Double-Digit Growth in Sales Volume
Key Takeaways :
▪️ SMGR recorded a revenue of IDR38.7tn, marking a +6.2% YoY increase in FY23 (vs IDR36.4tn in FY22), reflecting 100.2%/99.9% of the MNCS/Consensus target.
▪️ Sales volume increased by +10.0% YoY at 40.6mn tons with manageable blended ASP. This growth is supported by the uptick in regional sales volume, soaring by +42% YoY, attributed to ample coal supply.
▪️ Management anticipates a growth in the blended ASP within the range of 1%-1.5% for FY24E, considering the high competitiveness within Java Island with existing brand to compete in the retail segment. SMGR remains optimistic about its ability to manage ASP in key areas such as Sumatra.
▪️ We believe demand for SMGR cement will increase moderately and the uptrend of ASP will be limited, supported by higher infrastructure investments. However the main concern of oversupply is still intact. Thus, we give a BUY recommendation with a target price (TP) of Rp7,000 per share for the next 12 months, indicating +20.7% potential upside. Our valuation implies 16.2x/15.3x of PE in FY24E/FY25F.
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