MARK 1Q22 Earning Report (June 6 2022) | 02 August 2022

MARK  reported  another  satisfactory  1Q22  results  Some  of  the  notable
result  includes:
1Q22  Revenue:  Steady  QoQ  Revenue  stream
MARK  1Q22  revenue  reached  IDR361bn,  +66%  YoY  compared  to  1Q21.  On
QoQ  basis,  MARK  1Q22  revenue  is  maintained  at  361B  which  was  around
the  same  amount  of  revenue  earned  in  4Q21.
1Q22  Margin:  Steady  margin  from  capacity  expansion
As  the  company  expands  its  scale,  the  impact  towards  margin  have  been
steady.  MARK’s  1Q21  Gross  Margin/Operating  Margin/Net  Margin  has
reached  56.8%/47.4%/34.8%.  An  improvement  by  8.2ppts/6.6ppts/
2.6%ppts  QoQ.  This  result  proves  that  capacity  expansions  undertaken  by
the  company  did  yields  a  better  margin.
1Q22  Net  income:  Significant  YoY  growth
Combination  of  strong  revenue  growth  and  improving  margin  has  resulted  in
Q122  net  income  of  IDR392bn,  +81.3%  YoY.  QoQ  Net  income  also  improved
significantly  compared  to  3Q21/4Q21  of  -4,1%  to  an  even  +8%  this  QoQ.
Record  High  Dividend  payout:  Record  high  payout
With  the  company  realizing  its  plan  to  increase  its  dividend  payout  ratio  from
the  historical  range  of  30%-40%  to  50%  in  2022,  resulting  a  ~4%  dividend
yield  this  year,  Dividend  will  be  paid  earlier  than  expected  (previous  2H22)
to  1H22.  Dividend  distributed  per  share  for  FY21  will  be  Rp.50/Share  (Vs.
FY2021  Rp.15/Share).  Worth  to  note  that  that  this  dividend  is  amounted  to
MARK’s  IPO  Price  back  in  2017,  Truly  a  milestone  for  the  Company.
Maintain  BUY,  target  price  at  IDR2,000,  70%  upside.  We  remain  bullish
on  MARK’s  onward  growth  in  2022F.  We  maintain  our  previous  target  price
at  IDR2,000,  reflecting  16x  2022F  EPS  (vs  Initiate  TP:  13x  EPS).  We  believe
this  higher  multiple  is  justified  by  MARK  excellent  growth  and  its  upcoming
ESG  initiatives  such  as  upcycling  defective  formers  and  excess  materials
into  sanitary  wares  that  will  entice  new  investors.  Risk  to  our  call  include
slower  demand  and  supply  chain  issues.

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