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Strong regional headwinds spell trouble for Japfa’s earnings ahead

Michelle Zhu
Michelle Zhu4/17/2017 11:03 AM GMT+08  • 2 min read
Strong regional headwinds spell trouble for Japfa’s earnings ahead
SINGAPORE (April 17): CIMB Research is downgrading its call on Japfa from “add” to “reduce”, lowering its price target on the counter to 69 cents from $1.41 previously on strong headwinds in the industrial agri-food company’s two largest markets
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SINGAPORE (April 17): CIMB Research is downgrading its call on Japfa from “add” to “reduce”, lowering its price target on the counter to 69 cents from $1.41 previously on strong headwinds in the industrial agri-food company’s two largest markets, Indonesia and Vietnam.

In a report last Thursday analyst Jonathan Seow says Japfa’s “stellar FY16” is unlikely to be repeated this year as poultry prices in Indonesia have weakened considerably in 1Q17 due to oversupply, with broiler prices now at loss-making levels.

This is in addition to depressed swine prices in Vietnam, which prove contrary to CIMB’s initial expectations of a recovery after they first began falling in 4Q16, recalls Seow.

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