ICBP
Contact our analyst Eka
Buy, 35% upside
18th April 2024
Price Rp 10,150
Target price Rp 13,750
18th April 2024
Price Rp 10,150
Target price Rp 13,750
Dairy Sector Achieves positive-growth
- In Q4 2023, ICBP's sales increased by 4.5% YoY, yet they declined by -1.3% QoQ, to IDR 16.6 trillion. This change was due to a decline in snack food sales, although the dairy segment recorded positive growth. Domestic sales amounted to IDR 10.8 trillion, marking a slight increase of 0.6%. Meanwhile, export sales to the Middle East and Africa showed robust growth, rising by 13% YoY to reach IDR 4.6 trillion in Q4 2023.
- For FY 2023, ICBP reported a 5% YoY increase in sales, reaching IDR 67.9 trillion.
- After a negative growth in the previous quarter, the dairy segment turned around with a growth of 4.3% YoY and 18.3% QoQ to IDR 2.3 trillion in Q4 2023, with the EBIT margin improving quarterly to 10.5%. However, dairy sales volume decreased by -4% YoY, resulting in a 3% drop in sales to IDR 9.12 trillion for FY 2023.
- Noodle sales maintained a 5.1% YoY growth but decreased by -3.6% QoQ, to IDR 12.32 trillion. Despite this, the annual EBIT margin decreased to 25.5% but increased quarterly from 24.8% in Q3 2023. Noodles continued to be the highest contributor, accounting for 72% of the sales at IDR 20.4 trillion, boosted by a 3% YoY increase in sales volume.
- Snack food sales declined by -3.7% YoY and -11.4% QoQ, to IDR 1.01 trillion, with a decrease in EBIT margin to 9.4% from 10.4% in the previous year.
- Beverage sales reached IDR 404 billion, with a growth of 4.9%, achieving a higher EBIT margin of 15% compared to 2.4% in Q4 2022.
- Food seasoning sales increased by 13.3% YoY and 1% QoQ, to IDR 820 billion, although the EBIT margin declined to 6.4%. Sales of nutrition and special foods rose by 6.6% YoY to IDR 329 billion, with a stable EBIT margin of 7.1%.
- For FY 2024, ICBP forecasts single-digit sales growth, expecting higher demand and volume expansion.
Trade what you want (exciting shares like ICBP) when you want & wherever you are. Simply sign up for our Binaartha Online Trading
⬇️ here.⬇️
⬇️ here.⬇️
4Q2023 Results: Double-digit Core profit growth
Valuation: Maintain Buy rating with TP to 13,750
- ICBP reported a net loss of IDR 69 billion in Q4 2023, primarily due to an impairment loss on a long-term investment in Dufil Prima Food Plc. (Nigeria) of IDR 2.48 trillion, linked to a currency crisis in Nigeria and depreciation of the Nigerian naira. However, ICBP's core profit in Q4 2023 reached IDR 3.36 trillion, reflecting a 67.9% YoY growth.
- The cost of goods sold decreased by -6.2% QoQ and remained stable YoY, attributed to a -1.96% decrease in raw material costs. As a result, ICBP's gross profit increased by 8.8% YoY, to IDR 6.07 trillion, with an improved gross profit margin (GPM) of 39.3%, the highest in 2023.
- The rebound in CPO in Q1 2024, along with declines in wheat and sugar prices, is anticipated to drive higher margins in 2024. The management's guidance for EBIT ranges from 19% to 21% for FY 2024.
Valuation: Maintain Buy rating with TP to 13,750
- Our target price for ICBP is set at IDR 13,750, reflecting a potential upside of 35% and an 18X PE valuation within a year. We maintain our BUY recommendation.
Previously
