However, for 9MFY2023, Delfi reported patmi of US$32.8 million, up 22.1% y-o-y. Renuve was up 15.2% y-o-y to US$412.6 million. Ebitda for the same nine months reached US$52.8 million, up 9.4% y-o-y.
For the current 4QFY2023, Tay Wee Kuang of CGS-CIMB, who has an "add" call on this counter, expects the company's operating margin to recover because of operating leverage.
Nonetheless, given slower revenue growth ahead, no thanks to a weaker macroeconomy, higher raw material costs and unfavourable forex, Tay has trimmed his earnings projected for Delfi's FY2023 and FY2025 by 3.8% and 5.6%.
His reduced target price of $1.56, from $1.65 previously, is still pegged to 15x FY2024 earnings, which is slightly below the historical average since FY2018 due to tapering revenue growth rates.
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Re-rating catalysts include stronger-than-expected 4QFY2023 revenue momentum and better consumer sentiment as Indonesia heads to the polls later in 2024.
In their Nov 21 note, UOB Kay Hian's John Cheong and Heidi Mo kept their "buy" call on Delfi, as they expect the company to enjoy revenue growth in its home market Indonesia this coming year, as "handouts by political parties, which usually kick off campaigns, may boost chocolate sales".
However, to take into account higher material costs, they have cut their FY2023 and FY2025 earnings by 4%, leading to a reduced target price of $1.76 from $1.83 previously.
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