印尼家禽：是时候退缩了

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1、29March2019IndonesiaEQUITIESInsideTimetochickenout2Broilerpricesonamajordownswing3LimitedupsideforDOC–expectlowerpricesfrom2H197Valuationcomps11CharoenPokphandIndonesia(CPINIJ)13JapfaComfeedIndonesia(JPFAIJ)23Poultrycompanies’revenuebreakdown(2018)Indones

2、iaPoultryTimetochickenoutKeypointsêInitiatingwithacautiousview-waitforabetterentrypointandbetterclarityonIndonesianpoultry.Weseealowmarginofrelativesafety.êKeyrisks:broilerpricesfallfurther(-15%YoY)in1Q19E,DOCpricestrendlowerin2H19.Expectmuchlowerincrement

3、algrowthrateinFY19.êWeareinitiatingcoverageofCPIN,withanUnderperformrating,andofJPFAwithaNeutral(all19consensusratingsarebuys).WeinitiatecoverageoftheIndonesiapoultrysectorwithanegativeview;wehaveanUPratingonCharoenPokphandIndonesia(CPIN)andaNonJapfaComfee

4、dIndonesia(JPFA).Webelievecurrentvaluationsarebakinginthe100%3%15%8%2%19%continuationofthestrongFY18performances,andprovidingalowmarginof80%60%40%20%0%29%11%48%CPINFeed4%36%9%36%JPFADOC21%58%MAINrelativesafety(CPIN’sPEisat+3stddev),aswebelievethefo

5、llowingkeyriskswillmaterialise:1)acontinuationofthelowerbroilerpricesseenin1Q19(-14%YoY);and2)lessupsidefromthecurrentday-old-chicks(DOC)price.WebelieveboththeseissueswilllikelymateriallylimittheoutlookforFY19growth.BroilerpricesonamajordownswingBroilersco

6、ntributed73%and40%,respectively,oftheFY18incrementalEBITLivebird/BroilerProcessedfoodSource:Companydata,MacquarieResearch,March2019PeersCompsTickerRatingPrice(lcy)TP(lcy)PE(x)P/BV(x)CPINUP7150520028.05.6JPFAN195020009.01.9MAIN*NR1600n.a14.91.7*Nonrated,use

7、dBloombergconsensusforecast,pricesasof28March2019Source:Bloomberg,MacquarieResearch,March2019AnalystsPTMacquarieSekuritasIndonesiaRichardoWalujo+622125988369richardo.walujo@macquarie.comgrowthforCPINandJPFA.The1Q19broilerpriceistracking15%lowerthanthe1Q18

8、price,indicatingweakerdemandandhighersupply.Incontrasttothe16%YoYriseinFY18,weexpectbroilerpricestodecline6%YoYinFY19.WebelievebroilerswillnotcontributetoCPIN’sFY19EBIT(barelybreakingeven)whiletheircontributi