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Expect improved performance ahead on transformation initiatives. The company expects stronger 2H25 results, benefiting from its transformation initiatives that began in 3Q24 with the management implementing price harmonization, customer stock reduction and increasing direct sales coverage contribution. Notably, UNVR has experienced healthier consumer demand and channel recovery with higher sales per day rising by 5% in 2Q25 compared to 3Q23, while DT performance by value was +35% higher in 2Q25 versus 3Q24.
2Q25 topline weakness on expected normalization of lebaran. In 2Q25, UNVR reported revenue of IDR 8.7tn (-2.5% YoY; -7.7% QoQ), bringing 6M25 revenue to IDR 18.2tn (-4.4% YoY), in line with both our and consensus projections (SSI: 53.5%; Cons: 52.0%). The decline was mainly driven by -4.2% YoY contraction in domestic UVG on the back of the weak economy, coupled with some normalization of festive season demand, though its impact was partially offset by +1.6% YoY increase in UPG. From market share perspective, UNVR’s position has started to stabilize, standing at 33.1% in 2Q25 (1Q25: 32.8%; 4Q24: 33.3%).
2Q25 core profit in line with our estimate. UNVR’s 2Q25 GPM narrowed to 48.0% (1Q25: 48.2%; 2Q24: 49.5%) on unfavorable product mix and 7.6% YoY hike in CPO (c.21% of COGS) prices. EBIT margin slipped to 14.6% (1Q25: 17.1%; 2Q24: 14.6%) as 1Q25 one-off pension benefit normalized to higher run-rate remuneration of 3.0% (1Q25: 1.4%; 2Q24: 3.6%). Hence, 2Q25 core profit fell to IDR 918bn (-9.8% YoY; -25.8% QoQ), bringing 6M25 level to IDR 2.2tn, still broadly in line with our estimate but above consensus (SSI: 46.5%; Cons: 59.2%).
Maintain BUY on 15% upside. We retain BUY rating and TP of IDR 2,100 (previous: IDR 1,400), implying 2026F P/E of 14.0x and 14.8% upside. Our positive view is underpinned by market share stabilization and UNVR’s transformation strategy, including portfolio expansion to address weak purchasing power. The planned higher FY25F A&P run rate to ~9.2% (2024A: 8.8%; 5-year avg.: 7.15%) should help sustain sales volumes. In addition, potential dividend yield of 10.3%, combined with ongoing buyback program (up to IDR 2tn from end-Jul to Oct 2025 at a maximum price of IDR 1,700), makes UNVR attractive. Key risks: 1) weaker purchasing power, 2) higher raw materials prices, and 3) elevated DXY.
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.
The company offers a variety of financial services, including equity, debt and derivative securities brokerage services, research and portfolio management, asset management and capital market services, as well as a range of other investment solutions. Samuel Sekuritas Indonesia is also a leader in providing financial education and training, and has established itself as a leading provider of investor relations services.
The company has a strong research capability and is committed to providing its clients with up-to-date and reliable market analysis and recommendations. It also has a team of experienced and knowledgeable professionals who are dedicated to providing quality service to its clients. As a result, Samuel Sekuritas Indonesia has become a preferred partner for many investors in Indonesia.
In addition to its financial services, Samuel Sekuritas Indonesia also offers a range of other services, such as corporate finance and advisory services, mergers and acquisitions, and venture capital.
