Company Update

09 November 2023

SMGR IJ - MNC Sekuritas Equity Report November 9, 2023

Regional Sales Volume Grew 34.1% YoY

Key Takeaways :
▪️ SMGR recorded a revenue growth of IDR27.7tn in 9M23, or grew +4.0% YoY (vs IDR26.6tn in 9M22), reflecting 71.7%/71.5% of the MNCS/consensus target.

▪️ The cost of revenue had risen by +8.1% YoY to reach IDR20.2tn (vs IDR18.7tn in 9M22) due to the increases in several costs such as: 1) raw materials (+8.9% YoY) and 2) fuel and energy (+9.6% YoY). However, SMGR was able to trim down their selling expenses by -19.3% YoY to IDR1.8tn (vs IDR2.2tn in 9M22), specifically the transportation and handling costs (-29.1% YoY). Net profit was stable at IDR1.7tn, or edged +1.8% YoY, reflecting 63.9%/61.1% of the MNCS/consensus target.

▪️ We recommend BUY for BSDE, with a target price (TP) of IDR7,850 per share for the next 12 months, indicating +23.6% potential upside. Our valuation implies 20.1x/18.9x of PE in FY23E/FY24F.

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