Performance Review of BATA 2022-Q4

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PT Sepatu Bata Tbk (IDX : BATA)

Based on the 2022-Q4 financial report and the stock price of Rp 605 (at the time of writing this article), BATA is already overvalued because its PBV is 2.46x. But what about its performance and future prospects?

BATA's History

In 1932, the company was established in Indonesia as a shoe importer, and then started production at the Kalibata factory in South Jakarta. It has been listed on the Jakarta Stock Exchange (now the Indonesia Stock Exchange) since March 24, 1982, and has been listed for 41 years. In 2004, the company completed its expansion by building a factory in Purwakarta. In 2009, the factory in Kalibata was sold and the production activities were moved to the Purwakarta factory. In 2020, the company was able to increase digital sales by 95% compared to 2019. In addition, it converted 99 physical stores into online cash registers (POS) from previously using offline cash register software. In 2021, it formed PT Sepatu Bata Online to focus on online sales.

From the author's point of view, the company is very late in implementing the latest technology as an innovation to improve performance. This is reflected in the cash register system, where in years before 2020, they still used offline cash register software, meaning that sales reports were not in real-time to the headquarters. For the online sales segment, only in 2021 did they focus on establishing a subsidiary to manage online sales. Although late, at least the company is trying to innovate.

Performance of the year 2022

Income Statement

Source : Consolidated financial statements

Year 2022 was better than year 2020 and 2021, but still below the performance of year 2018 and 2019. The company was able to achieve sales of Rp 643.4 billion.


Source : RTI Business

The Profit and Loss Ratio is as follows:

1. GPM = 40.4%

2. OPM = -9.4%

3. NPM = -16.5%

The important point for the author is that PT Sepatu Bata Tbk is only made as a business for Indonesia, because the GPM Ratio is very thick (able to reach 40.4%) but the OPM and NPM ratios instead become negative (loss). The position that experienced a significant increase is in the Advertising Position, which in 2021 spent Rp 7.5 billion while in 2022 it was Rp 21.5 billion. In addition, there was a large depreciation position. As for the position of decrease in value, it was Rp 1.8 billion, while in the previous year there was none. The general and administrative expenses in the license position, in terms of ratio, consumed a profit of 4.2%.

Almost 99.1% worth of Rp 637.3 billion of sales were made domestically, while the remaining 0.9% worth of Rp 6 billion were made through export.

Financial Balance Sheet

From the author's point of view, the company has experienced a decline in performance over the last 5 years, as reflected by the decrease in assets and equity, and the increase in liabilities (DER 126.36%).
Source : RTI Business

In terms of liquidity, the company's ratios are as follows:

1. Debt to Equity Ratio = 126.36%
2. Cash Ratio = 0.69%
3. Quick Ratio = 22.41%
4. Current Ratio = 103.07%

Conclusion:

The author sees that BATA's financial performance is not attractive as it has recorded a net loss in the past 3 years. Instead of buying BATA, the author prefers to invest in government bonds or deposits.

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