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ICBP

Contact our analyst Eka
Buy, 33% upside
9th June 2022
​Price Rp 8,575

Target price Rp 11,440
Maintained Double-Digit Sales Growth
  • ICBP maintained double digit sales growth of +13.9% YoY or +21.2% QoQ to IDR 17.18 trillion in 1Q2022, while margins in most of ICBP’s businesses declined from a year ago because of higher raw material prices (wheat, skim milk powder, CPO) in 1Q2022.
  • Noodles sales grew +12.8% YoY or +19.6% QoQ to IDR 12.2 trillion with a higher ASP and higher sales from the Middle East and Africa, +25% YoY. The EBIT margin declined from 26.7% last year to 23% due to rising raw material costs.
  • Dairy and beverage sales both grew YoY and QoQ to IDR 2.77 trillion and IDR 369 billion respectively, both had higher QoQ EBIT margins which increased to 11% and 8.2% after a drop in 4Q2021 due to higher skim milk powder  prices.
  • Snack Food sales were IDR 1.01 billion which is an increase of +13.9% YoY or +19.6% QoQ. The snack food EBIT margin decreased to 7.6% from 15.6% last year.
  • Food Seasoning and Nutrition & special foods had growth of +6.3% and +29.7% YoY  to IDR 991 billion and IDR 317 billion respectively. Both also booked higher EBIT margins of 12.3% and 9.1%.
  • As ICBP has increased prices in the range of 3% - 5% in 1Q2022, and demand is expected to grow in 2022,  we maintain our double-digit sales growth target for this year of +17% to IDR 66.3 trillion.

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Quarterly Margins Improve
  • Despite cost pressed from higher raw material prices, ICBP margins improved in 1Q2022.
  • ICBP booked a profit of IDR 1.94 trillion, up by +11.6% YoY or +36.6% QoQ with a higher net profit margin of 11.3% from 10% in 4Q2021.
  • Cost of goods sold increased +22.7% YoY or +19.9% QoQ from the increase in raw material prices. As a result ICBP gross profit was stable at IDR 5.87 trillion in 1Q2022. This resulted in a higher GPM from 33.5% in 4Q2021 to 34.2% in 1Q2022.
  • Profit before tax also grew +4.3% to IDR 2.76 trillion with lower finance expenses of -36% YoY.
  • With higher ASPs and an improvement in margins in 1Q2022, we expect net profit to reach IDR 7.3 trillion for 2022F  with double digit growth of +14.4% YoY.

Valuation: Upgrade TP 11,440
  • We are targeting ICBP to reach IDR 11,440 or 32% upside, which is a 17x PE valuation within one year. Maintain BUY.
Read the full report
Previously
​ICBP Apr2022
​ICBP Dec2021
​ICBP Aug2021
​ICBP Mar2021
​ICBP Dec2020
​ICBP Jul2020
​ICBP, may 2017
PT. Binaartha Sekuritas

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