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.

Equity Bottom-Up

<ul><li>We are turning more cautious on KLBF’s FY23-25F EPS growth as we see threat for its branded prescription drugs from the persisting rising trend of hospital patients visits from JKN patients in 9M23 (17% CAGR in 2014-22).</li><li>Against this headwind, we project a lower FY24F earnings growth of 2.9% yoy (21-27% cut in FY23-25F est.) and cut our rating to HOLD with a lower TP of IDR1,600.</li><li>Hospital operators MIKA, HEAL and SILO have reported further increase in revenue portion from JKN patients in 9M23, continuing the trend from the past few years (data shown by National Health Program/ BPJS that showed 17% CAGR in 2014-22 (34% in FY22) increase in total number of visits by JKN patients to healthcare facilities.</li></ul>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.

We are turning more cautious on KLBF’s FY23-25F EPS growth as we see threat for its branded prescription drugs from the persisting rising trend of hospital patients visits from JKN patients in 9M23 (17% CAGR in 2014-22).Against this headwind, we project a lower FY24F earnings growth of 2.9% yoy (21-27% cut in FY23-25F est.) and cut our rating to HOLD with a lower TP of IDR1,600.Hospital operators MIKA, HEAL and SILO have reported further increase in revenue portion from JKN patients in 9M23, continuing the trend from the past few years (data shown by National Health Program/ BPJS that showed 17% CAGR in 2014-22 (34% in FY22) increase in total number of visits by JKN patients to healthcare facilities.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 (KLBF IJ) - Persisting Headwind in FY24 from Shifting Industry Trend

<ul><li>KLBF foresees better margins in 4Q23 and 2024, supported by the nutritional division (4Q23) and a favorable product mix (2024).</li><li>Additionally, the prolonged dry and hot weather has boosted patient traffic at hospitals and in turn leads to higher demand for pharma and OTC products.</li><li>KLBF currently trades at an attractive FY24F PE of 22.5x (15% discount to its avg 5-year). </li></ul>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.

KLBF foresees better margins in 4Q23 and 2024, supported by the nutritional division (4Q23) and a favorable product mix (2024).Additionally, the prolonged dry and hot weather has boosted patient traffic at hospitals and in turn leads to higher demand for pharma and OTC products.KLBF currently trades at an attractive FY24F PE of 22.5x (15% discount to its avg 5-year). 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 (KLBF IJ) - Better Outlook Amid Potential 4Q23 Improved Margin

Thematic (Sector/Industry)

<ul><li>We expect more provision for social aid and the festive events in 1H24 to cushion soft purchasing power recovery amid modest wage hikes.</li><li>We forecast FY24 net profit growth for the sector of 10.6% yoy (core profits: +5% yoy) supported by sales volume recovery (3-9%).</li><li>We maintain sector OW rating and expect ICBP (TP Rp13,000) and MYOR (TP Rp3,500) to fare better under soft recovery scenario.</li></ul>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.

We expect more provision for social aid and the festive events in 1H24 to cushion soft purchasing power recovery amid modest wage hikes.We forecast FY24 net profit growth for the sector of 10.6% yoy (core profits: +5% yoy) supported by sales volume recovery (3-9%).We maintain sector OW rating and expect ICBP (TP Rp13,000) and MYOR (TP Rp3,500) to fare better under soft recovery scenario.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.

Consumer: Festive events in 1H24 and higher social aid to cushion soft recovery in FY24 (OVERWEIGHT)

Macroeconomics

<ul><li>The main takeaways from the most recent Fed Beige Book suggest moderating economic growth in recent months, implying a Fed pause.</li><li>While the US headline Aug CPI is expected to increase, core inflation is expected to maintain its trend of subdued readings.</li><li>This more stable narrative regarding monetary policy has the potential to alleviate the recent market volatility which led to a weaker IDR on a stronger DXY, rising government bond yields, and the continuation of outflows from the equity market.</li></ul>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.

The main takeaways from the most recent Fed Beige Book suggest moderating economic growth in recent months, implying a Fed pause.While the US headline Aug CPI is expected to increase, core inflation is expected to maintain its trend of subdued readings.This more stable narrative regarding monetary policy has the potential to alleviate the recent market volatility which led to a weaker IDR on a stronger DXY, rising government bond yields, and the continuation of outflows from the equity market.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.

Macro Strategy & Flows Trackers: More Signals

<ul><li>The global manufacturing sector depicted some positive signs in July, with more countries reporting stronger activity, including Indonesia</li><li>While China's weak growth is a concern, the impact might be offset by better growth in other G20 economies, supporting the narrative of a soft landing towards the year-end, which may help mitigate potential volatility in asset prices</li><li>Domestic economic activity has been lacklustre, with more companies reporting lower-than-expected results</li></ul>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.

The global manufacturing sector depicted some positive signs in July, with more countries reporting stronger activity, including IndonesiaWhile China's weak growth is a concern, the impact might be offset by better growth in other G20 economies, supporting the narrative of a soft landing towards the year-end, which may help mitigate potential volatility in asset pricesDomestic economic activity has been lacklustre, with more companies reporting lower-than-expected resultsContent 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.

Macro and Flows Tracker - Not All Is Well

Indonesia

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.

Kalbe Farma (KLBF IJ) - Persisting Headwind in FY24 from Shifting Industry Trend

Against this headwind, we project a lower FY24F earnings growth of 2.9% yoy (21-27% cut in FY23-25F est.) and cut our rating to HOLD with a lower...

BRI Danareksa Research

Kalbe Farma (KLBF IJ) - Better Outlook Amid Potential 4Q23 Improved Margin

KLBF foresees better margins in 4Q23 and 2024, supported by the nutritional division (4Q23) and a favorable product mix (2024).

BRI Danareksa Research

Consumer: Festive events in 1H24 and higher social aid to cushion soft recovery in FY24 (OVERWEIGHT)

We expect more provision for social aid and the festive events in 1H24 to cushion soft purchasing power recovery amid modest wage hikes.

BRI Danareksa Research

Macro Strategy & Flows Trackers: More Signals

The main takeaways from the most recent Fed Beige Book suggest moderating economic growth in recent months, implying a Fed pause.

BRI Danareksa Research

Macro and Flows Tracker - Not All Is Well

The global manufacturing sector depicted some positive signs in July, with more countries reporting stronger activity, including Indonesia

BRI Danareksa Research