DIGIVESTASI - Shares of PT Industri Jamu dan Farmasi Sido Muncul Tbk (SIDO) experienced a sharp increase in trading on February 15, 2024. At around 15:12 WIB, the shares gained IDR 520 or 4%. 

In a recent study, Stockbit analyst Eddie Chandren predicted that after a negative performance in 2023, the party would see a less pronounced recovery in SIDO's performance in 2024. This was revealed. The recovery in corporate performance will be facilitated by an increase in people's purchasing power and sales can return to positive growth.  

"The improvement in people's purchasing power is supported by election campaign spending in the political year, an increase in the social protection program budget, and a return to a low inflation rate of 2-3%," Eddy said in the study. Quoted on Thursday (February 15, 2024). On a quarterly basis, he expects SIDO's performance to bottom out in Q3 2023, with recovery occurring in Q4 2023 and continuing into 2024 (the worst is over). 

"In our estimation, SIDO's net profit is expected to increase +8% in 2024, supported by revenue growth of +5% and margin improvement from operational cost efficiency. Therefore, we estimate that SIDO's net profit will reach Rp 857 million (down 22% YoY) and Rp 923 million (up 8% YoY) in 2023 and 2024 respectively," he explained.

Edi estimates that an annual net profit of Rp 8,500-900 billion is an achievable and sustainable net profit for SIDO. With this net profit range and the assumption of a dividend payout ratio of 95% (average of the last 3 years: 96.7%), SIDO has the potential to provide an annual dividend yield of 5.2-5.5% at a price of Rp 520/Blatt. , as of January 9, 2024.  

"We hope this return can provide certainty to investors as they await performance growth, and believe we will return to double digits in the long run," he added. He explained, in the long term, his party believes SIDO can return to double-digit annual rapid growth. 

The growth of the middle class due to sustained economic growth and increasing public awareness of the importance of health is expected to increase consumer demand for health products. SIDO, one of the leading consumer health companies with more than 300 SKUs and high brand equity, will definitely benefit from this.

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