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Volume Driven Works Like a Charm
KEY HIGHLIGHTS
■ To remain competitive in the increasingly crowded nugget market, SGF decided to focus on driving sales volumes rather than raising ASPs
■ After entering the sterilized milk market, JPFA will penetrate to yogurt market with new SKUs under the Real Good brand
■ We anticipate La Nina to cause raw material disruptions, especially soybean meal and corn, which could negatively affect crop yields. Based on historical data, we estimate potential price hikes of c.13% for soybean meal and 4% for corn, which could lead to 6% increase in raw material-to-COGS ratio and c.5% decline in GPM, ceteris paribus
■ At this stage, we anticipate favorable government policies, including reduced price relaxation starting from May 2024 and lower import quotas for Grand Parent Stock (GPS) in 2024 onwards, to enhance JPFA's profitability. Maintain sector Neutral on poultry. We retain a BUY rating and have upgraded our JPFA target price to1,790 (from 1,600), implying P/E ratio of 8.4x. We are currently undergoing a transfer of coverage
Samuel Sekuritas Indonesia is a leading Indonesian securities brokerage firm. Established in 1997, the firm has grown to become one of the most respected and trusted financial services companies in the country. With a wide range of services and products, Samuel Sekuritas Indonesia has become a trusted partner to many investors, both institutional and individual.
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The company has a strong research capability and is committed to providing its clients with up-to-date and reliable market analysis and recommendations. It also has a team of experienced and knowledgeable professionals who are dedicated to providing quality service to its clients. As a result, Samuel Sekuritas Indonesia has become a preferred partner for many investors in Indonesia.
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