Ultrajaya Milk Industry (ULTJ) – Buy (Maintain)
Price: Rp4,040 – Target Price: Rp5,300
Expecting strong rebound FY14
- PT Ultrajaya Milk Industry (ULTJ) net profit FY13 came in at Rp325bn, 11% below our previous estimate of Rp366bn. Results were in-line on revenue basis at Rp3,460bn compared to our estimate of Rp3,405bn, less than 2% higher.
- On a YoY basis, revenue was 23% higher while net income declined by 8% due to fall in gross margin, forex loss, and net income from associated net income falling to negative.
- Gross margin fell more than we anticipated in 4Q13 (25.7%) from 3Q13 (28.0%) as we expected the 10% increase in ASP in mid-November to help maintain the margin better but was not enough to overcome the effects of the Rupiah depreciation over the whole quarter. As a result, gross margin in FY13 came in at 29.3% compared to our estimate of 30.0%. [Read more...]