JPFA
Contact our analyst Eka
BUY, 22% upside.
6th May 2021
Price Rp 2020
Target price Rp 2,460
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.
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1Q2021FY: Higher Margin
Valuation: Maintain BUY with TP 2, 460
- 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