Site Visit Notes
Key Takeaways :
▪️We conducted a site visit to JPFA on May 17, 2023, where we observed their integrated vertical line poultry business in the mid-down stream. We began by visiting Ciomas Commercial Farm (CCF), a mid-stream facility in Cisoka, Banten, that focuses on the B2B segment.
▪️The CCF has an area of 4.6 Ha and is made up of 4 double-deck cages as well as a single-deck cage with a closed-house system. The system offers benefits such as increased cage productivity and reduced odor. From our observation, biosecurity and sanitation were generally kept up well.
▪️To gain insights into the market potential, we developed a model that considered the per capita broiler consumption in Banten. According to our estimates, the consumption per capita reached 8.5kg in FY22, reflecting a notable YoY increase of 6.6%.
▪️We visited PT So Good Food Manufacturing (SGFM) as the down-stream facilities, located in Cikupa, Tangerang. The plant encompasses a comprehensive poultry slaughtering facility and meat processing unit. We observed that the entire production workflow ran seamlessly, delivering their commitment to operational efficiency and HSE standards.
▪️We recommend BUY for JPFA IJ at a TP of IDR1,500, implying PE/PBV of 12.0x/1.3x in FY23E. JPFA's is currently trading near the level -0.5x STD PE Ratio (5-mean-average) of 9.9x. Downside risks include: 1) lower-than-expected sales volume; 2) weak DOC & Broiler prices.
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