Expect Muted Prospect Ahead
Key Takeaways :
▪️UNVR's unsatisfactory performance, particularly in the late stages of FY23, is attributed to the "consumer sentiment" effect. The Middle East geopolitical situation culminated in a fatwa by MUI on Nov-23, prompted consumers to "shift" to alternate brands.
▪️Despite the sales running rate in Jan-24 successfully recovering to 92%, given the ongoing Middle East geopolitical instability, we anticipate the AMP/revenue level to remain high to dispel misinformation, potentially hindering profitability.
▪️We anticipate potential impacts on the home & personal care (HPC) segment. Kantar projects a slowdown in HPC-related growth in FY24F. Moderately, we project a +1.0% YoY growth in the HPC segment (accounting for 65% of turnover) in FY24E.
▪️We recommend HOLD for UNVR with a lower TP of IDR 2,700, implying PE/PBV of 21.1x/30.5x in FY24E. The lower TP aligns with the vulnerable outlook and the downward revision of top-bottom line projections in FY24E.
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