CPIN - Sustaining growth amidst challenges in ‘25F

KBVS Update  
Monday, 24 March 2025

CPIN - Sustaining growth amidst challenges in '25F
(Maintain BUY; with TP: IDR6,075)

Statistics Indonesia (BPS) expects the LC (14% of water content) production to be at 4.81 mn tons (+41.38% yoy) in 3M25F. The imported SBM’ prices is still at around USD298 /tons (much lower than its 5years avg price of USD383.3 /tons). Thus, we still expect CPIN to sustain its margins' expansion in '25F on favorable raw materials (LC, SBM) prices as it would fully utilize its corn dryers & silos, with stable LB' and DOC' ASP, despite the government' new reference price for LC (14% of water content) at IDR5,500 per kg.

CPIN' earnings grew 60.1% yoy to IDR3.7 tn in FY24 on lower raw material prices (LC, SBM) with better chicken (LB, DOC) ASP, which came above ours (117.8%) and consensus' expectation (115.5%). While, CPIN' revenue grew 9.5% yoy to IDR67.5 tn in FY24. due to higher sales with better chicken' (DOC, LB) ASP.

CPIN' gross profit grew 153.2% yoy/70.2% qoq to IDR3.45 tn in 4Q24, on higher sales with better LB' & DOC' ASP and lower raw material (LC and SBM) prices. While, CPIN' EBIT grew 1475.1% yoy/124.1% qoq in 4Q24 due to better cost management. All in all, CPIN' gross, EBIT and net margin expanded to 15.4% (+200bps yoy), 8.6% (+220bps yoy) and 5.5% (+170bps yoy), respectively in FY24.

We adjusted up CPIN’ revenue in ‘25F by 6.9% from prior and expect it could still grow its revenue by 10.1% yoy in ‘25F due to higher sales volume on government free nutritious food program with stable LB’ and DOC’ ASP. Thus, we expect CPIN’ earnings in ‘25F to be 17.1% higher than prior. All in all, we expect CPIN to grow its ‘25F earnings by 14.4% yoy with a 20bps yoy net margin expansion.

Maintain BUY on CPIN with the same TP of IDR 6,075/share, which implies 23.5x ‘25F PE or slightly above -1stdev of its 5 years mean PE. Currently, CPIN is trading at 17.3x ‘25F P/E or slightly above its -2stdev of its 5 years’ mean P/E.

Regards,
Andre Suntono – KBVS Research Team