KLBF Apr2020

KLBF

Contact our analyst Eka

24% Upside, BUY
9th April, 2020
Price Rp 1145
Target price Rp1415

2019FY Result: Slight Increase

In 2019FY, KLBF net sales increased 7.4% YoY to IDR 22.63 trillion. Distribution & logistics grew 15.7%, higher than the other segments, and was 33% of total sales with IDR 7.37 trillion. Nutrition was 29% of total sales at IDR 6,62 trillion, prescription IDR 5.16 trillion and the consumer health segment recorded sales of IDR 3.47 trillion, lower by -2.8% YoY.
Gross profit increased slightly +4% YoY to IDR 10.24 trillion, profit before tax was +2.9% YoY at IDR 3.4 trillion and net income grew +2.0 % YoY to IDR 2.5 trillion

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Conservative for 2020

Amid the covid-19 outbreak and currency weakness which impacts costs, we are conservative on KLBF’s performances outlook in 2020. KLBF’s healthcare products are likely to be in demand because of the situation, but we also see weaker purchasing power and disruptions to the supply chain.
Rupiah depreciation will increase costs as most of KLBF’s raw materials are imported.
Positive sentiment can came from the government policy (Perppu No.1 2020) to help boost the economy and financial system. One of the policies is import duty exemption for products related to Covid-19 treatment. KLBF targets sales growth in the range of 6-8% YoY, and in line with that we expect 2020F net sales will reach IDR 24.03 trillion or 6.2% YoY growth. We are also expecting stable to lower margins from higher costs.

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Valuation: BUY TP 1,415 with 24% upside

We are targeting KLBF to trade at 25x PE within a year. Target Price is IDR 1,415 which represents 24% upside. BUY

Previously

KLBF Sep2019