SIDO - Sustaining growth in ‘25F, after a solid FY24 results

KBVS Update  
Thursday, 13 March 2025

SIDO - Sustaining growth in '25F, after a solid FY24
(Maintain BUY; with TP: IDR760)

Thanks to Industri Jamu dan Farmasi Sido Muncul' (SIDO) wide distribution channel (GT & MT), the company succeeded to maintain its Tolak Angin’ market share at 72% in FY24. SIDO' export sales contribution to its total revenue expanded 130bps yoy to 6.8% in FY24. While, we view that SIDO' partnership with the Indonesian Medical Association (IDI) will positively impact SIDO’ growth in the long run. We slightly reduced our SIDO '25F revenue (-2.3% from prior) on Indonesia' current economic condition. Yet, we still expect SIDO’ revenue to grow by 11% yoy in ‘25F on higher sales with hopefully better consumers’ spending, which is slightly above SIDO' guidance of a 10% yoy revenue growth.

We still expect SIDO’ gross profit and EBIT to grow by 11.3% yoy and 11.6% yoy, respectively in ‘25F as the company will likely to continue to launch new products and to improve its cost management further. As a result, we still expect SIDO’ earnings to grow by 12.2% yoy to IDR1.31 tn in ‘25F, with a 30bps yoy net margin expansion on better product mix and cost management, despite our '25F earnings adjustment (-1.5% from prior).

SIDO’ earnings grew 7.9% yoy/131.6% qoq in 4Q24 as SIDO' 4Q performance was always at the top than other quarters, for the last 6 years. As a result, SIDO' earnings grew 23.2% yoy to IDR1.17 tn in FY24, which came in-line with ours (100.5%) and consensus' expectation (98.8%).

SIDO' revenue grew 9.9% yoy in FY24, as people' higher awareness on health in 4Q24 amidst unpredictable weather during Christmas and year end' festivities, along with product restocking by distributors that has started for Ramadan month. All in all, SIDO' gross, EBIT and net margin expanded to 58.7% (+210bps yoy), 37.6% (+270bps yoy) and 29.9% (+320bps yoy), respectively in FY24.

Maintain BUY on SIDO with TP of IDR760, which implies 17.4x ‘25F P/E as we view that SIDO is a good company that could still grow its ‘25F earnings amidst Indonesia’ current economic condition, and further with a good free cash-flow generation. Currently, SIDO is trading at 12.7x ‘25F P/E or slightly above -2stdev of its 5 years’ mean P/E.

Please click link below for full report: https://www.kbvalbury.com/cfind/source/files/sido-sustaining-growth-in-25f.pdf

Regards,
Andre Suntono – KBVS Research Team