ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

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<a href="https://www.smartkarma.com/entities/kalbe-farma-tbk-pt" target="_blank" data-smartkarma-citation="entities:6303:1" rel="noopener">Kalbe Farma</a> had a tough year in 2023, with high raw material prices and product mix impacting margins but these headwinds have abated in 1Q2024 with promising growth ahead. </li>
<li>Distribution &amp; Logistics and the pharmaceutical segment led growth in 1Q2024, with growth in the latter driven by more specialty drugs and unbranded generics.</li>
<li>Consumer health and nutritionals give Kalbe a consumer edge, with price rises in 1Q2024 and new products helping to drive profitability. Valuations look reasonable versus history with lustre around profits. </li>
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Kalbe Farma had a tough year in 2023, with high raw material prices and product mix impacting margins but these headwinds have abated in 1Q2024 with promising growth ahead. 
Distribution &amp; Logistics and the pharmaceutical segment led growth in 1Q2024, with growth in the latter driven by more specialty drugs and unbranded generics.
Consumer health and nutritionals give Kalbe a consumer edge, with price rises in 1Q2024 and new products helping to drive profitability. Valuations look reasonable versus history with lustre around profits. 


Kalbe Farma (KLBF IJ) - Back to Fighting Fit Form

External broker reports(aggregated public sources), BRI Danareksa Research

BRI Danareksa Research

External broker reports(aggregated public sources)

As a one-stop financial solution with the vision to be the most valuable securities house, BRI Danareksa Sekuritas (BRIDS) has maintained an excellent track record and extensive experience in the capital market as an underwriter, broker, and financial advisor for individual, institutional, foreign and domestic, private and government clients. Established in 1992, PT Danareksa Sekuritas is a securities company that performs activities as a securities broker, underwriter, or arranger and financial advisor.

<ul><li>Unbranded Generic and distribution to drive FY24F top line, while CH and Nutrition revenue normalized</li><li>We raised FY24-25F NP by 4.5-2.9%, driven by the absence of covid inventory provision and forex gain</li><li>We upgrade KLBF to Buy (from Hold prev.) on its resilient growth profile, attractive valuation and light positioning</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Unbranded Generic and distribution to drive FY24F top line, while CH and Nutrition revenue normalizedWe raised FY24-25F NP by 4.5-2.9%, driven by the absence of covid inventory provision and forex gainWe upgrade KLBF to Buy (from Hold prev.) on its resilient growth profile, attractive valuation and light positioningContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Kalbe Farma - Resilient Growth Outlook at Reasonable Valuation

Kalbe Farma (KLBF.IJ) - Resilient Growth Outlook at Reasonable Valuation

<ul><li>Post FY23 earnings (broadly in-line vs our est.), KLBF guides for further improvements in FY24F revenues/ EPS growth at 6-7% and 13-15% yoy.</li><li>Despite the management’s guidance, we see limited catalysts for revenue growth to improve beyond 2Q24 amid soft purchasing power.</li><li>We keep our FY24-25F EPS growth forecast (3-10% yoy) and DCF-based TP of Rp1,600, with a Hold rating on the unexciting growth outlook.</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Post FY23 earnings (broadly in-line vs our est.), KLBF guides for further improvements in FY24F revenues/ EPS growth at 6-7% and 13-15% yoy.Despite the management’s guidance, we see limited catalysts for revenue growth to improve beyond 2Q24 amid soft purchasing power.We keep our FY24-25F EPS growth forecast (3-10% yoy) and DCF-based TP of Rp1,600, with a Hold rating on the unexciting growth outlook.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Kalbe Farma - Retaining Our Conservative FY24 View

<section class="figure"><section class="figure"><div class="content-highlight"><p><a href="https://www.smartkarma.com/entities/kalbe-farma-tbk-pt" target="_blank" data-smartkarma-citation="entities:6303:1" rel="noopener">Kalbe Farma (KLBF IJ)</a> is South-East Asia's largest pharmaceutical company, with the majority of its sales in Indonesia. The company booked a respectable and resilient set of 1H2021 results with sales rising supported by organic volume growth. After the recent correction , we see this as a key process to rising levels of health-conscious in Indonesia.</p></div></section><p><a href="https://www.smartkarma.com/entities/kalbe-farma-tbk-pt" target="_blank" data-smartkarma-citation="entities:6303:1" rel="noopener">Kalbe Farma (KLBF IJ)</a> saw a solid performance from its prescription pharmaceuticals division, with sales growth of +5.4% YoY in 1H2021.</p>
<p>The company's nutritionals division saw a slight drop of -0.5% in sales in 1H2021, mainly due to a change in products mix towards slightly more affordable products , which bodes well for future growth and its ESG credentials.</p>
<p>As a core part of the company's ESG initiative, <a href="https://www.smartkarma.com/entities/kalbe-farma-tbk-pt" target="_blank" data-smartkarma-citation="entities:6303:1" rel="noopener">Kalbe Farma (KLBF IJ)</a> is proactively extending access to healthcare through a number of different strategies.</p></section><section class="figure"></section><section class="figure"></section><section class="figure"><section class="figure"><p>The company expects continuing improvement in 2H2021, which will support sales growth of +7-10% for FY2021, with EPS growth of +7-10%, and a dividend payout ratio of 45-55%.</p>
<p><a href="https://www.smartkarma.com/entities/kalbe-farma-tbk-pt" target="_blank" data-smartkarma-citation="entities:6303:1" rel="noopener">Kalbe Farma (KLBF IJ)</a> currently trades in 22.9x FY21E PER and 20.9x FY22E PER versus its 5-year average forward PER of 26.3x forward PER, making it look attractive at current levels. </p></section></section>

Kalbe Farma (KLBF IJ) is South-East Asia's largest pharmaceutical company, with the majority of its sales in Indonesia. The company booked a respectable and resilient set of 1H2021 results with sales rising supported by organic volume growth. After the recent correction , we see this as a key process to rising levels of health-conscious in Indonesia.Kalbe Farma (KLBF IJ) saw a solid performance from its prescription pharmaceuticals division, with sales growth of +5.4% YoY in 1H2021.
The company's nutritionals division saw a slight drop of -0.5% in sales in 1H2021, mainly due to a change in products mix towards slightly more affordable products , which bodes well for future growth and its ESG credentials.
As a core part of the company's ESG initiative, Kalbe Farma (KLBF IJ) is proactively extending access to healthcare through a number of different strategies.The company expects continuing improvement in 2H2021, which will support sales growth of +7-10% for FY2021, with EPS growth of +7-10%, and a dividend payout ratio of 45-55%.
Kalbe Farma (KLBF IJ) currently trades in 22.9x FY21E PER and 20.9x FY22E PER versus its 5-year average forward PER of 26.3x forward PER, making it look attractive at current levels. 

Kalbe Farma (KLBF IJ)- Back to the Business of Health

Indonesia

PT Tempo Scan Pacific Tbk manufactures and distributes pharmaceutical , health care and cosmetic products. The Company offers a variety of products including prescription drugs, specialty care products, and home care consumer products.

Kimia Farma (Persero) Tbk manufactures, distributes, and sells pharmaceutical, chemical, biological, and other materials for use of manufacturing of contraceptives, cosmetics, medical equipment, medicines, and food and beverages. The Company also produces packing material, machinery, equipment, and supporting facilities related to pharmaceuticals as well as operates pharmacies.

PT Merck Tbk manufactures pharmaceutical products. The Company also distributes pharmaceutical raw materials, chemicals reagents, and medical instruments.

Darya-Varia Laboratoria Tbk PT manufactures, trades, and distributes pharmaceuticals and related chemicals, as well as health care products.

PT Pyridam Farma Tbk manufactures and develops pharmaceutical products as well as distributes medical equipment. Its factory located in Desa Cibodas, West Java.

Indofarma Persero Tbk PT manufactures and trades drugs. The Company's products include generic, branded, licensed, and over the counter (OTC) drugs as well as traditional herbs, health food, cosmetics, and supplementary baby food. Through its subsidiaries, Indofarma also produces packaging materials, machinery and equipment, and infrastructure related to pharmaceutical industry.

Mitra Keluarga Karyasehat Tbk PT engages in hospital management and business services. The Company operates hospitals located in the Greater Jakarta Area, Surabaya and Tegal.

PT Siloam International Hospitals Tbk owns and operates hospitals. The Company offers a comprehensive range of specialist medical services including laboratory services, radiology, imaging and complex surgical procedures. Siloam International operates its hospitals throughout Indonesia.

PT Sejahteraraya Anugrahjaya Tbk operates hospitals.

PT Medikaloka Hermina Tbk owns and operates a chain of hospitals. The Hospital provides professional healthcare services, as well as focuses on obstetric and pediatric care. Medikaloka Hermina also offers consulting services. Medikaloka Hermina serves patients in Indonesia.

Guangzhou Baiyunshan Pharmaceutical Holdings Co., Ltd. manufactures and sells Chinese patent medicine. The Company also wholesales, retails, imports, and exports Western and Chinese pharmaceutical products and various medical apparatus.

Guangzhou Baiyunshan Pharmaceutical Holdings (874 HK)

Guangzhou Baiyunshan Pharmaceutical Holdings

Perrigo Company PLC is a global healthcare supplier that develops, manufactures, and distributes OTC and generic prescription pharmaceuticals, infant formulas, nutritional products, active pharmaceutical ingredients and pharmaceutical and medical diagnostic products. The Company's primary markets and locations of manufacturing and logistics operations are the US, UK, Mexico, and Australia.

Changchun High & New Technology Industry (Group) Inc. is an investment holding company.  Through its subsidiaries, the Company manufactures biopharmaceuticals and Chinese traditional medicines, constructs infrastructure facilities, manufactures electrolytic condensers, and develops and manages real estate.

ROHTO PHARMACEUTICAL CO., LTD. manufactures and markets pharmaceuticals and cosmetics products.  The Company's products include eyewash, bath soaps, gastrointestinal medicine, and hand cream.  Rohto Pharmaceutical also has a license agreement with its subsidiary, Mentholatum (US) to sell their brand products.  The Company also manufactures contact lenses and health foods.

Xizang Haisco Pharmaceutical Group Company Limited develops, manufactures and sells drug formulations and active pharmaceutical ingredients. The Company's main products include hepatobiliary disease medication, anti-infective drugs, parenteral nutrition drugs, invert sugar for injection, and other related products.

Xizang Haisco Pharmaceutical Group Co (002653 CH)

Shenzhen Salubris Pharmaceuticals Co., Ltd. develops, manufactures, and distributes pharmaceutical and healthcare products such as tablets, capsules, injection formulations and active pharmaceutical ingredients.

Shenzhen Salubris Pharmaceuticals A (002294 CH)

Corcept Therapeutics Inc. is a pharmaceutical company that discovers and develops drugs for the treatment of severe metabolic and psychiatric disorders. The Company's lead product modulates the effect of cortisol, also known as the "stress hormone", by selectively blocking the binding of cortisol to one of its two known receptors, the GR-II receptor.

Dong-E-E-Jiao Co., Ltd. primarily manufactures and sells traditional Chinese medicine, health care products, health foods, and bio-medicine. The company also engages in gelatin products manufacturing.

SANTEN PHARMACEUTICAL CO., LTD. produces and sells ophthalmic medicine.  The Company manufactures a variety of products including eye drops and ointments. Santen Pharmaceutical also imports lenses and tools and equipment used by optometrists and produces anti-rheumatic drugs.

Glaxosmithkline Pharmaceuticals Ltd. manufactures and distributes a wide variety of pharmaceutical drugs, veterinary products and laboratory chemicals. The Company's products include "Phexin" capsules, "Betnesol" tablets and injections, "Becoride" asthma treatment, "Betnovate" ointment, "Cetzine" antihistamine, "Zucox" and "Rizap" anti-tuberculosis products.

Glaxosmithkline Pharmaceuticals (GLXO IN)

PT Kalbe Farma Tbk produces and develops pharmaceutical products for human and animal healthcare.  Through its subsidiaries, the Company also operates in the pharmaceutical, health food, and packaging industries.

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Kalbe Farma (KLBF IJ)