Sido's Performance Appears Projected To Grow 5 Percent In 2024

JAKARTA - The performance of PT Industri Jamu and Pharmacy Sido Muncul Tbk (SIDO) is expected to still record performance growth in 2024. It is estimated that the revenue of the producers of Tolak Angin and Kuku Bima Energy-G can grow by about 5 percent until the end of 2024.

Sucor Sekuritas analyst Clara Nathania explained, this year it is estimated that there will be a recovery in demand after purchasing power is depressed in 2023 amid food inflation, with rice prices soaring by more than 20 percent. Even so, recovery will not be too significant.

"We project revenue growth of 5% YoY by 2024," he wrote in research, quoted Monday, January 8.

He also reduced SIDO's revenue and net profit projection in 2024. The company's revenue was reduced by 12 percent to Rp3.47 trillion and the projected revised net profit fell 14 percent to Rp971 billion.

Clara projects that SIDO will generate moderate revenue growth of 8 percent CAGR over the next five years. This is supported by the normalization of people's purchasing power, coupled with the company's strategic efforts to expand its herbal product portfolio and RTD business.

For the record, Esemag, a recently introduced herbal product, continues to maintain growth of more than 100 percent YoY and contributes 1 percent to overall herbal sales. Meanwhile, the RTD business accounts for 4 percent of total F&B sales and is expected to grow further.

"In addition, SIDO will continue to increase exports after the company acquires new distributors in the Philippines," he explained.

As for 2023, Sucor Sekuritas estimates SIDO's revenue will reach IDR 3.31 trillion and a net profit of IDR 895 billion. Compared to 2022, SIDO's revenue and net profit decreased 24.34 percent YoY and 18.63 percent.

But on a quarterly basis, each grew 19.92 percent QoQ and 52.73 percent QoQ. The result was driven by the disbursement of government social assistance and the normalization of rice prices.

In addition, the company has historically implemented a price increase in the fourth quarter which prompted distributors to stock products. Clara also mentioned that SIDO management stated sales in October increased by more than 15 percent.

"We estimate that SIDO will print a better revenue in the fourth quarter of 2023 of IDR 949 billion or grow 34 percent QoQ," he explained.

Of these, Sucor Sekuritas maintains a SIDO holding rating with a price target of IDR 500. Clara sees that the company still has long-term growth potential because the company's per capita product consumption is still relatively low, around 4 sachets per capita.

"We see that SIDO remains attractive in the long term with strong cash flow and a strong balance sheet position, plus 26 percent ROE 2024 and 6 percent dividend yield," he added.