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ICBP

Contact our analyst Eka
Buy, 35% upside
14th April 2022
​Price Rp 7,325

Target price Rp 9,885
Sales lower quarterly
  • ICBP booked double digit sales growth of +11.3% YoY but sales were lower -1.7% QoQ to IDR 14.2 trillion in 4Q2021, while higher raw material prices (wheat, skim milk powder, CPO) in 4Q2021 weighed on margins.
  • Noodles sales grew +13% YoY but were lower by -2.7% QoQ to IDR 10.2 trillion and the EBIT margin declined from 26.4% last year to 25% due to the rising raw material costs.
  • Dairy and beverage sales both grew YoY and QoQ to IDR 2.35 trillion and IDR 339 billion respectively, but both also had lower EBIT margins which decreased to 2.7% and 3.8% due to higher skim milk powder  prices.
  • Snack Food sales were IDR 846 billion which is an increase of +6.5% YoY but lower -6.2% QoQ. The snack food EBIT margin also decreased to 4.9% from 14.1% last year.
  • Food Seasoning sales decreased -1% YoY or -8.6% QoQ to IDR 581 billion with a higher EBIT margin of 16.3% from 10.6% last year.
  • Nutrition & Special Food sales decreased -2% YoY but increased +5.3% QoQ to IDR 284 billion with a higher EBIT margin of 11.5%.
  • For 2021FY, ICBP maintained double digit growth of +22% YoY to IDR 56.8 trillion, which is +99.2% in line with our forecast.
  • We maintain our double-digit sales growth target for this year of +16% to IDR 65.6 trillion.

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Lower Margins
  • Because of higher raw material costs, ICBP margins were lower in 4Q2021.
  • ICBP booked a profit of IDR 1.4 2trillion, down by -46% YoY or -18.8% QoQ with a lower net profit margin of 10% from 21% in 4Q2020.
  • For 2021FY, ICBP net profit slightly decreased -3% YoY to IDR 6.38 trillion with a lower NPM of 11.2% from 14.1%.
  • Cost of goods sold increased +20% YoY or +1.2% QoQ from the increase in raw material prices. As a result ICBP gross profit decreased -3% YoY or -7% QoQ to IDR 4.75 trillion in 4Q2021. This resulted in a lower GPM from 38.4% in 4Q2020 to 33.5% in 4Q2021.
  • For 2021, the gross profit margin also decreased to 35.7% from 36.9%.
  • As rising prices for most raw materials will continue in 2022F, we expect the margin will contract further and target net profit to reach IDR 7.5 trillion for 2022F.

Valuation: Maintain BUY with TP 9,885
  • We are targeting ICBP to reach IDR 9,885 or 35% upside, which is a 14x PE valuation within one year. Maintain BUY.
Read the full report
Previously
​ICBP Dec2021
​ICBP Aug2021
​ICBP Mar2021
​ICBP Dec2020
​ICBP Jul2020
​ICBP, may 2017
PT. Binaartha Sekuritas

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