Company Report | May 23, 2018
Japfa Comfeed Indonesia , Tbk |
Summary (IDR bn)
2016/12A
2017/12A
2018/12E
2019/12E
JPFA posted the buoyant growth of 18.7% in sales from IDR6.62 trillion in
1Q17 into IDR7.86 trillion in 1Q18. The main bolster to
the buoyant sales
was the surge of 27% in sales from IDR2.6 trillion in 1Q17 into IDR3.4
trillion in 1Q18 posted by the commercial farm and consumer products
segment
.
Furthermore, the animal feeds also posted the growth of 12%
from IDR2.46 trillion in 1Q17 into IDR2.7 trillion in 1Q18.
Fantastic Growth in Profit
JPFA posted the fantastic growth of 491% in profit from IDR73 billion in
1Q17 into IDR433 billion in 1Q18. The main driver for the fantastic growth
is
the turnaround in the commercial farm and consumer products
from
posting the operational loss of IDR70 billion in 1Q17 into posting the
operational profit of IDR247 billion in 1Q18.
More Regulated Costing
We estimate that the Minister of Trade’s Regulation Number 58/2018 on
the Lowest Broiler Reference Prices of IDR17,000/kg and the Highest
Broiler Reference Prices of IDR19,000/kg
results in an easy review of
production costs boosting stable profitability for the poultry industry
.
Target Price of IDR2,000
Asia Pacific Poultry
A Glance at JPFA
JPFA is one of the biggest and most prominent agro-food companies in Indonesia
because of its commitment to providing quality animal
–
based protein since 1975.
The takeaway key for JPFA’s success roots from its integrated, inclusive, and
comprehensive services given to its customers through its robust distribution networks,
and wide-ranging agents across Indonesia.
It is committed to creating and giving added values to its industrial partners through its
robust production chains from quality animal feeds formulations, high
–
quality day-old
chicks, broiler chickens, fish, shrimps, and cows farms to varied and integrated processed
food products.
JPFA’s Competitiveness in the Asia Pacific
JPFA with the total asset topping USD1 billion has the highest potential for growth in
profit with the cheapest P/E of 10.8x; therefore, these qualities nominate JPFA as the
most attractive stock pick in the Asia Pacific.
Source: Bloomberg, NHKS research
Company
Market
Cap
(USD mn)
Total Asset
(USD mn)
Net Profit
Growth
Net Profit
Margin
ROE
P/E
P/BV
Dividend
Yield
JPFA
1,323
1,552
68.4%
4.9%
16.6%
10.8x
1.8x
1.5%
CPIN
3,314
1,788
17.9%
5.7%
17.7%
20.3x
3.4x
2.0%
MAIN
113
289
648.3%
2.7%
8.5%
10.3x
0.8x
1.4%
Thailand
CHAROEN POKPHAND FOODS
6,895
18,221
3.8%
3.0%
10.1%
12.8x
1.2x
3.8%
Malaysia
CAB CAKARAN CORP BHD
146
252
68.7%
3.9%
19.2%
8.6x
1.4x
0.3%
India
GODREJ AGROVET LTD
1,899
496
-5.7%
5.1%
27.8%
45.8x
11.8x
2.0%
AVANTI FEEDS LTD
1,506
163
162.4%
7.8%
45.0%
21.6x
3.7x
0.4%
Vietnam
MASAN GROUP CORP
4,689
2,798
11.1%
8.2%
20.6%
35.5x
7.2x
1.1%
China
Source: Company, NHKS research
Quarterly JPFA EBITDA Growth |
2016 - 2018
Source: Company, NHKS research
JPFA Sales Growth |
FY2013 - FY2018E
Commercial Farm Division EBIT Growth |
2015 - 2018
Commercial Farm Division Sales Growth |
2015 - 2018
Source: Company, NHKS research
Sales Trend |
FY2014 - FY2018E
Source: Company, NHKS research
Sales Breakdown (exclude inter-segment) |
1Q18
Multiple Valuation
Forward EV/EBITDA Band
| Last 3 years
Source: NHKS research
Dynamic Forward EV/EBITDA Band
| Last 3 years
Source: NHKS research
Rating and target price update
Target Price Revision
Date
Rating
Target Price
Last Price
Consensus
vs Last Price
vs Consensus
06/22/2017
Buy
1,860 (Dec 2017)
1,350
1,532
+37.8%
+21.4%
08/10/2017
Buy
1,710 (Dec 2017)
1,110
1,489
+54.1%
+14.8%
11/10/2017
Buy
1,740 (Dec 2018)
1,275
1,628
+36.5%
+6.9%
01/25/2018
Buy
1,820 (Dec 2018)
1,460
1,649
+24.7%
+10.4%
03/28/2018
Buy
1,820 (Dec 2018)
1,460
1,715
+24.7%
+6.1%
05/23/2018
Buy
2,000 (Dec 2018)
1,555
1,838
+28.6%
+8.8%
Source: NHKS research, Bloomberg
Closing and Target Price
Source: NHKS research
Analyst Coverage Rating
Source: Bloomberg
NH Korindo Sekuritas Indonesia (NHKS) stock ratings
Period: End of year target price
Rating system based on a stock’s absolute return from the date of publication
Summary of Financials
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in IDR Bn 2016/12A 2017/12A 2018/12E 2019/12E EBITDA/As s ets 11.3% 4.9% 7.7% 8.9%
Sales 27,063 29,603 33,793 38,864 Ca s h Di vi dend IDR bn) 160 570 270 455
Growth (% y/y) 8.2% 9.4% 14.2% 15.0% Di vi dend Yi el d (%) 1.0% 3.8% 1.5% 2.6%
Cost of Revenue (21,584) (24,572) (27,901) (32,010) Pa yout Ra ti o (%) 34.1% 27.6% 27.6% 27.6%
Gross Profit 5,479 5,031 5,892 6,854 DER 62.6% 62.0% 59.2% 43.9%
Gross Margin 20.2% 17.0% 17.4% 17.6% Net Gea ri ng 91.0% 89.7% 73.4% 52.7%
Opera ti ng Expens es (2,558) (2,735) (3,303) (3,799) LT Debt to Equi ty 38.5% 53.8% 44.7% 38.7%
EBIT 2,921 2,296 2,589 3,055 Ca pi ta l i za ti on Ra ti o 38.5% 38.3% 37.2% 30.5%
EBIT Margin 10.8% 7.8% 7.7% 7.9% Equi ty Ra ti o 48.7% 46.4% 45.6% 50.1%
Depreci a ti on 642 637 770 809 Debt Ra ti o 30.5% 28.8% 27.0% 22.0%
EBITDA 3,563 2,933 3,359 3,864 Fi na nci a l Levera ge 221.7% 200.9% 212.8% 203.6%
EBITDA Margin 13.2% 9.9% 9.9% 9.9% Current Ra ti o 213.0% 234.6% 201.0% 221.3%
Interes t Expens es (510) (569) (574) (561) Qui ck Ra ti o 75.3% 66.7% 53.0% 53.4%
In IDR bn 2016/12A 2017/12A 2018/12E 2019/12E 2016/12A 2017/12A 2018/12E 2019/12E
Ca s h 2,701 1,642 1,541 1,224 Pri ce /Ea rni ngs 8.0x 15.1x 10.8x 8.8x
In IDR bn 2016/12A 2017/12A 2018/12E 2019/12E 2016/12A 2017/12A 2018/12E 2019/12E
