External broker reports(aggregated public sources), MNC Sekuritas

MNC Sekuritas

External broker reports(aggregated public sources)

MNC Sekuritas, the first wholly-owned subsidiary established by the Group back in 1989, provides a complete range of services, from equity, fixed income, investment banking to providing research to optimize clients’ investments. Thus far, the company has more than 140 points of sales with over 100,000 clients. Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Equity Bottom-Up

Japfa Comfeed Indonesia / Equity Bottom-Up

<ul><li>JPFA made a notable recovery in 1Q24, with a net profit of IDR664.8 bn (vs a net loss of IDR-7.5 bn in 4Q23 and IDR-249.9 bn in 1Q23)</li><li>The higher-than-expected net profit was primarily supported by better margins in the animal feed and poultry-related segments.</li><li>The government has extended the relaxation of the reference price regulation for commodities such as eggs, corn and broiler meat.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

JPFA made a notable recovery in 1Q24, with a net profit of IDR664.8 bn (vs a net loss of IDR-7.5 bn in 4Q23 and IDR-249.9 bn in 1Q23)The higher-than-expected net profit was primarily supported by better margins in the animal feed and poultry-related segments.The government has extended the relaxation of the reference price regulation for commodities such as eggs, corn and broiler meat.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

JPFA IJ - MNC Sekuritas Equity Report June 6, 2024

External broker reports(aggregated public sources), BRI Danareksa Research

BRI Danareksa Research

As a one-stop financial solution with the vision to be the most valuable securities house, BRI Danareksa Sekuritas (BRIDS) has maintained an excellent track record and extensive experience in the capital market as an underwriter, broker, and financial advisor for individual, institutional, foreign and domestic, private and government clients. Established in 1992, PT Danareksa Sekuritas is a securities company that performs activities as a securities broker, underwriter, or arranger and financial advisor.

<ul><li>Lower ASP across poultry businesses dragged down 4Q23 profitability, resulting in DOC and livebird segment operating losses in 4Q23.</li><li>The current oversupply and high local corn prices may pressure 1Q24 earnings, potentially offset by higher LB prices during Ramadan. </li><li>We maintain our Hold rating with a TP of Rp1,100 based on FY24F EV/EBITDA, implying 11x FY24F PE.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Lower ASP across poultry businesses dragged down 4Q23 profitability, resulting in DOC and livebird segment operating losses in 4Q23.The current oversupply and high local corn prices may pressure 1Q24 earnings, potentially offset by higher LB prices during Ramadan. We maintain our Hold rating with a TP of Rp1,100 based on FY24F EV/EBITDA, implying 11x FY24F PE.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Japfa Comfeed Indonesia (JPFA IJ) - Soft Livebird and DOC Prices Dragged Down 4Q23 Earnings

<ul><li>We raise our FY24F EBITDA forecast by 10% to IDR4.8tr to take into account the lower feed costs in 3Q23.</li><li>Based on our revised forecast, we now expect higher net revenues in FY24F (+7.6% y-o-y) with a sustained EBITDA margin on the back of lower feed raw material costs.</li><li>We maintain our BUY rating on the stock with a higher EV/EBITDA based TP of IDR1,800.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We raise our FY24F EBITDA forecast by 10% to IDR4.8tr to take into account the lower feed costs in 3Q23.Based on our revised forecast, we now expect higher net revenues in FY24F (+7.6% y-o-y) with a sustained EBITDA margin on the back of lower feed raw material costs.We maintain our BUY rating on the stock with a higher EV/EBITDA based TP of IDR1,800.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Japfa Comfeed Indonesia - Expect the Feed Business to Further Drive Profitability

Thematic (Sector/Industry)

<ul><li>Following sector underperformance due to the weakness in LB prices, we think the recent rebound may act as a potent catalyst.</li><li>With the strong earnings growth outlook intact and the relatively light position of funds, we believe the sector could re-rate in FY24-25F.</li><li>We maintain our Overweight rating on the sector, foreseeing higher margins from lower feed costs. CPIN remains our top pick in the sector.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Following sector underperformance due to the weakness in LB prices, we think the recent rebound may act as a potent catalyst.With the strong earnings growth outlook intact and the relatively light position of funds, we believe the sector could re-rate in FY24-25F.We maintain our Overweight rating on the sector, foreseeing higher margins from lower feed costs. CPIN remains our top pick in the sector.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

<ul><li>The NFA issued a new regulation to increase the reference prices of livebirds and local corn, effective from Jun24 until amendment.</li><li>Although we view this positively, we only expect a minimum impact from reference prices on actual market prices. </li><li>We maintain our Overweight rating on the sector, foreseeing higher feed margins; CPIN remains our top pick.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

The NFA issued a new regulation to increase the reference prices of livebirds and local corn, effective from Jun24 until amendment.Although we view this positively, we only expect a minimum impact from reference prices on actual market prices. We maintain our Overweight rating on the sector, foreseeing higher feed margins; CPIN remains our top pick.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Poultry: New Reference Prices to Support the Industry, Albeit Unlikely to Be a Game Changer

Indonesia

PT Japfa Comfeed Indonesia Tbk manufactures animal feed, breeds and processes chickens, and operates aquaculture farms.  The Company trades its products domestically and internationally.

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Japfa Comfeed Indonesia (JPFA IJ)

JPFA IJ - MNC Sekuritas Equity Report June 6, 2024

JPFA made a notable recovery in 1Q24, with a net profit of IDR664.8 bn (vs a net loss of IDR-7.5 bn in 4Q23 and IDR-249.9 bn in 1Q23).

MNC Sekuritas