Monday, April 11, 2011

Kalbe Farma (KLBF)

by Mandiri Securities

Kalbe Farma: FY10 results 1.1% above our expectation and 3.3% above consensus estimates (KLBF, Rp3,075, Neutral, Rp3,100)

KLBF reported audited FY10 results with minor discrepancy with the unaudited results quoted previously. Net profit reached Rp1.3tn, 1.1% above our expectation and 3.3% above consensus estimates. This reflected a strong 38.5% yoy growth. Please note that such strong growth was partly enabled by lower corporate income tax (from 28% to 25%) and lower minority interest coming from EPMT.

Gross margin improved to 50.5% in 2010 from 49.7% in 2009 supported by Rupiah appreciation against the US dollar. This supported higher operating margin of 17.5% from 17.2% a year earlier, leading to a net profit of Rp1,3tn (+37.1% yoy) for FY10, which is also inline with our forecast and consensus estimates.

At current price, the stock is traded at 2011F PER of 23.2x and EV/EBITDA of 13.2x. We maintain our neutral call on the counter.

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