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Strength
UNVR’s FMCG market share improved to ~34.9% in Jun-Aug 2024 (Dec-23: 33.9%), while its gross margin (normalized) remained > 45% (3Q24: 47.4%; 2Q24: 49.5%; 3Q23: 50.5%), partly helped by the company’s global procurement program, despite persistent decline in UPG (3Q24: -2% YoY)
Weakness
In 3Q24, revenue dropped to IDR 8.3tn (-6.6% QoQ; -18.0% YoY), with both HPC and FnR segments showing negative growth of -9% and -2% QoQ, mainly due to down-trading, boycott and unharmonized pricing from distributors; pressure on margins may persist in the short-term from down-trading & transformation costs
Opportunity
UNVR has introduced strategic innovations to offset current consumer down-trading trend to cheaper items, such as launching smaller sachet-sized versions of existing products; severe market underperformance may present stock-trading opportunities
Threat
Intense price war with other major players like Wings, the rise of white-label products, and prolonged boycott could further pressure the company's profitability; poor 3Q24 results will result in analyst earnings downgrades, resulting in further share price underperformance
Samuel Sekuritas Indonesia is a leading Indonesian securities brokerage firm. Established in 1997, the firm has grown to become one of the most respected and trusted financial services companies in the country. With a wide range of services and products, Samuel Sekuritas Indonesia has become a trusted partner to many investors, both institutional and individual.
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