Next year will be a good period for consumer goods issuers

KONTAN.CO.ID – JAKARTA. Demand for consumer goods will usually increase ahead of Christmas and New Year. This trend will certainly give wind to consumer goods sector issuers. Will that trend also occur this year?

Panin Sekuritas analyst Rendy Wijaya said that the potential still exists although it may not be as significant as in previous years. According to him, with restrictions on Christmas and New Year this time to limit the spread of Covid-19, shopping activities will tend to be limited and not maximal.

“Keep in mind, too, that the potential increase in spending is more of a seasonal effect only. So in the next year, with the pandemic still continuing, the recovery in consumer spending is still relatively slow. Performance growth in 2020 is predicted to be slower than 2019,” Rendy told Kontan.co.id, Saturday (28/11).

Rendy said, during this pandemic, community activities are still below normal activity levels with an average in the range of -10% to -15%. This also affects the sale of products that are usually purchased more from modern retail outlets. This is still a negative sentiment that suppresses the performance of consumer goods sector stocks.

Meanwhile, NH Korindo Sekuritas analyst Putu Chantika sees that ahead of Christmas and the end of the year, a positive trend is overshadowing consumer goods issuers. He is optimistic that sales for consumer goods will increase in the fourth quarter of 2020 with the momentum of Christmas and New Year.

“Although the government limited this celebration, but when viewed from the third quarter of 2020, actually the purchasing power of the community, especially domestic, has already showed signs of recovery. Of course this becomes a positive catalyst for consumer goods issuers,” putu said

In general, Putu assessed, this year is not a good year for consumer goods issuers because it lost momentum for Eid al-Fitr to support sales. However, he predicted that next year could be a better year as sales return during Eid al-Fitr.

Putu sees the trend of strengthening rupiah exchange rate, low inflation and the government that plans to continue the cash bansos for at least 6 months (January to June 2021) could be a positive catalyst for consumer goods issuers.

“But on the other hand, the challenges faced by the consumer goods sector in the next year are some areas that do not raise the minimum wage. Not to mention the strengthening trend for some commodity prices that have the potential to depress the margins of consumer goods issuers,” Putu added.

With three money, Rendy is also confident that the outlook for consumer goods sector issuers in the next year will still be attractive. The consideration is that this sector has a positive impact from improving people’s purchasing power in line with the increasing economic activity. He predicted that performance growth will potentially be higher than this year, although it will not return to 100% normal levels.

“Especially if next year the stimulus from the government continues. Starting from the national economic recovery fund (PEN) to decisions related to salary subsidies that will also be the determinant of purchasing power of the public in general in the coming year. In addition, if vaccination goes well, it will certainly potentially boost the performance of issuers in this sector,” added Rendy.

Among the shares of consumer goods issuers, Rendy himself peddled shares of PT Indofood CBP Sukses Makmur Tbk(ICBP)as his preferred issuer. This is inseparable from ICBP which has solid performance supported by instant noodle segment. In addition, the acquisition of Pinehill Company will further boost ICBP’s performance going forward.

Putu also peddled ICBP due to similar factors, plus ICBP is also still eager to innovate its products, one of which is by launching Pop Mie Pake Nasi (Hot) products.

Putu also sees PT Mayora Indah Tbk(MYOR)as an attractive choice in line with the positive performance of the food & beverage segment.

In addition, several MYOR export destinations such as the Philippines, Vietnam, Thailand also showed a gradual improvement in terms of purchasing power after the lockdown easing was implemented.

Sunday, November 29, 2020 / 17:33 WIB

Reporter: Hikma Aerospace | Editor: Khomarul Hidayat