Consumer

4Q24 Earnings Outlook: ICBP and INDF to be Robust, SIDO Eyes Upside

 

  • We estimate that the Indofood group still reported strong net profit in FY24, while SIDO may exceed consensus expectations.
  • Heading into 2Q25, we believe instant noodles sales volume will remain resilient. The recent ASP increase should also bode well for earnings.
  • In Jan25, local funds increased their positions in ICBP and INDF. Foreign investor also increased position in INDF, driven to strong CPO price.

 

Recap of 4Q24 results: KLBF (In line) and UNVR (Below Expectations)

Within the consumer sector, two companies have already reported their FY24 results: KLBF (unaudited FY24: in line) and UNVR (below expectations). Both companies saw improvements in certain segments in 4Q24 and we believe it will continue to offer value products to capture the downtrading market. Both KLBF and UNVR anticipate better performance in 2025; however, for UNVR, a more significant recovery is expected in 2H25.

 

4Q24 recap: Solid revenue growth with margin pressure, possibly above consensus for SIDO

  • ICBP – Solid revenue and profit growth

We expect ICBP to meet revenue forecasts (4Q24: +8% yoy), but forex losses from a weaker Rupiah could weigh on profitability, with FY24F core profit increasing 18% yoy (FY24F net profit growth of 26% yoy).

  • MYOR – Strong revenue growth but margin pressure weighs on profitability

MYOR also demonstrated strong sales growth in 4Q24 (+18% yoy) but we expect to see a net profit decline in FY24F (-11% yoy) due to lower-than-expected gross margin improvements.

  • SIDO – Strong 4Q24 performance could drive revenue and margin upside

We expect SIDO's strong 4Q24 performance, driven by its "Last Bite" program supporting both revenue and margin expansion, to potentially beat consensus expectations.

  • INDF – Higher CPO prices and ICBP to support earnings growth

We expect INDF to benefit from higher CPO prices and ICBP’s performance, with FY24 net profit growth estimated at 15%/26% yoy (our forecast/consensus).

 

Reiterate ICBP as our top pick

Among consumer stocks, we believe the instant noodle sales volume will remain resilient from 2Q25 onward due to its affordability. In mid-Feb25, ICBP adjusted the selling price of its instant noodle products by Rp100 per pack, which should support 2Q25 margins and earnings. Indonesia reported household consumption growth below 5% in 4Q24 and FY24, marking the third consecutive year of sub-5% growth, with inflation at only 1.57%. Given the lack of strong catalysts for purchasing power ahead, this will sustain domestic instant noodle sales. Reiterate our Buy rating on ICBP as our top pick with TP Rp14,000, implying FY25F PE of 14.3x.

 

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