JAKARTA - PT Sido Muncul Herbal and Pharmaceutical Industry Tbk (SIDO) is expected to continue its positive performance in 2022. Research from NH Korindo Sekuritas argues that this is in line with the high public awareness of maintaining health by using herbal products.
NH Korindo's projection is also in line with the potential revenue growth that can be achieved by SIDO from the sale of the latest products which are well received by consumers. Moreover, consumers also don't forget the existing products that have been circulating in the market which provide a Compounded Annual Growth Rate (CAGR) of up to 51 percent for the last 3 years.
"The company also recorded a substantial increase in quarterly growth, driven by strong sales of new Vitamin C1000 flavors, Ready to Drink (RTD) variants, and new supplement products," explained NH Korindo Sekuritas, quoted on Wednesday 16 February.
Furthermore, the positive performance was accompanied by efforts to increase brand awareness to the public by collaborating with more than 20 marketplaces in Indonesia. These efforts have yielded sweet results, herbal supplement products made by SIDO are selling well in the online market and provide the largest contribution from the online sales line.
"The main factor is supported by the high level of public awareness of the importance of maintaining health," explained NH Korindo Sekuritas.
In addition, the high demand for immune-enhancing supplements also contributed to the increase in the company's net profit during 2021, namely 35 percent or equivalent to Rp.865 billion. Meanwhile, SIDO's revenue in the same year reached Rp. 2.7 trillion with a 23 percent increase in sales.
In detail, herbal products (TA) and beverages as the top contributors to total sales posted revenue of Rp. 1.2 trillion, up 26.9 percent on an annual basis and Rp. 326 billion, equivalent to 33.0 percent of each segment.
In terms of exports, export sales at the end of September 2021 showed an increase of 39 percent, and contributed 2.6 percent of total sales. Export destination countries such as Nigeria and Malaysia are still the main contributors with Kuku Bima and Tolak Angin as the main products.
In the future, NH Korindo Sekuritas hopes that other export destination countries such as the Philippines and Saudi Arabia will also be able to provide increased performance. The company's business in the development of essential oils is also closely monitored.
For this reason, NH Korindo decided to increase the target price of SIDO shares to Rp1,030 per share from the previous Rp979 per share, up 5.2 percent from the consensus and up 13.1 percent from the previous price at Rp910 per share.
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