---
endpoint: analytics
pattern: Consumer
status: done
latency_ms: 256634
conversation_id: a63618bb-3886-42ea-b8d9-73406a9ddfc9
citations: 17
created: 2026-05-31 22:11:43Z
---

# Is CLSA incrementally more positive/negative on Unilever Indo. If so, why?

# CLSA on Unilever Indonesia (UNVR IJ): Incrementally LESS NEGATIVE — but only valuation-driven; relative preference remains poor

**Short answer:** Yes — CLSA has turned **incrementally less negative** on UNVR over the past 6–7 months. The headline rating moved from **Underperform → Hold** in Feb 2025, and CLSA stayed at Hold after a stronger-than-expected 1Q25 in Apr 2025. **However, the upgrade was a valuation call on the share-price pullback rather than a thesis change**, and as recently as 12-June-2025 CLSA still flags UNVR as one of its two **least-preferred** names in the Indonesian consumer space.

---

## Rating / TP trajectory (last ~7 quarters)

| Date | Note title | Rating | TP (Rp) | What changed |
|---|---|---|---|---|
| 24-Oct-2024 | "Hitting the skids" | **Downgrade Hold → U-PF** | 2,500 → 1,980 | 24-26CL EPS cut 28%/24%/23% on weak 3Q24 (vol −16.1% YoY); transformation costs continue [11][12] |
| 26-Nov-2024 | "Ice cream divestment" | U-PF (unchanged) | 1,980 | Rp7tn pre-tax sale, viewed **neutral**; potential special dividend flagged [17] |
| 13-Feb-2025 | "Challenging moments" | **Upgrade U-PF → HLD** | 1,980 → 1,400 | 25/26CL EPS cut 13%/12%; target PE cut 18.5x → 15.5x (–2 std dev); upgrade driven by **share-price pullback**, not fundamentals [14][15] |
| 24-Apr-2025 | "Holding steady" | HLD (unchanged) | 1,400 | 1Q25 NPAT **+35% vs CL** on margin expansion/efficiencies; sales still −6% YoY; volumes still negative [1][3] |
| 12-Jun-2025 | "Needs over wants" (sector) | HLD | 1,400 | UNVR explicitly listed as **least-preferred** in the consumer space [6][7] |

The cumulative direction since the Oct-2024 downgrade is clear: from outright Underperform with –15% downside [11] to Hold with roughly flat upside [1], with progressively more constructive language around operational execution.

---

## Why CLSA has become incrementally LESS negative

**1. The transformation playbook is now further along.** Management told CLSA in Feb 2025 that distribution-channel inventory was at a **10-year low** — down ~50% since the destocking program began in 2021 — which is freeing up working capital and improving distributor performance [16]. By the 24-Apr-2025 review CLSA notes that management has **completed** both the stock-reduction and price-harmonisation strategies and is now pivoting to brand-equity building, distribution expansion and cost efficiencies [2].

**2. 1Q25 was a clean upside print on margins.** 1Q25 NPAT of Rp1,237bn came in **35% above CLSA estimate** (and 32% above consensus), with EBIT +215% QoQ and net margin recovering to 13.1% from 4.6% in 4Q24 [3]. Gross margin rebuilt to 48.2% (from 44.5% in 4Q24), and operating margin to 17.1% (from 6.7%) [3]. This is the first quarter where the efficiency narrative produced visible P&L payoff.

**3. Food & Refreshment is showing first green shoot.** F&R segment growth turned **slightly positive (+0.6% YoY in 1Q25)** after six consecutive negative quarters [4].

**4. Valuation has reset hard.** The stock is down ~39% over the trailing 12 months (absolute) [5]. CLSA's target PE was reset to 15.5x — well below historical norms — and the previously punitive –15% downside [11] has narrowed to roughly flat at the Apr-2025 mark [1].

**5. Ice-cream divestment removes a structural headwind.** The Rp7tn (pre-tax) sale at an implied **20–28x PE — above UNVR's then-current 19.8x/17.9x 24/25CL multiple** — was deemed accretive in valuation terms, removes a category where Chinese entrants (Aice, Joyday) were eroding share (from 59% in 2015 to 48% in 2023), and creates optionality for a special dividend [17].

---

## …but the relative call is STILL negative — three reasons

**1. The upgrade was explicitly valuation-driven, not thesis-driven.** CLSA's own language at the Feb-2025 upgrade: *"Given the recent price pullback, we upgrade from Underperform to Hold"* [14][15]. EPS forecasts were CUT 13%/12% at the same time the rating was lifted — a tell that this was not a fundamental rerate.

**2. Volume is still bleeding, and Home & Personal Care is getting worse, not better.** HPC segment sales growth was **−13.4% YoY in 1Q25**, the worst print in the available series and a deterioration from −12.2% in 4Q24 [4]. CLSA expects 2Q25 sales of Rp8,516bn (−10% QoQ / −5% YoY) as the transformation strategy still affects sell-in [10].

**3. In CLSA's June-2025 Indonesia consumer framework, UNVR is one of two LEAST-PREFERRED names.** Top picks are AMRT, ICBP and CMRY; tactical: MYOR. **Least preferred: UNVR and SIDO** — UNVR specifically because *"downtrading trend also means brand switching. Home care is one of the most downtraded categories (less staples)"* [6][7]. UNVR was also the **only** HPC peer with negative aggregate HPC sales (vs positive readings across other players) — a company-specific share loss signal, not just a category problem [8]. CLSA also notes UNVR's transformation cost initiatives won't show up until 2H25 [10].

---

## Synthesis

The directional shift is **less negative**, not positive. Two distinct vectors are operating:

- On an **absolute** basis: rating up one notch (U-PF → HLD), 1Q25 P&L delivered, valuation has reset, ice-cream divestment removed a problem segment.
- On a **relative** basis (within Indonesian consumer): still bottom-of-the-pack, still flagged as a brand-switching loser in the current downtrading cycle, with HPC volumes still deteriorating.

So when the user asks "incrementally more positive/negative" — the right framing is: CLSA has dialled back the *severity* of its negative call (U-PF → HLD) on better operational evidence and a much cheaper share price, but has **not** moved to a constructive thesis. The lead analyst (Jennifer Widjaja, jennifer.widjaja@clsa.com / +62 21 5088 7825) is still waiting to see post-Eid sales normalisation and the sustainability of cost-efficiency initiatives before getting more constructive [2].

**Key risk to thesis (catalysts that could push CLSA more positive):** sustained gross-margin expansion (CLSA flags lower CPO helping QoQ in 2Q25F to 48.9%) [10], HPC stabilisation, and execution on brand-equity rebuild in 2H25 as management has guided. **Key risk to thesis (could push CLSA back to negative):** continued HPC volume bleed, soft purchasing power, and competitive share loss to local/value brands.

---

**Sources**
[1] Unilever Indo – HLD (Holding steady) — CLSA, 24-Apr-2025 — 607956782LinqAlpha.PDF
[2] Same as above — 607956782LinqAlpha.PDF
[3] Same as above (1Q25 P&L table) — 607956782LinqAlpha.PDF
[4] Same as above (HPC vs F&R segment growth table) — 607956782LinqAlpha.PDF
[5] Same as above (stock performance table) — 607956782LinqAlpha.PDF
[6] Indonesia consumer (Needs over wants) — CLSA, 12-Jun-2025 — 607961903LinqAlpha.PDF (top picks / least preferred table)
[7] Same as above (text body) — 607961903LinqAlpha.PDF
[8] Same as above (HPC aggregate sales paragraph) — 607961903LinqAlpha.PDF
[9] Same as above (MYOR tactical / UNVR-SIDO least preferred passage) — 607961903LinqAlpha.PDF
[10] Same as above (2Q25 gross-margin preview table) — 607961903LinqAlpha.PDF
[11] Unilever Indo – U-PF (Hitting the skids) — CLSA, 24-Oct-2024 — 607941817LinqAlpha.PDF (downgrade headline)
[12] Same as above (earnings-cut detail) — 607941817LinqAlpha.PDF
[13] Same as above (action plans / 4Q24 outlook) — 607941817LinqAlpha.PDF
[14] Unilever Indo – HLD (Challenging moments) — CLSA, 13-Feb-2025 — 607950575LinqAlpha.PDF (upgrade headline)
[15] Same as above ("Upgrade to Hold" paragraph) — 607950575LinqAlpha.PDF
[16] Same as above (distribution stock at 10-year low) — 607950575LinqAlpha.PDF
[17] Unilever Indo – U-PF (Ice cream divestment) — CLSA, 26-Nov-2024 — 607945483LinqAlpha.PDF

## Citations

- [1] **607956782LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607956782LinqAlpha.PDF>
- [2] **607956782LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607956782LinqAlpha.PDF>
- [3] **607956782LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607956782LinqAlpha.PDF>
- [4] **607956782LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607956782LinqAlpha.PDF>
- [5] **607956782LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607956782LinqAlpha.PDF>
- [6] **607961903LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607961903LinqAlpha.PDF>
- [7] **607961903LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607961903LinqAlpha.PDF>
- [8] **607961903LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607961903LinqAlpha.PDF>
- [9] **607961903LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607961903LinqAlpha.PDF>
- [10] **607961903LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607961903LinqAlpha.PDF>
- [11] **607941817LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2024/10/607941817LinqAlpha.PDF>
- [12] **607941817LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2024/10/607941817LinqAlpha.PDF>
- [13] **607941817LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2024/10/607941817LinqAlpha.PDF>
- [14] **607950575LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/02/607950575LinqAlpha.PDF>
- [15] **607950575LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/02/607950575LinqAlpha.PDF>
- [16] **607950575LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/02/607950575LinqAlpha.PDF>
- [17] **607945483LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2024/11/607945483LinqAlpha.PDF>

