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BUY
Last Price
IDR 1395
Target Price
IDR 1620
Upside
16%
Investment Consideration
Fifth Consecutive Quarter of Volume-Led Growth
- PT Unilever Indonesia Tbk (UNVR) booked 3Q26 net sales from continuing operations (excluding the divested Sariwangi tea business) of IDR8.85 trillion, up 7.4% YoY and 4.7% QoQ. For 9M26, sales grew 7.2% YoY to IDR25.75 trillion, accelerating from 4.3% growth in FY25.
- Domestic Underlying Volume Growth (UVG) reached 6.4% in 3Q26 (9M26: 7.0%), marking the fifth consecutive quarter of positive volume. Underlying Price Growth (UPG) turned positive at 0.9% (9M26: 0.2%) as the company began calibrated price adjustments to offset input-cost inflation.
- Domestic sales rose 7.3% YoY to IDR8.60 trillion and exports 10.3% to IDR250.2 billion. Growth was broad-based across General Trade, Modern Trade and e-commerce/Health & Beauty, which grew high double digit.
Segment Performance: HPC Leads, F&R Growth Turns Price-Led
- Home & Personal Care (HPC) revenue increased 8.5% YoY to IDR6.60 trillion in 3Q26 (9M26: +8.2% to IDR18.97 trillion), driven by 8.6% UVG with flat pricing (UPG -0.2%). Sunsilk and Rinso delivered double-digit growth YTD. Segment gross margin eased to 43.2% (3Q25: 51.8%), while operating margin held at 22.8% (3Q25: 23.9%).
- Foods & Refreshment (F&R) revenue grew 4.1% YoY to IDR2.25 trillion, now mainly price-driven (UPG 3.9%, UVG 0.2%). Gross margin declined to 39.9% from 45.0% and operating margin to 17.6% from 25.0%. Management aims to share a further update on the Foods business before year-end.
3Q26 Results: Earnings Ahead of Sales Despite Margin Pressure
- Core profit from continuing operations rose 11.1% YoY and 48.5% QoQ to IDR1.23 trillion in 3Q26. 9M26 core profit grew 10.6% YoY to IDR3.31 trillion, ahead of sales growth and equal to 82.6% of our FY26F estimate. Including the IDR870.3 billion gain on the Sariwangi divestment, 9M26 total net profit reached IDR4.20 trillion.
- Cost of sales increased 23.8% YoY to IDR5.10 trillion on Middle East-related commodity inflation, a weaker rupiah and higher outer-island logistics costs. Gross profit fell 9.1% YoY to IDR3.75 trillion, with gross margin at 42.3% (3Q25: 50.0%). 9M26 gross margin stood at 45.1% (-373bps YoY), or 46.1% excluding transformation costs.
- Operating expenses fell 15.6% YoY to IDR2.25 trillion as A&P was rightsized (advertising -35.0%, promotion -27.6%); the 9M26 A&P-to-sales ratio improved to 10.1% from 13.2%. Operating profit rose 2.8% YoY to IDR1.50 trillion (OPM 16.9% vs 17.7%), helped further by a lower effective tax rate (18.8% vs 22.5%).
Valuation: Maintain BUY, TP IDR1,620 (+16% Upside)
- We targeting a new 12-month TP of IDR1,620 (previously IDR2,135), implying 15.4x 2026F and 14.4x 2027F P/E and 16% upside after October’s sharp share-price correction. Volume momentum, cost savings and strong cash generation support our BUY call.
- Key risks: prolonged commodity inflation into 2027, further rupiah depreciation, weaker consumer purchasing power and execution risk around the Foods portfolio decision.
Disclaimer:
PT Binaartha Sekuritas has compiled this report in good faith, using information believed to be reliable. PT Binaartha Sekuritas and its analyst take no responsibility for the accuracy of the information contained in this report. This report has been produced for distribution to clients of PT Binaartha Sekuritas only. This report is not an invitation to buy or sell any security. PT Binaartha Sekuritas may have used the information in this report prior to publication. The company or its clients may have positions in or may from time to time buy or sell the securities mentioned in this report or other related securities.