CPIN - Pressures from high feed prices and oversupply issues

CPIN - Pressures from high feed prices and oversupply issues Charoen Pokphand Indonesia (CPIN) is facing challenges in the current business landscape, marked by high feed prices and oversupply issues. In 4Q23, broiler chicken prices lowered qoq followed by lower day-old chick prices. Additionally, elevated corn prices in 4Q23 and fluctuating soybean meal prices have intensified the pressure on CPIN's profit margins. The company faces additional uncertainties, including potential oversupply of day-old chicks due to substantial Grand Parent Stock (GPS) import quotas and the resumption of culling programs in 1Q24. Despite these challenges, CPIN sees growth opportunities, emphasizing measured culling policy implementation. Moreover, positive domestic economic growth projections and the upcoming Ramadan and Eid al-Fitri festivities are expected to boost purchasing power. Note that, despite CPIN recording a 69% yoy net profit growth to IDR1.29 tn with an improved net profit margin of 8% yoy in 3Q23, CPIN's 9M23 net profit experienced a decrease to IDR2.67 tn (-19.10% yoy). (Source: Kontan)