SIDO
Contact our analyst Eka
31% upside, Buy
10th February 2021
Price Rp 775
Target price Rp 1015
10th February 2021
Price Rp 775
Target price Rp 1015
Higher Sales QoQ
Expanding Countries and Products
- In the 4th Quarter SIDO’s recorded the highest sales of 2020 with Herbal and F&B business segments showing the strongest growth while pharmacy has been in a decline since 3Q2020.
- For the 2020FY, SIDO sales grew +9% YoY to IDR 3.33 trillion driven by a strong rebound in Herbal and stronger F&B sales. For 4Q2020, SIDO booked sales of IDR 1.08 trillion +15% YoY and higher QoQ. The Herbal segment grew fastest at +50% QoQ or +22.6% YoY to IDR 779.1 billion. The F&B segment grew 1.8% while pharmacy fell -37.4% YoY due to lower demand and a lower-value product mix.
- Higher herbal sales were driven by Tolak Angin as demand started to rise seasonally during the rainy season while F&B demand was driven by the healthy drink category with products such as ginger beverages and Vit C1000 which increased around +65%.
- We are expecting double-digit sales growth in 2021F on the back of the stronger 4Q2020 results and good news from January 2021 performances which is inline with growing consumer demand for health products.
Expanding Countries and Products
- After success in the Saudi Arabian market with Tolak Angin as the main product, SIDO plans to expand to Vietnam and China with Tolak Angin and Cambodia with Vit C1000, plus other Middle East and African countries in 2021.
- For 4Q2020, SIDO export sales improved thanks to the Philippines and Nigeria while Malaysia showed good recovery momentum.
- SIDO targets export sales to contribute 4%-5% of total sales in 2021.
- SIDO also plans to enter into a new export business, essential oils through a SIDO subsidiary “ Semarang Herbal Indo Plant”, which has a production capacity of 11,250 kg per day and a current utilization rate of 50%.
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Stronger 4Q2020 Result
- In 4Q2020, SIDO maintained double-digit net profit growth of +28% YoY or +29% QoQ to IDR 293.2 billion with a stable NPM of 27.2%. For 2020FY SIDO booked net profit IDR 934 billion, growth of +16% YoY with a higher NPM of 28% from 26% in 2019.
- Operating profit grew stronger in 4Q2020 +24% YoY, 31% QoQ to IDR 364.98 billion and operating profit margins increased to 33.8%. For 2020FY, operating profit increased +12% YoY to IDR 1.19 trillion with a full year OPM of 35%, higher than 2019‘s 33%.
- Gross profit grew +19% YoY or 42.6% QoQ to IDR 621.6 billion in 4Q2020 and the gross profit margin was higher at 57%. For the full year SIDO booked 9% YoY growth or IDR 1.84 trillion with a stable margin of 55%.
- We increase our target for 2021F net profit to double digit growth +17% or IDR 1.09 trillion.
- With the good results and more expansion in 2021, We are targeting SIDO to reach IDR 1,015 or 31% upside, which is a 25x PE valuation within one year. Maintain BUY.
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