Company Update

05 Maret 2024

SIDO IJ - MNC Sekuritas Equity Report March 5, 2024

Consider Turning Point

Key Takeaways :
▪️SIDO reported better-than-expected 4Q23 revenues of IDR1.2tn (+62.3% QoQ), driven by the herbal segment (accounting for 74.1%), which saw a remarkable +97.5% QoQ surge.

▪️4Q23 net profit significantly increased by +162.9% QoQ, aided by better efficiency as OPEX/revenue hovered at 20.3% in 4Q23 (vs 22.1% in 4Q22).

▪️NOAA reported the potential for La Nina (producing wet conditions) in Jun’24-Aug’24 at 55% chance. We foresee these as favorable circumstances in 2H24 that could drive demand for SIDO's main product.

▪️We upgrade our call for SIDO to BUY with a TP of IDR710/share, implying PE/PBV of 21.5x/6.1x in FY24E. We expect favorable circumstances in 2H24 to be a turnaround. Downside risks include: 1) longer-than-anticipated El Nino; 2) escalating diminishment of buying power.

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