KLBF Hold

Kalbe Farma 1Q12 Results: Meet our expectations Revenues inline with expectations Revenues grew 27.7% to over Rp3tr in 1Q12, up from Rp2.4tr in the same quarter last year - reaching 23.5% of our full year forecast of Rp12.8tr, i.e. inline. All business segments recorded strong growth in the period. The only segment to disappoint was the consumer health segment whose 1Q12 revenues were only about 20% of our full year target. Operating profits also reached our expectations The operating profits grew by 23.6% yoy to Rp515bn in 1Q12, or up from Rp417bn in the same period last year. The figure was slightly above expectations, reaching 25.7% of our full year forecast of over Rp2tr. Bottom line: slightly above forecast At the bottom line, Kalbe recorded a 27.7% yoy increase in net profits to Rp403bn, or up from Rp316bn in the same period the year before. The figure is 26% of our full year forecast of Rp1.5tr. Lower profit margins, as expected Profit margins weakened in 1Q12, as expected. The gross margin fell to 49% from 51.8% in 1Q11. This was expected, however, given the stronger contribution from the distribution unit. The operating margin also declined, falling to 17.2% in 1Q12 from 17.7% in 1Q11. The net margin was stable at around 13.9. Still HOLD with a TP of Rp3,725 We are satisfied with the company's performance in 1Q12 as our full year forecasts were reached in almost all accounts. As such, we maintain our HOLD recommendation with a TP of Rp3,725, implying a 2012F P/E multiple of 22.6x. At the current share price level, the counter is trading at a 2012F P/E multiple of 21.4x.