JPFA May2021

JPFA

Contact our analyst Eka

BUY, 22% upside.
6th May 2021
Price Rp 2020
Target price Rp 2,460

Higher price

JPFA booked double digit revenue growth of +11.6% YoY to IDR 10.76 trillion in 1Q2021 due to higher ASPs in all businesses. The higher ASP proves recent government culling initiatives successfully achieved supply and demand balance in 1Q2021.
Commercial farm contributed IDR 4,27 trillion, the highest contribution to JPFA revenue at 38.9% and the highest growth among all business segments in 1Q2021 with 43.6% growth. The growth was from higher live bird ASPs, up +14% YoY together with higher sales volume +18.6% YoY.
Sales volume in DOC and feed is still in recovery with a slight decrease in 1Q2021.
ASP in DOC and Feed showed an improvement YoY with DOC’s ASP up +33%, Feed +9% and aquaculture +101%.
After the strong 1Q2021 result, we are expecting 2021 demand will continue to recover in line with a recovery in Indonesia private consumption.

Trade what you want (exciting shares like JPFA) when you want & wherever you are. Simply sign up for our Binaartha Online Trading
⬇️ here.⬇️

1Q2021FY: Higher Margin

JPFA booked net profit of IDR 916 billion in 1Q2021 up +151% YoY. This resulted in a higher net profit margin of 8.5% compared to 3.8% in 1Q2020.
JPFA 1Q2021 gross profit increased double-digit +53% YoY to IDR 2.79 trillion in line with a higher gross profit margin of 25.9% from 19% in 1Q2020.
Operating profit also grew +83% YoY to IDR 1.3 trillion, in line with a stronger OPM in 1Q2021 of 12.4% from 7.5% in 1Q2020.
We are expecting JPFA’s 2021F profit will rebound with 96% YoY growth to IDR 1.79 trillion from a demand recovery resulting from the vaccine program.

Valuation: Maintain BUY with TP 2, 460

Using a DCF valuation with WACC of 12.4%, we are targeting JPFA to trade at 14x 2022F PE within a year. Target Price is IDR 2,460 which represents 22% upside. We maintain our recommendation to BUY.

Previously

JPFA Mar2021