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

BRI Danareksa Research

External broker reports(aggregated public sources)

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.

Thematic (Sector/Industry)

<ul><li>PoultryMargins expansion prospect in FY24 from lower input costs</li><li>We retain our positive view for FY24 on margins expansion prospect from the expected drop in raw material costs</li><li>We believe the sector’s valuation is undemanding at 7.9x EV/EBITDA, (below 1SD of its 5-year mean of 10.4x) as it has priced in headwind from oversupply of chicken</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.

PoultryMargins expansion prospect in FY24 from lower input costsWe retain our positive view for FY24 on margins expansion prospect from the expected drop in raw material costsWe believe the sector’s valuation is undemanding at 7.9x EV/EBITDA, (below 1SD of its 5-year mean of 10.4x) as it has priced in headwind from oversupply of chickenContent 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: Margins expansion prospect in FY24 from lower input costs (OVERWEIGHT)

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

10 in 10 with Japfa - Feeding Emerging Asia

Japfa Comfeed Indonesia / Equity Bottom-Up

<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

<ul><li>While recent weak broiler prices and higher local corn prices may drive lower 3Q23 earnings (qoq), we maintain our Overweight view on the back of cheap valuation (at 9.2x EV/EBITDA, -1SD to 5-year average) in view of the potential earnings recovery in 4Q23 and FY24F (22% EPS growth).</li><li>Weak broiler prices in the second week of September, DOC remained robust. Despite the ongoing supply adjustment mechanism through culling, livebird (LB) prices in West Java dropped to IDR18k/kg in mid-September from IDR21k in the early month. In the past two years, LB prices have been weak during September.</li><li>Meanwhile, DOC prices remained high at around IDR 7,500/chick signaling a tighter supply due to the culling programs. </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.

While recent weak broiler prices and higher local corn prices may drive lower 3Q23 earnings (qoq), we maintain our Overweight view on the back of cheap valuation (at 9.2x EV/EBITDA, -1SD to 5-year average) in view of the potential earnings recovery in 4Q23 and FY24F (22% EPS growth).Weak broiler prices in the second week of September, DOC remained robust. Despite the ongoing supply adjustment mechanism through culling, livebird (LB) prices in West Java dropped to IDR18k/kg in mid-September from IDR21k in the early month. In the past two years, LB prices have been weak during September.Meanwhile, DOC prices remained high at around IDR 7,500/chick signaling a tighter supply due to the culling programs. 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: Poised for 4Q23 recovery despite ST headwinds (OVERWEIGHT)

<ul><li>Via a regulation issued on 24 Aug-23, the government seeks to continue stabilizing livebird prices by cutting PS aged 50-54 weeks and HE aged 19 days.</li><li>We estimate the supply reduction per month at around 69.4 million DOC FS during the Oct-Nov period, slightly lower than the 72.5 million during AugSep.</li><li>As such, we believe DOC and livebird prices will remain stable in 4Q23. We remain Overweight on the sector with CPIN as 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.

Via a regulation issued on 24 Aug-23, the government seeks to continue stabilizing livebird prices by cutting PS aged 50-54 weeks and HE aged 19 days.We estimate the supply reduction per month at around 69.4 million DOC FS during the Oct-Nov period, slightly lower than the 72.5 million during AugSep.As such, we believe DOC and livebird prices will remain stable in 4Q23. We remain Overweight on the sector with CPIN as 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.

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)

Poultry: Margins expansion prospect in FY24 from lower input costs (OVERWEIGHT)

Poultry Margins expansion prospect in FY24 from lower input costs. We retain our positive view for FY24 on margins expansion prospect from the...

BRI Danareksa Research

10 in 10 with Japfa - Feeding Emerging Asia

10 in 10 with Japfa - Feeding Emerging Asia

Singapore Exchange Ltd (SGX)

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

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...

BRI Danareksa Research

Poultry: Poised for 4Q23 recovery despite ST headwinds (OVERWEIGHT)

While recent weak broiler prices and higher local corn prices may drive lower 3Q23 earnings (qoq), we maintain our Overweight view on the back of...

BRI Danareksa Research

Poultry - Regulation remains supportive

Via a regulation issued on 24 Aug-23, the government seeks to continue stabilizing livebird prices by cutting PS aged 50-54 weeks and HE aged 19 days.

BRI Danareksa Research

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