GGRM 2017 NPAT came above

  • GGRM booked 4Q17 net profit of IDR2.3tn (+1.9% QoQ/+12.6% YoY), bringing 2017 earnings to IDR7.8tn (+16% YoY), above our forecast and slightly higher than consensus projection.
  • Higher-than-expected 2017 earnings came from higher profitability on lower COGS & opex, as seen from 4Q17 gross margin and operating expansion to 23.4% and 15.6% from 22% and 14.9% respectively in previous quarter.
  • Slight recovery in 4Q17 revenue, growing 2.4% QoQ/8.6% YoY, which we believe could be attributed partly by price adjustment and operating efficiency. This coupled with lower costs translate to 2017 operating profit growth of 11.5% YoY, above our forecast.
  • On the B/S front, 4Q17 net gearing rose to 43%, but in line with the seasonality of higher working capital requirement toward the end of year. 2017 net gearing of 43%, however, was lower than 2016 figure of 46%.
  • Our last rating on GGRM was a BUY with TP of IDR95,000