ID - [ICBP IJ]: Ground Checks: Higher Noodle & Dairy Selling Prices
Analyst: Andrey Wijaya
Link to report: https://research.rhbtradesmart.com/attachments/43/rhb-report-ind_indofood-cbp_company-update_20181004_rhb-22617186873495805bb45ba4f3635.pdf
♦ Maintain BUY and DCF-derived IDR10,300 TP (high-end of consensus), 15% upside, implying FY19F-20F P/Es of 26-23x.
♦ Our ground checks suggest average retail selling prices for Indofood CBP’s noodles and dairy products (~83% of total sales) have increased QoQ, likely to reflect the passing on of higher input costs.
♦ We believe the impact on sales volume will not be significant as the price hikes will likely be followed by its peers.
♦ The acquisition of remaining shares not owned in Nestle Indofood Citarasa should provide greater flexibility in the expansion of its food seasoning operations.
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