DIGIVESTASI - Several shareholders of PT Unilever Indonesia Tbk. (UNVR), who hold hundreds of millions of shares, face the risk of losses amid a downward trend in the stock price throughout 2024. As of Tuesday (October 1, 2024), UNVR's stock price closed at IDR 2,210, marking a 37.75% decline year-to-date (ytd).

RTI Business data shows that UNVR shares are still under pressure from foreign investor sell-offs, with a total net sell of IDR 393.08 billion throughout the year. Bloomberg reported that four major institutional investors holding more than 100 million shares of UNVR by the end of September 2024 are all at risk of losses, as their average purchase price per share is far above the current market price. Mitsubishi UFJ Financial Group Inc., which holds 344.40 million UNVR shares, has an average purchase price of IDR 4,253.90 per share. BlackRock Inc., with 242.33 million shares, also faces potential losses with an average price of IDR 5,419.85. The same goes for The Vanguard Group Inc., which holds 240.45 million shares with an average price of IDR 6,204.99 per share, and Norges Bank, which holds 107.23 million shares with an average price of IDR 2,836.22.

Throughout September 2024, UNVR's stock outlook appeared bleak. According to Bloomberg data, only three securities firms issued buy recommendations, while 21 recommended holding and eight gave sell recommendations. The consensus target price for UNVR shares over the next 12 months is IDR 2,535.96.

However, Unilever Indonesia is predicted to still have opportunities to improve its financial performance. In a previous report, Bloomberg Intelligence analysts Catherine Lim and Trini Tan forecast that Unilever Indonesia's profits will increase until 2026, supported by greater operational efficiency and economies of scale amid rising demand for household products, personal care items, and food. This strategy is expected to support operating profit growth of 3% over the 2024-2026 period.

Additionally, lower input costs are expected to help Unilever achieve an operating margin of 17.4% by 2026, up 70 basis points compared to 2023. Bloomberg estimates Unilever's revenue will reach IDR 36.83 trillion in 2024, rising to IDR 38.27 trillion in 2025 and IDR 39.81 trillion in 2026.

However, Sinarmas Sekuritas' Head of Retail Research, Ike Widiawati, noted market skepticism regarding UNVR shares, considering the shift in consumer behavior toward newer brands through online shopping. This trend is believed to have eroded Unilever's market share. Additionally, UNVR posted weak financial results in the first half of 2024, with a net profit of IDR 2.46 trillion, the lowest in 10 years, down 10.60% year-on-year (yoy), and sales of IDR 19.04 trillion, a decline of 6.15% compared to the same period last year.

Unilever Indonesia's President Director, Benjie Yap, acknowledged that the company is facing short-term challenges but remains committed to strengthening its business fundamentals. He also mentioned the ongoing transformation program aimed at enhancing competitiveness and efficiency, though these efforts are expected to take time to yield positive results. Unilever is optimistic that these improvements will strengthen its performance in the second half of 2024.

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