Can Japfa overcome near-term cyclical pressures to see turnaround?

SINGAPORE (Aug 8): Lower average selling prices and higher costs drove earnings for agri-food company Japfa down to US$5 million ($6.8 million) for the 2Q19 ended June, a steep 83% drop from a year ago.

Segmentally, one of the key contributors of Japfa’s weak performance was Japfa Cornfeed Tbk (JPFA), which saw earnings decline 23% y-o-y to US$18.6 million. This was on the back of higher corn prices, which pressured margins, and softer broiler prices, which led to EBIT declining 27.2% y-o-y to US$65.2 million.

Japfa posts 83% drop in 2Q earnings to $6.8 mil on lower average selling prices

SINGAPORE (July 31): Agri-food company Japfa saw its earnings plunge 83% to US$5.0 million ($6.8 million) for the 2Q19 ended June, from US$29.6 million a year ago.

Earnings per share (EPS) tumbled to 0.27 cents in 2Q19, compared to 1.63 cents in 2Q18.

2Q19 revenue rose 8% to US$975.0 million, from US$901.0 million in 2Q18.

The increase was led by higher revenue from Animal Protein Indonesia – the group’s largest segment – which grew 8.9% to US670.2 million.

Japfa cut to 'reduce' amid Swine Fever outbreak in Vietnam, lower poultry margins in Indonesia

SINGAPORE (Mar 14): CGS-CIMB Research is downgrading Japfa to “reduce” from “add” previously, and cutting its target price by nearly a third to 63 cents.

“Our lower expectations for the Vietnam swine business, and the continued moderation in Indonesian poultry margins lower our FY19 and FY20F EPS forecasts by 1.4% and 5.9%, respectively,” analyst Cezzane See says in a Wednesday report.

Japfa kept at 'buy' by UOB KayHian with 98 cents target despite African Swine Fever worries

SINGAPORE (Mar 5): UOB KayHian is maintaining Japfa at “buy” despite the stock’s 8% share price correction over the past two days in response to the African Swine Fever (ASF) in Vietnam.

Management has estimated a maximum net profit impact of US$15 million ($20.3 million), or 12% of Japfa’s FY18F core net profit, if the disease destroys 10% of its swine fattening volume and 20% of its feed volume in Vietnam. Fortunately, none of Japfa’s farms have been impacted so far.

Japfa posts 80-fold increase in FY18 earnings to $135.4 mil on record revenue

SINGAPORE (Mar 1): Japfa has announced a nearly 80-fold increase in its FY18 earnings to US$100.4 million ($135.4 million), compared to just US$1.32 million in FY17.

Revenue for the period reached a record high and was 11% higher at US$3.53 billion from US$3.19 billion a year ago, driven mainly by higher average selling price for both poultry in Indonesia and swine fattening in APO-Vietnam as well as higher sales volumes from Dairy and poultry feed in Indonesia and Vietnam.

All of the group’s business segments registered revenue growth.

Japfa's all geared up to combat African Swine Flu risks

SINGAPORE (Jan 30): Following a site visit to Japfa’s farms in Vietnam, analysts are confident that the group is able to survive eventual crisis involving its livestock.

Maybank Kim Eng is keeping its “buy” recommendation on Japfa with a target price of 99 cents.

Over the past decade, protein consumption in Vietnam has increased rapidly, in tandem with its GDP growth.

Japfa milks profits from its dairy business

SINGAPORE (Dec 7): Japfa, an agri-food company that is focused on feeding Asia’s emerging market population, has seen its share price rise 43.14% year to date, compared with a decline of 8.2% in the Straits Times Index.

Investor interest and demand for its products are driven by the need for more protein from the rising middle class in the region. As such, Japfa’s shares are seen as a proxy to rising food demand in Asia.

In 3Q18, the group’s sales, margins and profit showed marked improvement.

Japfa restarted at 'buy' by DBS on earnings recovery

SINGAPORE (Oct 25): DBS Group Research is reinstating coverage on animal protein play Japfa with a “buy” on projections of an earnings turnaround in 1H18 which would stretch into 2H18 and FY19.

DBS is forecasting FY18F profit to hit US$86.7 million, up from US$1.3 million in FY17 as the research house expects prices of DOC (day old chicks) and broilers in Indonesia to stay strong in 2H18.

Japfa started at 'buy' on expectations of over 500% y-o-y net profit growth

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.

The 6 biggest SGX-listed agriculture stocks are beating global benchmarks

SINGAPORE (Sept 4): Six of the biggest agriculture-focused stocks listed on the Singapore Exchange (SGX) are beating global agriculture benchmarks so far this year, according to data from Bloomberg and SGX.

Wilmar International, Olam International, Golden Agri-Resources, First Resources, Japfa and Bumitama Agri each have a market capitalisation above $1 billion. As of Aug 27, they have a combined market capitalisation of $35.8 billion.


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