MARK 4Q21 Earning Report | 28 March 2022

PT  Mark  Dynamics  Indonesia  Tbk  (MARK  IJ)
FY2021:  Double  Revenue,  Triple  Profit

Target  Price:  Rp2,000/share,  upside:  55%

MARK  reported  an  excellent  FY21  results  that  surpassed  our  expectation.  Some  of  the  notable  result  include:
 
FY21  Revenue:  doubling  revenue  achieved
MARK  4Q21  revenue  reached  IDR361bn,  +63.5%  YoY  compared  to  4Q20.  On  QoQ  basis,  MARK  4Q21  revenue  is  a  tad  higher  than  3Q21  Revenue  (+0.4%  QoQ).  This  brings  MARK’s  FY21  to  IDR1.194  tn,  +111.1%  YoY  growth,  beating  our  forecast  by  5.5%.  

FY21  Margin:  capacity  expansion  brings  solid  margin  improvement
As  the  company  expands  its  scale,  the  impact  towards  margin  has  started  to  bear  its  fruits.  MARK’s  FY21  Gross  Profit  Margin/Operating  Margin/Net  Margin  has  reached  50.8%/43.2%/32.9%,  significant  improvement  by  8.9ppts/10.7ppts/7.4%ppts  YoY.  On  QoQ  basis,  4Q21  Gross  margin  contracted  by  4.6ppts  to  48.6%  (vs  3Q21:  53.2%),  driven  by  one-time  bonus  for  employee,  thus  we  expect  gross  margin  to  recover  to  >50%  in  1Q22.

FY21  Net  income:  Profit  almost  tripled,  RoAE  reached  71%
Combination  of  strong  revenue  growth  and  expanding  margin  has  resulted  in  FY21  net  income  to  IDR392bn,  +172.3%  YoY.  Worth  to  note  that  this  also  translate  into  RoAA/RoAE  of  44.3%/71.0%,  underpinning  MARK’s  efficiency  on  its  asset  and  capital.

Cash  position:  Ready  to  become  a  dividend  play  in  2022  onwards
MARK  almost  reached  net  cash  position  by  the  end  of  FY21  (Net  gearing  ratio:  4.1%).  MARK  is  planning  to  increase  its  dividend  payout  ratio  from  the  historical  range  of  30%-40%  to  50%  in  2022,  resulting  in  ~4%  dividend  yield  this  year,  which  we  expect  to  be  paid  in  2H22.  

Maintain  BUY  and  upgrade  target  price  at  IDR2,000,  55%  upside.  We  remain  bullish  on  the  MARK’s  growth  trajectory  in  2022F.  We  upgrade  our  target  price  at  IDR2,000,  reflecting  16x  2022F  EPS  (vs  previous  TP:  13x  EPS).  We  believe  this  higher  multiple  is  justified  by  MARK  excellent  growth  and  its  upcoming  ESG  initiatives  that  will  enable  new  pool  of  investors.  Risk  to  our  call  include  slower  demand.

For  Full  Report,  Download  Here:
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