Consumer

4Q25 Preview: Steady Revenue Growth, Margins Gradually Improving 

 

  • We estimate 4Q25/ FY25 sector revenue growth of +6.7/+4.2% yoy, broadly in line with consensus’ est. of +4.1% yoy.
  • The revenue growth is mainly supported by ICBP and MYOR, while we also expect GPM recovery in 4Q25 on normalization in soft commodity prices.
  • Reiterate our Overweight stance on the sector; ICBP (Buy, TP Rp11,500) remains the top pick in the sector.

 

4Q25: steady topline growth with improving gross margin

We estimate aggregate Consumer sector to post 4Q25 rev growth of +6.7% yoy (-0.3% qoq), mainly driven by ICBP (+10.2% yoy) and MYOR (+9% yoy). This translates into FY25 sector rev growth of +4.2% yoy, in line with consensus’ est. of +4.1% yoy. On margins, we expect a gross margin recovery in 4Q25, supported by the normalization in some soft commodity prices, although FY25 gross margins remain 60bps lower yoy. Meanwhile, operating margin is projected to edge lower yoy both in 4Q25 and FY25F by 40bps and 30bps, respectively.

 

Key highlights across companies:

  • ICBP – We expect ICBP’s 4Q25 revenue to be broadly on track with our FY25 growth forecast of +3.5% yoy. We also see some room of gross and operating margin improvement in 4Q25 to 37.9% and 23.2%, respectively, driven by some normalization in CPO (-3% qoq), while wheat (-0.1% yoy) and cooking oil prices (-0.5% yoy) remain relatively stable. However, we forecast core profit to decline by -35.6% yoy in 4Q25 and -11% yoy in FY25F due to last year’s reported forex loss.
  • MYOR – We forecast 4Q25 rev growth of +9% yoy, bringing FY25 rev growth to +6.8% yoy. We believe this is realistic as our last discussion with the company indicated resilient demand with high single-digit yoy sales growth in 4Q25, despite a high base in 4Q24. We also expect gross margin to improve to 24.1% in 4Q25, slightly above consensus at 23.3% on lower cocoa (-13.8% qoq) and coffee prices (-2.4% qoq) with selective ASP adjustments. Nevertheless, we estimate FY25F net profit and core profit to decline by -8.3% and -4.5% yoy, respectively, reflecting margin pressure earlier this year.
  • UNVR – We expect continued improvement in UNVR’s sales momentum in 4Q25, following its turnaround in 3Q25. We forecast 4Q25 revenue growth of +5.1% yoy, lifting FY25 rev growth to +1.7% yoy. On a qoq basis, however, revenue is likely to decline (historically we have seen stronger seasonality in 3Q over the past 7 years (exhibit 9). Meanwhile, 4Q25 earnings growth is projected to surge +177.2% yoy, supported by a very low base in 4Q24.
  • INDF – We expect 4Q25 rev growth of +4.2% yoy, coming from ICBP’s contributions despite CPO prices declining 9.8% yoy. Meanwhile, core profit is forecast to fall by -72.3% yoy, broadly in line with consensus’ est. of -77.6%.

 

Reiterate Overweight on sector, ICBP remains as top pick

We maintain our Overweight stance on the sector, underpinned by its attractive valuation, low domestic fund positioning/ ownership and potential catalyst from Govt’s fiscal acceleration that should support household consumption. ICBP (Buy, TP Rp11,500) remains our top pick in the sector due to its defensive business model and compelling valuation at 9.3x PE FY26F.

 

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