HMSP 3Q18 volume: +1.2% YoY, Flat Market Share
Michael W Setjoadi – RHB Sekuritas
♦9M18 volume growth of +0.1% – this is still better than the industry’s decline of -0.5% YoY, which met our and consensus’ FY18 estimates.
♦Sampoerna A’s market share down 60bps QoQ and 30bps YoY, as A Mild 16 ‘s 3Q18 ASPs increased 11.3% YoY. We believe this is to further differentiate the market positioning between Sampoerna A, U and Magnum Mild.
♦Dji Sam Soe (DSS) continued to gain market share through its Magnum Mild 16 product. Market share has improved to 9.4%, +30bps QoQ and +130bps YoY.
♦Hence, lower sales mix (higher sales contribution from Magnum Mild 16) could pressure HMSP’s margin. On the other hand, HMSP has aggressively increased the prices of A Mild and U Mild to offset lower sales mix.
♦Pick up in general trade, post retail price floor regulation. Retail price floor regulation is much easier to be enforced in MT could shift the spending trend of cigarettes back to the GT. In addition, low cig affordability may also encourage smokers to buy cigarettes on per-stick basis, instead of a pack.
Details in our report: https://research.rhbtradesmart.com/attachments/21/rhb-report-ind_hmsp_results-preview_20181019_rhb-49487143315901165bc9050d17ce5.pdf
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