The retail sector is continuing to suffer under the weight of the Covid-19 throughout 1Q20 and likely continue to the next quarter. MAPI, as one of Indonesian retailer, recorded a low single digit growth on revenue and a sharp decline in the pace of SSSG. For company’s outlook, we lower our top line and bottom line assumption as our initial view of recovering growth for 1H20 is challenged by a persistently weak demand environment.
ERAA still recorded positive performance in 1Q20. In facing a challenging environment, ERAA has implemented a number of strategies such as increase sales through digital platform, maintain quality of working capital and leverage.
Kino posted strong performance in 1Q20, supported by personal care and beverage segments as its main contributors. In addition, KINO decided to liquidate its two joint ventures with the Malee group as a form of streamlining its organizational structure and changing the company’s business model. Coupled this with the eroding purchasing power due to the pandemic, we project KINO’s short – term profitability to take a hit. However, we still view KINO as a HOLD for longer-term investment option.
KLBF recorded modest top-line and bottom-line growth in 1Q20. This growth was supported by all segments which recorded excellent performance. On the margin side, GPM and OPM both recorded contractions which triggered by COGS. This is an opposite to the NPM which rise was ensured by a lower Opex and foreign currency gain. We project that KLBF will have to bear the challenge caused by the COVID-19 pandemic. Nevertheless, at this point, we still maintain our estimates for FY20 at a conservative growth rate.
ICBP recorded strong revenue and earnings supported by excellent performance from all segments, except beverage segment that still showed a decline.
GGRM still recorded modest growth in revenue and net profit in 1Q20, supported by advances in all seg-ments such as SKM, SKT and paperboard. However, GPM and EBIT margins still recorded a contraction due to a moderate increase in ASP amid an increase in excise tax rates and downward trend in cigarettes volume sales.
INDF posted significant profit growth in FY19 compared to FY18’s growth; that was attributable to its positive performance—particularly CBP and Bogasari’s best performance as well as improving margins of the agribusiness and distribution segments. We project that FY20’s revenue and earnings are likely to weaken as PSBB and uncertain Idul Fitri holiday bonuses (THR) payout are two hiccups in solid domestic consumption. Despite the hiccups, INDF’s outlook is pretty sound as it is one of the defensive players and the market leader in food-branded products.
FY19’s Unaudited Bottom Line Lowers than Estimate
Focuses on Strategic Growth Drivers
