However, the analyst notices some weakness for prices of day-old chicks (DOCs) coming off the Lebaran festivities in Indonesia which could affect broiler prices in 3QFY2022 ending September.
CGS-CIMB Research is keeping its “add” recommendation on Japfa with a target price of 81 cents, as analyst Tay Wee Kuang expects earnings pressure to ease in the near term amid consumption recovery.
“We believe that in tandem with the more extensive economic reopening in Indonesia and Vietnam, JAP’s key operating regions for animal proteins, consumption patterns have improved in the second quarter, especially given the stable broiler prices in Indonesia, and swine prices in Vietnam after an early Lebaran and Tet, respectively,” says Tay, referring to the two major holidays in Indonesia and Vietnam.
