MYOR has consistently innovated to expand its market share domestically and abroad. Domestically, MYOR's wafer category grew from a 7% market share in 2018 to 24% in 2024, becoming a key growth driver. For FY25F and beyond, we expect new product categories – soft cakes (Bonita), savory snacks (Apetito), and soft candies (Fruta Gummy) – will drive future growth. The estimated market sizes in Indonesia for these categories are IDR8tn, IDR20tn, and IDR6tn, respectively, according to management. If these brands can achieve 30% market share, they could increase MYOR's domestic sales by >50%. With a competitive price point at a threshold of ~IDR 2,000 per piece, these new products are well-positioned to gain market share, especially amid weakening buying power condition, in our view. In the export market, MYOR continues to gain traction, particularly in the Philippines with new soluble coffee products and in Malaysia due to effective marketing. All in all, we believe MYOR has tremendous market share opportunities in both domestic and export markets.
Margin will gradually expand in 3Q25F onwards
MYOR continues to average down its raw material costs, especially for coffee and cocoa. We note that the price of Indonesia local coffee tends to decline much faster than that of global coffee due to increasing competition from coffee from Brazil, which has aggressively supplied to China. With weaker export shipments, this creates more coffee supply that is available in Indonesia. Cocoa prices have also dropped globally, as demand has weakened at the same time as palm kernel has acted as a substitute. All in all, we expect a slight recovery in 3Q25F with a notable margin recovery more apparent in 4Q25F.
Maintain Buy; all the bad news already priced in
We revise down FY25F-27F EPS by 2-7% due to higher-than-expected input costs, especially from more expensive coconut oil. That said, MYOR’s market share and sales keep expanding; hence, any improvement in margin will boost earnings significantly, in our view. Fundamentally, we see low downside risks currently. We maintain our Buy rating with lower TP of IDR3,700 (vs IDR4,000 previously), using an unchanged FY25F P/E of 26.5x. With implied upside of 67.4% and potential dividend yield of 3.5%, MYOR’s TSR is at 70.9%. Currently, the stock trades at a FY25F P/E of 16x. A downside risks is a tougher-than-expected competitive landscape.
Company profileMYOR is a leading player in Indonesia's food market, offering high-quality products at affordable price points. MYOR is also a market leader in some of its products, not only in Indonesia but also in the export market. Its products include food processing (53% of sales) and coffee products (47% sales). Its processed-food products include wafers, biscuits, chocolates, milk and cereals. The company also exports to the Philippines, Vietnam, Malaysia, Thailand, China, India, Africa, US, Russia, Middle East, Lebanon and Africa. Philippines, MYOR’s biggest export market, accounts for 30% of its exports.
Valuation MethodologyOur target price of IDR3,700 is based on 2025F P/E of 26.5x (+0.3SD of its five-year-mean). The benchmark index of the stock is JCI.
Risks that may impede the achievement of the target priceDownside risk would be tougher-than-expected competition landscape.
ESGMYOR is among the best Indonesian consumer companies in terms of good corporate governance practices, in our view. It has contributed to the Indonesian Food and Nutrition Society’s house-to-house and in-school education programs and has been promoting the ‘healthy breakfast movement’ across Southeast Asia. MYOR has also been offering technical assistance and training in planting coffee (one of its major raw materials) to reduce environmental waste, as well as ensuring long-term ability to produce high-quality products in order to help farmers and their communities.
Fig. 1: Biscuits and wafer market share trend
Source: Company data, Verdhana research
Fig. 2: Coffee and cocoa price index (Jan'23 = 100)
Source: Bloomberg Finance L.P., Verdhana research
Fig. 3: MYOR – Forward P/E band
Source: Company data, Verdhana estimates
INVESTMENT RATINGS A rating of ‘Buy’, indicates that the analyst expects the stock to outperform the Benchmark over the next 12 months. A rating of ‘Neutral’, indicates that the analyst expects the stock to perform in line with the Benchmark over the next 12 months. A rating of ‘Reduce’, indicates that the analyst expects the stock to underperform the Benchmark over the next 12 months. A rating of ‘Suspended’, indicates that the rating, target price, and estimates have been suspended temporarily to comply with applicable regulations and/or firm policies. Securities and/or companies that are labelled as ‘Not Rated’ or ‘No Rating’ are not in regular research coverage. Benchmark is Indonesia Composite Index (‘IDX Composite’). A ‘Target Price’, if discussed, indicates the analyst’s forecast for the share price with a 12-month time horizon, reflecting in part of the analyst’s estimates for the company’s earnings, and may be impeded by general market and macroeconomic trends, and by other risks related to the company or the market in general.
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