Comprehensive Deep Dive: Indofood Sukses Makmur, Indofood CBP, AKR Corporindo, and Indika Energy – Financial Insights and Future Prospects

Report by: PT UOB Kay Hian Sekuritas

Date: Wednesday, 06 November 2024

Indofood Sukses Makmur (INDF IJ)

Indofood Sukses Makmur, Indonesia’s vertically integrated food producer, continues to shine. The company reported a robust 3Q24 core NPAT of Rp2,627 billion, marking a 9.2% year-on-year (yoy) and 6.4% quarter-on-quarter (qoq) increase. The 9M24 core NPAT stands at Rp8,296 billion, reflecting a notable 17.4% yoy rise, surpassing both the company’s and consensus expectations.

Key Financial Highlights

• Revenue: Rp86,944 billion (up 3.6% yoy)
• Gross Profit: Rp29,694 billion (up 13.4% yoy)
• Operating Profit: Rp16,094 billion (up 13.2% yoy)
• Net Profit: Rp8,761 billion (up 23.7% yoy)
• Core NPAT: Rp8,296 billion (up 17.4% yoy)

Segmental Performance

The standout performance came from Indofood Agri Resources (IFAR), which saw its EBIT skyrocket by 77.3% yoy. Indofood Consumer Branded Product (ICBP) contributed with a 2.8% EBIT growth in 3Q24. Overall, the company is poised for a 13.2% and 6.4% core NPAT growth in 2024 and 2025, respectively. Maintaining a BUY recommendation, the target price is set at Rp12,000.

Indofood CBP (ICBP IJ)

Indofood CBP, a market leader in consumer-branded products, reported an impressive 3Q24 core NPAT of Rp2,407 billion, reflecting a 5.1% yoy and 1.2% qoq growth. The 9M24 core NPAT stands at Rp8,030 billion, up 15.3% yoy, aligning well with both the company’s and consensus expectations.

Key Financial Highlights

• Revenue: Rp55,486 billion (up 8.1% yoy)
• Gross Profit: Rp20,644 billion (up 11.0% yoy)
• Operating Profit: Rp11,996 billion (up 10.1% yoy)
• Net Profit: Rp8,149 billion (up 15.4% yoy)
• Core NPAT: Rp8,030 billion (up 15.3% yoy)

Segmental Performance

ICBP’s strong volume growth was a notable highlight. Noodle volumes expanded by 14% qoq domestically and 23% qoq internationally. Despite not raising prices since July 2022, ICBP is expected to continue benefiting from margin expansion due to declining flour and skim milk powder prices. The company is anticipated to achieve a 13.4% and 13.7% core NPAT growth in 2024 and 2025, respectively. The target price remains at Rp15,000, maintaining a BUY recommendation.

AKR Corporindo (AKRA IJ)

AKR Corporindo has shown significant technical strength, closing with strong gains and forming a long-body bullish candlestick. The bullish candlestick reversal pattern suggests potential for further rallies. The immediate resistance levels are at Rp1,405 and Rp1,445, while support levels are at Rp1,330 and Rp1,295.

Technical Analysis

• Resistance Levels: Rp1,405, Rp1,445
• Support Levels: Rp1,330, Rp1,295
• Stop-loss: Rp1,320

With RSI sloping upwards and emerging from the oversold zone, there is a strong indication for a bullish trend. The MACD remains on a bearish crossover. A technical BUY is recommended at Rp1,350, with a target price of Rp1,405, offering a potential return of 4% within 2-4 weeks.

Indika Energy (INDY IJ)

Indika Energy has also exhibited strong technical performance. The share price closed with strong gains, forming a long-body bullish candlestick and advancing with higher trading volume. This suggests a potential for further rallies, with immediate resistance levels at Rp1,680 and Rp1,735, and support levels at Rp1,510 and Rp1,470.

Technical Analysis

• Resistance Levels: Rp1,680, Rp1,735
• Support Levels: Rp1,510, Rp1,470
• Stop-loss: Rp1,510

The RSI is sloping upwards and approaching its center line, while the MACD is on a bearish crossover. A technical BUY is recommended at Rp1,590, with a target price of Rp1,675, offering a potential return of 5% within 2-4 weeks.

Conclusion

In summary, the financial results and technical analysis indicate promising prospects for Indofood Sukses Makmur, Indofood CBP, AKR Corporindo, and Indika Energy. With robust performance metrics, strategic positioning, and favorable market conditions, these companies are well-positioned for continued growth and profitability. Investors are advised to consider the BUY recommendations, keeping an eye on the highlighted target prices and technical indicators for optimal investment decisions.

Stay tuned for more in-depth financial insights and market analyses to make informed investment choices.