Consumer Non-cyclical - Higher Selling Prices In January
Our ground checks suggest that some consumer companies have raised the retail selling prices of their products MoM, especially instant noodles, RTD-tea, ice cream and personal care products. This is likely a pass-on cost caused by the weakened IDR and rising commodity prices. While the price hike may pressure sales volumes, it should also improve profit margins. All in all, we see consumer companies now becoming more confident on domestic spending, going forward. Maintain OVERWEIGHT on the Indonesia consumer sector, with Indofood Sukses and Nippon Indosari as our Top Picks.