Oct 27, 2010

Mustika Ratu & Chinese cosmetics

PT Mustika Ratu Tbk, (MRAT) established in 1975 is engaged in the production, distribution and marketing of herbal-based and natural cosmetics, herbal drinks and other related activities. 
In a company report published by PT Pefindo, MRAT also produces body care products for men, opens and franchises spa centers, and creates home spa products. MRAT introduces Indonesian unique tradition SPA, namely Taman sari Royal Heritage Spa. Besides in Jakarta, Yogyakarta and other big cities in Indonesia, MRAT Spa has also penetrated Singapore, Malaysia, Thailand, Japan, China, Russia, Czech, Bulgaria, and Canada, even to Africa.
Efficiency for higher margin
Mustika Ratu recorded good performance in 2009, its sales reach Rp345.58 billion or increase 12.27% YoY from 2008 figure of Rp307.80 billion. 
Operating profit in 2009 shows even better increases, it reach Rp41.55 billion, raise 64.24% YoY from 2008 figure of Rp25.30 billion. MRAT’s efficiency showed its effect here, they success to reduce operating expenses from 47.45% to 44.44%, so they booked better operating margin of 12.02% compared to 8.22% in 2008.
Still growing after pressure from Chinese cosmetics
 MRAT booked moderate revenue growth of 3.15% YoY in 1H 2010; it might because there is more competition from China’s cosmetics, in 2009 almost 30% domestic market of cosmetic is devoured by China’s product which offer lower price. 
With such a competition, MRAT still can book revenue growth in 1H 2010, it shows that MRAT strategy in improving their sales is working. As they success to improve their margin in 2009, MRAT keep maintain it so in 1H 2010 they record 11.12% operating margin, comfy above 5 years average of 8.36%. 
"As we believe MRAT is consistent maintaining their margin, we estimate MRAT operating margin for 2010-2014 will be in range of 11.5%-12%."
Business prospects
 Global economic downturn seems not affected MRAT’s sales, pass 2008 global downturn, MRAT still can booked 12.27% YoY sales growth in 2009. 
"We estimate MRAT’s revenue growth will still in good figure in 2010, as they book 3.15% YoY growth in 1H10. In addition, the increase in Indonesia economic growth to above 6% in 2010 and recovering purchasing power is expected to support MRAT, for 2010 we estimate MRAT to book at least 8.97% YoY revenue growth to reach Rp 376.57 billion. 

Please download here to read all MRAT report.

Disclosure: No position at the stock mentioned above.

Print This Article

No comments: