In today’s briefing:
- Ultrajaya Milk (ULTJ IJ) – The Milkmaid Cometh
- BBNI IJ Initiation: On a Rewarding Journey to 20% ROE
Ultrajaya Milk (ULTJ IJ) – The Milkmaid Cometh
- Ultrajaya Milk (ULTJ IJ) is back to the boil in terms of sales growth for both its dairy and carton tea businesses, which both benefit from a nominalisation of mobility.
- The company’s margins have improved in the dairy business as cost pressure has abated with falling powdered milk prices. Competition has picked up but the overall market is growing sufficiently.
- Ultrajaya Milk will open a new distribution centre in 1Q2024, which should help to drive growth plus it looks to launch new product categories in 2024. Valuations are attractive.
BBNI IJ Initiation: On a Rewarding Journey to 20% ROE
- Bank Negara Indonesia Persero (BBNI IJ) has stated its target of achieving an FY28e ROE of 20%, with ambition to join the other three big Indonesian Banks already doing it.
- Although the current results are not on par with the other three, the bank has outlined its strategy to reach the target (1% credit cost; 37% CIR by 2028 exit)
- Projecting a gradual re-rating to align with peers by 2028 and extrapolating book value growth over the 5-year period provides a shareholder return of 30% CAGR
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