SINGAPORE (Oct 17): UOB Kay Hian is initiating coverage on Japfa at “buy” with a target price of 90 cents or 12.2 times FY18F earnings, compared to 13.6 times by peers.

In a Wednesday report for the retail market, analyst John Cheong says the industrial agri-food company as a deeply undervalued stock on a strong turnaround path and expects FY18 net profit to increase by more than 500% y-o-y.

“2017 saw a perfect storm with a weak poultry performance in Indonesia due to sluggish consumption and China’s ban on pork imports from Vietnam. The likelihood of multiple adverse factors across countries occurring simultaneously again seems remote,” says Cheong.

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