YoY down to IDR2.8tn (vsIDR2.5tn in 1H22). Net profit came in at IDR866.2bn or increased 3.1% YoY (vs IDR840.1bn in 1H22), reflecting 32.3%/30.9% from MNCS target/consensus estimates.
▪️ We recommend BUY for SMGR at a lower TP of IDR8,450, per share for the next 12 months, indicating +23.3% potential upside. Our valuation implies 16.5x/14.3x of PE in FY23E/FY24F.
Disclaimer On
