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.
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