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Japfa offers diversification at a bargain price: DBS

Atiqah Mokhtar
Atiqah Mokhtar8/26/2021 10:35 AM GMT+08  • 3 min read
Japfa offers diversification at a bargain price: DBS
DBS expects Japfa's China dairy operations to mitigate short-term weaknesses in other operations due to Covid-19.
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DBS Group Research analyst Cheria Christi Widjaja has reiterated her “buy” call for Japfa in a research note dated August 24, with a target price of $1.05.

“We reiterate our “buy” recommendation on Japfa as we expect its resilient performance to continue in 2H2021 supported by its China dairy operation which will mitigate the potential short-term weakness in other operations due to Covid-19 situations,” Widjaja says.

The way she sees it, while Japfa’s Indonesian poultry operations will face near-term headwinds in 3Q2021 due to stricter movement restrictions. In addition, she expects growth from its Vietnam swine operations, which saw sales for swine fattening and swine feed grow by 29% and 43% y-o-y respectively in 1H2021, to slow down in 2Q2021 due to the worsening Covid-19 situation in Vietnam.

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