PT Kalbe Farma Tbk. (OTC:PTKFF) Growing in the midst of challenging Market Conditions

PT Kalbe Farma Tbk. (OTC:PTKFF) Growing in the midst of challenging Market Conditions

PT Kalbe Farma Tbk. (OTC:PTKFF) Growing in the midst of challenging Market Conditions

PT Kalbe Farma Tbk. (“Kalbe”) was established in 1966 and is one of the largest publicly-listed pharmaceutical companies in Southeast Asia. Kalbe has four main divisions managing a broad and strong portfolio of brands; prescription pharmaceuticals division (Cefspan, Brainact, Broadced, etc), consumer health division comprising over-the-counter drugs (Promag, Mixagrip, Komix, Woods, Fatigon, etc) as well as ready-to-drink and supplement drink products (Hydro Coco, Extra Joss), nutritionals division (ChilKid, Prenagen, Diabetasol,Zee etc), and distribution division. Kalbe currently has more than 40 subsidiaries and 13 production facilities with international standards, supported by around 17,000 employees and 1,250 sales and marketing personnel, spread in 76 branches across Indonesia. Since 1991, Kalbe’s shares have been listed on the Indonesia Stock Exchange (IDX: KLBF).

In the first quarter of this year, Covid-19 virus outbreak made Indonesia face challenges to increase the economic growth. Under these conditions, Kalbe posted net sales of Rp 5,796 billion for the first quarter of 2020, an increase of 8.0% compared to the same period last year of Rp 5,366 billion.

The increase in sales was supported by the Company’s Prescription Drugs Division which posted sales growth of 5.3% to Rp 1,397 billion, and accounted for 24.1% of Kalbe’s total net sales in the first quarter of 2020. Consumer Health Division achieved an increase in sales of 6.9% to Rp. 996 billion with a contribution of 17.2% to the total net sales of the Company. The Nutrition Division’s net sales stood at Rp 1,602 billion in the first quarter of 2020, growing 5.4% from the previous year’s achievement and accounted for 27.6% of Kalbe’s total net sales, while the Distribution & Logistics Division achieved a net sales increase of 13.5 % from Rp 1,587 billion to Rp 1,800 billion, and contributed 31.1% to the Company’s total net sales.

Gross profit grew by 4.8% to Rp 2,617 billion in the first quarter of 2020. Gross profit to sales ratio fell to 45.2% from 46.6% for the same period a year earlier. This was caused by higher sales contribution from the distribution and logistics business. Profit before income tax in the first quarter of 2020 amounted to Rp. 887.6 billion grew by 11.7% with profit before income tax ratio reaching 15.3%, or an increase of 14.8% in the same period in the previous year. The company will continue to combine product portfolio management strategies, manage the effectiveness of sales and marketing activities, and monitor other operating costs to maintain profit levels before income tax.

Net income of the owners of the parent entity grew 12.5% to reach Rp 669.3 billion in the first quarter of 2020 compared to Rp 595.1 billion in the same period in the previous year. Higher net profit growth compared to net sales growth was mainly due to increased efficiency in operating costs.

To support the government and the community to be able to fight and get past the pandemic, Kalbe will continue to strive to improve services, produce and provide products that can improve public health. With the hope that Indonesia’s Covid-19 pandemic conditions will improve in the second half of 2020, remain aware of the impact of the movement of the US dollar on the Rupiah, and keep monitor competitive conditions in the market, the Company maintains a net sales growth target of 6%-8% with a projected net profit growth of around 5%-6%. The company is also preparing a capital expenditure budget of Rp 1.0 trillion, which will be used to expand production and distribution capacity. The dividend distribution ratio is maintained at a ratio of 45% – 55%, with due regard to the availability of funds and internal funding needs.

Technical Indicators

Overall, the bias in prices is: Upwards. The projected upper bound is: 0.16.

The projected lower bound is: 0.04.

The projected closing price is: 0.10.

Candlesticks

A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 1 white candles and 1 black candles. During the past 50 bars, there have been 2 white candles and 2 black candles.

A rising window occurred (where the top of the previous shadow is below the bottom of the current shadow). This usually implies a continuation of a bullish trend. There have been 24 rising windows in the last 50 candles–this makes the current rising window even more bullish.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 52.6396. This is not an overbought or oversold reading. The last signal was a buy 5 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 51.14. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 21. This is not a topping or bottoming area. The last signal was a buy 0 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 3 period(s) ago.

Rex Takasugi – TD Profile

PT KALBE FARMA closed up 0.050 at 0.100.

Open     High     Low      Close      Volume
0.080    0.125    0.080    0.100      241,351
Technical Outlook
Short Term:        Neutral
Intermediate Term: Bearish

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect very strong flows of volume into PTKFF.PK (bullish). Our trend forecasting oscillators are currently bearish on PTKFF.PK and have had this outlook for the last 3 periods.

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