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JPFA

Contact our analyst Eka
BUY, 26% upside.
2nd March 2021 
​Price Rp 1,580

Target price Rp 2,000
Demand Increased in 4Q2020
  • JPFA’s performance continued to recover in 4Q2020. JPFA 4Q2020 revenue increased +2.9% YoY to IDR 12.04 trillion and grew an even stronger +50.2% QoQ.
  • For 2020FY, JPFA’s revenue still decreased -4.9% YoY to IDR 36.96 trillion because of weak 2Q2020 and 3Q2020 results.
  • However, the revenue achievement is above our expectation for 2020F at IDR 35.7 trillion.
  • Sales volume in all of JPFA’s business segments showed an improvement QoQ with DOC’s sales volume up +5.3%, Livebirds +3%, Feed +10.4% and aquaculture +9.3%.
  • The reduction in supply recommended by the government also helped to improve 4Q2020 prices.
  • We are expecting 2021 demand will continue to recover in line with a recovery in Indonesia private consumption.

2020FY Results: Above Expectation
  • JPFA booked net profit of IDR 659 billion in 4Q2020 up +549% QoQ but still lower -9% YoY. For 2020FY JPFA net profit decreased -48% YoY to IDR 917 billion because of the covid-19 outbreak effect in 2Q2020 and 3Q2020. This resulted in a  lower net profit margin of 2.5% in 2020.  However net profit in 2020 was above our expectation at IDR 435 billion.
  • JPFA 4Q2020 gross profit increased slightly +6% YoY and 152% QoQ to IDR 3.3 trillion in line with a higher gross profit margin of 27.7% from 16.5% in 3Q2020.
  • Operating profit also grew +31% YoY and 260% QoQ to IDR 1.46 trillion, in line with a stronger OPM in 4Q2020 of 12.1% from 5.1% in 3Q2020.
  • We are expecting JPFA’s 2021F profit will rebound with 96% YoY growth to IDR 1.79 trillion from a demand recovery as the  vaccine program is on schedule.

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New Contribution
  • The acquisition of PT So Good Food (SGF) in 2020 give a significant contribution to JPFA. We estimate SGF will contribute in the range of  IDR 240 bn -260 bn for a full year or 13% - 15% of JPFA’s profit in 2021F.
  • The new normal is changing consumer’s purchases towards processed food which resulted in a positive impact to SGF. In 2020, with frozen products under So Good brands increasing more than 10% YoY.

Valuation: Upgrade to BUY with TP 2,000
  • Using a DCF valuation with WACC of 12.4%, we are targeting JPFA to trade at 12x 2022F PE within a year. Target Price is IDR 2,000 which represents 26% upside. We upgrade our recommendation to BUY.
Read the full report
Previously
​JPFA Nov2020
​JPFA Aug2020
​JPFA May2020
​JPFA Mar2020
​JPFA Aug 2019
JPFA March 2019
JPFA November 2018
​JPFA September 2018
​JPFA 18 July, 2018
PT. Binaartha Sekuritas

Setiabudi Atrium, Jl. HR Rasuna Said No.62, RT.18/RW.2, Karet Kuningan, Setia Budi, Jakarta Selatan, DKI Jakarta 12920
+62215206678 | email: kyc.online@binaartha.com

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