SIDO
Contact our analyst Eka
25% upside, Buy
28th April 2021
Price Rp 805
Target price Rp 1000
28th April 2021
Price Rp 805
Target price Rp 1000
Maintained Positive Growth
- Despite weak domestic demand because of Public Activity Restrictions (PPKM) in early 2021, SIDO’s maintained positive-growth in 1Q2021. SIDO booked sales of IDR 793 billion or up +9% YoY.
- The F&B segment grew +30% YoY growth to IDR 257.4 billion, inline with high demand for healthy drink products. As of 1Q2021, the healthy drink category contributed 50% of F&B sales.
- The Herbal segment grew +1%, while pharmacy decreased -8% YoY but that’s a lesser decline than last year.
- For Export sales, SIDO booked higher sales in 1Q2021 driven by F&B energy drink products, especially to Malaysia and Nigeria. Export sales contributed 3% of total consolidated sales.
- Online sales also grew strongly up by 1700% in 1Q2021. Online sales have started contributing to growth in the last 4 quarters.
- We are still expecting double-digit sales growth in 2021F as we expect better 2Q2021 demand inline with growing consumer demand for health products and as the vaccination program is expected to normalize economic activity.
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1Q2021 Result: Higher Margin
Valuation: Maintain BUY with TP 1,000
- In 1Q2021, SIDO maintained double-digit net profit growth of +13% YoY to IDR 269 billion with a higher NPM of 34% compared to 1Q2020’s 32%. Higher margins were due to stable raw material prices and SIDO maintaining effective cost management.
- Operating profit grew double digits in 1Q2021 +16% YoY to IDR 332 billion and the operating profit margins increased to 42% from 39% in 1Q2020.
- Gross profit grew +10% YoY to IDR 793 billion in 1Q2021 and the gross profit margin was stable at 56%.
- We maintain our target for 2021F net profit to grow +14% to IDR 1.06 trillion.
Valuation: Maintain BUY with TP 1,000
- We are targeting SIDO to reach IDR 1,000 or 25% upside, which is a 25x PE valuation within one year. Maintain BUY.
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