JPFA
Contact our analyst Eka
Buy, 61% upside.
24th June 2025
Price Rp 1445
Target price Rp 2320
24th June 2025
Price Rp 1445
Target price Rp 2320
Lower ASP, but positive sales volume growth
- Lower ASP, but Positive Sales Volume GrowthJPFA posted a +2.9% YoY increase in total sales, reaching IDR 14.3 trillion in Q1 2025. This growth was supported by higher sales volumes, despite lower average selling prices (ASP) for Day-Old Chicks (DOC) and broilers.
- Sales from the commercial farming segment declined -2.9% YoY to IDR 5.57 trillion but still rose +2.2% QoQ. This was due to a -3.9% YoY drop in live bird ASP, though sales volume rose +4.7% YoY. The segment’s margin narrowed to 4.6%, down from 5.2% in Q1 2024.
- In the feed segment, operating margin declined to 16.3% in Q1 2025 from 18.5% a year earlier, driven by an -11.5% YoY decrease in ASP, in line with falling raw material costs. Corn prices dropped from IDR 7,000/kg in Jan 2024 to IDR 5,500/kg in Jan 2025, and soybean prices fell -14% YoY to USD 1,008/Bu in March 2025.
- The poultry processing and consumer products segment recorded +23.7% YoY growth to IDR 2.55 trillion, with its operating margin improving to 3.8%.
- DOC revenue rose +16.8% YoY to IDR 841 billion in Q1 2025, driven by a +12.2% increase in sales volume, though ASP fell -2.8%. The DOC operating margin decreased to 24%.
- The aquaculture segment also posted growth of +5.4% YoY to IDR 1.16 trillion, supported by higher sales volume and ASP.
- Looking ahead, live bird and DOC prices softened in Q2 2025 due to weaker consumer spending. However, seasonal trends and expected demand recovery in 2H 2025—along with government culling initiatives—should support price improvements.
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Q1 2025 Result: Margin Improve YoY
Valuation: Maintain BUY with a Target Price of IDR 2,320
- JPFA’s Q1 2025 net income rose +2.4% YoY to IDR 680 billion, with net profit margin steady at 4.7%. Cost of sales increased +1.6% YoY to IDR 11.6 trillion, as lower raw material costs offset higher volumes.
- Gross profit rose +1.6% YoY to IDR 2.69 trillion, with gross margin at 18.8%, an improvement from Q1 2024. Operating profit grew +6.2% YoY to IDR 1.14 trillion, with an operating margin of 7.9%.
- We project JPFA’s net profit to reach IDR 3.26 trillion in FY2025, driven by expected price recovery and improved demand in the second half.
Valuation: Maintain BUY with a Target Price of IDR 2,320
- Using a DCF valuation and a WACC of 9.8%, we maintain our BUY rating for JPFA with a target price of IDR 2,320. This implies a 61% upside and an 8x PE based on 2025 forecasts.
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