SIDO
Contact our analyst Eka
26% upside, BUY
26th February 2024
Price Rp 625
Target price Rp 790
26th February 2024
Price Rp 625
Target price Rp 790
Double digit growth Herbal & Supplement business
- SIDO's sales increased by 70% QoQ but declined by -3.76% YoY to IDR 1.2 trillion due to higher demand in rainy season in 4Q2023. However, for 2023FY, SIDO sales still decreased -8% YoY, with total sales reaching IDR 3.56 trillion.
- Herbal & supplement sales decreased by -8.6% YoY but improved quarterly +97.5% YoY to IDR 892 billion. Higher Quarterly growth amid the contracted full year performance due to better demand in the end of year. Result higher herbal and supplement GPM at 70.7% in 4Q2023.
- The pharmaceutical segment maintained an improvement, with a +6.9% YoY or +0.03% QoQ growth to IDR 30.2 billion in 4Q2023 after a bans all syrup medicine, and expecting back to normal condition in 1Q2024, The pharmaceutical gross profit margin (GPM) booked higher at 33.1%.
- F&B sales increased by +14.3% YoY or +25% QoQ to IDR 281.6 billion in 4Q2023 supported by significant growth in the Ready to Drink (RDT) product and energy drink. F&B margins continued to improve, reaching 38.9% in 4Q2023 helped by a decline in several raw material prices.
- For export sales, SIDO report export sales increased 39.5% mostly supported by Herbal and Essential Oil segment growth.
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4Q2023 Result: Higher Margin
- SIDO’s 4Q2023 GPM recorded highest at 62.3% in 2023FY.
- SIDO COGS decline -6% YoY but increased +43% QoQ to IDR 453.8 billion in 4Q2023 due to lower raw material cost of -12.6% YoY. Result higher gross profit at IDR 750.8 billion, with highest GPM.
- SIDO’s 4Q2023 bottom line profit increased by +163% QoQ but -5.3% YoY to IDR 364 billion, with a higher net profit margin (NPM) at 30.2%.
- As of 2023, SIDO's net profit was IDR 950.6 billion, still decreased of -13.9% YoY, with a slightly lower NPM of 26.7% due to higher forex loss. The unrealized loss in foreign exchange of IDR 43bn was contributed by export business to Nigeria due to the depreciation of Naira.
- The management had 2024F guidance at +10% growth for top line and bottom line with margin improvement as softer raw material prices. While for avoid losses on forex, all business transaction oi Nigeria will be facilitated upon receipt of payment in advance.
- However, despite the challenges, our recommendation for SIDO remains a BUY. The expectation is that purchasing power will normalize in the this year. The target price (TP) is IDR 790, representing a 26% upside, with a 21x PE valuation within one year.
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