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ULEVER: 1QCY10 Result Review

ULEVER announced its 1QCY10 results on January 26, 2010. The company posted NPAT of PkR582mn against PkR559mn for the same period last year, a growth of 4% YoY. The result translates into an EPS of PkR43.77/share for the period under review against PkR42.07/share for the corresponding period in the previous year. The company’s profitability was kept in check due to a shift in strategy to increase exposure in second-tier cities and associated increased spending on marketing and promotions. Going forward, we expect the company to closely follow its successful strategy of introducing continuous innovations to its existing brands in the Home and Personal Care (HPC) segment. That said, we believe the market has been over exuberant regarding ULEVER’s performance and outlook. Trading at a relatively expensive PER of 16x and at a premium of 25% to our target price of PkR3320/share, we recommend a SELL on ULEVER.
AKD Research 
30 April 2010

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