Japfa 11.15Japfa CFO Kevin Monteiro presenting to fund managers at the Consumer Day Conference 2015 jointly organised by Asia Fund Space and Phillip Capital at SGX Centre 1 this week (Dec 1). Photo: Asia Fund Space.
Excerpts from DBS Vickers' report


Recent spike in day-old-chick (DOC) prices, currently hover above Rp6,000/chick – significantly higher than Japfa’s 3Q15 DOC ASP of Rp4,400/chick, prompted the Indonesia government to consider price ceiling.

FY Dec (US$’m) 2015F 2016F
Revenue 2,781 3,029
Net profit 44 78
EPS (S cts) 3.6 6.3
PE ( based on 50 cents stock price) 13.9 7.9
Book value/share (S cts) 60.3 66.5
Industry players have collectively culled 2m parent stock (PS) since Oct-15; 4m more in the pipeline.

We do not expect the proposed price ceiling to impact Japfa’s profitability, as our FY15F/FY16F ASP assumptions of Rp4,085/Rp4,207 remain well below current elevated prices.

BUY rating reiterated on 88% upside to S$0.90 TP.

Full report here.

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