SIDO
Contact our analyst Eka
31% upside, BUY
28th October 2022
Price Rp 740
Target price Rp 970
28th October 2022
Price Rp 740
Target price Rp 970
Strong sales rebound
- In 3Q2022, SIDO sales increased +37% QoQ but were still lower -11% YoY to IDR 1.0 trillion. Higher quarterly sales were boosted by sales from herbal supplements and F&B. For 9M2022, SIDO sales reached IDR 2.6 trillion which is still a decrease of -6% YoY.
- Herbal & supplement sales increased double digits from 2Q2022, +45.2% QoQ (but were lower by -5.5% YoY) to IDR 667.6 billion due to an increase in sales volume as the rainy season has come earlier this year. But sales were lower compared to 2021 due to higher demand last year because of the Covid-19 cases in 2021.
- F&B sales also grew a double digit +26% QoQ but were lower by -20% YoY to IDR 297.8 billion in 3Q2022. Kuku Bima Energy sales also recorded double digit growth in both the domestic and export markets.
- Pharmacy sales were flat, +1.1% QoQ to IDR 36.2 billion in 3Q2022.
- Online sales jumped by +150% YoY in 9M2022. General trade outlet coverage has exceeded the 2022 target of 151 outlets already in 9M2022.
- With the demand rebound in 3Q2022, we now expect SIDO top line in 2022F to reach IDR 4.03 trillion which is positive growth.
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3Q2022 Result: Quarterly rebound
Valuation: BUY with TP 970
- SIDO had a quarterly results rebound in 3Q2022. SIDO net profit was IDR 274.8 billion, up by +83% QoQ but still lower -24.4% YoY with a higher QoQ NPM of 27.4% compared to 2Q2022’s 20.6%. For 9M2022, SIDO net profit still decreased by -16.8% YoY to IDR 720.4 billion with a lower NPM of 27.6%.
- Operating profit margins also increased QoQ from 26.2% in 2Q2022 to 34.7% in 3Q2022.
- Gross profit increased +45% QoQ but was lower by -15% YoY to IDR 539 billion in 3Q2022 with a higher QoQ GPM of 53.8% from 50.9% in 2Q2022.
- With the results rebound in 3Q2022, we are now expecting SIDO profit to reach IDR 1.26 trillion for this full year.
Valuation: BUY with TP 970
- After the rebound in 3Q2022 results, we upgrade our recommendation to BUY. We are targeting SIDO to reach IDR 970 or 31% upside, which is a 21x PE valuation within one year. BUY.
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