Gross Domestic Product (GDP) of the chemical, pharmaceutical, and traditional medicine industries continues positive trend in 2Q25. This condition showed that this industry still has quite a stable growth potential in the long term.

Prompt Manufacturing Index (PMI) for the chemical, pharmaceutical, and traditional medicine industries remained in the expansive zone in 2Q25, indicating that manufacturing activity in this industry is still quite strong.

The pharmaceutical industry is dependent on imported raw materials. However, the government has implemented various initiatives to reduce this dependence, followed by various initiatives from pharmaceutical issuers.

The performance of issuers in our coverage tends to mix. KLBF booked revenue growth of 4.60% YoY to IDR17.08 trillion in 6M25, while SIDO experienced a decrease in revenue of 3.57% YoY to IDR1.83 trillion in 6M25. However, both issuers experienced an increase in NPM in 6M25.

With the various catalysts above, we give an overweight rating to the pharmaceutical sector. The pharmaceutical issuers in our coverage are SIDO, with an estimated fair value of IDR635, and KLBF, with an estimated fair value of IDR1,640.

By PHINTRACO SEKURITAS | Research
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