This catchy slogan has become a familiar sound to our ears, not only capturing the public's attention but also effectively transforming the perception of traditional herbal medicine, or 'jamu', from something seen as outdated and provincial to something modern and relevant.
Since its launch in the early 2000s, this tagline has revolutionized how we view and consume jamu.
Thanks to a clever marketing campaign that features intellectually esteemed personalities like Rhenald Kasali, Bob Sadino, Agnes Monica, Lula Kamal, and Anggito Abimanyu, Tolak Angin has rebranded a traditional remedy into a chic and smart choice for the informed consumer.
Through this innovative marketing strategy, Sidomuncul has not only changed the stigma surrounding traditional remedies but also expanded its product range to meet diverse health needs.
From vitamins aimed at disease prevention, daily beverage products, to specific medicines and herbal remedies for various medical conditions, Sidomuncul has effectively broadened its appeal and utility.
Source: Company
Sidomuncul's recent financial report for 1Q24 has indeed presented satisfying results. SIDO reported a robust profit of IDR 390 bn, marking an increase of 7.3% qoq and a substantial 30.0% yoy.
This profit surge was driven not only by stronger sales but also by efficient cost management. This cost efficiency is particularly noteworthy as it was achieved despite a 12.6% decrease in revenue qoq, which highlights the company's ability to enhance profitability through strategic cost reductions and operational optimizations.
Source: Sucor Research
Reduced expenses on items such as cheaper raw materials, particularly in F&B sector, along with decreased operational and administrative expenditures, have significantly boosted Sidomuncul's financial performance.
These cost-cutting measures have led to the highest NPM, EBITDA margin, and OPM observed in the last five years.
Source: Bloomberg
Despite a qoq decline in revenue, the yoy revenue saw a notable increase of 16%. The Herbal segment has been a significant driver of this growth, showing a 13.3% increase led by products such as health teas, energy drinks, and capsule products.
Source: Company
Our analysts expect Sidomuncul's strong performance to continue in the upcoming quarters, bolstered by increased sales due to higher mobility during the Idul Fitri holiday season and an extended rainy season anticipated due to the La Niña phenomenon.
Once again, we encounter the paradoxical question: should we be thankful for illness?
To capitalize on these trends and to further enhance performance, Sidomuncul is also launching new products to meet consumer health needs and strengthen its market position by diversifying its offerings and targeting new customer segments.
Source: Company
Given the promising outlook, our analysts recommend a 'BUY' for SIDO and have raised the target price to IDR 830.