Buy, 48% upside

22nd September 2026

Price Rp 2270

Target price Rp 3350

Investment Consideration

Solid performance Across all Business Segments

• PT Japfa Comfeed Indonesia Tbk (JPFA) maintained strong performance in 2Q26, with total sales increasing 34.1% YoY to IDR17.64 trillion, despite a slight 0.4% QoQ decline. Growth was supported by higher sales volumes and stronger average selling prices across most business segments. For 1H26, total sales increased 28.7% YoY to IDR35.35 trillion.
• The Commercial Farming segment recorded sales growth of 19.8% YoY to IDR6.29 trillion, although revenue declined 10.7% QoQ. Growth was supported by an 11.0% YoY increase in sales volume and a 12.6% YoY increase in livebird ASP. However, segment margin contracted to -7.9% in 2Q26 as production costs increased faster than selling prices. For 1H26, segment revenue still grew 23.0% YoY to IDR13.3 trillion, although margin declined to 2.7% from 5.1%.
• The Poultry Processing & Consumer Products segment recorded strong revenue growth of 31.8% YoY to IDR3.2 trillion, while margin improved significantly to 6.0% from 3.2%, reflecting stronger operating performance.
• The DOC segment delivered the strongest improvement, with revenue increasing 140% YoY and 60% QoQ to IDR1.7 trillion. Performance was driven by an 18.0% YoY increase in ASP and 13.2% YoY volume growth. Segment margin improved substantially to 29.0%, compared with -1.8% in 2Q25.
• The Feed segment recorded revenue growth of 56.3% YoY and 7.8% QoQ to IDR5.25 trillion, supported by volume growth of 13.0% YoY and 5.7% QoQ, together with an 8.2% YoY improvement in ASP. Feed margin moderated to 20.5% from 22.7%.
• Raw material prices remained a key factor for feed profitability. Corn prices fluctuated between IDR4,000/kg and IDR6,573/kg, reaching IDR6,573/kg in August 2026, while soybean prices remained relatively stable at around IDR10,600/kg.
• The Aquaculture segment recorded strong revenue growth of 39.0% YoY to IDR1.62 trillion, although margin moderated slightly to 9.4% from 10.8%.
• Looking ahead, we expect stronger performance in 2H26 as DOC and livebird prices improved in July and reached their highest levels of the year in August. Demand should also benefit from the normalization of activity following the school holiday period and additional demand generated by the government’s free nutritious meals program.

Q2 2026 Result: Earnings Grow Despite Margin Pressure

• JPFA recorded EBITDA of IDR1.45 trillion in 2Q26, increasing 12.4% YoY, supported by broad-based growth across its major business segments.
• Net profit increased 18.4% YoY to IDR659 billion, although it declined 64.0% QoQ. Net profit margin moderated to 3.7% from 4.2% in the corresponding period last year.
• Cost of sales increased 37.6% YoY to IDR14.5 trillion, outpacing revenue growth. As a result, gross profit increased 20.2% YoY to IDR3.1 trillion, while gross profit margin declined to 17.6% from 19.7%.
• Operating profit increased 13.9% YoY to IDR1.13 trillion, although operating profit margin moderated to 6.4% from 7.6%. The margin contraction mainly reflected higher input costs and weaker profitability in the Commercial Farming segment, partly offset by the significant recovery in DOC profitability and improved margins in Poultry Processing & Consumer Products.
• We forecast FY2026 net profit of IDR4.7 trillion, supported by improving poultry prices, sustained demand recovery, and stronger contributions from the DOC and downstream businesses.

Valuation: Maintain BUY, TP IDR 3,350 (+48% Upside)

• We maintain our BUY recommendation on JPFA with a 12-month target price of IDR3,350, implying 48% upside from the current share price.
• Our target price is based on a DCF valuation using a WACC of 13.5% and implies a 2026F P/E multiple of 7.5x. Our positive outlook is supported by improving poultry prices, strong DOC profitability, continued volume growth, and expectations for stronger operating performance in 2H26.