Indofood CBP Sukses Makmur(ICBP IJ)

Transcription

1 Equity Research Result note Tuesday,20 March 2018 BUY Maintain Last price (IDR) 8,825 Target Price (IDR) 9,700 Upside/Downside +9.9% Previous Target Price (IDR) 9,700 Stock Statistics Sector Bloomberg Ticker Consumer ICBP IJ No of Shrs (mn) 11,662 Mkt. Cap (IDRbn/USDmn) 102,916/7,477 Avg. daily T/O (IDRbn/USDmn) 43.6/3.2 Major shareholders (%) Indofood Sukses Makmur Tbk 80.5 Estimated free float 19.5 EPS Consensus (IDR) 2017F 2018F 2019F Danareksa Consensus Danareksa/Cons ICBP relative to JCI Index Indofood CBP Sukses Makmur(ICBP IJ) Lower opex save the earnings ICBP reported 4Q17 earnings of IDR755bn (down 20% qoq and 2% yoy), culminating in FY17 net profits of Rp3.8tn, up 5.4% yoy. The FY17 earnings are in line with our full year forecast (97.6%) and the consensus (97.5%). Soft demand led to tepid FY17 revenues growth. ICBP reported a 4Q17 top line of IDR8.2tn, down 8.8% qoq but still up 3.4% yoy. This led to flattish FY17 revenues of IDR35.6tn, +3.6% yoy. In our last meeting, we learnt that instant noodles recorded lower sales volume last year with more sales of lower priced products. As consumers had to shoulder higher costs last year, many cut their spending on discretionary food products. At the gross level, ICBP booked a lower 4Q17 gross margin of 29.7%. Higher flour prices from Bogasari (up 1% in April and another 3% in 3Q17) squeezed the margin of instant noodles, we believe. This led to a slightly lower FY17 gross margin of 31.1% (FY16: 31.3%). FY17 earnings growth of 5.4% yoy. On the operating front, the company cut FY17 opex spending by 2.6% yoy on continued soft demand. This paved the way for a higher FY17 operating margin of 15.1% (FY16: 14.4%). Nonetheless, lower interest income and higher losses in associate companies put pressure on pretax profits, resulting in a flattish pretax margin of 14.6%. At the bottom line, ICBP booked 4Q17 net profits of IDR755bn, down 20% qoq and 2% yoy. This led to FY17 net profits of IDR3.8tn, +5.4% yoy. The FY17 earnings were in line with our forecast (97.6%) and consensus estimates (97.5%). 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 7.6% yoy to IDR39.1tn. 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. Maintain BUY. At the current share price, ICBP is trading at 24x FY18F PE, still below its average 1-year PE of 25.3x. We will revisit our forecast following the release of the FY17 results. Maintain BUY with a TP of Rp9,700. Source : Bloomberg x Natalia Sutanto (62-21) ext.3508 natalia.sutanto@danareksa.com Key Financials Year to 31 Dec 2015A 2016A 2017F 2018F 2019F Revenue (IDRbn) 31,741 34,375 36,291 39,038 42,302 EBITDA (IDRbn) 4,456 5,541 5,765 6,261 6,823 EBITDA Growth (%) Net profit (IDRbn) 3,001 3,600 3,890 4,293 4,753 EPS (IDR) EPS growth (%) BVPS (IDR) 1, , , , ,112.7 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. REVENUE AND GROWTH Exhibit 2. NET PROFIT AND GROWTH Exhibit 3. MARGINS Exhibit 4. GEARING LEVEL See important disclosure at the back of this report 2

3 Exhibit 5. FY17 Result FY16 FY17 YoY, % 3Q17 4Q17 QoQ, YoY, % FY17F A/F, % A/C, % (in Rp bn) Net sales 34,375 35, ,970 8,176 (8.8) , COGS 23,607 24, ,144 5,749 (6.4) , Gross profit 10,768 11, ,826 2,427 (14.1) , Opex 5,832 5,681 (2.6) 1,528 1,051 (31.2) (20.8) 6, Op profit 4,936 5, ,298 1, , Other inc (exp) 53 (171) (422.2) 103 (411) (501.3) (1,539.9) Pretax profit 4,989 5, , (31.1) (4.4) 5, Tax expense (1,358) (1,663) 22.5 (486) (481) (1.1) 46.2 (1,455) Net profit 3,600 3, (20.5) (1.7) 3, (in %) Gross margin Op margin Pretax margin Net margin See important disclosure at the back of this report 3

4 Exhibit 6. Income Statement Revenue 31,741 34,375 36,291 39,038 42,302 COGS (22,122) (23,607) (24,971) (26,758) (28,901) Gross profit 9,619 10,768 11,320 12,280 13,401 EBITDA 4,456 5,541 5,765 6,261 6,823 Oper. profit 3,908 4,936 5,160 5,677 6,256 Interest income Interest expense (314) (179) (187) (240) (273) Forex Gain/(Loss) Income From Assoc. Co s Other Income (Expenses) (38) (171) (11) (11) (12) Pre-tax profit 4,010 4,989 5,345 5,898 6,531 Income tax (1,086) (1,358) (1,455) (1,605) (1,777) Minority interest 78 (31) Net profit 3,001 3,600 3,890 4,293 4,753 Core Net Profit 2,972 3,600 3,890 4,293 4,753 Exhibit 7. Balance Sheet Cash & cash equivalent 7,658 8,372 8,643 10,302 12,097 Receivables 3,364 3,894 4,111 4,422 4,792 Inventory 2,547 3,110 3,290 3,525 3,807 Other Curr. Asset Fixed assets - Net 6,556 7,114 7,524 7,983 8,491 Other non-curr.asset 6,043 6,216 7,743 8,329 9,025 Total asset 26,561 28,902 31,516 34,783 38,453 ST Debt 1, ,026 1,099 1,187 Payables 2,581 3,083 3,261 3,495 3,775 Other Curr. Liabilities 2,181 2,417 2,544 2,736 2,965 Long Term Debt 1, ,016 1,188 Other LT. Liabilities 2,755 3,059 3,235 3,469 3,749 Total Liabilities 10,174 10,401 10,911 11,815 12,863 Shareholder'sFunds 15,455 17,564 19,663 22,021 24,639 Minority interests Total Equity & Liabilities 26,561 28,902 31,516 34,783 38,453 See important disclosure at the back of this report 4

5 Exhibit 8.Cash Flow Net income 3,001 3,600 3,890 4,293 4,753 Depreciation and Amort Change in Working Capital (452) (152) (106) (153) (182) OtherOper. Cash Flow (112) (224) (195) (233) (287) Operating Cash Flow 2,986 3,829 4,194 4,492 4,851 Capex (1,295) (1,164) (1,014) (1,044) (1,075) Others Inv. Cash Flow (20) 230 (1,144) (112) (136) Investing Cash Flow (1,315) (933) (2,158) (1,157) (1,211) Net change in debt 32 (815) New Capital (1,201) (1,491) (1,791) (1,935) (2,136) Dividend payment (1,294) (1,493) (1,791) (1,935) (2,136) Other Fin. Cash Flow 1,108 1,618 1,788 1,950 2,167 Financing Cash Flow (1,357) (2,182) (1,765) (1,676) (1,844) Net Change in Cash ,659 1,795 Cash - begin of the year 7,343 7,658 8,372 8,643 10,302 Cash - end of the year 7,658 8,372 8,643 10,302 12,097 Exhibit 9. Key Ratios Year to 31 Dec 2015A 2016A 2017F 2018F 2019F Growth (%) Sales EBITDA Operating profit Net profit Profitability (%) Gross margin EBITDA margin Operating margin Net margin ROAA ROAE Leverage Net Gearing (x) (0.3) (0.4) (0.3) (0.4) (0.4) Interest Coverage (x) Source : ICBP, Danareksa Estimates See important disclosure at the back of this report 5