Indofood CBP Sukses Makmur(ICBP IJ)

Transcription

1 Equity Research Result note Wednesday, 02 May 2018 BUY Maintain Last price (IDR) 8,675 Target Price (IDR) 9,700 Upside/Downside +11.8% Previous Target Price (IDR) 9,700 Stock Statistics Sector Bloomberg Ticker Consumer ICBP IJ No of Shrs (mn) 11,662 Mkt. Cap (IDRbn/USDmn) 101,167/7,271 Avg. daily T/O (IDRbn/USDmn) 40.7/2.9 Major shareholders (%) Indofood Sukses Makmur Tbk 80.5 Estimated free float 19.5 EPS Consensus (IDR) 2018F 2019F 2020F Danareksa Consensus Danareksa/Cons (3.2) (2.5) 1.5 ICBP relative to JCI Index Indofood CBP Sukses Makmur(ICBP IJ) Solid 1Q18 revenues, higher gross margins ICBP reported 1Q18 earnings of IDR1.2tn, +61% qoq and +11% yoy, supported by higher gross margins. At the top line, ICBP booked IDR9.9tn of revenues, +21% qoq and +4.5% yoy, thanks to strong growth for noodles (+7% yoy) and Nutrition (+20% yoy). The 1Q18 earnings are in line with our full year forecast (28.9%) and slightly above the consensus (29.7%). Noodles and Nutrition supported 1Q18 top line growth. ICBP reported a 1Q18 top line of IDR9.9tn, up 32% qoq and +7% yoy. Noodles, the major revenues contribution, reported strong 21% qoq and 7% yoy revenues growth in 1Q18. Nutrition - which contributed 2% to revenues - booked solid revenues growth of 2% yoy. The remaining divisions (Dairy and Beverages) reported flattish revenues growth of 1% and 3% yoy, respectively. At the same time, Food seasonings and Snack Food still booked negative growth of 12% and 5% yoy, respectively. 1Q18 earnings: 11% yoy growth thanks to a solid top line & higher gross margins. In 1Q18, ICBP reported a higher gross margin of 32.4% thanks to subdued prices of its major raw materials: Wheat (down 6% yoy), CPO (down 21% yoy) and skimmed milk (down 22% yoy). Nonetheless, higher opex spent in the quarter resulted in an operating margin of 16.3% (4Q17: 16.8%). By division, only Noodles and Food Seasonings reported higher EBIT margins of 22% (1Q17: 19%) and 13% (1Q17: 11%), respectively. By comparison, the other divisions reported lower or flattish EBIT margins. Below the operating line, other income offset higher financing costs, supporting the 1Q18 bottom line which grew by 11% yoy to IDR1.2tn. The 1Q18 earnings are in line with our full year forecast (28.9%) and slightly above consensus estimates (29.7%). Expect better performance in ICBP is expected to show stronger performance this year, supported by the regional elections and international events held in Indonesia. At the top line, we estimate higher FY18F top line growth of 8.4% yoy to IDR38.6tn. Continued soft commodity prices should help ICBP to maintain its gross margins, we believe. Combined with manageable opex, we expect to see better operating and net margins of 14.5% and 11.0%, respectively. Source : Bloomberg Maintain BUY. At the current share price, ICBP is trading at 25.2x FY18F PE, which is at its average 1-year PE of 25.3x. We will revisit our forecast following the release of the 1Q18 results. Maintain BUY with a TP of Rp9,700. x Natalia Sutanto (62-21) ext.3508 natalia.sutanto@danareksa.com Key Financials Year to 31 Dec 2016A 2017A 2018F 2019F 2020F Revenue (IDRbn) 34,375 35,607 38,590 41,846 45,612 EBITDA (IDRbn) 5,541 5,378 5,966 6,442 6,970 EBITDA Growth (%) 24.3 (2.9) Net profit (IDRbn) 3,600 3,797 4,005 4,374 4,829 EPS (IDR) EPS growth (%) BVPS (IDR) 1, , , , ,315.5 DPS (IDR) PER (x) PBV (x) Dividend yield (%) EV/EBITDA (x) Source : ICBP, Danareksa Estimates See important disclosure at the back of this report 1

2 Exhibit 1. Revenues and Growth Exhibit 2. Net Profits and Growth Exhibit 3. Margins Exhibit 4. Gearing Level Exhibit 5. 1Q18 result 1Q17 4Q17 1Q18 QoQ, % YoY, % FY18F A/F, % A/C, % (in Rp bn) Net sales 9,458 8,176 9, , COGS 6,476 5,749 6, , Gross profit 2,982 2,427 3, , Opex 1,496 1,051 1, , Op profit 1,486 1,376 1, , Other inc (exp) 49 (411) 53 (113.0) Pretax profit 1, , , Tax expense (385) (481) (461) (4.2) 19.7 (1,853) 24.9 Net profit 1, , , (in %) Gross margin Op margin Pretax margin Net margin See important disclosure at the back of this report 2

3 Exhibit 6. Income Statement Revenue 34,375 35,607 38,590 41,846 45,612 COGS (23,607) (24,548) (26,677) (28,901) (31,476) Gross profit 10,768 11,059 11,912 12,946 14,136 EBITDA 5,541 5,378 5,966 6,442 6,970 Oper. profit 4,936 5,378 5,382 5,875 6,419 Interest income Interest expense (179) (154) (235) (260) (279) Forex Gain/(Loss) Income From Assoc. Co s Other Income (Expenses) (171) (341) (11) (12) (13) Pre-tax profit 4,989 5,207 5,605 6,155 6,759 Income tax (1,358) (1,663) (1,853) (2,034) (2,184) Minority interest (31) Net profit 3,600 3,797 4,005 4,374 4,829 Core Net Profit 3,600 3,797 4,005 4,374 4,829 Exhibit 7. Balance Sheet Cash & cash equivalent 8,372 8,586 10,230 11,862 13,457 Receivables 3,894 4,033 4,371 4,740 5,167 Inventory 3,110 3,234 3,514 3,807 4,147 Other Curr. Asset Fixed assets - Net 7,114 7,524 7,983 8,491 9,047 Other non-curr.asset 6,216 7,597 8,233 8,928 9,732 Total asset 28,902 31,176 34,552 38,067 41,808 ST Debt 970 1,008 1,096 1,187 1,293 Payables 3,083 3,206 3,484 3,775 4,111 Other Curr. Liabilities 2,417 2,496 2,707 2,935 3,199 Long Term Debt ,098 1,171 Other LT. Liabilities 3,059 3,179 3,454 3,742 4,076 Total Liabilities 10,401 10,665 11,723 12,737 13,849 Shareholder'sFunds 17,564 19,569 21,882 24,379 27,003 Minority interests Total Equity & Liabilities 28,902 31,176 34,552 38,067 41,808 See important disclosure at the back of this report 3

4 Exhibit 9. Cash Flow Net income 3,600 3,797 4,005 4,374 4,829 Depreciation and Amort Change in Working Capital (152) (68) (165) (181) (209) OtherOper. Cash Flow (224) (170) (235) (293) (354) Operating Cash Flow 3,829 3,559 4,190 4,468 4,817 Capex (1,164) (409) (1,044) (1,075) (1,107) Others Inv. Cash Flow 230 (1,057) (166) (143) (170) Investing Cash Flow (933) (1,466) (1,210) (1,218) (1,277) Net change in debt (815) (58) New Capital (1,491) (1,791) (1,889) (2,090) (2,282) Dividend payment (1,493) (1,791) (1,889) (2,090) (2,282) Other Fin. Cash Flow 1,618 1,761 1,951 2,143 2,363 Financing Cash Flow (2,182) (1,879) (1,531) (1,831) (2,022) Net Change in Cash ,448 1,420 1,518 Cash - begin of the year 7,658 8,372 8,586 10,230 11,862 Cash - end of the year 8,372 8,586 10,230 11,862 13,457 Exhibit 10. Key Ratios Year to 31 Dec 2016A 2017A 2018F 2019F 2020F Growth (%) Sales EBITDA 24.3 (2.9) Operating profit Net profit Profitability (%) Gross margin EBITDA margin Operating margin Net margin ROAA ROAE Leverage Net Gearing (x) (0.4) (0.3) (0.4) (0.4) (0.4) Interest Coverage (x) Source : ICBP, Danareksa Estimates See important disclosure at the back of this report 4

5 See important disclosure at the back of this report 5