Continued Underlying Momentum: La Nina 2H24
Key Takeaways :
▪️ SIDO reported outstanding performance in 2Q24. 2Q24 net profit surged to IDR218.0 bn (-44.2% QoQ/+47.5% YoY), translating to an NPM of 25.9% (vs 19.8% in 2Q23), hitting an all-time high (ATH) if we exclude the covid-19 period.
▪️ The accelerated La Nina cycle is expected to amplify demand for the "Tolak Angin" product, a key driver of Herbal segment growth. Interestingly, we found a correlation between stock prices and sea surface temperatures (SST) as a proxy for the El Nino-La Nina cycle.
▪️ We maintain our call for SIDO with BUY at a TP of IDR820/share. We anticipate the impending La Nina, coupled with new export opportunities in Vietnam and enhanced distribution partnerships with Alfamart and Indomaret, will drive higher revenue streamline and improved margin.
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