Analysts Believe Sido's Performance Appears To Improve This Year

Director of Sido Muncul, Irwan Hidayat. (Photo: Instagram @irwansido)

JAKARTA - The performance of PT Industri Jamu and Pharmacy Sido Muncul Tbk (SIDO) is believed to be getting better until the visitors in 2024. Analysts assess that there are several factors that will affect the performance of the producers of Tolak Angin and Kuku Bima Energy-G.

William Siregar, Equity Analysis OCBC Sekuritas, said that his party maintains SIDO's share buy rating with the belief that performance growth will improve gradually in 2024, especially in the second quarter of 2024.

"In the midst of the possibility that rice prices will remain high in the first quarter of 2024, we see a bright side of SIDO's sales volume this year. The ongoing election process is the support for consumer spending, supported also by the rainy season in the fourth quarter of 2023 until the first quarter of 2024," William explained in his research, quoted Tuesday, February 6.

The increase in purchasing power was also driven by social assistance by the government worth a total of IDR 493.5 trillion in 2024. Meanwhile, from SIDO management, after projecting a 10 percent decline in performance last year, the figure will bounce off again by 10 percent in 2024.

Meanwhile, Mirae Asset Sekuritas analyst Andreas Saragih continues to champion SIDO as his top pick in the pharmaceutical sector.

"We still choose companies with superior profitability, characterized by high margins and strong ROE, coupled with attractive dividend valuations and yields," said Andreas.

He continued, the consideration of dividend yields is very relevant in evaluating companies in this sector, given their average growth prospects profile.

In addition, SIDO shows a lower exposure to exchange rate volatility and has a stronger balance sheet position because the company is debt-free with a higher inventory turnover.

Mirae estimates that throughout 2023, SIDO will pocket revenue of IDR 3.30 trillion, down from 2022 results of IDR 3.86 trillion. Meanwhile, the net profit post is also expected to decrease to IDR 826 billion from IDR 1.1 trillion in 2022.

This year, SIDO's revenue and profit are expected to improve. The top line is estimated to increase to IDR 4.66 trillion, while net profit is projected to reach IDR 927 billion.