Company Update / Poultry / IJ / Click here for full PDF version
Author(s): Andrianto Saputra ;Lukito Supriadi
- 1Q24 net profit of Rp665bn (vs. net loss of -Rp250bn in 1Q23) came significantly above at 47/54% of ours/consensus FY24F estimate.
- This was driven by stellar DOC & broiler segment performance, leading to NPM improvement of 3.1%.
- Maintain BUY call with unchanged TP of Rp1,400 as robust 1Q24 earnings has yet to be priced-in.
1Q24 net profit was above ours/consensus FY24F estimate
delivered strong 1Q24 net profit of Rp665bn (vs. net loss of -Rp250bn in 1Q23), came significantly above ours/consensus estimate at 47/54% (vs. 5yr avg exclude covid period of 4%). 1Q24 revenue rose to Rp13.9tr (+18% yoy/+4% qoq) and this was in-line of our/consensus estimate at 25% (vs. 5yr avg of 23%). 1Q24 GPM improved by 446bps yoy to 11.4% (+384bps qoq) and ahead of ours' of 9.7%. Opex to sales stood at 6.5% (-90bps yoy/+10bps qoq) as salary to sales was at 2.2% (-43bps yoy/+17bps qoq).
Robust 1Q24 earnings was driven by DOC & Broiler segment
1Q24 DOC segment's EBIT recovered to Rp234bn (vs. EBIT loss of -Rp310/-37bn in 1Q23/4Q23) from higher DOC price (+109% yoy/+50% qoq). Similarly, 1Q24 broiler segment posted a stellar EBIT of Rp300bn (vs. EBIT loss of -Rp445/-379bn in 1Q23/4Q23) on the back of broiler price recovery (+16% yoy/+10% qoq). Meanwhile, 1Q24 EBIT feed segment stood at Rp740bn (-2.0% yoy/+18% qoq) with EBIT margin of 8.1% (-112bps yoy/+105bps qoq) as it has increased its feed ASP to pass on higher corn price (+48% yoy/+13% qoq).
Input costs normalization in mid of Feb24 shall improve feed margin
With corn price having normalized since mid of Feb24 and expected to sustain until May24 (link), we see further upside risk on ' feed segment margins in 2Q24F as ' average corn inventory is at 45-60days. For now, we are reviewing our forecast as we await details from the company.
Maintain BUY rating with unchanged TP of Rp1,400/sh
We think robust 1Q24 earnings has yet to be fully priced-in into share price performance given that share price has retraced -5% in the past 1M. Hence, we maintain our BUY rating with unchanged TP of Rp1,400/sh, based on 11.5x FY24F PE (5yr mean). Downside risks are: weak broiler price, higher input cost and US$ appreciation.
Sumber : IPS