Better topline performance on more working days. In 2Q25, SIDO posted revenue of IDR 1.0tn (+23.3% YoY; +31.7% QoQ), bringing 6M25 revenue to IDR 1.8tn (-3.6% YoY), relatively in line with our and consensus estimates (SSI: 42.3%; Cons: 45.2%). The rebound was driven by higher trade activities post-Ramadan normalization in working days, coupled with persistent rainfall that lifted 2Q25 herbal revenue to IDR 716bn (+47.2% YoY; +97.3% QoQ). Most of SIDO’s topline growth (herbal segment c.75% of total revenues) was volume-driven, as the company implemented only selective price increases this year—such as the January 2025 Tolak Angin hike in line with inflation—amid weak purchasing power. Meanwhile, F&B sales (c.20% of topline) declined to IDR 284bn (-11.4% YoY; -29.4% QoQ), pressured by softer energy drinks demand amid easing heatwave conditions as well as lower mining activities on decreasing coal and metal prices. From the export side, contribution reached 9.7% of total 1H25 sales (FY24: 6.8%).

 

Improved margins and strong bottom line. On the profitability front, SIDO’s 2Q25 GPM improved to 60.5% (1Q25: 52.3%; 2Q24: 56.8%) on the back of favorable business mix, lower raw materials costs, and higher sales volumes. Segment-wise, herbal’s QoQ margin expanded to 68.2% (1Q25: 61.2%; 2Q24: 69.4%), while F&B’s QoQ margin fell to 44.3% (1Q25: 45.8%; 2Q24: 39.6%). EBIT margin widened to 43.2% (1Q25: 35.0%; 2Q24: 30.9%), supported by lower salary costs, which dropped to 2.7% of 2Q25 revenue (1Q25: 3.7%; 2Q24: 4.6%) following normalization from 1Q25 due to religious holiday allowances (THRs). On the bottom line, 2Q25 net profit reached IDR 368bn (+68.6% YoY; +57.8% QoQ), bringing 6M25 net profit to IDR 600bn (-1.3% YoY), broadly in line with both our and consensus estimates (SSI: 46.6%; Cons: 52.3%). However, following management’s lower guidance we have fine-tuned our numbers (figure 1).

 

Stronger momentum in 2H. Following the release of SIDO’s 1H25 results, the management now expects mid-single-digit growth in both top and bottom lines for FY25 (previous guidance: ~10%), implying ~double-digit growth rate in 2H25, supported by: 1) new product launches in both domestic and export markets with higher A&P spending (FY25 target run rate of 10–12% vs. 1H25: 7.8%); 2) improved macro conditions on government stimulus; and 3) higher energy drinks demand from increased mining activities due to downstream developments and favorable harvesting period in 2H25 due to seasonality.

 

Maintain BUY on 25% Upside. We retain BUY on SIDO since we believe its -11.0% share price drop YTD has priced in most bad news related to weak 1Q25 earnings. To reflect this soft performance last quarter, we cut our DCF-based TP from IDR 800 to IDR650, implying a reasonable 14.9x 2026F P/E, as we expect SIDO’s share price to perform better ahead, particularly given much improved 2Q25 results and SIDO's dominant position in herbal products and energy drinks markets. BUY on 28% upside potential to our lower TP. Key risks: volatility in raw materials prices and intensifying competition.