FROM EQUITY RESEARCH DESK

IDEA OF THE DAY

Kalbe Farma: Resilient growth outlook at reasonable valuation (KLBF.IJ Rp 1,425; BUY; TP Rp 1,600)

• Unbranded Generic and distribution to drive FY24F top line, while CH and Nutrition revenue normalized
• We raised FY24-25F NP by 4.5-2.9%, driven by the absence of covid inventory provision and forex gain
• We upgrade KLBF to Buy (from Hold prev.) on its resilient growth profile, attractive valuation and light positioning

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RESEARCH COMMENTARY

4W & 2W Sales in Apr24

• 4W sales reached 48.6k units in Apr24, bringing YTD 4W sales to 263.7k units (-23% yoy), 24% of Gaikindo’s target/our target vs seasonality of 33%. The sluggish sales had been anticipated given the traction since early this year and since 4W sales are usually made in the Lebaran month. All top 5 brands recorded lower sales, with Toyota sales down 25% yoy, Daihatsu -15%, and Honda -37%.
• 2W sales reached 419.1k units in Apr24, bringing YTD 2W sales to 2.1m units (-1% yoy), 33% of AISI’s target/34% of our number, inline with the seasonality of 33%-35%.
• We remain cautious on 4W and 2W sales. We are currently recalibrating our ASII numbers given the continuous weaker trend. (Jerry & Christian - BRIDS)

 

KTA from MAPI/MAPA’s 1Q24 call:

• Lower 1Q24 GPM for MAPA and MAPI (vs 1Q23): From a high base in 1Q23, there was an increasing contribution from digital sales (lower margin)
• International business: MAPA’s business in the Philippines, Cambodia and Thailand already reached positive EBIT. For MAPI, Vietnam is also EBIT positive.
• F&B boycott: 1Q24 not as bad as Nov23. But still under pressure vs pre-boycott. Will conduct more efficiencies with cautious store openings going forward.
• Guidance: we still maintain our initial guidance (MAPI 20% top line growth with maintained GPM and EBIT margins, MAPA: 25% yoy top line with a maintained GPM at 47-48% and higher EBIT margin of 14-15%) with the expectation of improved performance in 2Q24 onward.
• 1Q24 SSSG MAPI: -1.1%, MAPA +2.6%. Digimap +18%, Dept stores 4%, Fashion flat and F&B – 28%. We still maintain our FY24F mid-single digit SSSG for MAPI and mid-to-high single digit SSSG for MAPA.

 

Comments: Store expansion remains as the driver for MAPI/MAPA’s top line this year. Stronger quarterly revenue leading to lower opex/rev and improved margins in the coming quarters should support better earnings ahead. (Natalia Sutanto– BRIDS)

 

MDKA 1Q24 operational highlights

• 2024 sales guidance:

• 4-5wmt Saprolite (1Q: 1.1wmt/28%)
• 10-11wmt Limonite (1Q: 0.6wmt/6%)
• 85-92k NPI (1Q: 21.6kt/25%)
• 50-55k Matte (1Q: 14.4kt/29%)
• 100-120k Oz gold (1Q: 26.6k Oz/27%)
• 14-16kt Copper (1Q: 4.3kt/31%)
• Overall sales achievements are inline with the guidance, except limonite ore sales that lagged behind at 6% due to delays in RKAB approval in March. However, FY guidance should remain intact as the company has 4.7wmt of stockpile that can be sold.
• 1Q24 revenue grew slightly to USD539.5mn, +0.5% qoq, driven by higher ASP (Gold +9.1% qoq), (Copper +2.3% qoq) and higher sales volume (Copper +95.5% qoq), (Matte +23.1% qoq).
• Meanwhile, AISC dropped simultaneously due to lower electricity costs and nickel ore prices (Gold -0.5% qoq), (Copper -28.6% qoq), (NPI -6.3% qoq), (Matte -7.3% qoq).
• This resulted in an improved cash margin (Gold +41.2% qoq), (Copper +106.8% qoq), (Matte +29x qoq).

 

Comment: We can expect margin expansion in 1Q, along with further improvements in 2Q as ASPs rise throughout the quarter. However, earnings should still be in-line with consensus estimates. (Timothy Wijaya - BRIDS)

Poultry – 2nd week of May24 Price Update

• Livebird prices continued to increase to Rp22.5k/kg currently, from avg livebird prices in the previous week at Rp21k, an increase of 6% wow.
• DOC remained stable at Rp6.3k/chick in early May from the end of April.
• The local corn price continued its downtrend to Rp4.8k/kg from Rp4.9k/kg in the previous week (-1.4% wow).
• Post its peak at US$381/t in early May, soybean meal (SBM) prices decreased to c. US$370/t in the 2nd week of May. (Victor & Tita – BRIDS)

MARKET NEWS

MACROECONOMY

Indonesia’s Consumer Confidence Index Climbed to 127.7 in Apr24

Indonesia’s Consumer Confidence Index rose to 127.7 with sentiment on the current economic conditions reaching the second highest reading of 119.4. The current income index reached 124.2, the highest since Jun23. With the improvement in the current income index, usage for consumption was steady at 73.6%. Meanwhile, usage for savings decreased to 16.7% (vs. 17.0%) and increased for installments (9.7% vs. 9.4%). (Bank Indonesia)

 

SECTOR

Healthcare: Implementation of BPJS one tariff by Jun25

President Jokowi has set a deadline for the implementation of standard inpatient class hospital treatment facilities (KRIS) in the National Health Insurance (JKN) program by 30 June 2025. The deadline is stipulated in Presidential Regulation (Perpres) No. 59/2024 on the 3^rd Amendment to Presidential Regulation No. 82/2018 on the JKN program. (Bisnis)

 

CORPORATE

AVIA Collaborates with BBTN to Expand Market Potential

AVIA has partnered with BBTN to expand its market potential by providing banking services and recommending AVIA's paint products and building materials to contractors and developers while recommending BBTN's banking products to customers and distributors. (Bisnis)

 

HEAL to Distribute Dividends of Rp 8.5/share

HEAL approved the distribution of dividends for the fiscal year of 2023, amounting to Rp130.6bn, approved at the AGMS. The cash dividend amounted to Rp8.5/share. For information, HEAL closed 2023 with net revenue of Rp5.78tr (+18%yoy). Net profit attributable to owners of the parent entity reached Rp437bn, and patient volume reached more than 8.5 mn patients (19.49% yoy). (Kontan)

 

JSMR to Distribute Dividends of Rp274.8bn

JSMR will distribute dividends for 2023 totaling Rp274.8bn, or Rp37.86/share. Cum dividend in the regular market and negotiated market: 20 May 2024; Ex dividend in the regular market and negotiation market: 21 May 2024, Cum dividends in the cash market: 22 May 2024, Ex dividends in the cash market: 27 May 2024, List of shareholders entitled to dividends: 22 May 2024, Dividend payment: 7 June 2024. (Emiten News)