SIDO
Contact our analyst Eka
25% upside, Buy
30th July 2021
Price Rp 805
Target price Rp 1000
30th July 2021
Price Rp 805
Target price Rp 1000
2Q2021 Demand Increased
- The rising number of covid-19 cases in Indonesia has increased demand for food supplements and multivitamins as immune boosters in 2Q2021.
- SIDO recorded double digit sales growth of 18.2% YoY or 8.6% QoQ to IDR 861.3 billion in 2Q2021. The herbal & supplement segment increased +31.4% YoY to IDR 555.7 billion in line with volume and demand increases. Tolak Angin products increased by more than 30% YoY in 2Q2021.
- For 1H2021, SIDO booked +13.4% sales growth to IDR 1.65 trillion. The results are on track to match our 2021 estimate.
- The F&B segment decreased -1% YoY but still grew +4.4% QoQ to IDR 268.7 billion in 2Q2021. For 1H2021, the F&B segment still grew +12.2% to IDR 526.2 billion driven by Healthy drinks (+19%) and export sales of energy drinks.
- Meanwhile pharmacy had positive growth of +6.8% YoY or +22% QoQ in 2Q2021 after a decline in 1Q2021.
- For Export sales, Nigeria and Malaysia led with sales higher by 90% in 1H2021 from Kuku Bima energy products. The Nigeria market hasn’t been significantly affected by the covid-19 pandemic while the Philippines market registered a slight improvement but is still far from pre-covid levels. SIDO is targeting an export sales contribution of 4% of total sales in 2021.
- Online sales also grew strongly up by 11x from last year.
- We are still expecting double-digit sales growth in 2021F as we expect better 2H2021 demand inline with growing consumer demand for health products and as the vaccination program is expected to normalize economic activity.
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2Q2021 Result: Higher Margin
Valuation: Maintain BUY with TP 1,000
- In 2Q2021, SIDO maintained double-digit net profit growth of +25% YoY to IDR 232.9 billion with a higher NPM of 27% compared to 2Q2020’s 25%. For 1H2021, SIDO recorded net profit of IDR 502 billion with a higher NPM of 30%.
- Operating profit grew double digits in 2Q2021 +30% YoY to IDR 288 billion and the operating profit margins increased to 34% from 30% in 2Q2020. For 1H2021, operating profit grew +22% to IDR 620.7 billion with a higher OPM of 38%.
- Gross profit grew +29% YoY to IDR 482 billion in 2Q2021 with a higher GPM at 56% from 51%. For 1H2021, gross profit grew +21 YoY to IDR 930 billion with a higher GPM of 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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