Johannes Salim, CFA

Equity Bottom-Up

Japfa Comfeed Indonesia / Equity Bottom-Up

<ul><li>Conference call with the IR of <a href="https://www.smartkarma.com/entities/8258" target="_blank" data-smartkarma-citation="entities:8258:1">Japfa Comfeed Indonesia Tbk Pt (JPFA IJ)</a> reveals that the company is a play on growing protein consumption in Indonesia.</li><li>Given earnings cyclicality, vertical integration and economies of scale are JPFA's key competitive advantages.</li><li>While going through complete earnings cycle (2012-17E), the company has demonstrated good operating cash flows generation.</li><li>JPFA trades at 13.1x 2017E PE (in which we consider the E as the mid-cycle earning), a large 38% valuation discount to rival <a href="https://www.smartkarma.com/entities/10889" target="_blank" data-smartkarma-citation="entities:10889:1">Charoen Pokphand Indonesi Pt (CPIN IJ)</a>'s 21.0x</li></ul>

Conference call with the IR of Japfa Comfeed Indonesia Tbk Pt (JPFA IJ) reveals that the company is a play on growing protein consumption in Indonesia.Given earnings cyclicality, vertical integration and economies of scale are JPFA's key competitive advantages.While going through complete earnings cycle (2012-17E), the company has demonstrated good operating cash flows generation.JPFA trades at 13.1x 2017E PE (in which we consider the E as the mid-cycle earning), a large 38% valuation discount to rival Charoen Pokphand Indonesi Pt (CPIN IJ)'s 21.0x

Japfa Comfeed: Attractively-Valued Agriculture Play