KLBF
Contact our analyst Eka
28% Upside, BUY
12th November, 2020
Price Rp 1470
Target price Rp1890
12th November, 2020
Price Rp 1470
Target price Rp1890
More covid-19 related products and vaccine update
3Q2020 results bellow expectation
Margin Improved
Valuation: BUY TP 1,890 with 28% upside
- KLBF’s covid-19 vaccine collab with Genexine, is now targeting commercialization in the middle or 3Q of 2021, after facing delays in stage I research.
- As of October 2020, the vaccine is still in stage 2 clinical trials which are being carried out in South Korea, as will stage 3. The clinical trials in Indonesia are expected to start in 4Q2020.
- KLBF has also launched Remdesivir treatment for Covid-19 in Indonesia.
3Q2020 results bellow expectation
- As of 9M2020, KLBF recorded positive net sales growth of 1.6%% YoY to IDR 17.1 trillion. In terms of QoQ growth, KLBF net sales decreased by -5.3% to IDR 5.49 trillion in 3Q2020.
- Consumer health decreased -23.7% QoQ to IDR 820.59 billion in 3Q2020 due to higher consumer health product demand earlier in the covid-19 outbreak in 2Q2020. Distribution and logistics also decreased by -10.7% QoQ to IDR 1.74 trillion in 3Q2020.
- Nutrition and Pharmaceutical sales still maintained a positive QoQ growth in 3Q2020. Nutrition recorded sales of IDR 1.72 trillion or growth of +6.8% QoQ and Pharmaceutical sales recoded +3.3% QoQ growth to IDR 1.2 trillion in 3Q2020.
- As KLBF’s management has revised their sales target for 2020F, we revise our 2020F target to 4.7% growth, IDR 23.7 trillion.
Margin Improved
- Despite the 3Q2020 sales decrease, KLBF still maintained their margin due to price increases on selected products.
- Profit before tax grew +4.4% YoY to IDR 2.68 trillion, mostly due to lower operating expenses and forex gains. The margin slightly improved from 15.3% to 15.7% in 9M2020.
- The net income margin also increased slightly to 11.9% and net income grew by a single digit +5.8% YoY to IDR 2.02 trillion.
- We are expecting KLBF can at least maintain their margin in 2020F and the bottom line will reach IDR 2.69 trillion or growth of +8% YoY.
Valuation: BUY TP 1,890 with 28% upside
- We are targeting KLBF to trade at 30x PE within a year. Target Price is IDR 1,890 which represents 28% upside. BUY
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