SIDO - 9M24 earnings in-line with ours, and better performance in ‘25F

KBVS Update 
Tuesday, 29 October 2024

SIDO - 9M24 in-line with ours, and to perform better in '25F
(Upgraded to BUY; TP: IDR760)

SIDO' net profit reached IDR170 bn (+22.5% yoy/-22.5% qoq) in 3Q24. Note that, in the last 3 years, SIDO’ 3Q performance, was the lowest amongst others. As a result, SIDO' 9M24 net profit still grew by 32.7% yoy to IDR778 bn, mainly due to higher sales growth yoy, with better product mix and cost management, which came in-line with ours’ (74.3%), but below consensus’ (65.7%).

SIDO’ revenue reached IDR730 bn (+3.2% yoy/-13.4% qoq) in 3Q24. The qoq decline in SIDO’ 3Q24 revenue was mainly due to a 4.5% yoy/11.3% qoq decline in its Herbal segment’ revenue as lower Tolak Angin sales amidst weaker consumer purchasing power. As a result, SIDO’ 9M24 revenue still grew 11.2% yoy to IDR2.62 tn, despite softer sales in 3Q24. Thus, SIDO’ gross, EBIT and net margin still expanded by 290bps yoy, 570bps yoy and 480bps yoy, respectively in 9M24 due to higher sales, better product mix and cost management yoy.    

We revised up our SIDO’ revenue in '25F by 2.6% from previous as the company’ informed us that the rainy season came a bit late this year, which could boost SIDO’ sales in 1Q25 amidst festivities; Ramadan’ fasting month in march’25. As a result our SIDO ‘25F gross profit and EBIT rose by 2.5% and 10.7% from previous on better product mix and cost management. All in all, we expect SIDO’ net profit to reach IDR1.33 tn in ‘25F.  

Upgraded SIDO to BUY and TP of IDR 760/share, which implies 17.1x ‘25 P/E or slightly below its 5 years mean P/E. Currently, SIDO is trading at 13.7x ‘25F P/E or below its 5 years mean P/E.

Regards,
Andre Suntono – KBVS Research Team