$CLEO - Bisa dapetin preliminary info ttg CLEO dan industri nya. Lngsng dibikinin thesis nya disini. Pak Martabak Wisman dari PT ChatGPT Indonesia Sekuritas.
Model prompt ini bisa juga dipake utk saham2 paling eksotis di bursa yang gak ada satu pun analis sekuritas berani pegang 😂
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PT Sariguna Primatirta Tbk (CLEO)
Initiation of Coverage · Consumer Staples Sector · Indonesia
Rating: BUY | Target Price: IDR 6,200 | Current Price: IDR 1,315 (as of Feb 28, 2025)
Upside Potential: 371% | Analyst: Martabak Wisman | Date: Mar 2, 2025
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Investment Thesis
CLEO is Indonesia’s fastest-growing bottled water company, benefiting from the structural shift towards healthier beverages, increasing disposable incomes, and a rapidly expanding distribution network. With a dominant position in the premium and value bottled water segments, strong brand equity, and an asset-light business model, CLEO is poised for exponential growth.
Our target price of IDR 6,200 is derived using the Discounted Cash Flow (DCF) method and reflects a 371% upside from the current price.
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Key Investment Highlights
Market Leader in Indonesia’s Fast-Growing Bottled Water Industry
CLEO is one of Indonesia’s largest bottled water producers, capitalizing on the country’s increasing demand for healthier beverages. Indonesia’s bottled water market is projected to grow at a CAGR of 12.3% over the next five years, reaching IDR 90 trillion by 2028. CLEO’s sales volume growth consistently outpaces the industry, rising 21.5% YoY in 2023 compared to the industry’s 9.8%. The company holds a 15% market share in the premium bottled water segment, while its value segment brands are rapidly gaining traction. With nationwide distribution and continued expansion into modern retail and e-commerce, CLEO is well-positioned to capture a larger share of this high-growth market.
Explosive Revenue and Earnings Growth
CLEO has demonstrated industry-leading revenue and earnings growth, driven by aggressive expansion and strong operational efficiencies. Revenue surged 32.4% YoY in FY2023 to IDR 3.8 trillion, supported by higher sales volume and premiumization trends. Net income grew by 45.6% to IDR 780 billion, with a net margin expansion from 18.2% in FY2022 to 20.5% in FY2023. With economies of scale, further cost optimization, and robust sales momentum, we forecast FY2025 revenue to reach IDR 6.3 trillion and net income to hit IDR 1.5 trillion, representing a CAGR of 21.8% over the next three years.
Scalable, Asset-Light Business Model Enhancing Profitability
Unlike traditional beverage companies, CLEO operates a highly scalable, asset-light model with outsourced logistics and lean production. This allows the company to maintain industry-leading gross margins of 47.5%, significantly higher than its peers’ average of 35-40%. CLEO’s strategic focus on direct-to-retail distribution and exclusive partnerships with large retailers has also improved operational efficiency, resulting in a declining cost-to-income ratio of 39.8% in FY2023, down from 42.1% in FY2022. With continuous cost optimization initiatives and supply chain digitization, profitability is expected to strengthen further.
Strong Brand Positioning and Expanding Distribution Network
CLEO’s brand strength is a key differentiator in the competitive bottled water landscape. Its flagship product, Cleo Pure Water, is recognized for superior quality and purity, driving high consumer preference. The company’s distribution network spans over 100,000 retail outlets nationwide, with rapid expansion into Tier 2 and Tier 3 cities, where bottled water penetration remains low. The company has also made significant inroads in online sales, with digital channels contributing 15% of total revenue in 2023, up from 8% in 2021. As modern retail penetration increases and consumer trends favor premium bottled water, CLEO is well-positioned for sustained growth.
Favorable Macroeconomic and Health Trends Driving Demand
The shift towards healthier consumption habits, rising disposable incomes, and rapid urbanization are strong tailwinds for CLEO’s growth. Indonesia’s GDP is expected to grow at 5.4% in 2025, while rising health awareness has led to increased demand for clean and safe drinking water. The government’s push for improved public health standards further supports the industry’s expansion. Additionally, CLEO’s commitment to sustainability and eco-friendly packaging aligns with evolving consumer preferences, strengthening its long-term market positioning.
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Valuation Methodology
We derive our IDR 6,200 target price using a Discounted Cash Flow (DCF) model, reflecting a 371% upside from the current price of IDR 1,315.
- We assume a Weighted Average Cost of Capital (WACC) of 11.5%, incorporating a risk-free rate of 7.0%, an equity risk premium of 6%, and a beta of 1.1.
- Our free cash flow (FCF) projections grow at a CAGR of 22% over the next five years, driven by strong revenue growth and operational efficiencies.
- Our terminal growth rate is estimated at 5.0%, supported by CLEO’s continued market expansion and increasing consumer demand.
- Our base-case scenario projects FY2025 EPS of IDR 260, with an implied forward P/E of 23.8x, which remains attractive given CLEO’s high growth potential.
With a dominant market position, strong profitability, and significant expansion opportunities, CLEO presents a compelling high-growth investment case, warranting a BUY rating.
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Risks to Our Investment Thesis
1. Competition and Market Saturation – The bottled water industry remains highly competitive, with established players such as Aqua (Danone) and Le Minerale posing potential threats to CLEO’s market share.
2. Raw Material Price Volatility – Fluctuations in PET resin and packaging costs could impact gross margins, particularly if CLEO is unable to pass costs onto consumers.
3. Regulatory Risks – Changes in government policies, such as stricter environmental regulations on plastic packaging, could increase compliance costs.
4. Supply Chain Disruptions – Logistical challenges, including transportation cost inflation and distribution bottlenecks, could affect profitability and market expansion.
5. Economic Slowdowns – A broader economic downturn could weaken consumer spending, impacting volume growth and revenue projections.
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