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ULTJ: Powered By Milk

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Algo Research Team

Company | Jun 11, 2023 | Views: 334

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Key Summary:

  • Corporate action, average buyback IDR1,600/share
  • Better fundamental in 2023 from margin improvement
  • Very attractive valuation vs. peers

Have you got milk? One company that we are looking at the moment is Ultrajaya (ULTJ) who is the leading pioneer of dairy products in Indonesia and its famous Ultra Milk commands the no.1 leadership position in UHT milk by volume. The company currently has one of the most attractive valuations in the consumer sector at 12.4x PER with a potentially +28% average FY23-24 earnings growth mostly on the back of margin improvement.


As investors are seeking shelter in defensive names, we think this company might have what it takes to outperform this year. Consistent stock purchases by owners also gives us confidence in the performance of the share price. Downside risks include: Supply chain disruption (i.e. cattle disease), lower than expected revenue from aggressive competition and higher than expected raw materials costs (i.e. El-Nino).

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