ICBP May2024

ICBP

Contact our analyst Eka

Buy, 25% upside
8th May 2024
Price Rp 10,775
Target price Rp 13,500

Sales across all business segments increased

ICBP's sales rose by 4.1% YoY or 20% QoQ, reaching IDR 19.9 trillion, driven by growth across all business segments. Domestic sales climbed to IDR 14.5 trillion, marking a 3.3% increase. Meanwhile, sales to the Middle East and Africa saw a modest growth of 0.4% YoY, reaching IDR 3.96 trillion, and sales to Other Asia surged by 23.6% YoY to IDR 533 billion in Q1 2024.
Every business segment of ICBP recorded positive growth, with the beverage segment achieving the highest annual growth of 8.2% YoY or 5.4% QoQ to IDR 426 billion, spurred by a 10% increase in volume. This resulted in a significant improvement in the beverage segment's EBIT margin, which rose to 16.5% from 11.8% in the previous year.
The dairy segment also sustained positive growth, increasing by 2.6% YoY and 19.8% QoQ to IDR 2.7 trillion in Q1 2024. The EBIT margin for this segment improved gradually to 13.1%, driven by an 8% rise in dairy sales volume due to higher demand during the Ramadan season.
Noodle sales maintained a 4.7% YoY growth or 19.1% QoQ, reaching IDR 14.67 trillion. The annual EBIT margin peaked at 27.8% in Q1 2024, aided by a 7% increase in domestic sales volume and lower raw material prices.
Snack food sales increased by 2.6% YoY and 14.6% QoQ to IDR 1.16 trillion, with a stable EBIT margin of 7.7%.
Sales of food seasoning grew by 3.4% YoY and 58% QoQ to IDR 1.3 trillion, although the EBIT margin declined YoY to 11.7%. Sales of nutrition and special foods rose by 5.8% YoY to IDR 335 billion, maintaining a stable EBIT margin of 9.9%.
For FY 2024, ICBP anticipates single-digit sales growth, expecting higher demand and volume expansion.

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Q1 2024 Results: Maintained double-digit Core profit growth

ICBP reported a net profit of IDR 2.35 trillion in Q1 2024, recovering from a net loss in Q4 2023, but this was a -40.5% decrease YoY, primarily due to net losses on foreign exchange differences from financing activities totaling IDR 1.19 trillion. Nevertheless, ICBP's core profit in Q1 2024 reached IDR 3.24 trillion, reflecting a 13.2% YoY growth.
ICBP's gross profit increased by 9.2% YoY to IDR 7.6 trillion, with an improved gross profit margin (GPM) of 38.2% due to higher sales volume and lower input prices, with raw material expenses decreasing by -8.8% YoY.
ICBP's operating profit also increased by 23.2% YoY to IDR 4.9 trillion, with a higher operating profit margin of 24.7% due to reduced operating expenses by -9.6% YoY.
Anticipating higher demand in 2024 and a weaker Rupiah, we target ICBP's bottom line to reach IDR 8.56 trillion, reflecting a 22.5% growth.

Valuation: Maintain Buy rating with TP to 13,500

Our target price for ICBP is set at IDR 13,500, reflecting a potential upside of 24% and a 16X PE valuation within a year. We maintain our BUY recommendation.

Previously