Company Update / Poultry / IJ / Click here for full PDF version
Author(s): Andrianto Saputra ;Lukito Supriadi
- 1Q24 profit of Rp711bn (+195% yoy) was in-line at 20/22% of our/cons estimates (vs. 5yr avg of 19%); revenue also came in-line.
- This was driven by broiler segment with 51% EBIT contribution in 1Q24 (vs. -58% in 1Q23).
- Maintain BUY with TP of Rp5,400/sh as feed margin is expected to improve in 2Q24F due to cost normalization.
1Q24 net profit was in-line with our/consensus estimates
delivered 1Q24 net profit of Rp711bn (+195% yoy) and this was in-line at 20/22% of ours/consensus estimate (vs. 5yr avg of 19%). 1Q24 net sales of Rp15.9tr (+9.3% yoy/+9.8% qoq) was also in-line. 1Q24 GPM rose to 7.3% (+150bps yoy/+232bps qoq), while opex to sales stable at 3.6% (vs. 4.1/5.8% in 1Q23/4Q23), resulting in EBIT margin of 3.7% (vs. 1.7/-0.8% in 1Q23/4Q23). As such, NPM improved to 2.4% (+149bps yoy/+375bps qoq).
Broiler segment drove 1Q24 outperformance
1Q24 broiler segment recorded EBIT of Rp542bn (vs. EBIT loss of -Rp283/-562bn in 1Q23/4Q23) and this was driven by higher average broiler price (+16% yoy/+10% qoq). Meanwhile, 1Q24 feed EBIT margin dropped to 5.9% (vs. 8.5/6.9% in 1Q23/4Q23) as has yet fully pass on the higher corn price (+48% yoy/+13% qoq). Management expects that feed segment's margin is expected to recover from corn price normalization in 2Q24F.
1Q24 earnings was dragged down by DOC & processed chicken
On the other hand, 1Q24 DOC segment booked EBIT loss of -Rp114bn (vs. EBIT loss of -Rp344/-79bn in 1Q23/4Q23) despite higher DOC price (+109% yoy/+50% qoq). In addition, processed chicken also recorded EBIT loss of -Rp102bn (vs. EBIT loss of -136bn in 4Q23) amid higher input cost of carcass product in Jul-Dec23 which processing chicken' inventory stood at Rp2.3tr in Dec23. To note, carcass chicken products contributed c.35-45% of processing chicken sales and has GPM profile of <10%. We suspect the segmental losses in DOC and processed food may be associated with 's inter-segmental transfer pricing policy as we seek more details from the company.
Maintain BUY with unchanged TP of Rp5,400
We are reviewing our forecast and maintain our BUY rating with unchanged TP of Rp5,400 based on 25x FY24F PE (5yr mean). Risks are broiler, DOC price and feed cost input price fluctuations.
Sumber : IPS
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