---
endpoint: analytics
pattern: Consumer
status: done
latency_ms: 208081
conversation_id: a216e9ba-11fb-4489-94ec-b99823a95414
citations: 14
created: 2026-05-31 22:11:10Z
---

# How does Kalbe Farma’s valuation compare to peers, and what justifies its premium/discount?

# Kalbe Farma (KLBF IJ) — Valuation vs Peers and What Justifies the Re-rating

**Anchor**: CLSA "Kalbe Farma — O-PF (Solid roadmap)" dated 18-May-2025 (most recent CLSA single-stock note in the archive), priced at Rp1,505 with TP Rp1,740 (+16% upside). Coverage transferred to Omar Abdulaziz; rating upgraded from HLD to O-PF [13]. CLSA's most recent corpus date on KLBF is 18-May-2025 — read "latest" relative to that, not today.

---

## 1. Headline valuation: KLBF trades at a premium to Indonesian consumer-staples peers but at a discount to its own history

CLSA's peer table benchmarks Kalbe explicitly against domestic consumer-staples (not hospital) peers [1]:

| Ticker | Company | Mkt Cap (US$bn) | PE 25F | PE 26F | EBIT mgn 25F | Sales gth 25F | EPS gth 25F | ROE 25F |
|---|---|---|---|---|---|---|---|---|
| UNVR IJ | Unilever Indonesia | 4.1 | **19.1x** | 17.6x | 13.0% | 1.0% | 4.9% | 109.2% |
| MYOR IJ | Mayora Indah | 3.1 | **15.9x** | 14.8x | 10.9% | 11.9% | 13.7% | 18.1% |
| SIDO IJ | Sidomuncul | 1.0 | **13.3x** | 12.3x | 35.5% | 9.2% | 7.5% | 34.3% |
| ICBP IJ | Indofood CBP | 7.8 | **11.1x** | 10.5x | 22.7% | 8.9% | 15.3% | 22.9% |
| INDF IJ | Indofood Sukses Makmur | 4.3 | **5.9x** | 5.4x | 19.0% | 5.9% | 10.3% | 17.3% |
| CMRY IJ | Cisarua Mountain Dairy | 2.2 | **20.9x** | 18.0x | 19.3% | 14.4% | 12.6% | 24.0% |
| **KLBF IJ** | **Kalbe Farma** | **4.3** | **19.9x** | **18.3x** | **13.2%** | **7.8%** | **8.1%** | **14.9%** |
| **Weighted average (domestic staples)** | — | — | **14.3x** | **13.2x** | 17.9% | 7.8% | 11.1% | 34.0% |

Source: CLSA, Bloomberg [1].

**Three observations from the table:**
- **Premium vs the staples basket**: KLBF's 19.9x PE 25F is ~5.6 turns above the domestic staples weighted average (14.3x), or roughly a **~39% PE premium** [1].
- **Premium vs better-margin / better-growth food peers**: KLBF trades richer than MYOR (15.9x), SIDO (13.3x), ICBP (11.1x), and INDF (5.9x) despite a *lower* 25F EBIT margin than SIDO/ICBP/INDF and a *lower* 25F sales-growth profile than MYOR/CMRY [1].
- **Discount only vs CMRY**: Cisarua Mountain Dairy (20.9x) is the only peer in CLSA's basket trading above KLBF, justified by its stronger 14.4% sales growth and 19.3% EBIT margin [1].

CLSA cross-references KLBF's own historical PE band as a second benchmark — and on that axis, KLBF is at a **discount** to its 5-yr mean [5]:

| KLBF PE band | Multiple |
|---|---|
| +1 SD | 29.25x |
| 5-yr average | 24.22x |
| –1 SD | 19.19x |
| Current implied (Nov-24 print on PE band) | ~16.5x |
| CLSA target multiple | **22.0x** (near –0.5 SD) |

Source: CLSA [5].

---

## 2. The 22x target multiple — explicit "premium vs staples / discount vs own history" framework

CLSA's headline valuation language is precise [2][3]:

> "We use a PE-based valuation and a target multiple of 22x, which is near –0.5 SD below the five-year mean. Our valuation is based on the 25-26CL average earnings… We believe Kalbe Farma deserves to be valued on a 22x PE given better earnings growth and further contribution from the specialties segment to support Ebit margin."

The 22x target on 25-26CL average EPS of ~Rp79 yields the Rp1,740 fair value (Rp3,657bn avg earnings × 22 ÷ 46,256m shares) [14].

This is structurally **a premium to consumer-staples peers and a discount to KLBF's own history** — CLSA is essentially saying KLBF should trade between the staples basket (14.3x) and its own 5-yr mean (24.22x), closer to the latter.

---

## 3. What justifies the PREMIUM vs Indonesian consumer-staples peers

CLSA's investment thesis bundles four arguments, all of which support a structurally higher multiple than packaged-food peers [4][7][8]:

**a) Pharma backbone, not packaged food.** Prescription pharma is the growth driver — CLSA models +10% YoY in 25CL vs 5-8% YoY for the other segments [6]. Pharma carries higher entry barriers (regulation, formulary access, distribution scale) than the consumer-foods peers in the basket, supporting a higher steady-state multiple.

**b) Margin expansion runway, not margin defence.** Gross margin is forecast to expand ~100bps to 39.8% in 25CL; EBIT margin to ~13.2% (vs 12.5% in 2023, 13.5% in 2024). CLSA models continued opex leverage — marketing expense at 7.0% and salary at 8.4% of sales (down from prior years) [12]. Compare this to UNVR (slowing top-line at 1.0%, EBIT margin already 13.0%) where the path is defensive, not expansive [1].

**c) Specialty/biologic optionality.** The catalyst is biosimilars and novel biologics development — CLSA flags these as "better margin than unbranded generics" and a launch-driven re-rating catalyst [8]. None of the consumer-staples peers carry this kind of mix-shift optionality.

**d) Net-cash balance sheet + dominant share.** "Solid financial position and currently net cash" [7]; net cash per share grows from Rp93/sh in 2024 to ~Rp146/sh in 27CL [6]. Combined with "dominant market share, strong distribution network and healthy balance sheet" [4], KLBF deserves a quality premium relative to peers with more leverage.

**e) Earnings recovery trajectory.** EPS growth turns from –18% in 2023 to +17% in 2024, then 8-9% across 25-27CL [6]; ROE rises from 13.2% in 23A → 15.3% by 27CL [6]. The recovery slope, not just the level, supports a re-rating from current ~16-19x toward CLSA's 22x target.

---

## 4. What justifies the DISCOUNT vs Kalbe's own 5-yr history (22x target vs 24.22x average)

CLSA is *not* paying 24-29x — there's a structural –0.5 SD haircut against the 5-yr mean. The drivers [4][9]:

- **JKN-driven de-rating since mid-2014.** "The stock has de-rated since mid-2014 due to stronger-than-expected cannibalisation by unbranded generics upon the implementation of national healthcare insurance (JKN)" [4]. The market has structurally repriced KLBF for a lower-margin generic mix — CLSA is not betting on a full reversal.
- **FX risk.** "80% of the company's raw material costs are denominated in US dollars, whereas 95% of its sales are denominated in rupiah" [9]. This is a permanent earnings-quality discount vs domestic-cost peers like SIDO and CMRY.
- **Cannibalisation tail risk.** Continued unbranded-generic cannibalisation of branded generics is flagged as the key division-specific risk [9].
- **Down-trading in nutritionals + consumer health.** Per the April-10 sector note, the powdered milk market contracted -4.2% YoY in 2024 and the company has had to introduce affordable SKUs/RTD to defend share — a permanent headwind to nutritional segment growth [11][10].
- **Earnings growth not strong enough for a full mean re-rating.** 8-9% EPS growth (25-27CL) is below the historical pace that justified the 24x average [6].

---

## 5. Reconciling the April-10 vs May-18 valuation views (vintage check)

The two CLSA notes in this archive frame KLBF's valuation differently — they are NOT contradictory but anchored to different price points:

| Note | Date | Statement | Implied messaging |
|---|---|---|---|
| Indonesia healthcare sector | 10-Apr-2025 | "Kalbe is trading at **15x PE 25CL**" [11] | At Apr-10 price, KLBF was at a *discount* to staples avg (14.3x) and deep discount to own history — looked cheap |
| Kalbe Farma O-PF (Solid roadmap) | 18-May-2025 | Priced at Rp1,505, **19.9x 25F**; TP 22x = Rp1,740 [13][1] | After the rally to Rp1,505, KLBF re-rated to *premium* vs staples; CLSA still sees +16% upside to fair value |

Between mid-April and mid-May, the stock re-rated from ~15x to ~20x PE. CLSA's upgrade reflects (a) confidence in the operational story (stable margin, pharma-led growth) and (b) better visibility on 25-26CL earnings (forecasts raised ~3% on revenue, ~2-3% on net profit) [3].

---

## 6. Bottom line — what to tell the IC

- **Versus Indonesian consumer-staples peers** (UNVR, MYOR, SIDO, ICBP, INDF, CMRY), KLBF trades at a **~39% PE premium** (19.9x vs 14.3x weighted avg 25F) [1]. The premium is justified by (i) pharma-segment growth backbone with higher entry barriers, (ii) gross/EBIT margin expansion path (39.8% gross, 13.2% EBIT in 25CL) [12][6], (iii) specialty/biologic optionality [8], (iv) net-cash balance sheet [7], and (v) EPS recovery from a –18% trough in 2023 to mid-to-high single-digit growth through 27CL [6].
- **Versus its own 5-yr history**, KLBF still trades at a **discount** — current implied PE (16-20x) vs 5-yr mean of 24.22x; CLSA's 22x target is –0.5 SD below the mean [5][2]. The structural discount is anchored to (i) the post-2014 JKN-driven de-rating from unbranded-generic cannibalisation [4], (ii) USD-denominated raw material exposure (80% of COGS) vs IDR-denominated sales (95%) [9], and (iii) down-trading in nutritionals/consumer health.
- **Trade implication**: CLSA's O-PF call (TP Rp1,740, +16% upside from Rp1,505) [13] is essentially betting that margin expansion + earnings recovery drive a re-rating from current levels toward (but not all the way back to) the 5-yr mean. The "premium vs staples / discount vs history" tension is exactly what creates the asymmetry.

---

**Caveats**
- Peer set above is CLSA's *consumer-staples* basket — Kalbe is not benchmarked against domestic healthcare peers (MIKA, HEAL, PRDA) in this peer comp table; that's a deliberate framing choice consistent with KLBF's revenue mix (only ~28-30% prescription pharma; the rest is consumer health, nutritionals, distribution) [13].
- All CLSA data here is anchored to the 18-May-2025 note (latest in the archive). Subsequent earnings prints or share-price moves are not reflected.

---

**Sources**
[1] Kalbe Farma — O-PF (Solid roadmap) — CLSA (18-May-2025), Figure 24 Consumer staples peers valuations table — 607959722LinqAlpha.PDF
[2] Kalbe Farma — O-PF (Solid roadmap) — CLSA (18-May-2025), p.1 "Upgrade recommendation" valuation language — 607959722LinqAlpha.PDF
[3] Kalbe Farma — O-PF (Solid roadmap) — CLSA (18-May-2025), Valuation section (Figure 23) — 607959722LinqAlpha.PDF
[4] Kalbe Farma — O-PF (Solid roadmap) — CLSA (18-May-2025), Valuation details / de-rating since mid-2014 — 607959722LinqAlpha.PDF
[5] Kalbe Farma — O-PF (Solid roadmap) — CLSA (18-May-2025), Figure 25 Kalbe PE band (+1sd 29.25, avg 24.22, -1sd 19.19) — 607959722LinqAlpha.PDF
[6] Kalbe Farma — O-PF (Solid roadmap) — CLSA (18-May-2025), Five-year financials table — 607959722LinqAlpha.PDF
[7] Kalbe Farma — O-PF (Solid roadmap) — CLSA (18-May-2025), Investment thesis paragraph — 607959722LinqAlpha.PDF
[8] Kalbe Farma — O-PF (Solid roadmap) — CLSA (18-May-2025), Catalysts (biosimilar/biologics) — 607959722LinqAlpha.PDF
[9] Kalbe Farma — O-PF (Solid roadmap) — CLSA (18-May-2025), Investment risks (USD-IDR FX exposure, cannibalisation) — 607959722LinqAlpha.PDF
[10] Indonesia healthcare — Navigating growth strategies — CLSA (10-Apr-2025), Kalbe Farma promising outlook bullets — 607955557LinqAlpha.PDF
[11] Indonesia healthcare — Navigating growth strategies — CLSA (10-Apr-2025), "Kalbe is trading at 15x PE 25CL" + segment growth detail (Figure 15) — 607955557LinqAlpha.PDF
[12] Kalbe Farma — O-PF (Solid roadmap) — CLSA (18-May-2025), Ebit margin expense management paragraph — 607959722LinqAlpha.PDF
[13] Kalbe Farma — O-PF (Solid roadmap) — CLSA (18-May-2025), Cover snapshot (Rp1,505 price, TP Rp1,740, market cap US$4.3bn) — 607959722LinqAlpha.PDF
[14] Kalbe Farma — O-PF (Solid roadmap) — CLSA (18-May-2025), Figure 24 New valuation summary table (25-26CL avg earnings Rp3,657bn × 22x PE = Rp1,740) — 607959722LinqAlpha.PDF

## Citations

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