AMRT - 9M23 solid performance with margin expansions

AMRT - 9M23 solid performance with margin expansions Sumber Alfaria Trijaya (AMRT)' 9M23 revenue grew 10.9% yoy as 3Q23 revenue reached IDR26.2 tn (+8% yoy/-5.3% qoq), which driven by food products sales (+10% yoy/-8.4% qoq) and non-food products sales (+3.8% yoy/+2.3% qoq) in 3Q23. This came in-line with our and consensus'expectation (at 73.1%). Thanks to better product mix, AMRT' 3Q23 gross profit reached IDR5.5 tn (+11.8% yoy/-4.9% qoq), which made 9M23 gross profit grew 14.1% yoy with 60bps yoy margin expansion. All in all, AMRT ' 3Q23 net profit reached IDR578 bn (+16.1% yoy/-31% qoq) and 9M23 net profit reached IDR2.2 tn (+25.1% yoy) with 30bps yoy margin expansion, due to higher other income (+19.6% yoy) despite higher opex (+12.7% yoy) and tax expenses (+25.1% yoy). This came at 63.7% and 61.7% of our and consensus' expectation. Note that, historically 9M net profit achievement only around 59% of FY net profit. (Source: Company, KBV Research) Comment: Another solid performance amidst lower consumers' spending in 3Q23 due to lack of festive events. Expect higher performance from AMRT in 4Q23 due to year-end' festive events. We are also waiting for 9M23 earnings call by AMRT' management as to revisit our model.