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27% Upside, BUY
5th August, 2021
Price Rp 1,305
Target price Rp1,660
Investment Consideration
Positive Growth
- KLBF recorded record sales of IDR 6.35 trillion, up +9.4% YoY or +5.6% QoQ in 2Q2021. For 1H2021, KLBF net sales increased +7% YoY to IDR 12.37 trillion.
- Distribution & logistics recorded higher growth of +19% YoY to IDR 2.33 trillion and is still the largest contributor to KLBF total sales. Consumer health and Pharmaceutical recorded positive growth of 3.6% and 12% to IDR 978 billion and IDR 1.3 trillion respectively in 2Q2021.
- Nutrition was flat at IDR 978 billion as the beverage segment sales decreased due to the implementation of PPKM restrictions in the domestic market.
- In terms of 2Q2021 gross profit margins, distribution and logistics GPM was flat at 25%. Consumer health GPM increased to 61% in 2Q2021 from 60% in 2Q2020 and 55% in 1Q2021. Pharmaceutical GPM slightly decreased to 53% from 56%. Nutrition GPM also decreased to 51% from 54%.
- As demand continues to increase in 2Q2021, we expect better growth in the next quarters. We are targeting single digit growth for KLBF sales in 2021 to reach IDR 24.2 trillion.
2Q2021: Stable Margin
- Inline with single-digit growth in sales, KLBF booked net income increase of +8.7% YoY or 9% QoQ to IDR 780 billion in 2Q2021. For 1H2021, KLBF recorded a net profit increase of +7.9% YoY to IDR 1.49 trillion. The NPM was stable at 12.3%
- KLBF gross profit increased +4.4% YoY or 4% QoQ in 2Q2021 to IDR 2.75 trillion, inline with a higher cost of revenue +13.6% YoY. This resulted in a lower gross profit margin at 43.3% from 45.4% in 2Q2020.
- KLBF still maintained their overall margin though, due to efficiency at the operating level. Operating profit increased by +8.7% YoY to IDR 1 trillion, while the operating profit margin was stable at 15.8% YoY in 2Q2021.
- We are forecasting KLBF 2021 net profit to reach IDR 2.88 trillion, which is growth of +6% YoY.
Valuation: BUY TP 1,660 with 27% upside
- We are targeting KLBF to trade at 26x PE within a year. Target Price is IDR 1,660 which represents 27% upside. BUY