The state of sales
September 13th, 2020
Sales growth
It’s mid September, over a month into reporting & most results are already out. From our coverage 100 stocks in Indonesia & 11 soon to be 12 in the US, 4 haven’t reported yet. As sales is the driver of everything, sales growth is the main focus of our modeling. Here’s a look at the state of 2Q sales growth.
The bad news
First, here’s the bad news. Average YoY sales growth for Indonesian companies was -15%, which is the first negative growth since 2015. Sales in absolute terms have come back close to 2017 levels. Sadly, the % of GDP which our universe represents has shrunk dramatically from a peak of 20% in late 2017 to 16.6%, which is below 2015’s 18%.
The good news
Only 24 of our stocks had positive sales growth from a year ago, but of course that’s where the good news is. Out of those 24, 10 are palm oil plantations which is 70% of that sector. All 6 (100%) of the telcom & Internet stocks we cover had positive growth. Fastest growth telco is CENT, fastest Palm oil, TBLA.
US
The Sales growth of stocks in our US coverage has slowed, but there the similarity ends.... We cover top stocks like AAPL, AMZN, MSFT, FB, TSLA, but also weaker BA & XOM... but 2Q sales growth still averaged +18%. The share of GDP has expanded not contracted. The fastest growth is none of the above, it’s Smith & Wesson, +125%.
3Q
We were able to accurately predict the average 2Q sales growth using the closest historical proxy which is, surprisingly, import growth. The prediction using this method was exactly -15%. Next week we will get imports data for August which will give us a better idea of how the 3Q will look. We will report back when we get the data....
It’s mid September, over a month into reporting & most results are already out. From our coverage 100 stocks in Indonesia & 11 soon to be 12 in the US, 4 haven’t reported yet. As sales is the driver of everything, sales growth is the main focus of our modeling. Here’s a look at the state of 2Q sales growth.
The bad news
First, here’s the bad news. Average YoY sales growth for Indonesian companies was -15%, which is the first negative growth since 2015. Sales in absolute terms have come back close to 2017 levels. Sadly, the % of GDP which our universe represents has shrunk dramatically from a peak of 20% in late 2017 to 16.6%, which is below 2015’s 18%.
The good news
Only 24 of our stocks had positive sales growth from a year ago, but of course that’s where the good news is. Out of those 24, 10 are palm oil plantations which is 70% of that sector. All 6 (100%) of the telcom & Internet stocks we cover had positive growth. Fastest growth telco is CENT, fastest Palm oil, TBLA.
US
The Sales growth of stocks in our US coverage has slowed, but there the similarity ends.... We cover top stocks like AAPL, AMZN, MSFT, FB, TSLA, but also weaker BA & XOM... but 2Q sales growth still averaged +18%. The share of GDP has expanded not contracted. The fastest growth is none of the above, it’s Smith & Wesson, +125%.
3Q
We were able to accurately predict the average 2Q sales growth using the closest historical proxy which is, surprisingly, import growth. The prediction using this method was exactly -15%. Next week we will get imports data for August which will give us a better idea of how the 3Q will look. We will report back when we get the data....
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