KLBF June2021

KLBF

Contact our analyst Eka

30% Upside, BUY
2nd June, 2021
Price Rp 1450
Target price Rp1880

1Q2021: Positive sales growth

KLBF recorded record net sales of IDR 6.02 trillion, up 3.8% YoY in 1Q2021.
Distribution & logistics and consumer health sectors recorded positive growth of 11.7% and 2.7% respectively in 1Q2021. Distribution and logistics was the largest contributor with 33% of total sales, IDR 2.0 trillion. Consumer health contributed 17% of total sales, IDR 1.02 trillion.
Nutrition contributed 26% of total sales, IDR 1.58 trillion which is a slight decline of -1% YoY. Pharmaceutical was stable and contributed 23% of total sales, IDR 1.39 trillion.
Most of KLBF segments recorded slightly lower margins YoY except distribution and logistics. Consumer health gross profit margin decreased to 53% in 1Q2021 from 54%, while distribution and logistic GPM slightly increased to 25% from 24%. Pharmaceutical and nutrition GPM was 53% from 54%.
With the positive results and high demand in 1Q2021, we expect better growth in the next quarters. The management has revised their 2021 target growth from 5%-6% to 7%-9%. We are targeting single digit growth for KLBF sales in 2021 to reach IDR 24.2 trillion.

Stable Margin

KLBF recorded +1.1% gross profit growth in 1Q2021 to IDR 2.65 trillion, inline with a higher cost of revenue +6% YoY. This resulted in a lower gross profit margin, and was due to higher growth in lower gross margin products
KLBF still maintained their overall margin though, due to efficiency at the operating level. Operating profit increased by +4.3% YoY to IDR 926 billion, while the operating profit margin was stable at 15.4% YoY in 1Q2021
The net profit margin increased slightly to 11.9% and net income grew by a single digit +7.1% YoY to IDR 716 billion in 1Q2021.
We are forecasting KLBF net profit to reach IDR 2.88 trillion, which is growth of +6% YoY.

Valuation: BUY TP 1,880 with 30% upside

We are targeting KLBF to trade at 29x PE within a year. Target Price is IDR 1,880 which represents 30% upside. BUY

Previously

KLBF Apr2021