ICBP
Contact our analyst Eka
Buy, 22% upside
11th April 2023
Price Rp 10,075
Target price Rp 12,300
11th April 2023
Price Rp 10,075
Target price Rp 12,300
Maintained double-digit growth
- ICBP maintained double-digit sales growth of +12% YoY but sales were lower -2.6% QoQ to IDR 15.8 trillion with an improved margin in 4Q2022. For 2022, ICBP booked revenue of IDR 64.79 trillion with double digit growth of +14% YoY. Domestic sales contributed IDR 46.2 trillion with +12.2% growth while export sales to the Middle East and Africa grew by +14.5% to IDR 14.94 trillion.
- Sales of noodles grew by +14.5% YoY but declined -3.9% QoQ, to IDR 11.7 trillion with a higher EBIT margin of 26.1% due to higher prices and volumes while commodity cost pressure eased.
- Dairy sales declined by -5.9% YoY but were higher +10.1% QoQ to IDR 2.2 with a higher EBIT margin of 10% from 3.2% in 3Q2022 due to higher selling prices while volumes declined.
- Snack Food sales grew faster than others, +24.7% YoY or +7.4% QoQ to IDR 1.05 trillion. The snack food EBIT margin increased to 10.4% from 4.9% last year.
- Beverage sales grew by +11% YoY but were lower -9.2% QoQ to IDR 376 billion with a lower EBIT margin of 2.4% from 5.7% in 3Q2022.
- Food Seasoning sales grew by +24.6% YoY but declined -13.7% QoQ to IDR 724 billion while the margin recovered to 11.1%.
- Nutrition & special foods sales increased +8.5% YoY or +15.9% QoQ to IDR 308 billion but with a lower EBIT margin of 7.3%.
- Demand growth from Lebaran and fasting in March – April will boost ICBP performance in 1Q2023. We maintain our double-digit sales growth target for this year at +12% to IDR 72.33 trillion.
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4Q2022 Result: Margin Improvement continues
Valuation: Maintain Buy TP to 12,300
- The margin improvement continued in 4Q2022 due to lower commodity prices and higher selling prices.
- The cost of goods sold decreased by -6.1% QoQ but was still higher +6.8% YoY at IDR 10.08 trillion. As a result, ICBP's gross profit increased by +22.4% YoY or +4% QoQ to IDR 5.8 trillion in 4Q2022. This resulted in a higher GPM of 36.5%.
- Net profit decreased -9.9% YoY in 4Q2022 due to an IDR 1.33 trillion forex loss in 4Q2022 from a gain in 4Q2021. As a result, profit before tax was lower by -9.2% YoY or -5.5% QoQ to IDR 2.03 trillion.
- We expect higher margins in 1H2023 from higher volumes and higher selling prices. We are targeting net profit to reach IDR 7.71 trillion for 2023F which is +68% growth.
Valuation: Maintain Buy TP to 12,300
- We are upgrading our one year ICBP target price to IDR 12,300 which is 22% upside, and a 20X PE valuation. Maintain BUY.
Previously