ICBP Dec2021

ICBP

Contact our analyst Eka

Buy, 33% upside
9th December, 2021
Price Rp 8,775
Target price Rp 11,340

Double-digit sales growth

In 3Q2021, ICBP booked double digit sales growth of +33% YoY or 10% QoQ to IDR 14.4 trillion. For 9M2021, sales growth was also a double digit 25.7% YoY to IDR 42.6 trillion, and this is in line with our forecast.
Noodles recorded faster growth of +42% YoY or 12% QoQ to IDR 10.5 trillion in 3Q2021. Noodles EBIT margin was higher at 21.8% compared to 20.9% in 3Q2020.
Diary sales were up +15% or +2% QoQ to IDR 2.24 trillion. Diary EBIT margin decreased to 6.5% from 10.8% from higher cogs, up +20% YoY.
Snack Food sales were IDR 902 billion which is an increase of +32% YoY or +20% QoQ, but snack food EBIT margin was lower at 5.6% from 11.4% last year.
Food Seasoning sales decreased -4% YoY or -10% QoQ to IDR 635 billion with a lower EBIT margin of 11.5%.
Nutrition & Special Food sales increased +20% YoY or +8% QoQ to IDR 270 billion.
Beverages recorded growth of +21% YoY to IDR 331 billion, but the EBIT margin was negative after a positive margin in 1Q2021.
We maintain our double-digit sales growth target for this year of +23% YoY to IDR 57.26 trillion.

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Higher Margins

In 3Q2021, ICBP booked profit of IDR 1.74 trillion, up sharply +199% YoY or +17.8% QoQ with a higher net profit margin of 12.1% from 5.4% in 3Q2020.
For 9M2021, net profit increased +25.4% YoY to IDR 4.97 trillion with a stable NPM of 36.4%.
The cost of goods sold increased +36.1% YoY from an increases in raw materials. However ICBP’s gross profit still grew +27.5% YoY or 11.8% QoQ to IDR 5.1 trillion in 3Q2021. This resulted in a lower GPM from 36.9% in 3Q2020 to 35.4% in 3Q2021.
For 9M2021, gross profit still grew +26% YoY to IDR 15.5 trillion.
As 3Q2021 profit growth is faster than expected, we revise up our 2021F profit target to IDR 7.2 trillion or +10.5% YoY.

Valuation: Maintain BUY with TP 11,340

We are targeting ICBP to reach IDR 11,340 or 33.4% upside, which is a 15x PE valuation within one year. Maintain BUY.

Previously

ICBP Aug2021